EXHIBIT (4)(xiv)
DEFINED TERMS ARE BOLDED -- DO NOT BOLD THE QUOTES.
DAYS, PERCENTS AND DOLLAR AMOUNTS ARE WRITTEN OUT AND IN PARENS.
DO NOT USE THE WORD "THE" BEFORE BANK AND BORROWER. PLEASE SEARCH THESE TERMS
AFTER REVISIONS TO MAKE SURE "THE" IS NOT THERE.
REFERENCES ARE TO "PARAGRAPH" NOT "SUBPARAGRAPH" OR "SECTION."
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") made
this 25th day of February, 19 97 by and between LASALLE NATIONAL
BANK, a national banking association ("Bank"), 000 Xxxxx XxXxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, and
Brite-Line Technologies, Inc.
00000 Xxxx 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000 ("Borrower")
[Insert entity designation(s) and address(es) of principal place of
business].
WITNESSETH:
WHEREAS, Borrower may, from time to time, request Loans
from Bank, and the parties wish to provide for the terms and
conditions upon which such Loans, if made by Bank, shall be made;
NOW, THEREFORE, in consideration of any Loan (including
any Loan by renewal or extension) hereafter made to Borrower by Bank,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Borrower, the parties
agree as follows:
1. DEFINITIONS.
(a) "Account," "Account Debtor," "Chattel Paper," "Documents,"
"Equipment," "General Intangibles," "Goods," "Instruments," and
"Inventory," shall have the respective meanings assigned to such
terms, as of the date of this Agreement, in the Illinois Uniform
Commercial Code.
(b) "Affiliate" shall mean any Person directly or indirectly
controlling, controlled by or under common control with Borrower.
(c) "Collateral" shall mean all of the property of Borrower
described in paragraph 4 hereof, together with all other real or
personal property of any Obligor or any other Person now or hereafter
pledged to Bank to secure, either directly or indirectly, repayment of
any of the Liabilities.
(d) "Eligible Account" shall mean an Account owing to Borrower
which is acceptable to Bank in its sole discretion for lending
purposes. Without limiting Bank's discretion, Bank shall, in general,
consider an Account to be an Eligible Account if it meets, and so long
as it continues to meet, the following requirements:
(i) it is genuine and in all respects what it purports to
be;
(ii) it is owned by Borrower and Borrower has the right to
subject it to a security interest in favor of Bank or assign it to
Bank;
(iii) it arises from (A) the performance of services by
Borrower and such services have been fully performed and acknowledged
and accepted by the Account Debtor thereunder; or (B) the sale or
lease of Goods by Borrower, and such Goods have been completed in
accordance with the Account Debtor's specifications (if any) and
delivered to and accepted by the Account Debtor, such Account Debtor
has not refused to accept any of the Goods, returned or offered to
return any of the Goods, or refused to accept any of the services
which are the subject of such Account, and Borrower has possession of,
or Borrower has delivered to Bank (at Bank's request) shipping and
delivery receipts evidencing delivery of such Goods;
(iv) it is evidenced by an invoice rendered to the
Account Debtor thereunder, is due and payable within ninety (90)
days after the date of the invoice and does not remain unpaid ninety
(90) days past the invoice date thereof; provided, however, that if
more than twenty-five percent (25%) of the aggregate dollar amount of
invoices owing by a particular Account Debtor remain unpaid ninety
(90) days after the respective invoice dates thereof, then all
Accounts owing by that Account Debtor shall be deemed ineligible;
(v) it is not subject to any prior assignment, claim,
lien, security interest or encumbrance whatsoever, other than
Permitted Liens and the security interest granted to Bank hereunder;
(vi) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor thereunder, and is not subject to
setoff, counterclaim, credit, allowance or adjustment by such Account
Debtor, or to any claim by such Account Debtor denying liability
thereunder in whole or in part;
(vii) it does not arise out of a contract or order which
fails in any material respect to comply with the requirements of
applicable law;
(viii) the Account Debtor thereunder is not a director,
officer, employee or agent of Borrower, or a Subsidiary, Parent or
Affiliate, unless the Account arises out of a transaction permitted by
paragraph 10(i) hereof and is otherwise an Eligible Account;
(ix) it is not an Account with respect to which the
Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless Borrower assigns its right
to payment of such Account to Bank pursuant to, and in full compliance
with, the Assignment of Claims Act of 1940, as amended;
(x) it is not an Account with respect to which the
Account Debtor is located in a state which requires Borrower, as a
precondition to commencing or maintaining an action in the courts of
that state, either to (A) receive a certificate of authority to do
business and be in good standing in such state, or (B) file a notice
of business activities report or similar report with such state's
taxing authority, unless (x) Borrower has taken one of the actions
described in clauses (A) or (B), (y) the failure to take one of the
actions described in either clause (A) or (B) may be cured
retroactively by Borrower at its election, or (z) Borrower has proven,
to Bank's satisfaction, that it is exempt from any such requirements
under any such state's laws;
(xi) it is an Account which arises out of a sale made in
the ordinary course of Borrower's business;
(xii) See Exhibit A
(xiii) it is not an Account with respect to which the
Account Debtor's obligation to pay is conditional upon the Account
Debtor's approval of the Goods or services or is otherwise subject to
any repurchase obligation or return right (except for the right of
Account Debtors to return goods for breach of warranty in accordance
with Borrower's usual and customary business practices), as with
sales made on a xxxx-and-hold, guaranteed sale, sale on approval, sale
or return or consignment basis;
(xiv) it is not an Account (A) with respect to which any
representation or warranty contained in this Agreement is untrue or
(B) which violates any of the covenants of Borrower contained in this
Agreement;
(xv) it is not an Account which, when added to a
particular Account Debtor's other indebtedness to Borrower, exceeds a
credit limit determined by Bank in its sole discretion for that
Account Debtor (except that Accounts excluded from Eligible Accounts
solely by reason of this subparagraph 1(d)(xv) shall be Eligible
Accounts to the extent of such credit limit); and
(xvi) it is not an Account with respect to which the
prospect of payment or performance by the Account Debtor is or will be
impaired, as determined by Bank in its sole discretion.
(e) "Eligible Inventory" shall mean Inventory of Borrower
which is acceptable to Bank in its sole discretion for lending
purposes. Without limiting Bank's discretion, Bank shall, in general,
consider Inventory to be Eligible Inventory if it meets, and so long
as it continues to meet, the following requirements:
(i) it is owned by Borrower and Borrower has the right to
subject it to a security interest in favor of Bank ;
(ii) it is located on the premises listed on Exhibit B
and is not in transit;
(iii) it is not subject to any prior assignment, claim,
lien, security interest or encumbrance whatsoever, other than
Permitted Liens and the security interest granted to Bank hereunder;
(iv) if held for sale or lease or furnishing under
contracts of service, it is (except as Bank may otherwise consent in
writing) new and unused and free from defects which would, in Bank's
sole determination, affect its market value;
(v) it is not stored with a bailee, consignee,
warehouseman, processor or similar party unless Bank has given its
prior written approval and Borrower has caused any such bailee,
consignee, warehouseman, processor or similar party to issue and
deliver to Bank, in form and substance acceptable to Bank, such UCC
financing statements, warehouse receipts, waivers and other documents
as Bank shall require;
(vi) Bank has determined in accordance with Bank's
customary business practices that it is not unacceptable due to age,
type, category or quantity; and
(vii) it is not Inventory (A) with respect to which any
of the representations and warranties contained in this Agreement are
untrue or (B) which violates any of the covenants of Borrower
contained in this Agreement.
(f) "Event of Default" shall have the meaning specified in
paragraph 12 hereof.
(g) "Exhibit A" shall mean the exhibit entitled Exhibit A -
Special Provisions which is attached hereto and made a part hereof.
(h) "Exhibit B" shall mean the exhibit entitled Exhibit B -
Business and Collateral Locations which is attached hereto and made a
part hereof.
(i) "Indemnified Party" shall have the meaning specified in
paragraph 14 hereof.
(j) "Liabilities" shall mean any and all obligations,
liabilities and indebtedness of Borrower to Bank or to any parent,
affiliate or subsidiary of Bank of any and every kind and nature,
howsoever created, arising or evidenced and howsoever owned, held or
acquired, whether now or hereafter existing, whether now due or to
become due, whether primary, secondary, direct, indirect, absolute,
contingent or otherwise (including, without limitation, obligations of
performance), whether several, joint or joint and several, and whether
arising or existing under written or oral agreement or by operation of
law.
(k) "Loan" or "Loans" shall mean all advances made by Bank to
Borrower pursuant to paragraph 2 hereof and all other loans, advances
and financial accommodations made by Bank to or on behalf of Borrower
hereunder.
(l) "Loan Limit" shall have the meaning specified in paragraph
1 of Exhibit A.
(m) "Lock Box" and "Lock Box Account" shall have the meanings
specified in paragraph 7 hereof.
(n) "Obligor" shall mean Borrower and each Person who is or
shall become primarily or secondarily liable for any of the
Liabilities.
(o) "Original Term" shall have the meaning specified in
paragraph 9 hereof.
(p) "Other Agreements" shall mean all agreements, instruments
and documents, including, without limitation, guaranties, mortgages,
trust deeds, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, financing statements
and all other writings heretofore, now or from time to time hereafter
executed by or on behalf of Borrower or any other Person and delivered
to Bank or to any parent, affiliate or subsidiary of Bank in
connection with the Liabilities or the transactions contemplated
hereby.
(q) "Parent" shall mean any Person now or at any time or times
hereafter owning or controlling (alone or with any other Person) at
least a majority of the issued and outstanding stock of Borrower or
any Subsidiary.
