Exhibit 2
LOAN AGREEMENT
This LOAN AGREEMENT is made as of November 30, 1999 by and between
OPTICAL SECURITY GROUP, INC. (the "BORROWER"), a Colorado corporation having its
principal place of business at 000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000, XXX, and APPLIED HOLOGRAPHICS PLC (Registered No. 1688482), a public
limited company incorporated and existing under the laws of England and Wales
having its registered office at 22 Sedling Road, District 6, Washington, Tyne &
Wear XX00 0XX (the "LENDER").
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set
forth in this Section 1 or elsewhere in the provisions of this Loan Agreement
referred to below:
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement
benefits legislation (be it federal, provincial, territorial or otherwise) then
applicable to the Borrower or any of its Subsidiaries.
BALANCE SHEET DATE. March 31, 1999.
BORROWER. As defined in the preamble hereto.
BRIDGESTONE. Bridgestone Technologies, Inc., a Delaware corporation
with its principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx 00000.
BRIDGESTONE ACQUISITION. See Section 5.17.
BRIDGESTONE ACQUISITION DOCUMENTS. All documents, instruments and
agreements which are to be executed in connection with the Bridgestone
Acquisition, all in form and substance satisfactory to the Lender.
BRIDGESTONE GUARANTY. The Guaranty to be made by Bridgestone in favor
of the Lender pursuant to which Bridgestone guaranties to the Lender the payment
and performance of the Obligations and in form and substance satisfactory to the
Lender.
BUSINESS DAY. Any day on which banks are open for ordinary banking
business in Xxx Xxxx, Xxx Xxxx, Xxxxxx, Xxxxxxxx xxx Xxxxxx, Xxxxxxx.
CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 5.18(a).
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CLOSING DATE. The first date on which the conditions set forth in
Section 8 have been satisfied.
CLOSING FEE. See Section 3.1.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of the Borrower
and its Domestic Subsidiaries that are or are intended to be subject to the
security interests created by the Security Documents.
COLLECTED INTEREST. See Section 3.8.
DEFAULT. See Section 10.1.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC SUBSIDIARY. Any Subsidiary of the Borrower which is not a
Foreign Subsidiary.
DRAWDOWN DATE. The date on which the Loan is made or is to be made.
DRAWDOWN TERMINATION DATE. December 10, 1999.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(2) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See Section 5.18(a).
EPA. See Section 5.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
EUROPEAN UNION. The European community established by the Treaty of
Rome of 25 March 1957 as amended by the Single Xxxxxxxx Xxx 0000 and by the
Treaty on European Union which was signed at Maastricht on 7 February 1992 (and
came into being on 1 November 1993) (the Maastricht Treaty) as further amended
from time to time.
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EVENT OF DEFAULT. See Section 10.1.
FOREIGN SUBSIDIARY. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time,
and (b) consistently applied with past financial statements of the Borrower
adopting the same principles, PROVIDED that in each case referred to in this
definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within
the meaning of Section 3(2) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.
GUARANTIES. The several Guaranties, each dated as of the date hereof,
made by each Domestic Subsidiary of the Borrower in favor of the Lender pursuant
to which each Domestic Subsidiary of the Borrower guaranties to the Lender the
payment and performance of the Obligations and in form and substance
satisfactory to the Lender.
HAZARDOUS SUBSTANCES. See Section 5.18(b).
HIGHEST LAWFUL RATE. The maximum non-usurious rate of interest
permitted by applicable law.
INDEBTEDNESS. As to any Person and whether recourse is secured by
or is otherwise available against all or only a portion of the assets of such
Person and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized
Lease,
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(vi) every obligation of such Person under any lease (a
"SYNTHETIC LEASE") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "RECEIVABLES"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(viii) every obligation of such Person (an "EQUITY RELATED
PURCHASE OBLIGATION") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices (a
"DERIVATIVE CONTRACT"),
(x) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (i) through (x) (the "PRIMARY OBLIGATION") of another Person
(the "PRIMARY OBLIGOR"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (A) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (B) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the
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Borrower or any of its wholly-owned Subsidiaries) thereof, excluding amounts
representative of yield or interest earned on such investment, (x) any synthetic
lease shall be the stipulated loss value, termination value or other equivalent
amount, (y) any derivative contract shall be the maximum amount of any
termination or loss payment required to be paid by such Person if such
derivative contract were, at the time of determination, to be terminated by
reason of any event of default or early termination event thereunder, whether or
not such event of default or early termination event has in fact occurred and
(z) any equity related purchase obligation shall be the maximum fixed redemption
or purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price.
INSOLVENCY EVENT. Any of the following events or circumstances: (i) the
Borrower or any of its Subsidiaries organized in the United Kingdom shall be
deemed unable to pay its debts within the meaning of section 123(1) (a), (b), or
(2) of the Xxxxxxxxxx Xxx 0000 (Xxxxxx Xxxxxxx) or shall otherwise become
insolvent or stop or suspend making payments (whether of principal or interest)
with respect to all or any class of its Indebtedness or announce an intention to
do so, (ii) a meeting shall be convened by the Borrower or any of its
Subsidiaries for the purpose of passing any resolution to purchase, reduce or
redeem any of its capital stock or to comply with section 142 of the Companies
Act 1985 (England), (iii) any petition shall be presented or other step taken
for the purpose of the appointment of an administrator or the winding up of the
Borrower or any of its Subsidiaries (not being, in the case of a winding up, a
petition which such Person can demonstrate to the reasonable satisfaction of the
Lender, by providing an opinion of leading counsel to that effect, is frivolous,
vexatious or an abuse of the process of the court or relates to a claim to which
such Person has a good defense and which is being vigorously contested by such
Person) or an order shall be made or resolution passed for the winding up of any
the Borrower or any of its Subsidiaries or a notice shall be issued by convening
a meeting for the purpose of passing any such resolution (except for the purpose
of a solvent amalgamation or reconstitution which shall have been approved by
the Lender), or (iv) any steps shall be taken, or negotiations commenced by the
Borrower or any of its Subsidiaries or by any of their respective creditors with
a view to proposing any kind of composition, compromise or arrangement involving
such Person and any of its creditors or for the presentation of a petition for
the appointment of an administrator.
INTEREST. See Section 3.8.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
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LENDER. As defined in the preamble hereto.