(r) "Permitted Liens" shall mean (i) statutory liens of
landlord's, carriers, warehousemen, mechanics, materialmen or
suppliers incurred in the ordinary course of business and securing
amounts not yet due or declared to be due by the claimant thereunder,
(ii) liens or security interests in favor of Bank, (iii) zoning
restrictions and easements, licenses, covenants and other restrictions
affecting the use of real property that do not individually or in the
aggregate have a material adverse effect on Borrower's ability to use
such real property for its intended purpose in connection with
Borrower's business, and (iv) liens specifically permitted by Bank in
writing.
(s) "Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or foreign or
United States government (whether federal, state, county, city,
municipal or otherwise), including, without limitation, any instru-
mentality, division, agency, body or department thereof.
(t) "Renewal Term" shall have the meaning specified in
paragraph 9 hereof.
(u) "Subsidiary" shall mean any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time stock of any other
class of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly
or indirectly, owned by Borrower or by any partnership or joint
venture of which more than fifty percent (50%) of the outstanding
equity interests are at the time, directly or indirectly, owned by
Borrower.
(v) "Tangible Net Worth" shall have the meaning specified in
subparagraph 11(o) hereof.
(w) "Business Day" shall mean any day other than a Saturday, a
Sunday or (i) with respect to all matters, determinations, fundings
and payments in connection with LIBOR Rate Loans, any day on which
banks in London, England or Chicago, Illinois are required or
permitted to close, and (ii) with respect to all other matters, any
day that banks in Chicago, Illinois are permitted or required to
close.
(x) "Interest Period" shall have the meaning specified in
Paragraph (3)(b) of Exhibit A of the Agreement hereto.
(y) "LIBOR Rate Loans" shall mean the Loans bearing interest
at the rate set forth in Paragraph (3)(b) of Exhibit A of the
Agreement.
(z) "Prime Rate Loans" shall mean the Loans bearing interest
at the rates set forth in Paragraph (3)(a) of Exhibit A of the
Agreement.
2. LOANS.
Subject to the terms and conditions of this Agreement (including
Exhibit A) and the Other Agreements, during the Original Term and any
Renewal Term, Bank may, in its sole discretion, make such Loans to
Borrower as Borrower shall from time to time request. The aggregate
unpaid principal of all Loans outstanding at any one time shall not
exceed the Loan Limit set forth in Exhibit A and shall bear interest
at the rates set forth in Exhibit A. ALL LOANS SHALL BE REPAID BY
BORROWER UPON DEMAND BY BANK. Prior to Bank making such demand, Loans
shall be repaid as provided elsewhere in this Agreement. If at any
time the outstanding principal balance of the Loans exceeds the Loan
Limit, or any portion of the Loans exceeds any applicable sublimit set
forth in Exhibit A, Borrower shall immediately, and without the
necessity of a demand by Bank, pay to Bank such amount as may be
necessary to eliminate such excess and Bank shall apply such payment
to the Liabilities in such order as Bank shall determine in its sole
discretion. Borrower hereby authorizes Bank, in its sole discretion,
to charge any of Borrower's accounts to make any payments of principal
or interest required by this Agreement. All Loans shall, in Bank's
sole discretion, be evidenced by one or more promissory notes in form
and substance satisfactory to Bank. However, if such Loans are not so
evidenced, such Loans may be evidenced solely by entries upon the
books and records maintained by Bank.
3. FEES AND CHARGES.
Borrower shall pay to Bank, in addition to all other amounts
payable hereunder, the fees and charges set forth in Exhibit A. It is
the intent of the parties that the rate of interest and the other
charges to Borrower under this Agreement shall be lawful; therefore,
if for any reason the interest or other charges payable under this
Agreement are found by a court of competent jurisdiction, in a final
determination, to exceed the limit which Bank may lawfully charge
Borrower, then the obligation to pay interest and other charges shall
automatically be reduced to such limit and, if any amount in excess of
such limit shall have been paid, then such amount shall be refunded to
Borrower.
4. GRANT OF SECURITY INTEREST TO BANK.
As security for the payment of all Loans now or in the future
made by Bank to Borrower hereunder and for the payment or other
satisfaction of all other Liabilities, excluding contingent
indemnities which survive termination or expiration of this Agreement,
Borrower hereby assigns to Bank and grants to Bank a continuing
security interest in the following property of Borrower, whether now
or hereafter owned, existing, acquired or arising and wherever now or
hereafter located: (a) all Accounts (whether or not Eligible
Accounts) and all Goods whose sale, lease or other disposition by
Borrower has given rise to Accounts and have been returned to, or
repossessed or stopped in transit by, Borrower; (b) all Chattel Paper,
Instruments, Documents and General Intangibles (including, without
limitation, all patents, patent applications, trademarks, trademark
applications, tradenames, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, customer lists, tax refund
claims, claims against carriers and shippers, guarantee claims,
contracts rights, security interests, security deposits and any rights
to indemnification); (c) all Inventory (whether or not Eligible
Inventory); (d) all Goods (other than Inventory), including, without
limitation, Equipment, vehicles and fixtures; (e) all deposits and
cash, and any other property of Borrower now or hereafter in the
possession, custody or control of Bank or any agent or any parent,
affiliate or subsidiary of Bank or any participant with Bank in the
Loans for any purpose (whether for safekeeping, deposit, collection,
custody, pledge, transmission or otherwise); and (f) all additions and
accessions to, substitutions for, and replacements, products and
proceeds of the foregoing property, including, without limitation,
proceeds of all insurance policies insuring the foregoing property,
and all of Borrower's books and records relating to any of the
foregoing and to Borrower's business.
5. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN.
Borrower shall, at Bank's request, at any time and from time to
time, execute and deliver to Bank such financing statements, documents
and other agreements and instruments (and pay the cost of filing or
recording the same in all public offices deemed necessary or desirable
by Bank) and do such other acts and things as Bank may deem necessary
or desirable in order to establish and maintain a valid, attached and
perfected security interest in the Collateral in favor of Bank (free
and clear of all other liens, claims and rights of third parties
whatsoever, whether voluntarily or involuntarily created, except
Permitted Liens) to secure payment of the Liabilities, and in order to
facilitate the collection of the Collateral. Borrower irrevocably
hereby makes, constitutes and appoints Bank (and all Persons
designated by Bank for that purpose) as Borrower's true and lawful
attorney and agent-in-fact to execute such financing statements,
documents and other agreements and instruments and do such other acts
and things as may be necessary to preserve and perfect Bank's security
interest in the Collateral. Borrower further agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or
of a financing statement shall be sufficient as a financing statement.
6. POSSESSION OF COLLATERAL AND RELATED MATTERS.
Until the commencement of a foreclosure or liquidation to
realize upon the Collateral, Borrower shall have the right, except as
otherwise provided in this Agreement, in the ordinary course of
Borrower's business, to (a) sell, lease or furnish under contracts of
service any of Borrower's Inventory normally held by Borrower for any
such purpose, and (b) use and consume any raw materials, work in
process or other materials normally held by Borrower for such purpose;
provided, however, that a sale in the ordinary course of business
shall not include any transfer or sale in satisfaction, partial or
complete, of a debt owed by Borrower.
7. COLLECTIONS.
(a) Borrower shall direct all of its Account Debtors to make
all payments on the Accounts directly to a post office box (the "Lock
Box") designated by, and under the exclusive control of, Bank or
another financial institution acceptable to Bank. Borrower shall
establish an account (the "Lock Box Account") in Borrower's name with
Bank or such other financial institution acceptable to Bank, into
which all payments received in the Lock Box shall be deposited, and
into which Borrower will immediately deposit all payments made for
Inventory or services and received by Borrowerin the identical form in
which such payments were made, whether by cash or check. If Borrower,
any Affiliate or Subsidiary, or any shareholder, officer, director,
employee or agent of Borrower or any Affiliate or Subsidiary, or any
other Person acting for or in concert with Borrower shall receive any
monies, checks, notes, drafts or other payments relating to or as
proceeds of Accounts or other Collateral, Borrower and each such
Person shall receive all such items in trust for, and as the sole and
exclusive property of, Bank and, immediately upon receipt thereof,
shall remit the same (or cause the same to be remitted) in kind to the
Lock Box Account. If the Lock Box Account is not established with
Bank, the financial institution with which the Lock Box Account is
established shall acknowledge and agree, in a manner satisfactory to
Bank, that the amounts on deposit in such Lock Box Account are the
sole and exclusive property of Bank, that such financial institution
has no right to setoff against the Lock Box Account or against any
other account maintained by such financial institution into which the
contents of the Lock Box Account are transferred, and that such
financial institution shall wire, or otherwise transfer in immediately
available funds in a manner satisfactory to Bank, funds deposited in
the Lock Box Account on a daily basis as such funds are collected.
Borrower agrees that all payments made to such Lock Box Account or
otherwise received by Bank, whether in respect of the Accounts or as
proceeds of other Collateral or otherwise, will be applied on account
of the Liabilities in accordance with the terms of this Agreement;
provided, that so long as no Event of Default has occurred and is
continuing, payments received by Bank shall not be applied to the
unmatured portion of the LIBOR Rate Loans, but shall be held in an
interest bearing cash collateral account maintained by Bank until the
earlier of (i) the last day of the Interest Period applicable to such
LIBOR Rate Loan and (ii) the occurrence of an Event of Default;
provided further, that so long as no Event of Default has occurred,
the immediately available funds held in such interest bearing cash
collateral account may be disbursed, at Borrower's discretion, to
Borrower so long as after giving effect to such disbursement,
Borrower's availability under Paragraph 1 of Exhibit A of the
Agreement at such time equals or exceeds the outstanding Liabilities
at such time. If the Lock Box Account is established with Bank,
Borrower agrees to pay all fees, costs and expenses which Bank incurs
in connection with opening and maintaining the Lock Box Account and
depositing for collection by Bank any check or other item of payment
received by Bank on account of the Liabilities. All of such fees,
costs and expenses shall constitute Loans hereunder, shall be payable
to Bank by Borrower upon demand, and, until paid, shall bear interest
at the highest rate then applicable to Loans hereunder. All checks,
drafts, instruments and other items of payment or proceeds of
Collateral shall be endorsed by Borrower to Bank, and, if that
endorsement of any such item shall not be made for any reason, Bank is
hereby irrevocably authorized to endorse the same on Borrower's
behalf. For the purpose of this paragraph, Borrower irrevocably
hereby makes, constitutes and appoints Bank (and all Persons
designated by Bank for that purpose) as Borrower's true and lawful
attorney and agent-in-fact (i) to endorse Borrower's name upon said
items of payment and/or proceeds of Collateral and upon any Chattel
Paper, document, instrument, invoice or similar document or agreement
relating to any Account of Borrower or goods pertaining thereto; (ii)
to take control in any manner of any item of payment or proceeds
thereof; and (iii) to have access to any lock box or postal box into
which any of Borrower's mail is deposited, and open and process all
mail addressed to Borrower and deposited therein.
(b) Bank may, at any time and from time to time, after the
occurrence and continuance of an Event of Default, whether before or
after notification to any Account Debtor and whether before or after
the maturity of any of the Liabilities, (i) enforce collection of any
of Borrower's Accounts or contract rights by suit or otherwise; (ii)
exercise all of Borrower's rights and remedies with respect to
proceedings brought to collect any Accounts; (iii) surrender, release
or exchange all or any part of any Accounts, or compromise or extend
or renew for any period (whether or not longer than the original
period) any indebtedness thereunder; (iv) sell or assign any Account
of Borrower upon such terms, for such amount and at such time or times
as Bank deems advisable; (v) prepare, file and sign Borrower's name on
any proof of claim in bankruptcy or other similar document against any
Account Debtor; and (vi) do all other acts and things which are
necessary, in Bank's sole discretion, to fulfill Borrower's
obligations under this Agreement and to allow Bank to collect the
Accounts. In addition to any other provision hereof, Bank may at any
time, after the occurrence and continuance of an Event of Default, at
Borrower's expense, notify any parties obligated on any of the
Accounts to make payment directly to Bank of any amounts due or to
become due thereunder.
(c) Bank shall, within one ( 1 ) business days after receipt
by Bank at its office in Chicago, Illinois of cash or other
immediately available funds from collections of items of payment and
proceeds of any Collateral, apply the whole or any part of such
collections or proceeds against the Liabilities in such order as Bank
shall determine in its sole discretion.
(d) Bank, in its sole discretion, without waiving or releasing
any obligation, liability or duty of Borrower under this Agreement or
the Other Agreements or any Event of Default, may at any time or times
hereafter, but shall not be obligated to, pay, acquire or accept an
assignment of any security interest, lien, encumbrance or claim
asserted by any Person in, upon or against the Collateral. All sums
paid by Bank in respect thereof and all costs, fees and expenses
including, without limitation, reasonable attorney fees, all court
costs and all other charges relating thereto incurred by Bank shall
constitute Loans, payable by Borrower to Bank on demand and, until
paid, shall bear interest at the highest rate then applicable to Loans
hereunder.
(e) Immediately upon Borrower's receipt of any portion of the
Collateral evidenced by an agreement, Instrument or Document,
including, without limitation, any Chattel Paper, Borrower shall
deliver the original thereof to Bank together with an appropriate
endorsement or other specific evidence of assignment thereof to Bank
(in form and substance acceptable to Bank). If an endorsement or
assignment of any such items shall not be made for any reason, Bank is
hereby irrevocably authorized, as Borrower's attorney and agent-in-fact,
to endorse or assign the same on Borrower's behalf.
8. SCHEDULES AND REPORTS.
(a) Within ten (10) days after the close of each fiscal month,
and at such other times as may be requested by Bank from time to time
hereafter, Borrower shall deliver to Bank (i) a schedule identifying
each Eligible Account together with copies of the invoices when
requested by Bank (with evidence of shipment attached) pertaining to
each such Eligible Account, for the month (or other applicable period)
immediately preceding; (ii) such additional schedules, certificates,
reports and information with respect to the Collateral as Bank may
from time to time require; and (iii) a collateral assignment of any or
all items of Collateral to Bank. Bank, through its officers,
employees or agents, shall have the right, at any time and from time
to time in Bank's name, in the name of a nominee of Bank or in
Borrower's name, to verify the validity, amount or any other matter
relating to any of Borrower's Accounts, by mail, telephone, telegraph
or otherwise. Borrower shall reimburse Bank, on demand, for all
costs, fees and expenses incurred by Bank in this regard.
(b) Without limiting the generality of the foregoing, Borrower
shall deliver to Bank, at least once a month (or more frequently when
requested by Bank), a report with respect to Borrower's Inventory.
Borrower shall immediately notify Bank of any event causing loss or
depreciation in value of Borrower's Inventory (other than normal
depreciation occurring in the ordinary course of business).
(c) All schedules, certificates, reports, assignments and other
items delivered by Borrower to Bank hereunder shall be executed by an
authorized representative of Borrower and shall be in such form and
contain such information as Bank shall specify.
9. TERMINATION.
This Agreement shall be in effect from the date hereof until
June 6 , 19 99 (the "Original Term") and shall automatically renew
itself from year to year thereafter (each such one-year renewal being
referred to herein as a "Renewal Term") unless (a) Bank makes demand
for repayment prior to the end of the Original Term or the then
current Renewal Term; (b) the due date of the Liabilities is
accelerated pursuant to paragraph 13 hereof; or (c) Borrower elects to
terminate this Agreement at the end of the Original Term or at the end
of any Renewal Term by giving Bank written notice of such election at
least ninety (90) days prior to the end of the Original Term or the
then current Renewal Term and by paying all of the Liabilities in full
on the last day of such term. If one or more of the events specified
in clauses (a), (b) and (c) occurs, this Agreement shall terminate on
the date thereafter that the Liabilities are paid in full. At such
time as Borrower has repaid all of the Liabilities and this Agreement
has terminated, Borrower shall deliver to Bank a release, in form and
substance satisfactory to Bank, of all obligations and liabilities of
Bank and its officers, directors, employees, agents, parents,
subsidiaries and affiliates to Borrower, and if Borrower is obtaining
new financing from another lender, Borrower shall deliver such
lender's indemnification of Bank, in form and substance satisfactory
to Bank, for checks which Bank has credited to Borrower's account, but
which subsequently are dishonored for any reason.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Borrower hereby represents, warrants and covenants that:
(a) the financial statements delivered or to be delivered by
Borrower to Bank at or prior to the date of this Agreement and at all
times subsequent thereto accurately reflect, in all material respects,
the financial condition of Borrower, and there has been no material
adverse change in the financial condition, the operations or any other
status of Borrower since the date of the financial statements
delivered to Bank most recently prior to the date of this Agreement;
(b) the office where Borrower keeps its books, records and
accounts (or copies thereof) concerning the Collateral, Borrower's
principal place of business and all of Borrower's other places of
business, locations of Collateral and post office boxes are as set
forth in Exhibit B; Borrower shall promptly (but in no event less than
ten (10) days prior thereto) advise Bank in writing of the proposed
opening of any new place of business, the closing of any existing
place of business, any change in the location of Borrower's books,
records and accounts (or copies thereof) or the opening or closing of
any post office box of Borrower;
(c) the Collateral, including, without limitation, the
Equipment (except any part thereof which prior to the date of this
Agreement Borrower shall have advised Bank in writing consists of
Collateral normally used in more than one state) is and shall be kept,
or, in the case of vehicles, based, only at the addresses set forth on
Exhibit B, and at other locations within the continental United States
of which Bank has been advised by Borrower in writing;
(d) if any of the Collateral consists of Goods of a type
normally used in more than one state, whether or not actually so used,
Borrower shall immediately give written notice to Bank of any use of
any such Goods in any state other than a state in which Borrower has
previously advised Bank such Goods shall be used, and such Goods shall
not, unless Bank shall otherwise consent in writing, be used outside
of the continental United States;
(e) no security agreement, financing statement or analogous
instrument exists or shall exist with respect to any of the Collateral
other than any security agreement, financing statement or analogous
instrument evidencing security interests in favor of Bank or
evidencing Permitted Liens;
(f) each Account or item of Inventory which Borrower shall,
expressly or by implication, request Bank to classify as an Eligible
Account or as Eligible Inventory, respectively, shall, as of the time
when such request is made, conform in all respects to the requirements
of such classification as set forth in the respective definitions of
"Eligible Account" and "Eligible Inventory" as set forth herein and as
otherwise established by Bank from time to time, and Borrower shall
promptly notify Bank in writing if any such Eligible Account or
Eligible Inventory shall subsequently become ineligible;
(g) Borrower is and shall at all times during the Original Term
or any Renewal Term be the lawful owner of all Collateral now
purportedly owned or hereafter purportedly acquired by Borrower, free
from all liens, claims, security interests and encumbrances
whatsoever, whether voluntarily or involuntarily created and whether
or not perfected, other than the Permitted Liens;
(h) Borrower has the right and power and is duly authorized and
empowered to enter into, execute and deliver this Agreement and the
Other Agreements and perform its obligations hereunder and thereunder;
Borrower's execution, delivery and performance of this Agreement and
the Other Agreements does not and shall not conflict with the
provisions of any statute, regulation, ordinance or rule of law, or
any agreement, contract or other document which may now or hereafter
be binding on Borrower, where such conflict would have a material
adverse effect on its business, property, assets, operations or
condition, financial or otherwise, and Borrower's execution, delivery
and performance of this Agreement and the Other Agreements shall not
result in the imposition of any lien or other encumbrance upon any of
Borrower's property (other than Permitted Liens) under any existing
indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument by which Borrower or any of its property may
be bound or affected;
(i) Except as previously disclosed to Bank in writing, there
are no actions or proceedings which are pending, or to the best of
Borrower's knowledge, threatened against Borrower which might result
in any material adverse change in its financial condition or
materially adversely affect the Collateral and Borrower shall,
promptly upon becoming aware of any such pending or threatened action
or proceeding, give written notice thereof to Bank;
(j) Borrower has obtained all licenses, authorizations,
approvals and permits, the lack of which would have a material adverse
effect on the operation of its business, and Borrower is and shall
remain in compliance in all material respects with all applicable
federal, state, local and foreign statutes, orders, regulations, rules
and ordinances (including, without limitation, statutes, orders,
regulations, rules and ordinances relating to taxes, employer and
employee contributions and similar items, securities, employee
retirement and welfare benefits, employee health and safety or
environmental matters) the failure to comply with which would have a
material adverse effect on its business, property, assets, operations
or condition, financial or otherwise;
(k) all written information now, heretofore or hereafter
furnished by Borrower to Bank is and shall be true and correct in all
material respects as of the date with respect to which such
information was or is furnished;
(l) Borrower is not conducting, permitting or suffering to be
conducted, nor shall it conduct, permit or suffer to be conducted, any
activities pursuant to or in connection with which any of the
Collateral is now, or will (while any Liabilities remain outstanding)
be owned by any Affiliate; provided, however, that Borrower may enter