LENDER'S COST OF FUNDS. The rate per annum determined by the Lender in
its sole discretion to be that which fairly expresses as a percentage per annum
the cost to the Lender of funding such principal amount from whatever source it
may select in good faith. For reference purposes only, the Lender's Cost of
Funds as at November 29, 1999 was [LIBOR plus 1.4%].
LENDER'S HEAD OFFICE. 22 Sedling Road, District 6, Washington, Tyne &
Xxxx XX00 0XX, Xxxxxxx.
LIEN. Any mortgage, security interest, pledge, hypothecation,
assignment, attachment, deposit arrangement, encumbrance, lien (statutory,
judgment or otherwise), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any similar
such interest arising under the laws of any applicable domestic or foreign
jurisdiction and including any conditional sale or other title retention
agreement, any financing lease involving substantially the same economic effect
as any of the foregoing and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any domestic or foreign
jurisdiction).
LOAN. The loan made or to be made by the Lender to the Borrower on the
Drawdown Date in the aggregate principal amount not to exceed $10,000,000
pursuant to Section 2.1.
LOAN AGREEMENT. This Loan Agreement, including the Schedules and
Exhibits hereto.
LOAN DOCUMENTS. This Loan Agreement, the Note and the Security
Documents.
LOAN REQUEST. See Section 2.4.
MATURITY DATE. The date which is the earliest to occur of (a) December
31, 2000; or (b) any date specified in a demand notice delivered by the Lender
to the Borrower; PROVIDED, that such date shall not be earlier than six (6)
months from the date of such demand notice; PROVIDED FURTHER, that such demand
notice shall not be delivered to the Borrower prior to the date of termination
of the Merger Agreement pursuant to the terms thereof; or (c) any date which may
be mutually agreed upon in writing by the Borrower and the Lender; PROVIDED,
that the Maturity Date may be accelerated by the Lender in accordance with the
provisions of Section 10.1.
MERGER. See Section 3.1.
MERGER AGREEMENT. That certain Agreement and Plan of Merger, dated
November 30, 1999, by and among the Lender, Newco and the Borrower.
MERGER DOCUMENTS. All documents, instruments and agreements (including
without limitation the Merger Agreement) which are to be executed in connection
with the Merger, all in form and substance satisfactory to the Lender.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
NEWCO. NEWCO, a Colorado corporation and a direct wholly-owned
subsidiary of the Lender.
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NOTE. See Section 2.3.
NOTE RECORD. A Record with respect to a Note.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to the Lender existing on the date of this
Loan Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Loan Agreement or any of the other Loan Documents
or in respect of the Loan or the Note or other instruments at any time
evidencing any thereof.
OECD. The Organization for Economic Cooperation and Development.
OUTSTANDING. With respect to the Loan, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates as defined in the
Security Agreements.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 7.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
RCRA. See Section 5.18(a).
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to the Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by the
Lender with respect to the Loan referred to in the Note.
XXXX. See Section 5.18(a).
SECURITY AGREEMENTS. The several Security Agreements dated as of the
date hereof between the Borrower and its Domestic Subsidiaries and the Lender
and each in form and substance satisfactory to the Lender.
SECURITY DOCUMENTS. The Guaranties, the Bridgestone Guaranty, the
Security Agreements, the Stock Pledge Agreement and all other instruments and
documents, including without limitation Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document.
SENIOR LENDER. Mercantile Safe Deposit & Trust Company, a Maryland
banking and trust company.
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STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement dated as of the date
hereof between the Borrower and the Lender and in form and substance
satisfactory to the Lender.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
UNITED KINGDOM. The United Kingdom of Great Britain and Northern
Ireland.
UNRESTRICTED INTEREST. See Section 3.8.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or person
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
YEAR 2000 COMPLIANT. See Section 5.20.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Loan
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of New York, have the
meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that section
of this Loan Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Loan Agreement as a whole and not to
any particular section or subdivision of this Loan Agreement.
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(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Loan Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Loan Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Lender and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this Loan
Agreement and the other Loan Documents are not intended to be construed
against the Lender merely on account of the Lender's involvement in the
preparation of such documents.
2. THE TERM LOAN.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set
forth in this Loan Agreement, the Lender agrees to lend on the Drawdown Date
in a single draw such amount as requested by the Borrower up to a maximum
aggregate principal amount of $10,000,000. The Drawdown Date shall occur on
any single date from the Closing Date up to and including the Drawdown
Termination Date upon notice by the Borrower to the Lender given in
accordance with Section 2.4. The Borrower's request for the Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in Section 8 and Section 9 have been satisfied on the
date of such request.
2.2. REPAYMENT OF THE LOAN. The Borrower hereby absolutely and
unconditionally promises to pay the Lender on the Maturity Date the entire
unpaid principal amount of the Loan then outstanding and the entire unpaid
amount of all other Obligations (except as may be expressly waived in writing by
the Lender).
2.3. THE NOTE. The Loan shall be evidenced by a promissory note of the
Borrower in substantially the form of Exhibit A hereto (the "NOTE"), dated the
Closing Date and completed with appropriate insertions. The Note shall be
payable to the order of the Lender in a principal amount equal to the aggregate
principal amount of the Loan and representing the obligation of the Borrower to
pay to the Lender such principal amount or, if less, the outstanding amount of
the Loan, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes the Lender to make or cause to be made a notation on the
Note Record reflecting the original principal amount of the Loan and, at or
about the time of the Lender's receipt of any principal payment on the Note, an
appropriate notation on the Note Record reflecting such payment. The aggregate
unpaid amount set forth on the Note Record shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to the Lender, but the failure to
record, or any error in so recording, any such amount on the Note Record shall
not affect the obligations of the Borrower hereunder or under the Note to make
payments of principal of and interest on the Note when due.
2.4. REQUEST FOR LOAN. The Borrower shall give to the Lender written
notice in the form of EXHIBIT B hereto (or telephonic notice confirmed in a
writing in the form of EXHIBIT B hereto) of the Loan requested hereunder (a
"LOAN REQUEST") no less than two (2) Business Days
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prior to the proposed Drawdown Date. Such notice shall specify (a) the principal
amount of the Loan requested, and (b) the proposed Drawdown Date of Loan. Such
notice shall be irrevocable and binding on the Borrower and shall obligate the
Borrower to accept the Loan requested from the Lender on the proposed Drawdown
Date.