into transactions with Affiliates in the ordinary course of business
pursuant to terms that are no less favorable to Borrower than the
terms upon which such transfers or transactions would have been made
had they been made to or with a Person that is not an Affiliate and,
in connection therewith, may transfer cash or property to Affiliates
for fair value;
(m) Borrower's name has always been as set forth on the first
page of this Agreement and Borrower uses no tradenames or division
names in the operation of its business, except as otherwise disclosed
in writing to Bank; Borrower shall notify Bank in writing within ten
(10) days of the change of its name or the use of any tradenames or
division names not previously disclosed to Bank in writing;
(n) with respect to Borrower's Equipment: (i) other than
Equipment leased by Borrower on the date hereof, and Permitted Liens,
Borrower has good and indefeasible and merchantable title to and
ownership of all Equipment, including, without limitation, the
Equipment described or listed on the schedule of Equipment delivered
to Bank concurrently with this Agreement; (ii) Borrower shall keep and
maintain the Equipment in good operating condition and repair and
shall make all necessary replacements thereof and renewals thereto so
that the value and operating efficiency thereof shall at all times be
preserved and maintained in all material respects; (iii) Borrower
shall not permit any such items to become a fixture to real estate or
an accession to other personal property; and (iv) Borrower,
immediately on demand by Bank, shall deliver to Bank any and all
evidence of ownership of, including, without limitation, certificates
of title and applications of title to, any of the Equipment;
(o) this Agreement and the Other Agreements to which Borrower
is a party are the legal, valid and binding obligations of Borrower
and are enforceable against Borrower in accordance with their
respective terms;
(p) Borrower is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business, now
owns property having a value both at fair valuation and at present
fair saleable value greater than the amount required to pay its debts,
and will not be rendered insolvent by the execution and delivery of
this Agreement or any of the Other Agreements or by completion of the
transactions contemplated hereunder or thereunder;
(q) Borrower is not now obligated, nor shall it create, incur,
assume or become obligated (directly or indirectly), for any loans or
other indebtedness for borrowed money other than the Loans, except
that Borrower may (i) borrow money from a Person other than Bank on an
unsecured and subordinated basis if a subordination agreement in favor
of Bank and in form and substance satisfactory to Bank is executed and
delivered to Bank relative thereto; (ii) maintain any present
indebtedness to any Person which has been disclosed to Bank in writing
and consented to in writing by Bank, and (iii) incur unsecured
indebtedness to trade creditors in the ordinary course of Borrower's
business;
(r) Borrower does not own any margin securities, and none of
the proceeds of the Loans hereunder shall be used for the purpose of
purchasing or carrying any margin securities or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase any margin securities or for any other purpose not permitted
by Regulation G or Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time;
(s) except as otherwise disclosed in writing to Bank,
Borrower has no Parents, Subsidiaries or divisions, nor is Borrower
engaged in any joint venture or partnership with any other Person;
(t) if Borrower is a corporation or partnership, Borrower is
duly organized and in good standing in its state of organization and
Borrower is duly qualified and in good standing in all states where
the nature and extent of the business transacted by it or the
ownership of its assets makes such qualification necessary; or, if
Borrower is not so qualified, Borrower may cure any such failure
without losing any of its rights or affecting Bank's rights.
(u) Except as heretofore disclosed to Bank in writing, Borrower
is not in default under any material contract, lease or commitment to
which it is a party or by which it is bound, nor does Borrower know of
any dispute regarding any contract, lease or commitment which is
material to the continued financial success and well-being of
Borrower;
(v) there are no controversies pending or, to the best of
Borrower's knowledge, threatened between Borrower and any of its
employees, other than employee grievances arising in the ordinary
course of business which are not, in the aggregate, material to the
continued financial success and well-being of Borrower, and Borrower
is in compliance in all material respects with all federal and state
laws respecting employment and employment terms, conditions and
practices; and
(w) Borrower possesses, and shall continue to possess, adequate
licenses, patents, patent applications, copyrights, service marks,
trademarks, trademark applications, tradestyles and tradenames to
continue to conduct its business as heretofore conducted by it.
Borrower represents, warrants and covenants to Bank that all
representations and warranties of Borrower contained in this Agreement
(whether appearing in paragraphs 10 or 11 hereof or elsewhere) shall
be true at the time of Borrower's execution of this Agreement, shall
survive the execution, delivery and acceptance hereof by the parties
hereto and the closing of the transactions described herein or related
hereto, shall remain true until the repayment in full of all of the
Liabilities and termination of this Agreement, and shall be remade by
Borrower at the time each Loan is made pursuant to this Agreement.
11. ADDITIONAL COVENANTS OF BORROWER.
Until payment or satisfaction in full of all Liabilities and
termination of this Agreement, unless Borrower obtains Bank's prior
written consent waiving or modifying any of Borrower's covenants
hereunder in any specific instance, Borrower agrees as follows:
(a) Borrower shall at all times keep accurate and complete
books, records and accounts with respect to all of Borrower's business
activities, in accordance with sound accounting practices and
generally accepted accounting principles consistently applied, and
shall keep such books, records and accounts, and any copies thereof,
only at the addresses indicated for such purpose on Exhibit B;
(b) Borrower agrees to deliver to Bank the following financial
information, all of which shall be prepared in accordance with
generally accepted accounting principles consistently applied: (i) no
later than twenty-five (25) days after each fiscal month, copies of
internally prepared financial statements, including, without
limitation, balance sheets and statements of income, retained earnings
and cash flow of Borrower, certified by the Chief Financial Officer of
Borrower; (ii) no later than forty-five (45) days after the end of
each of the first three quarters of Borrower's fiscal year a balance
sheet, operating statement and reconciliation of surplus of Borrower,
which quarterly financial statements may be unaudited but shall be
certified by the Chief Financial Officer of Borrower; and (iii) no
later than ninety (90) days after the end of each of Borrower's fiscal
years, audited annual financial statements with an unqualified
certification by independent certified public accountants selected by
Borrower and reasonably satisfactory to Bank, which financial
statements shall be accompanied by a letter from such accountants
acknowledging that they are aware that a primary intent of Borrower in
obtaining such financial statements is to influence Bank and that Bank
is relying upon such financial statements in connection with the
exercise of its rights hereunder;
(c) Borrower shall promptly advise Bank in writing of any
material adverse change in the business, assets or condition,
financial or otherwise, of Borrower, the occurrence of any Event of
Default hereunder or the occurrence of any event which, if uncured,
will become an Event of Default hereunder after notice or lapse of
time (or both);
(d) Bank, or any Persons designated by it, shall have the
right, at any time, to call at Borrower's places of business at any
reasonable times, and, without hindrance or delay, to inspect the
Collateral and to inspect, audit, check and make extracts from
Borrower's books, records, journals, orders, receipts and any
correspondence and other data relating to Borrower's business, the
Collateral or any transactions between the parties hereto, and shall
have the right to make such verification concerning Borrower's
business as Bank may consider reasonable under the circumstances.
Borrower shall furnish to Bank such information relevant to Bank's
rights under this Agreement as Bank shall at any time and from time to
time request. Borrower authorizes Bank to discuss the affairs,
finances and business of Borrower with any officers, employees or
directors of Borrower or with any Affiliate or the officers, employees
or directors of any Affiliate, and to discuss the financial condition
of Borrower with Borrower's independent public accountants. Any such
discussions shall be without liability to Bank or to Borrower's
independent public accountants. Borrower shall pay to Bank all
customary fees and out-of-pocket expenses incurred by Bank in the
exercise of its rights hereunder, and all of such fees and expenses
shall constitute Loans hereunder, payable on demand and, until paid,
shall bear interest at the highest rate then applicable to Loans
hereunder;
(e) Borrower shall:
(i) keep the Collateral properly housed and shall keep
the Collateral insured for the full insurable value thereof against
loss or damage by fire, theft, explosion, sprinklers, collision (in
the case of motor vehicles) and such other risks as are customarily
insured against by Persons engaged in businesses similar to that of
Borrower, with such companies, in such amounts and under policies in
such form as shall be satisfactory to Bank. Original (or certified)
copies of such policies of insurance have been or shall be delivered
to Bank within thirty (30) days after the date hereof, together with
evidence of payment of all premiums therefor, and shall contain an
endorsement, in form and substance acceptable to Bank, showing loss
under such insurance policies payable to Bank. Such endorsement, or
an independent instrument furnished to Bank, shall provide that the
insurance company shall give Bank at least thirty (30) days written
notice before any such policy of insurance is altered or canceled and
that no act, whether willful or negligent, or default of Borrower or
any other Person shall affect the right of Bank to recover under such
policy of insurance in case of loss or damage. Borrower hereby
directs all insurers under such policies of insurance to pay all
proceeds payable thereunder directly to Bank. Borrower irrevocably,
makes, constitutes and appoints Bank (and all officers, employees or
agents designated by Bank) as Borrower's true and lawful attorney (and
agent-in-fact) for the purpose of making, settling and adjusting
claims under such policies of insurance, endorsing the name of
Borrower on any check, draft, instrument or other item of payment for
the proceeds of such policies of insurance and making all
determinations and decisions with respect to such policies of
insurance; provided, that no Event of Default shall have occurred and
is continuing, Borrower may make, settle and adjust claims involving
less that Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00)
in the aggregate per fiscal year without Bank's consent; and
(ii) maintain, at its expense, such public liability and
third party property damage insurance as is customary for Persons
engaged in businesses similar to that of Borrower with such companies
and in such amounts, with such deductibles and under policies in such
form as shall be satisfactory to Bank and original (or certified)
copies of such policies have been or shall be delivered to Bank within
thirty (30) days after the date hereof, together with evidence of
payment of all premiums therefor; each such policy shall contain an
endorsement showing Bank as additional insured thereunder and
providing that the insurance company shall give Bank at least thirty
(30) days written notice before any such policy shall be altered or
canceled.
If Borrower at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required above or to pay any
premium in whole or a part relating thereto, then Bank, without
waiving or releasing any obligation or default by Borrower hereunder,
may (but shall be under no obligation to) obtain and maintain such
policies of insurance and pay such premiums and take such other
actions with respect thereto as Bank deems advisable. All sums
disbursed by Bank in connection with any such actions, including,
without limitation, court costs, expenses, other charges relating
thereto and reasonable attorneys' fees, shall constitute Loans
hereunder, shall be payable on demand by Borrower to Bank and, until
paid, shall bear interest at the highest rate then applicable to Loans
hereunder;
(f) Borrower shall not use the Collateral, or any part thereof,
in any unlawful business or for any unlawful purpose or use or
maintain any of the Collateral in any manner that does or could result
in material damage to the environment or a violation of any applicable
environmental laws, rules or regulations; shall keep the Collateral in
good condition, repair and order; shall permit Bank to examine any of
the Collateral at any time and wherever the Collateral may be located;
shall not permit the Collateral, or any part thereof, to be levied
upon under execution, attachment, distraint or other legal process;
shall not sell, lease, grant a security interest in or otherwise
dispose of any of the Collateral except as expressly permitted by this
Agreement; and shall not secrete or abandon any of the Collateral, or
remove or permit removal of any of the Collateral from any of the
locations listed on Exhibit B or in any written notice to Bank
pursuant to paragraph 10(b) hereof, except for the removal of
Inventory sold in the ordinary course of Borrower's business as
permitted herein;
(g) all monies and other property obtained by Borrower from
Bank pursuant to this Agreement will be used solely for business
purposes of Borrower;
(h) Borrower shall, at the request of Bank, indicate on its
records concerning the Collateral a notation, in form satisfactory to
Bank, of the security interest of Bank hereunder; and Borrower shall
not maintain duplicates or copies of such records at any address other
than Borrower's principal place of business set forth on the first
page of this Agreement;
(i) Borrower shall file all required tax returns and pay all of
its taxes when due, subject to any extensions granted by the
applicable taxing authority, including, without limitation, taxes
imposed by federal, state or municipal agencies, and shall cause any
liens for taxes to be promptly released; provided, that Borrower shall
have the right to contest the payment of such taxes in good faith by
appropriate proceedings so long as (i) the amount so contested is
shown on Borrower's financial statements, (ii) the contesting of any
such payment does not give rise to a lien for taxes, (iii) Borrower
keeps on deposit with Bank (such deposit to be held without interest)
an amount of money which, in the sole judgment of Bank, is sufficient
to pay such taxes and any interest or penalties that may accrue
thereon, and (iv) if Borrower fails to prosecute such contest with
reasonable diligence, Bank may apply the money so deposited in payment
of such taxes. If Borrower fails to pay any such taxes and in the
absence of any such contest by Borrower, Bank may (but shall be under
no obligation to) advance and pay any sums required to pay any such
taxes and/or to secure the release of any lien therefor, and any sums
so advanced by Bank shall constitute Loans hereunder, shall be payable
by Borrower to Bank on demand, and, until paid, shall bear interest at
the highest rate then applicable to Loans hereunder;
(j) Borrower shall not assume, guarantee or endorse, or
otherwise become liable in connection with, the obligations of any
Person, except by endorsement of instruments for deposit or collection
or similar transactions in the ordinary course of business;
(k) Borrower shall not enter into any merger or consolidation,
or sell, lease or otherwise dispose of all or substantially all of its
assets, or enter into any transaction outside the ordinary course of
Borrower's business, including, without limitation, any purchase,
redemption or retirement of any shares of any class of its stock, and
any issuance of any shares of, or warrants or other rights to receive
or purchase any shares of, any class of its stock; provided, however,
that Borrower may (i) grant options to purchase;
(l) Borrower shall not declare or pay any dividend or other
distribution (whether in cash or in kind) on any class of its stock
(if Borrower is a corporation) or on account of any equity interest in
Borrower (if Borrower is a partnership or other type of entity);
(m) Borrower shall not purchase or otherwise acquire, or
contract to purchase or otherwise acquire, the obligations or stock of
any Person, other than direct obligations of the United States;
(n) Borrower shall not amend its organizational documents or
change its fiscal year; where such actions would have an adverse
effect on the Borrower's business, property, assets, operations or
condition, financial or otherwise, as determined by Bank in its sole
discretion, provided that Bank receives ten (10) days prior written
notice of such amendment or change;
(o) See Exhibit A
(p) Borrower shall reimburse Bank for all costs and expenses,
including, without limitation, legal expenses and reasonable
attorneys' fees, incurred by Bank in connection with documentation and
consummation of this transaction and any other transactions between
Borrower and Bank, including, without limitation, Uniform Commercial
Code and other public record searches, lien filings, Federal Express
or similar express or messenger delivery, appraisal costs, surveys,
title insurance and environmental audit or review costs, and in
seeking to collect, protect or enforce any rights in or to the
Collateral or incurred by Bank in seeking to collect any Liabilities
and to administer and enforce any of Bank's rights under this
Agreement. Borrower shall also pay all normal service charges with
respect to all accounts maintained by Borrower with Bank and any
additional services requested by Borrower from Bank. All such costs,
expenses and charges shall constitute Loans hereunder, shall be
payable by Borrower to Bank on demand, and, until paid, shall bear
interest at the highest rate then applicable to Loans hereunder.
12. DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default" by Borrower hereunder:
(a) the failure of any Obligor to pay when due, declared due,
or demanded by Bank, any of the Liabilities;
(b) the failure of any Obligor to perform, keep or observe any
of the covenants, conditions, promises, agreements or obligations of
such Obligor under this Agreement or any of the Other Agreements;
provided that any such failure by Borrower under this Agreement shall
not constitute an Event of Default and the continuance thereof
hereunder until the tenth (10th) day following written notice thereof.
Bank agrees to endeavor to provide a copy of such notice of default to
the law firm of Xxxxxxx X. Kream, Esq. by mail at the mailing address
of 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or by facsimile
transmission at facsimile number (000) 000-0000. Failure of Bank to
provide such copy of notice of default shall not impair Bank's rights
hereunder;
(c) the failure of any Obligor to perform, keep or observe any
of the covenants, conditions, promises, agreements or obligations of
such Obligor under any other agreement with any Person if such failure
may have a material adverse effect on such Obligor's business,
property, assets, operations or condition, financial or otherwise;
(d) the making or furnishing by any Obligor to Bank of any
representation, warranty, certificate, schedule, report or other
communication within or in connection with this Agreement or the Other
Agreements or in connection with any other agreement between such
Obligor and Bank, which is untrue or misleading in any material
respect;
(e) the loss, theft, damage or destruction of any of the
Collateral in an amount in excess of One Hundred Thousand and No/100
Dollars ($100,000.00) in the aggregate for all such events during any
year of the Original Term or any Renewal Term as determined by Bank in
its sole discretion, or (except as permitted hereby) sale, lease or
furnishing under a contract of service of any of the Collateral;
(f) the creation (whether voluntary or involuntary) of, or any
attempt to create, any lien or other encumbrance upon any of the
Collateral, other than the Permitted Liens, and involuntary liens
securing amounts less than One Hundred Thousand and No/100 Dollars
($100,000.00) and which are released within ten (10) days of its
creation, or the making or any attempt to make any levy, seizure or
attachment thereof; provided that with respect to states in which
creditors may obtain a prejudgment attachment without notice, such
attachment shall be an Event of Default only if the attachment remains
in effect for ten (10) days;
(g) the commencement of any proceedings in bankruptcy by or
against any Obligor or for the liquidation or reorganization of any
Obligor, or alleging that such Obligor is insolvent or unable to pay
its debts as they mature, or for the readjustment or arrangement of
any Obligor's debts, whether under the United States Bankruptcy Code
or under any other law, whether state or federal, now or hereafter
existing for the relief of debtors, or the commencement of any
analogous statutory or non-statutory proceedings involving any
Obligor; provided, however, that if such commencement of proceedings
against such Obligor is involuntary, such action shall not constitute
an Event of Default unless such proceedings are not dismissed within
sixty (60) days after the commencement of such proceedings;
(h) the appointment of a receiver or trustee for any Obligor,
for any of the Collateral or for any substantial part of any Obligor's
assets or the institution of any proceedings for the dissolution, or
the full or partial liquidation, or the merger or consolidation, of
any Obligor which is a corporation or a partnership; provided,
however, that if such appointment or commencement of proceedings
against such Obligor is involuntary, such action shall not constitute
an Event of Default unless such appointment is not revoked or such
proceedings are not dismissed within sixty (60) days after the
commencement of such proceedings;
(i) the entry of any judgment or order against any Obligor
which remains unsatisfied or undischarged and in effect for thirty
(30) days after such entry without a stay of enforcement or execution,
to the extent such judgments exceed One Hundred Thousand and No/100
Dollars ($100,000.00) outstanding at any time;
(j) the death of any Obligor who is a natural Person, or of any
partner of any Obligor which is a partnership, or of any natural
person who owns a material interest in a corporate Obligor, or the
dissolution of any Obligor which is a partnership or corporation;
(k) the occurrence of an event of default under, or the
revocation or termination of, any agreement, instrument or document
executed and delivered by any Person to Bank pursuant to which such
Person has guaranteed to Bank the payment of all or any of the
Liabilities or has granted Bank a security interest in or lien upon
some or all of such Person's real and/or personal property to secure
the payment of all or any of the Liabilities;
(l) the institution in any court of a criminal proceeding
against any Obligor, or the indictment of any Obligor for any crime;
and
(m) Bank shall reasonably feel insecure for any material reason
whatsoever, including, without limitation, fear of removal or waste of
the Collateral, or any part thereof.
13. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Upon the occurrence of an Event of Default described in
paragraph 12(g) hereof, all of Borrower's Liabilities shall
immediately and automatically become due and payable, without notice
of any kind. Upon the occurrence of any other Event of Default, all
Liabilities may, at the option of Bank, and without demand, notice or
legal process of any kind, be declared, and immediately shall become,
due and payable.
(b) Upon the occurrence of an Event of Default, Bank may
exercise from time to time any rights and remedies available to it
under the Uniform Commercial Code and any other applicable law in
addition to, and not in lieu of, any rights and remedies expressly
granted in this Agreement or in any of the Other Agreements and all of
Bank's rights and remedies shall be cumulative and non-exclusive to
the extent permitted by law. In particular, but not by way of
limitation of the foregoing, Bank may, without notice, demand or legal
process of any kind, take possession of any or all of the Collateral
(in addition to Collateral of which it already has possession),
wherever it may be found, and for that purpose may pursue the same
wherever it may be found, and may enter into any of Borrower's
premises where any of the Collateral may be, and search for, take
possession of, remove, keep and store any of the Collateral until the
same shall be sold or otherwise disposed of, and Bank shall have the
right to store the same at any of Borrower's premises without cost to
Bank. At Bank's request, Borrower shall, at Borrower's expense,
assemble the Collateral and make it available to Bank at one or more
places to be designated by Bank and reasonably convenient to Bank and
Borrower. Borrower recognizes that if Borrower fails to perform,
observe or discharge any of its Liabilities under this Agreement or
the Other Agreements, no remedy at law will provide adequate relief to
Bank, and agrees that Bank shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of
proving actual damages. Any notification of intended disposition of
any of the Collateral required by law will be deemed reasonably and
properly given if given at least five (5) calendar days before such
disposition. Any proceeds of any disposition by Bank of any of the
Collateral may be applied by Bank to the payment of expenses in
connection with the Collateral, including, without limitation, legal
expenses and reasonable attorneys' fees, and any balance of such
proceeds may be applied by Bank toward the payment of such of the
Liabilities, and in such order of application, as Bank may from time
to time elect.
14. INDEMNIFICATION.
Borrower agrees to defend (with counsel reasonably satisfactory
to Bank), protect, indemnify and hold harmless Bank, each affiliate or
subsidiary of Bank, and each of their respective officers, directors,
employees, attorneys and agents (each an "Indemnified Party") from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature (including, without limitation,
the disbursements and the reasonable fees of counsel for each
Indemnified Party in connection with any investigative, administrative
or judicial proceeding, whether or not the Indemnified Party shall be
designated a party thereto), which may be imposed on, incurred by, or
asserted against, any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal, state or local laws or
regulations, including, without limitation, securities, environmental
and commercial laws and regulations, under common law or in equity, or
based on contract or otherwise) in any manner relating to or arising
out of this Agreement or any Other Agreement, or any act, event or
transaction related or attendant thereto, the making and the
management of the Loans or any Letters of Credit or the use or
intended use of the proceeds of the Loans or any Letters of Credit;
provided, however, that Borrower shall not have any obligation
hereunder to any Indemnified Party with respect to matters caused by
or resulting from the willful misconduct or gross negligence of such
Indemnified Party. To the extent that the undertaking to indemnify
set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Borrower shall satisfy such
undertaking to the maximum extent permitted by applicable law. Any
liability, obligation, loss, damage, penalty, cost or expense covered
by this indemnity shall be paid to each Indemnified Party on demand,
and, failing prompt payment, shall, together with interest thereon at
the highest rate then applicable to Loans hereunder from the date
incurred by each Indemnified Party until paid by Borrower, be added to
the Liabilities of Borrower and be secured by the Collateral. The
provisions of this paragraph 14 shall survive the satisfaction and
payment of the other Liabilities and the termination of this
Agreement.
15. NOTICE.
All written notices and other written communications with
respect to this Agreement shall be sent by ordinary, certified or
overnight mail, by telecopy or delivered in person, and in the case of
Bank shall be sent to it at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000, Attention: Asset Based Lending Division, and in
the case of Borrower shall be sent to it at its principal place of
business set forth on the first page of this Agreement.
16. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.
This Agreement and the Other Agreements are submitted by
Borrower to Bank for Bank's acceptance or rejection at Bank's
principal place of business as an offer by Borrower to borrow monies
from Bank now and from time to time hereafter, and shall not be
binding upon Bank or become effective until accepted by Bank, in
writing, at said place of business. If so accepted by Bank, this
Agreement and the Other Agreements shall be deemed to have been made
at said place of business. THIS AGREEMENT AND THE OTHER AGREEMENTS
SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF
ILLINOIS AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION,
EFFECT AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT LIMITATION, THE
LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, BUT EXCLUDING
PERFECTION OF THE SECURITY INTERESTS IN THE COLLATERAL, WHICH SHALL BE
GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT JURISDICTION. If
any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or remaining provisions of this
Agreement.
To induce Bank to accept this Agreement, Borrower irrevocably agrees
that, subject to Bank's sole and absolute election, ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR
RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL
SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO,
STATE OF ILLINOIS. BORROWER HEREBY CONSENTS AND SUBMITS TO THE
JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN SAID
CITY AND STATE. Borrower hereby irrevocably appoints and designates
the Secretary of State of Illinois, whose address is Springfield,
Illinois (or any other person having and maintaining a place of
business in such state whom Borrower may from time to time hereafter
designate upon ten (10) days written notice to Bank and who Bank has
agreed in its sole discretion in writing is satisfactory and who has
executed an agreement in form and substance satisfactory to Bank
agreeing to act as such attorney and agent), as Borrower's true and
lawful attorney and duly authorized agent for acceptance of service of
legal process. Borrower agrees that service of such process upon such
person shall constitute personal service of such process upon
Borrower. Bank agrees to endeavor to provide a copy of such process to
the law firm of Xxxxxxx X. Kream, Esq. by mail at the mailing address
of 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or by facsimile
transmission at facsimile number (000) 000-0000. Failure of Bank to
provide a copy of such process shall not impair Bank's rights
hereunder. BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR
CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST BORROWER BY BANK IN
ACCORDANCE WITH THIS PARAGRAPH.
17. MODIFICATION AND BENEFIT OF AGREEMENT.
This Agreement and the Other Agreements may not be modified,
altered or amended except by an agreement in writing signed by
Borrower and Bank. Borrower may not sell, assign or transfer this
Agreement or the Other Agreements or any portion thereof, including,
without limitation, Borrower's rights, titles, interest, remedies,
powers or duties hereunder and thereunder. Borrower hereby consents
to Bank's sale, assignment, transfer or other disposition, at any time
and from time to time hereafter, of this Agreement or the Other
Agreements, or of any portion thereof, or participations therein,
including, without limitation, Bank's rights, titles, interest,
remedies, powers and/or duties and agrees that it shall execute and
deliver such documents as Bank may request in connection with any such
sale, assignment, transfer or other disposition.
18. HEADINGS OF SUBDIVISIONS.
The headings of subdivisions in this Agreement are for
convenience of reference only, and shall not govern the interpretation
of any of the provisions of this Agreement.
19. POWER OF ATTORNEY.
Borrower acknowledges and agrees that its appointment of Bank as
its attorney and agent-in-fact for the purposes specified in this
Agreement is an appointment coupled with an interest and shall be
irrevocable until all of the Liabilities are paid in full and this
Agreement is terminated.
20. WAIVER OF JURY TRIAL; OTHER WAIVERS.
(a) BORROWER AND BANK EACH HEREBY WAIVE ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY
TO THIS AGREEMENT, ANY OF THE OTHER AGREEMENTS, THE LIABILITIES, THE
COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWER OR BANK OR WHICH,
IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE
RELATIONSHIP BETWEEN BORROWER AND BANK. IN NO EVENT SHALL BANK BE
LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
(b) Borrower hereby waives demand, presentment, protest and
notice of nonpayment, and further waives the benefit of all valuation,
appraisal and exemption laws.
(c) BORROWER AND BANK EACH HEREBY WAIVE ALL RIGHTS TO NOTICE
(EXCEPT AS OTHERWISE PROVIDED HEREIN) AND HEARING OF ANY KIND PRIOR TO
THE EXERCISE BY BANK OF ITS RIGHTS TO REPOSSESS THE COLLATERAL OF
BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON
SUCH COLLATERAL; provided that in the event that Bank seeks to enforce
its rights hereunder by judicial process, Bank shall provide Borrower
with such notices as are required by law.