2.5. OPTIONAL PREPAYMENT OF LOAN. The Borrower shall have the right at
any time to prepay the Note on or before the Maturity Date, as a whole, or in
part, upon not less than three (3) Business Days prior written notice to the
Lender, without premium or penalty, PROVIDED that each partial prepayment shall
be in the principal amount of $500,000 or an integral multiple thereof. Any
prepayment of principal of the Loan shall include all fees and interest accrued
to the date of prepayment. No amount repaid with respect to the Loan may be
reborrowed.
2.6. INTEREST ON LOAN. Except as otherwise provided in Section 3.7, the
outstanding amount of the Loan shall bear interest at the rate of two percent
(2%) per annum above the Lender's Cost of Funds as in effect from time to
time[; provided, that in the event the Merger Agreement is terminated solely
because (a) the Lender's shareholders failed to approve the Merger, or (b) the
Lender failed to obtain the financing necessary to complete the Merger, or (c)
a material breach by the Lender of any Merger Document, then commencing as of
the Drawdown Date and continuing thereafter the outstanding amount of the Loan
shall bear interest at the rate of one-half percent (1/2%) per annum above the
Lender's Cost of Funds as in effect from time to time]. Interest shall be
payable monthly in arrears on the first day of each calendar month for the
immediately preceding calendar month, commencing on the first such date
following the Drawdown Date, and on the Maturity Date. Any change in the
interest rate resulting from a change in the Lender's Cost of Funds is to be
effective at the beginning of the day of such change in the Lender's Cost of
Funds. The Lender will give the Borrower prompt notice in writing of any change
in the Lender's Cost of Funds. The Borrower promises to pay interest on the
amount of the Loan outstanding from time to time from the Drawdown Date until
the earlier of the Maturity Date or payment in full of the Obligations in
accordance with the provisions of this Section 2.6.
3. CERTAIN GENERAL PROVISIONS.
3.1. CLOSING FEE. Unless otherwise expressly waived in writing by the
Lender in accordance with the terms hereof, the Borrower agrees to pay to the
Lender on the Maturity Date a closing fee in the amount of $1,700,000 (the
"CLOSING FEE"). For the avoidance of doubt, each of the Borrower and the Lender
agree that the Closing Fee shall be deemed fully earned by the Lender on the
Closing Date; PROVIDED, that prior to the Maturity Date the Closing Fee shall
not bear interest and commencing on the Maturity Date and thereafter the Closing
Fee shall bear interest at the rate of six (6%) per annum above the Lender's
Cost of Funds until the Closing Fee is paid in full in cash or otherwise waived.
The Lender agrees to waive the Closing Fee if, as at the Maturity Date, (a) the
Borrower has completed its merger with a wholly-owned Subsidiary of the Lender
pursuant to the terms and conditions set forth in the Merger Agreement and the
other Merger Documents (the "Merger"), or (b) the Merger Agreement has been
terminated solely because either (i) the Lender's shareholders failed to approve
the Merger, or (ii) the Lender failed to obtain the financing necessary to
complete the Merger, or (c) a material breach by the Lender of any Merger
Document.
3.2. FUNDS FOR PAYMENTS.
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3.2.1. PAYMENTS TO LENDER. All payments of principal,
interest, fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made on the due date thereof to the
Lender in Dollars at the Lender's Head Office or at such other place
that the Lender may from time to time designate, in each case such
payment shall be sent by the Borrower not later than 11:00 a.m.
(Denver, Colorado time) and in immediately available funds; PROVIDED,
that in calculating interest hereunder such payment shall only be
credited to the Borrower's account when it is actually received by the
Lender at the Lender's Head Office or at such other place as the Lender
has designated.
3.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions
of any nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Lender on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to
enable the Lender to receive the same net amount which the Lender would
have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Lender
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
3.3. COMPUTATIONS. All computations of interest on the Loan and of
other fees shall be based on a 360-day year and paid for the actual number of
days elapsed. Whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. In the absence of manifest error, the
outstanding amount of the Loan as reflected on the Note Record from time to time
shall be considered correct and binding on the Borrower unless within five (5)
Business Days after receipt of any notice by the Lender of such outstanding
amount, the Lender shall notify the Borrower to the contrary.
3.4. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to the Lender by any regulatory authority (whether or not
having the force of law), shall:
(a) subject the Lender to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Loan
Agreement, the other Loan Documents, or the Note (other than taxes
based upon or measured by the income or profits of the Lender), or
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(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to the Lender of the
principal of or the interest on the Loan or any other amounts payable
to the Lender under this Loan Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Loan Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or commitments of an office of the Lender, or
(d) impose on the Lender any other conditions or requirements
with respect to this Loan Agreement, the other Loan Documents, or the
Note, and the result of any of the foregoing is
(i) to increase the cost to the Lender of making,
funding, issuing, renewing, extending or maintaining the Loan,
or
(ii) to reduce the amount of principal, interest, or
other amount payable to the Lender hereunder on account of the
Loan, or
(iii) to require the Lender to make any payment or to
forego any interest or other sum payable hereunder, the amount
of which payment or foregone interest or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by the Lender from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by the Lender
at any time and from time to time and as often as the occasion therefor may
arise, pay to the Lender such additional amounts as will be sufficient to
compensate the Lender for such additional cost, reduction, payment or foregone
interest or other sum.
3.5. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Section 3.4 and a brief explanation of such amounts which
are due, submitted by the Lender to the Borrower, shall be conclusive, absent
manifest error, that such amounts are due and owing.
3.6. INDEMNITY. The Borrower agrees to indemnify the Lender and to hold
the Lender harmless from and against any loss, cost or expense that the Lender
may sustain or incur as a consequence of (a) default by the Borrower in payment
of the principal amount of or any interest on the Loan as and when due and
payable, including any such loss or expense arising from interest or fees
payable by the Lender to lenders of funds obtained by it in order to maintain
the Loan, (b) default by the Borrower in making a borrowing after the Borrower
has given (or is deemed to have given) a Loan Request, or (c) the making of any
payment on the Loan on a day that is not the Maturity Date, including interest
or fees payable by the Lender to lenders of funds obtained by it in order to
maintain the Loan.
3.7. INTEREST AFTER DEFAULT.
3.7.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loan and all other overdue
amounts payable hereunder or under any of the other Loan Documents
shall bear interest compounded monthly and
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payable on demand at a rate per annum equal to four percent (4%) above
the otherwise applicable rate until such amount shall be paid in full
(after as well as before judgment).