(d) Bank's failure, at any time or times hereafter, to require
strict performance by Borrower of any provision of this Agreement or
any of the Other Agreements shall not waive, affect or diminish any
right of Bank thereafter to demand strict compliance and performance
therewith. Any suspension or waiver by Bank of an Event of Default
under this Agreement or any default under any of the Other Agreements
shall not suspend, waive or affect any other Event of Default under
this Agreement or any other default under any of the Other Agreements,
whether the same is prior or subsequent thereto and whether of the
same or of a different kind or character. No delay on the part of
Bank in the exercise of any right or remedy under this Agreement or
any Other Agreement shall preclude other or further exercise thereof
or the exercise of any right or remedy. None of the undertakings,
agreements, warranties, covenants and representations of Borrower
contained in this Agreement or any of the Other Agreements and no
Event of Default under this Agreement or default under any of the
Other Agreements shall be deemed to have been suspended or waived by
Bank unless such suspension or waiver is in writing, signed by a duly
authorized officer of Bank and directed to Borrower specifying such
suspension or waiver.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the 6th day of June , 19 96 .
Plymouth Rubber Company, Inc. LASALLE NATIONAL BANK
By Xxxxx X. Xxxxxxx By
Title Vice President - Finance Title
and
By
Title
EXHIBIT B - BUSINESS AND COLLATERAL LOCATIONS
Attached to and made a part of that certain Loan and Security
Agreement of even date herewith between
("Borrower") and LASALLE NATIONAL BANK ("Bank").
A. Borrower's Business Locations (please indicate which location is
the principal place of business and at which locations originals and
all copies of Borrower's books, records and accounts are kept).
1.
2.
3.
B. Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and
all post office boxes of Borrower. Please indicate the relationship
of such location to Borrower (i.e. public warehouse, processor, etc.).
1.
2.
3.
\rar (c:\docs\std-1\22) 12/95
EXHIBIT A-SPECIAL PROVISIONS
Attached to and made a part of that certain Loan and Security
Agreement of even date herewith between Brite-Line Technologies, Inc.
("Borrower") and LaSalle National Bank ("Bank").
CREDIT TERMS
(1) LOAN LIMIT: Bank may, in its sole discretion, advance an amount
up to the sum of the following sublimits (the "Loan Limit"):
(a) Subject to subparagraph (2) of this Exhibit A, up to
eighty-five percent (85%) of the face amount (less
maximum discounts, credits and allowances which may be
taken by or granted to Account Debtors in connection
therewith) of Borrower's Eligible Accounts; provided,
that with respect to Eligible Accounts which are payable
in currencies other than U.S. Dollars, the face amount
and all discounts, credits and allowances shall be
determined using the U.S. Dollar equivalent thereof at
such time, determined with such frequency as Bank shall
require, but not less than weekly, based on the exchange
rates published in the Wall Street Journal on the date of
determination; plus
(b) Up to fifty-five percent (55%) of the lower of the cost
or market value of Borrower's Eligible Inventory or One
Million Two Hundred Fifty Thousand and No/100 Dollars
($1,250,000.00), whichever is less; plus
(c) Such reserves as Bank elects, in its sole discretion, to
establish from time to time;
provided, that the aggregate amount of: (i) Loan made
pursuant to subparagraph (b) above and (ii) Loans, as
such term is defined in that certain Loan and Security
Agreement entered into by and between plymouth Rubber
Company, inc. ("Plymouth")and Bank dated June 6, 1996, as
it may be amended from time to time (the ("Plymouth
Agreement"), made pursuant to subparagraph 1(b) of Exhibit
A of the Plymouth Agreement shall in no event exceed
Seven Million Two Hundred Fifty Thousand No/100 Dollars
($7,250,000);
further provided, that the aggregate Loan Limit shall in
no event exceed Three Million Five Hundred Thousand and
No./100 Dollars ($3,500,000), except as such amount may
be increased or decreased by Bank, in its sole
discretion, from time to time; and
further provided that the aggregate amount of Loans to
(i) Borrower under this Agreement and (ii) the aggregate
amount of Loans to Plymouth under the Plymouth Agreement
shall in no event exceed Fifteen Million and No/100
Dollars ($15,000,000).
(2) ELIGIBLE ACCOUNTS CRITERIA REVISIONS:
Subparagraph 1(d)(xii) of the Agreement is hereby amended in its
entirety to read as follows:
The Account Debtor is a resident or citizen of and is located
within the United States of America or is a resident or citizen
of and is located within a foreign country and with respect to
EXHIBIT A - SPECIAL PROVISIONS - PAGE 2
Account Debtors who are residents or citizens of and are located
within a foreign country, the Account is supported by (i) a
Letter of Credit which is in form and substance satisfactory to
Bank, issued by a financial institution acceptable to Bank and
assigned to Bank in a manner acceptable to Bank or (ii) credit
insurance with an endorsement acceptable to Bank and assigned to
Bank in a manner acceptable to Bank.
(3) INTEREST RATE: Subject to the terms and conditions set forth
below, the Loans shall bear interest at the per annum rate of
interest set forth in subsection (a) or (b) below:
(a) One-fourth of one percent (1/4 of 1%) per annum in excess
of Bank's publicly announced prime rate (which is not
intended to be Bank's lowest or most favorable rate in
effect at any time) (the "Prime Rate") in effect from
time to time, payable on the last Business Day of each
month in arrears. Said rate of interest shall increase
or decrease by an amount equal to each increase or
decrease in the Prime Rate effective on the effective
date of each such change in the Prime Rate.
(b) Two and one-fourth percent (2-1/4%) per annum in excess
of the per annum rate of interest at which U.S. Dollar
deposits of an amount comparable to the amount of the
Loans and for a period equal to the relevant Interest
Period (as hereinafter defined) are offered generally to
Bank (rounded upward if necessary to the nearest 1/16 of
1.00%) in the London Interbank Eurodollar market at 11:00
a.m. (London time) two (2) Business Days prior to the
commencement of each Interest Period ("LIBOR"), such rate
to remain fixed for such Interest Period. "Interest
Period" shall mean any continuous period of ninety (90)
days, as selected from time to time by Borrower by
irrevocable notice (in writing, by telex, telegram or
cable) given to Bank not less than three (3) Business
Days prior to the first day of each respective Interest
Period) commencing on the date hereof; provided that:
(i) each such period occurring after such initial period
shall commence on the day on which the immediately
preceding period expires; (ii) the final Interest Period
shall be such that its expiration occurs on or before the
end of the Original Term or any Renewal Term; and (iii)
if for any reason Borrower shall fail to timely select a
period, then such Loans shall continue as, or revert to,
Prime Rate Loans. Interest shall be payable on the last
Business Day of each month, at maturity, and on the date
of any payment hereon by Borrower.
Upon the occurrence of an Event of Default and the
continuance thereof, the Loans shall bear interest at the
rate of two percent (2.0%) per annum in excess of the
interest rate otherwise payable thereon, which interest
shall be payable on demand. All interest shall be
calculated on the basis of a 360-day year.
(3).(1) OTHER LIBOR PROVISIONS:
(a) Subject to the provisions of this Agreement, Borrower
shall have the option (i) as of any date, to convert all
or any part of the Prime Rate Loans to, or request that
new Loans be made as, LIBOR Rate Loans of various
Interest Periods, (ii) as of the last day of any Interest
EXHIBIT A - SPECIAL PROVISIONS - PAGE 3
Period, to continue all or any portion of the relevant
LIBOR Rate Loans as LIBOR Rate Loans; (iii) as of the
last day of any Interest Period, to convert all or any
portion of the LIBOR Rate Loans to Prime Rate Loans; and
(iv) at any time, to request new Loans as Prime Rate
Loans; provided, that Loans may not be continued as or
converted to LIBOR Rate Loans, if the continuation or
conversion thereof would violate the provisions of
Paragraphs (3).(1)(b) and (3).(1)(c) of this Exhibit A or
if an Event of Default has occurred and is continuing.
(b) Bank's determination of LIBOR as provided above shall be
conclusive, absent manifest error. Furthermore, if Bank
determines, in good faith (which determination shall be
conclusive, absent manifest error), prior to the
commencement of any Interest Period that (i) U.S. Dollar
deposits of sufficient amount and maturity for funding
the Loans are not available to Bank in the London
Interbank Eurodollar market in the ordinary course of
business, or (ii) by reason of circumstances affecting
the London Interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the rate of interest
to be applicable to the Loans requested by Borrower to be
LIBOR Rate Loans or the Loans bearing interest at the
rates set forth in Paragraph (3)(b) of this Exhibit A
shall not represent the effective pricing to Bank for
U.S. Dollar deposits of a comparable amount for the
relevant period (such as for example, but not limited to,
official reserve requirements required by Regulation D to
the extent not given effect in determining the rate),
Bank shall promptly notify Borrower and (x) all existing
LIBOR Rate Loans shall convert to Prime Rate Loans upon
the end of the applicable Interest Period, and (y) no
additional LIBOR Rate Loans shall be made until such
circumstances are cured.
(c) If, after the date hereof, the introduction of, or any
change in any applicable law, treaty, rule, regulation or
guideline or in the interpretation or administration
thereof by any governmental authority or any central bank
or other fiscal, monetary or other authority having
jurisdiction over Bank or its lending offices (a
"Regulatory Change"), shall, in the opinion of counsel to
Bank, make it unlawful for Bank to make or maintain LIBOR
Rate Loans, then Bank shall promptly notify Borrower and
(i) the LIBOR Rate Loans shall immediately convert to
Prime Rate Loans on the last Business Day of the then
existing Interest Period or on such earlier date as
required by law and (ii) no additional LIBOR Rate Loans
shall be made until such circumstance is cured.