3.7.2. AMOUNTS NOT OVERDUE. During the continuance of a
Default or an Event of Default the principal of the Loan not overdue
shall, until such Default or Event of Default has been cured or
remedied or such Default or Event of Default has been waived in writing
by the Lender, bear interest at a rate per annum equal to four percent
(4%) above the otherwise applicable rate.
3.8. USURY PROVISION. It is not the intention of any parties to this
Loan Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision of
this Loan Agreement or of any other Loan Document, the Lender shall not be
entitled to receive, collect or apply, as interest, charges, fees, penalties
or additional amounts (collectively, referred to herein as "INTEREST") on any
of the Loans or any other Obligation, any amount in excess of the Highest
Lawful Rate. If under the laws of any applicable jurisdiction there is no
legal limitation on the rate of Interest that may be charged with respect to
an obligation owing to the Lender (including, without limitation, the
outstanding principal amount of the Loan, unpaid interest with respect to the
Loan or any other Obligations due and payable under any Loan Document), there
shall be no maximum amount applicable to such obligation, notwithstanding any
reference thereto herein or in any other Loan Document. If at any time the
rate at which interest is payable to the Lender on the Loan or any other
Obligation exceeds the Highest Lawful Rate, the Loan or other Obligation
shall bear interest at the Highest Lawful Rate only but shall continue to
bear interest at the Highest Lawful Rate until such time as the total amount
of interest accrued on the Loan or other Obligation equals (but does not
exceed) the total amount of interest which would have accrued thereon had
there been no Highest Lawful Rate applicable thereto. If at the maturity or
final payment of the Loan or other Obligation (whether at stated maturity, by
acceleration or prepayment or otherwise) the total amount of interest which
has then accrued or been paid thereon as provided above (the "COLLECTED
INTEREST") is less than the total amount of interest which would have accrued
thereon had there been no Highest Lawful Rate applicable thereto (the
"UNRESTRICTED INTEREST"), then the Borrower shall, in addition to the
Collected Interest, pay to the Lender an amount equal to (a) the lesser of
the Unrestricted Interest owed or accrued for the benefit of the Lender and
the total amount of interest which would have accrued thereon for the benefit
of the Lender had the Loan or other Obligation at all times borne Interest at
the Highest Lawful Rate, MINUS (b) the Collected Interest paid for the
account of the Lender. This Section 3.8 shall control every provision of
every agreement pertaining to the transactions contemplated by or contained
in this Loan Agreement or any of the other Loan Documents and shall equally
apply to any guaranty or other obligation of any Subsidiary of the Borrower
or of any other Person under the Loan Documents as if such obligations were
"Obligations" as defined herein.
4. SECURITY AND GUARANTIES.
4.1. SECURITY OF BORROWER. The Obligations shall be secured by a
perfected security interest (subject only to the Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower and its
Domestic Subsidiaries, whether now owned or hereafter acquired, pursuant to the
terms of the Security Documents to which the Borrower or its Domestic
Subsidiaries are a party.
4.2. GUARANTIES OF DOMESTIC SUBSIDIARIES. The Obligations shall also be
guaranteed pursuant to the terms of the Guaranties and the Bridgestone Guaranty.
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5. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Lender as of the date
hereof, as of the date the Loan is made and immediately following the
consummation of the Bridgestone Acquisition as follows:
5.1. CORPORATE AUTHORITY.
5.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
its Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or organization, (b) has all requisite corporate power to
own its property and conduct its business as now conducted and as
presently contemplated, and (c) is in good standing as a foreign
corporation (or similar business entity) and is duly authorized to do
business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a materially
adverse effect on the business, assets or financial condition of the
Borrower or its Subsidiaries.
5.1.2. AUTHORIZATION. The execution, delivery and performance
of this Loan Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate (or similar) authority of such Person, (b) have been duly
authorized by all necessary corporate (or similar organizational)
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which the Borrower or any of its Subsidiaries is subject or any
judgment, order, writ, injunction, license or permit applicable to such
Person, (d) do not conflict with any provision of the corporate charter
or bylaws or other organizational or constitutive documents of, or any
agreement or other instrument binding upon, the Borrower or any of its
Subsidiaries, and (e) except for the Liens granted in favor of the
Lender under this Loan Agreement and the other Loan Documents, do not
result in the creation or imposition of any Lien on any undertaking,
assets, rights or revenues of the Borrower or its Subsidiaries.
5.1.3. ENFORCEABILITY. The execution and delivery of this Loan
Agreement and the other Loan Documents to which the Borrower or any of
its Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
5.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Loan Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
5.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 5.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of
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the Borrower and its Subsidiaries as at the Balance Sheet Date or acquired since
that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
5.4. FISCAL YEAR; FINANCIAL STATEMENTS.
5.4.1. FISCAL AND FINANCIAL YEAR. The Borrower and each of its
Subsidiaries has a fiscal year (or financial year, as applicable) which
is the twelve months ending on March 31 of each calendar year.
5.4.2. FINANCIAL STATEMENTS. There has been furnished to the
Lender a consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement
of income for the fiscal year then ended, certified by the Borrower's
independent certified public accountants. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower not disclosed in said balance sheet and the
related notes thereto.
5.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended, other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of the Borrower or its Subsidiaries. Except as set forth on
SCHEDULE 5.5, since the Balance Sheet Date the Borrower has not made any
Distribution.
5.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
5.7. LITIGATION. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Borrower or any of
its Subsidiaries before any court, tribunal or administrative agency or board
that, if adversely determined, might, either in any case or in the aggregate,
materially adversely affect the properties, assets, financial condition or
business of the Borrower and its Subsidiaries or materially impair the right of
the Borrower and its Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Borrower, or which question
the validity of this Loan Agreement or any of the other Loan Documents, or any
action taken or to be taken pursuant hereto or thereto.
5.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries.
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Neither the Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of the Borrower or any of
its Subsidiaries.
5.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of the Borrower or any of its Subsidiaries.
5.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal, state and foreign income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
5.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
5.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
5.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or rights
thereunder.
5.14. PERFECTION OF SECURITY INTEREST. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Lender's security interest in the Collateral. The
Collateral and the Lender's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses. The Borrower is
the owner of the Collateral free from any Lien, except for Permitted Liens.
5.15. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Borrower or any of its Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than the Borrower or
such Subsidiary could obtain from third parties, none of the officers,
directors, or employees of the Borrower or any of its Subsidiaries is presently
a party to any transaction with the Borrower or any of its Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement or other
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arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the
Borrower, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
5.16. EMPLOYEE BENEFIT PLANS.
5.16.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA
and/or all Applicable Pension Legislation and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by
Section 412 of ERISA. The Borrower has heretofore delivered to the
Lender the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
5.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning
of Section 3(1) or Section 3(2)(B) of ERISA, provides benefit
coverage subsequent to termination of employment, except as required
by Title I, Part 6 of ERISA or the applicable state insurance laws.
The Borrower may terminate each such Plan at any time (or at any
time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower without liability to
any Person other than for claims arising prior to termination.
5.16.3. GUARANTEED PENSION PLANS. Each contribution
required to be made to a Guaranteed Pension Plan, whether required
to be made to avoid the incurrence of an accumulated funding
deficiency, the notice or lien provisions of Section 302(f) of
ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods
has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has
posted security in connection with an amendment to a Guaranteed
Pension Plan pursuant to Section 307 of ERISA or Section 401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed
Pension Plan and there has not been any ERISA Reportable Event
(other than an ERISA Reportable Event as to which the requirement of
30 days notice has been waived), or any other event or condition
which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve
months of the date of this representation), and on the actuarial
methods and assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension Plans within the
meaning of Section 4001 of ERISA did not exceed the aggregate value
of the assets of all such Guaranteed Pension Plans, disregarding for
this purpose the benefit liabilities and assets of any Guaranteed
Pension Plan with assets in excess of benefit liabilities.
5.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
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Section 4201 of ERISA or as a result of a sale of assets described
in Section 4204 of ERISA. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of Section
4241 or Section 4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under Section 4041A of
ERISA.
5.17. USE OF PROCEEDS. The proceeds of the Loan shall be used solely
to finance the acquisition by the Borrower of 100% of the issued and
outstanding common stock of Bridgestone and other transactions in connection
therewith (the "BRIDGESTONE ACQUISITION"), all in accordance with the terms
of and pursuant to the Bridgestone Acquisition Documents.
5.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
(a) none of the Borrower, its Subsidiaries or any operator of
the Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
or any state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment in the United Kingdom,
France, Germany, the European Union or other applicable jurisdiction
(hereinafter "ENVIRONMENTAL LAWS"), which violation would have a
material adverse effect on the environment or the business, assets or
financial condition of the Borrower or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation,
any federal, state or local governmental authority, (i) that any one
of them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that any hazardous waste,
as defined by 42 U.S.C. Section 6903(5), any hazardous substances as
defined by 42 U.S.C. Section 9601(14), any pollutant or contaminant
as defined by 42 U.S.C. Section 9601(33), any waste substance or
other material as defined in the Environmental Protection Act 1990
(United Kingdom), and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws ("HAZARDOUS SUBSTANCES") which any one of them
has generated, transported or disposed of has been found at any site
at which a federal, state or local agency or authority in any other
applicable jurisdiction, or other third party has conducted or has
ordered that the Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances;
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(c) except as set forth on SCHEDULE 5.18 attached hereto: (i)
no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is
located on any portion of the Real Estate; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would
have a material adverse effect on the value of any of the Real Estate
or adjacent properties or the environment; (iv) to the best of the
Borrower's knowledge, there have been no releases on, upon, from or
into any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located
on, and which would have a material adverse effect on the value of, the
Real Estate; and (v) in addition, any Hazardous Substances that have
been generated on any of the Real Estate have been transported offsite
only by carriers having an identification number issued by the EPA (or
by a similar agency in other jurisdictions, as applicable), treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the
other Real Estate is subject to any applicable environmental law
requiring the performance of Hazardous Substances site assessments, or
the removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the recording of any Mortgage or to the effectiveness of
any other transactions contemplated hereby.
5.19. SUBSIDIARIES, ETC. SCHEDULE 5.19 sets forth all the Subsidiaries
of the Borrower, their respective jurisdictions of organization and principal
places of business. Except as set forth on SCHEDULE 5.19, neither the Borrower
nor any Subsidiary of the Borrower is engaged in any joint venture or
partnership with any other Person.
5.20. YEAR 2000 PROBLEM. The Borrower and its Subsidiaries have (a)
reviewed the areas within their businesses and operations which could be
adversely affected by failure to become "YEAR 2000 COMPLIANT" (i.e. that
computer applications, imbedded microchips and other systems used by the
Borrower or any of its Subsidiaries, will be able properly to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (b) developed a detailed plan and timetable
to become Year 2000 Compliant in a timely manner, and (c) committed adequate
resources to support the Year 2000 plan of the Borrower and its Subsidiaries.
Based upon such review, the Borrower reasonably believes that the Borrower and
its Subsidiaries will become "Year 2000 Compliant" in a timely manner except to
the extent that failure to do so will not have any materially adverse effect on
the business or financial condition of the Borrower or any of its Subsidiaries.
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5.21. DISCLOSURE. None of this Loan Agreement or any of the other Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to the Borrower or any of its Subsidiaries in the case of
any document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein not misleading.
There is no fact known to the Borrower or any of its Subsidiaries which
materially adversely affects, or which is reasonably likely in the future to
materially adversely affect, the business, assets, financial condition or
prospects of the Borrower or any of its Subsidiaries, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.
5.22. NO WITHHOLDING. Neither the Borrower nor any of its Subsidiaries
is required by the laws of any jurisdiction to make any deduction or withholding
of any nature whatsoever from any payment to be made by the Borrower or its
Subsidiaries hereunder or under any Loan Document unless disclosed to the Lender
in writing prior to the Closing Date (which may be in the form of legal
opinions) and unless the amount and likelihood such deductions or withholdings
are not, in the Lender's reasonable discretion, material. Neither this Loan
Agreement nor any of the other Loan Documents is subject to any registration or
stamp tax or any other similar or like taxes payable in any jurisdiction.
5.23. CHIEF EXECUTIVE OFFICE. The location of the Borrower's and each
of its Subsidiaries chief executive office or registered office, as applicable,
is set forth in SCHEDULE 5.23.
5.24. INSURANCE. The Borrower and each of its Subsidiaries maintain
with financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices and with the details of such coverage
being more fully described on SCHEDULE 5.24 hereto.
5.25. DELIVERY OF CERTAIN DOCUMENTS. The Borrower has delivered to the
Lender true and complete copies of all of the Bridgestone Acquisition Documents
(including all amendments thereto). Each of the representations and warranties
made by the Borrower and any of its Subsidiaries in any of the Bridgestone
Acquisition Documents was true and correct in all material respects when made
and continues to be true and correct in all material respects on the Closing
Date, except to the extent that any of such representations and warranties
relate, by the express terms thereof, solely to a date falling prior to the
Closing Date.
6. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as the Loan or Note is
outstanding:
6.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loan and the fees provided
for in this Loan Agreement, all in accordance with the terms of this Loan
Agreement and the Note.
6.2. MAINTENANCE OF OFFICE.
(a) The Borrower and each of its Subsidiaries incorporated or
organized in the United States of America will maintain its chief
executive office at the location set forth in SCHEDULE 5.23, or at such
other place in the United States of America as such Person shall
designate upon written notice to the Lender where notices,
presentations and
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demands to or upon such Person in respect of the Loan Agreement and the
other Loan Documents to which such Person is a party may be given or
made.
(b) Each Subsidiary of the Borrower incorporated or organized
in a jurisdiction other than the United States of America will maintain
its registered office at the location set forth in SCHEDULE 5.23, or at
such other place in such jurisdiction of incorporation or organization
as such Person shall designate upon written notice to the Lender where
notices, presentations and demands to or upon such Person in respect of
the Loan Agreement and the other Loan Documents to which such Person is
a party may be given or made.
6.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles (or equivalent thereof in any jurisdiction other
than the United States of America), and (b) maintain, and cause each of its
Subsidiaries to maintain, adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties and the properties of its Subsidiaries, contingencies, and
other reserves.
6.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to the Lender contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities and
Exchange Commission (or equivalent thereof in any other jurisdiction) or sent to
the stockholders of the Borrower and from time to time such other financial data
and information as the Lender may reasonably request.
6.5. NOTICES.
6.5.1. DEFAULTS. The Borrower will promptly notify the Lender
in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under
this Loan Agreement or any other note, evidence of indebtedness,
indenture or other obligation to which or with respect to which the
Borrower or any of its Subsidiaries is a party or obligor, whether as
principal or surety, the Borrower shall forthwith give written notice
thereof to the Lender, describing the notice or action and the nature
of the claimed default.
6.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Lender (a) of any violation of any Environmental Law that
the Borrower or any of its Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency or any similar environmental agency or board in
any other jurisdiction and (b) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice
from any agency of potential environmental liability, of any federal,
state or local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or
operations of the Borrower or any of its Subsidiaries, or the Lender's
security interests pursuant to the Security Documents.
6.5.3. NOTIFICATION OF CLAIMS AGAINST COLLATERAL. The Borrower
will, immediately upon becoming aware thereof, notify the Lender in
writing of any setoff, claims (including, with respect to the Real
Estate, environmental claims), withholdings
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or other defenses to which any of the Collateral, or the Lender's
rights with respect to the Collateral, are subject.
6.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Lender
in writing within fifteen (15) days of becoming aware of any litigation
or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a materially
adverse effect on the Borrower or any of its Subsidiaries and stating
the nature and status of such litigation or proceedings. The Borrower
will, and will cause each of its Subsidiaries to, give notice to the
Lender, in writing, in form and detail satisfactory to the Lender,
within ten (10) days of any judgment not covered by insurance, final or
otherwise, against the Borrower or any of its Subsidiaries in an amount
in excess of $100,000.
6.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises and those of
its Subsidiaries and will not, and will not cause or permit any of its
Subsidiaries to, convert to a limited liability company (or the equivalent
thereof in any foreign jurisdiction). It (a) will cause all of its properties
and those of its Subsidiaries used or useful in the conduct of its business
or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
PROVIDED that nothing in this Section 6.6 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or those
of its Subsidiaries if such discontinuance is, in the judgment of the
Borrower, desirable in the conduct of its or their business and that do not
in the aggregate materially adversely affect the business of the Borrower and
its Subsidiaries on a consolidated basis.
6.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements.
6.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrower and each Subsidiary of the
Borrower will
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pay all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor.
6.9. INSPECTION OF PROPERTIES AND BOOKS, ETC. The Borrower shall permit
the Lender to visit and inspect any of the properties of the Borrower or any of
its Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Lender may reasonably request.
6.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, be in material
compliance with (a) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws, (b) the provisions of its charter
documents and by-laws and all other organizational and constitutive documents,
(c) all agreements and instruments by which it or any of its properties may be
bound and (d) all applicable decrees, orders, and judgments. If at any time
while the Loan or Note is outstanding, any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that the Borrower may fulfill any of
its obligations hereunder, the Borrower will immediately take or cause to be
taken all reasonable steps within the power of the Borrower to obtain such
authorization, consent, approval, permit or license and furnish the Lender with
evidence thereof.
6.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service,
furnish to the Lender a copy of the most recent actuarial statement required
to be submitted under Section 103(d) of ERISA and Annual Report, Form 5500,
with all required attachments, in respect of each Guaranteed Pension Plan,
(b) promptly upon receipt or dispatch, furnish to the Lender any notice,
report or demand sent or received in respect of a Guaranteed Pension Plan
under Section 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under Section 4041A, 4202, 4219, 4242, or
4245 of ERISA, and (c) furnish to the Lender (at such time as such reports
are prepared in order to comply with Applicable Pension Legislation) copies
of all actuaries reports in relation to the Employee Benefit Plans operated
by them from time to time.
6.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loan
solely to finance the Bridgestone Acquisition.
6.13. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Lender and execute such further instruments
and documents as the Lender shall reasonably request to carry out to its
satisfaction the transactions contemplated by this Loan Agreement, the other
Loan Documents, the Bridgestone Acquisition Documents and the Merger Documents.
6.14. ADDITIONAL GUARANTORS. The Borrower will cause each Domestic
Subsidiary created, acquired or existing on or after the Closing Date (including
Bridgestone) to become a Guarantor immediately and shall cause such Subsidiary
to execute and deliver to the Lender (a) a Guaranty (or in the case of
Bridgestone, the Bridgestone Guaranty) in form and substance satisfactory to the
Lender, and (b) further Security Documents or other instruments and documents as
the Lender may reasonably require in order to grant to the Lender a first
priority perfected security interest in such Subsidiary's assets, together with
legal opinions in form and substance reasonably satisfactory to the Lender to be
delivered to the Lender opining as to the
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authorization, validity and enforceability of such Guaranty and Security
Documents and (as to the applicable Security Documents) the perfection of such
security interests.
6.15. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrower
or any of its Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Lender of such creation or
acquisition, as the case may be, and provide the Lender with an updated SCHEDULE
5.19 hereof and take all other actions required by Section 6.14 hereof.
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as the Loan or Note is
outstanding:
7.1. RESTRICTIONS ON INDEBTEDNESection The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Lender arising under any of the Loan
Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or any Subsidiary of the Borrower or under any Capitalized Lease,
PROVIDED that the aggregate principal amount of such Indebtedness of
the Borrower and its Subsidiaries shall not exceed the aggregate amount
of $1,000,000 at any one time;
(d) Indebtedness existing on the date of this Loan Agreement
(including all commitments to make loans or credit extensions available
to the Borrower by any Person but which remain undrawn by the Borrower
on the date hereof) and any refinancings thereof (so long as the
aggregate amount of such Indebtedness is not increased) and listed and
described on SCHEDULE 7.1 hereto;
(e) Existing Indebtedness of Bridgestone assumed by the
Borrower in connection with the Bridgestone Acquisition pursuant to the
Bridgestone Acquisition Documents;
(f) Indebtedness of a Subsidiary of the Borrower to the
Borrower; and
(g) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations.
7.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any Lien upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a
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period of more than thirty (30) days after the same shall have been incurred any
Indebtedness or claim or demand against it that if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
its general creditors; or (e) sell, assign, pledge or otherwise transfer any
"receivables" as defined in clause (vii) of the definition of the term
"Indebtedness," with or without recourse; PROVIDED that the Borrower or any of
its Subsidiaries may create or incur or suffer to be created or incurred or to
exist:
(i) Liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(ii) Liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or Liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(iii) deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment insurance, old
age pensions or other social security obligations;
(iv) Liens on properties in respect of judgments or awards
that have been in force for less than the applicable period for taking
an appeal so long as execution is not levied thereunder or in respect
of which the Borrower or such Subsidiary shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect
of which a stay of execution shall have been obtained pending such
appeal or review;
(v) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens on properties, in existence less than
120 days from the date of creation thereof in respect of obligations
not overdue;
(vi) encumbrances consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
Liens under leases to which the Borrower or a Subsidiary of the
Borrower is a party, and other minor Liens or encumbrances none of
which in the opinion of the Borrower interferes materially with the use
of the property affected in the ordinary conduct of the business of the
Borrower and its Subsidiaries, which defects do not individually or in
the aggregate have a materially adverse effect on the business of the
Borrower individually or of the Borrower and its Subsidiaries on a
consolidated basis;
(vii) presently outstanding Liens listed on SCHEDULE 7.2
hereto;
(viii) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by Section 7.1(c), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired;
(ix) Liens in favor of the Lender under the Loan Documents;
and
(x) Liens to secure the Indebtedness permitted by Section
7.1(e).
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7.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) Bridgestone in connection with the Bridgestone
Acquisition;
(b) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;
(c) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000 or banks of any other jurisdiction
which are members of the OECD;
(d) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Xxxxx'x Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
(e) Investments existing on the date hereof and listed on
SCHEDULE 7.3 hereto;
(f) Investments with respect to Indebtedness permitted by
Section 7.1(e);
(g) Investments consisting of the Guaranty or Investments by
the Borrower in Subsidiaries of the Borrower existing on the Closing
Date;
(h) Investments in OpSec France not to exceed $150,000 in the
aggregate;
(i) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by Section 7.5.2; and
(j) Investments consisting of loans and advances to employees
for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $50,000 in the aggregate at
any time outstanding;
PROVIDED, HOWEVER, that, such Investments will be considered Investments
permitted by this Section 7.3 only if all actions have been taken to the
satisfaction of the Lender a first priority perfected security interest in
all of such Investments free of all encumbrances other than Permitted Liens.
7.4. DISTRIBUTIONS. Except as set forth on SCHEDULE 7.4, the Borrower
will not make any Distributions.
7.5. MERGER, CONSOLIDATION.
7.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except the merger or
consolidation of one or more of its Subsidiaries of the Borrower with
and into the Borrower, or the Bridgestone Acquisition, or the Merger,
or the merger or consolidation
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of two or more Subsidiaries of the Borrower so long as such merger does
not have an adverse effect on the Liens held by the Lender as security
for the Obligations.
7.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than the sale of inventory, the
licensing of intellectual property and the disposition of obsolete
assets, in each case in the ordinary course of business consistent with
past practices.
7.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred.
7.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (c) generate any Hazardous Substances on any of the Real
Estate, (d) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (e) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.
7.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could result
in a material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in
Section 302 of ERISA, whether or not such deficiency is or may be
waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a Lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to
Section 302(f) or Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to Section 307 of ERISA or
Section 401(a)(29) of the Code;
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess
of benefit liabilities; or
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(f) take any action referred to in paragraphs (a) through (e)
above that would violate any provisions of Applicable Pension
Legislation.
7.9. CHANGES TO BRIDGESTONE ACQUISITION DOCUMENTS. The Borrower will
not, and will not permit its Subsidiaries to, (a) amend the economic terms of
the Bridgestone Acquisition Documents or (b) amend, supplement or waive any of
the other terms or conditions set forth in the Bridgestone Acquisition
Documents, without the prior written consent of the Lender.
7.10. ASSIGNMENT BY BORROWER. The Borrower shall not, and will not
permit its Subsidiaries to, assign or transfer any of its rights or obligations
under any of the Loan Documents, the Bridgestone Acquisition Documents or the
Merger Documents without the prior written consent of the Lender.
7.11. MODIFICATION OF CHARTER. The Borrower will not, nor permit any of
its Subsidiaries to amend or permit to be amended its certificate of
incorporation or bylaws, memorandum and articles of association, or similar
organizational documents without the prior written consent of the Lender unless
such amendment, supplement or modification would not have any material adverse
effect on the Lender's rights under the Loan Documents or the Borrower's or any
of its Subsidiaries' obligations under the Loan Documents or any of such
Persons' abilities to perform such obligations.
7.12. UPSTREAM LIMITATIONS. The Borrower will not enter into, nor
permit any of its Subsidiaries to enter into, any agreement, contract or
arrangement (other than the Loan Agreement and the other Loan Documents)
restricting the ability of any Subsidiary to pay or make dividends or
distributions in cash or kind, to make loans, advances or other payments of
whatsoever nature or to make transfers or distributions of all or any part of
its assets to the Borrower or any Subsidiary.
7.13. INCONSISTENT AGREEMENTS. The Borrower will not, nor will it
permit its Subsidiaries to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower or such
Subsidiary of its obligations hereunder or under any of the Loan Documents.
7.14. NEGATIVE PLEDGES. Except as set forth on SCHEDULE 7.14, the
Borrower will not, nor will it permit its Subsidiaries to, enter into or permit
to exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits the Borrower or its Subsidiaries from creating
or incurring any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest in favor of the Lender under the Loan Documents other
than customary anti-assignment provisions in leases and licensing agreements
entered into by such Person in the ordinary course of its business.
8. CLOSING CONDITIONS.
The obligation of the Lender to make the Loan shall be subject to the
satisfaction of the following conditions precedent:
8.1. LOAN DOCUMENTS; MERGER DOCUMENTS; BRIDGESTONE ACQUISITION
DOCUMENTS. Each of the Loan Documents, the Merger Agreement and the Bridgestone
Acquisition Documents shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and shall be in
form and substance satisfactory to the
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Lender. The Lender shall have received a fully executed copy of each Loan
Document and Bridgestone Acquisition Document.
8.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Lender shall have
received from the Borrower and each of its Subsidiaries, a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in effect
on such date of certification, and (b) its by-laws (or other similar document)
as in effect on such date.
8.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Loan Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Lender shall have been provided to the Lender.
8.4. INCUMBENCY CERTIFICATE. The Lender shall have received from the
Borrower and each of the Domestic Subsidiaries an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of the Borrower or
such Domestic Subsidiary, and giving the name and bearing a specimen signature
of each individual who shall be authorized: (a) to sign, in the name and on
behalf of each of the Borrower or such Domestic Subsidiary, each of the Loan
Documents to which the Borrower or such Domestic Subsidiary is or is to become a
party; (b) in the case of the Borrower to make the Loan Request; and (c) to give
notices and to take other action on its behalf under the Loan Documents.
8.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Lender a legal, valid and enforceable security interest
in the Collateral (subject only to Permitted Liens entitled to priority under
applicable law). All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Lender to protect and
preserve such security interests shall have been duly effected. The Lender shall
have received evidence thereof in form and substance satisfactory to the Lender.
8.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Lender shall
have received from each of the Borrower and its Subsidiaries a completed and
fully executed Perfection Certificate and the results of UCC searches and all
other applicable Lien searches, indicating no Liens other than Permitted Liens
and otherwise in form and substance satisfactory to the Lender.
8.7. SENIOR LENDER CONSENTS. The Borrower and its Subsidiaries shall
have delivered to the Lender evidence satisfactory to the Lender that all
necessary or otherwise advisable consents by the Senior Lender permitting the
Borrower and its Subsidiaries to enter into and fully perform their obligations
under this Loan Agreement and the other Loan Documents have been obtained by the
Borrower and its Subsidiaries.
8.8. CERTIFICATES OF INSURANCE. The Lender shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
8.9. OPINION OF COUNSEL. The Lender shall have received a favorable
opinion addressed to the Lender, dated as of the Closing Date, in form and
substance satisfactory to the Lender, from Xxxx, Xxxxxxx & Xxxxxx, P.C., counsel
to the Borrower and its Subsidiaries.
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9. CONDITIONS TO BORROWING.
The obligation of the Lender to make the Loan, whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
9.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Loan Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this Loan Agreement shall
be true as of the date as of which they were made and shall also be true at and
as of the time of the making of the Loan, with the same effect as if made at and
as of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Loan Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
9.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of the Lender would make it illegal for the Lender to make the Loan.
9.3. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Loan Agreement, the other Loan Documents, the
Bridgestone Acquisition Documents and all other documents incident thereto shall
be satisfactory in substance and in form to the Lender and the Lender shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Lender may reasonably request.
9.4. BRIDGESTONE ACQUISITION. The Lender shall have received evidence
satisfactory to the Lender, including a legal opinion from Borrower's counsel,
that all of the closing conditions (other than full payment of the purchase
price for which the funds provided by the Lender to the Borrower under this Loan
Agreement are to be used) to the purchase of 100% of Voting Stock of Bridgestone
pursuant to the Bridgestone Acquisition Documents shall have been satisfied and
none of the conditions shall have been amended, supplemented or waived except in
accordance with Section 7.9 hereof.
10. EVENTS OF DEFAULT; ACCELERATION; ETC.
10.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "DEFAULTS") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loan
when the same shall become due and payable, whether at the stated date
of maturity or any accelerated date of maturity or at any other date
fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loan,
the Closing Fee, or other sums due hereunder or under any of the other
Loan Documents, when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in Sections 6 or 7;
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(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
Section 10.1) for fifteen (15) days after written notice of such
failure has been given to the Borrower by the Lender;
(e) any representation or warranty of the Borrower or any of
its Subsidiaries in this Loan Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to
or in connection with this Loan Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing borrowed money or credit received or in respect of any
Capitalized Leases for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the
maturity thereof, or any such holder or holders shall rescind or shall
have a right to rescind the purchase of any such obligations;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or of any substantial part of the assets of the
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or any Insolvency Event shall occur, or
shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any
such case or other proceeding shall be commenced against the Borrower
or any of its Subsidiaries and the Borrower or any of its Subsidiaries
shall indicate its approval thereof, consent thereto or acquiescence
therein or such petition or application shall not have been dismissed
within fourteen (14) days following the filing thereof;
(h) the Borrower or any of its Subsidiaries organized in
Germany shall become obligated to file for bankruptcy proceedings
pursuant to Section 64 of the GmbH Act;
(i) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of the Borrower or any Subsidiary of the Borrower in
an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(j) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than fourteen (14) days, whether or not consecutive,
any final judgment against the Borrower or any of its Subsidiaries
that, with other outstanding final judgments,
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undischarged, against the Borrower or any of its Subsidiaries exceeds
in the aggregate $200,000;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Lender's security interests or
liens in a substantial portion of the Collateral shall cease to be
perfected, or shall cease to have the priority contemplated by the
Security Documents, in each case otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Lender, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of the Borrower or any of
its Subsidiaries party thereto or any of their respective stockholders,
or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or
issue a judgment, order, decree or ruling to the effect that, any one
or more of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
in an aggregate amount exceeding $50,000, or the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $50,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
Section