(d) If, for any reason, a LIBOR Rate Loan is paid prior to
the last Business Day of any Interest Period or if a
LIBOR Rate Loan does not occur on a date specified by
Borrower in its request (other than as a result of a
default by Bank), Borrower agrees to indemnify Bank
against any loss (including any loss on redeployment of
the funds repaid), cost or expense incurred by Bank as a
result of such prepayment.
(e) If any Regulatory Change (whether or not having the force
of law) shall (i) impose, modify or deem applicable any
assessment, reserve, special deposit or similar
requirement against assets held by, or deposits in or for
the account of or loans by, or any other acquisition of
funds or disbursements by, Bank; (ii) subject Bank or the
LIBOR Rate Loans to any tax, duty, charge, stamp tax or
EXHIBIT A - SPECIAL PROVISIONS - PAGE 4
fee or change the basis of taxation of payments to Bank
of principal or interest due from Borrower to Bank
hereunder (other than a change in the taxation of the
overall net income of Bank); or (c) impose on Bank any
other condition regarding the LIBOR Rate Loans or Bank's
funding thereof, and Bank shall determine (which
determination shall be conclusive, absent any manifest
error) that the result of the foregoing is to increase
the cost to Bank of making or maintaining the LIBOR Rate
Loans or to reduce the amount of principal or interest
received by Bank hereunder, then Borrower shall pay to
Bank, on demand, such additional amounts as Bank shall,
from time to time, determine are sufficient to compensate
and indemnify Bank from such increased cost or reduced
amount.
(f) Each request for LIBOR Rate Loans shall be in an amount
not less than Five Hundred Thousand and No/100 Dollars
($500,000.00), and in integral multiples of One Hundred
Thousand and No/100 Dollars ($100,000.00).
(g) Unless otherwise specified by Borrower, all Loans shall
be Prime Rate Loans.
(h) No more than three (3) Interest Periods may be in effect
with respect to outstanding LIBOR Rate Loans at any one
time.
(i) The maximum amount of Libor Rate Loans outstanding at any
one time shall not exceed fifty percent (50%) of the
aggregate Loan Limit.
(4) FEES AND CHARGES:
(a) Facilities Fees: Borrower and Plymouth Shall jointly pay
to Bank an annual facilities fee equal to three-eighths
of one percent (3/8 of 1%) of the aggregate Loan Limit of
Borrower and Plymouth, which fee shall be fully earned by
Bank and payable on June 6, 1997 and on the date of same
day of each year thereafter during the Original Term and
any Renewal Term.
(b) Prepayment Fee: If Borrower elects to terminate this
Agreement prior to the termination date hereof, Borrower
shall pay to Bank a prepayment fee equal to (i) three
percent (3%) of the aggregate Loan Limit if this
Agreement is terminated on or before June 6, 1997 (ii)
two percent (2%) of the aggregate Loan Limit if this
Agreement is terminated after June 6, 1997 and prior to
June 6, 1998; and (iii) one percent (1%) of the aggregate
Loan Limit if this Agreement is terminated after June 6,
1998 but prior to the end of the Original Term or any
year of any Renewal Term; provided that if Borrower sells
all or substantially all of its assets or stock to a
Person other than an Affiliate and such sale is consented
to by Bank and the Liabilities are prepaid and the
Agreement is terminated as a result thereof, then
Borrower shall be required to pay a prepayment fee of one
percent (1%) of the aggregate Loan Limit of Borrower.
ADDITIONS AND CHANGES TO COVENANTS
(5) CHECKING ACCOUNT PROVISIONS: Borrower shall maintain its general
controlled disbursement account with Bank. Normal charges
shall be assessed thereon.
EXHIBIT A - SPECIAL PROVISIONS - PAGE 5
(6) TANGIBLE NET WORTH: Notwithstanding the provisions of
subparagraph 11(o) of the Agreement, Borrower shall at all times
maintain a tangible net worth of not less than the Minimum
Tangible Net Worth, as hereinafter defined. At all times from
March 1, 1997 through November 29, 1997, "Minimum Tangible Net
Worth" shall equal One Million Sixty-Nine Thousand and No/100
Dollars ($1,069,000.00). From November 30, 1997 through November
29, 1998, Minimum Tangible Net Worth shall equal One Million
Three Hundred Nineteen Thousand and No/100 dollars
($1,319,000.00) Thereafter, from November 30th of each year
through November 29th of the following year, Minimum Tangible
Net Worth shall be equal to Minimum Tangible Net Worth on the
last day of the immediately preceding fiscal year plus Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00).
"Tangible Net Worth" being defined for purposes of this
subparagraph as Borrower's shareholders' equity (including
retained earnings) less the book value of all intangible assets
as determined solely by Bank on a consistent basis plus the
amount of any LIFO reserve plus the amount of any debt
subordinated to Bank, all as determined under generally accepted
accounting principles applied on a basis consistent with the
financial statement dated March 1, 1996 except as set forth
herein. For purposes of this subparagraph, (a) intangible
assets are: (i) intangible asset-FAS #87, (ii) deferred tax
asset, net of the valuation reserve-FAS #109, and (iii) trade
names and (b) pension liability adjustments are excluded.
(7) LOANS TO EMPLOYEES: In addition to the restrictions contained
in subparagraph 11(l) of the Agreement, Borrower shall not make
any loan to any Person except loans to employees not exceeding
One Hundred Thousand and No/100 Dollars ($100,000.00) in the
aggregate outstanding at any one time.
(8) PERMITTED BORROWINGS: Notwithstanding the provisions of
subparagraph 10(q) of the Agreement, Borrower may finance or
refinance the acquisition of Equipment, whether by purchase
money financing, lease or otherwise.
ADDITIONS AND CHANGES TO DEFAULT PROVISIONS
(9)ADDITIONAL CROSS DEFAULTS: In addition to the Events of Default
specified in Paragraph 12 of the Agreement, it shall be an Event
of Default hereunder if Plymouth , subject to any applicable
cure period, shall fail to perform, keep or observe any of the
covenants, conditions promises, agreements or other obligations
or Plymouth to Bank under any agreement now ir hereafter
existing between plymouth and Bank, including, without
limitation, that certain Plymouth Agreement or in the event of
termination of said plymouth Agreement.
(10) Change of Control Default: In addition to the Events of Default
specified in Paragraph 12 of the Agreement, it shall be an Event
of Default hereunder if Plymouth shall cease to own at least
100% of the issued and outstanding stock of Borrower.
(11) CHANGE OF MANAGEMENT DEFAULT: In addition of the Events of
Default specified in Paragraph 12 of the Agreement, it shall be
an Event of Default hereunder if Xxxxxxx Xxxxxxxxx shall cease
to be the Chief Executive Officer and President of Borrower.
EXHIBIT A - SPECIAL PROVISIONS - PAGE 6
OTHER PROVISIONS
(12) PERMITTED LIENS: Bank acknowledges that the liens evidenced by
the following filed financing statements and any amendments
thereto, as said financing statements exist as of February 3,
1997, shall constitute Permitted Liens:
9722005452; 9320012721; 932037852; 932073046;
932090200;952091599
CONDITIONS TO CLOSING
(13) ADDITIONAL CONDITIONS TO CLOSING: Bank shall be under no
obligation to consummate the transactions contemplated by this
Agreement until each of the conditions listed in this Paragraph
(13) has been satisfied. Whenever a condition contained herein
requires delivery of an agreement or other document to Bank,
each such agreement or other document shall be in form and
substance satisfactory to Bank in its sole discretion.
(a) Landlord's Agreement: Borrower shall Cause to be executed
in favor of Bank and delivered to Bank a Landlord's
Agreement from each lessor of property(ies) set forth on
Exhibit B, which landlord's Agreement shall include a
copy of the relevant lease.
(b) Guaranties: Borrower shall cause to be executed in favor
of Bank and delivered to Bank the Continuing Unconditional
Guaranty of Plymouth of any and all indebtedness of Borrower
to Bank.
(c) Warehouseman's Letters: Bank hereby acknowledges that
Eligible Inventory is and from time to time may be stored
with a bailee, warehouseman, or similar party at the
locations set forth in Exhibit B. Relative thereto,
Borrower shall cause each such party to execute and
deliver to Bank a Warehouseman's Letter.
(d) Patent, Trademark and License Mortgage: Borrower shall
execute and deliver to Bank a Patent, Trademark and
License Mortgage.
(e) Attorney's Opinion Letter: Borrower shall cause to be
executed and delivered to Bank an Attorney's Opinion
Letter.
\mam (m:\dept\abl\xxxxxxx\docs\plymth\exhibita)
07/02/96 3:15 PM
EXHIBIT B - BUSINESS AND COLLATERAL LOCATIONS
Attached to and made a part of that certain Loan and Security
Agreement of even date herewith between Brite-Line Technologies,
Inc. ("Borrower") and LASALLE NATIONAL BANK ("Bank").
A. Borrower's Business Locations (please indicate which lcoation
is the principal place of business and at which locations
originals and all copies of Borrower's books, records and
accounts are kept).
1. 00000 Xxxx 00xx Xxxxxx (xxxxx place of business/
Xxxxxx, Xxxxxxxx 00000 leased property)
2.
3.
B. Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment
locations) and all post office boxes of Borrower. Please
indicate the relationship of such location to Borrower (i.e.
public warehouse, processor, etc).
1. c/o Midstates Warehouse
000 Xxxx 000xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
2. c/x Xxxx Intermodal Warehouse
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
3. x/x Xxxxxxxxx Xxxxxxx Xxxxxxxxx
0000 Shader
Xxxxxx, Xxxxxxx 00000
4. c/o Southern Warehouse Corporation
0000 Xxxx Xxxxxxxxxxxx
Xxxxxxx, Xxxxx 00000
5. c/o Weber Distribution
00000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Initialled by Borrower:
Initialled by Bank:
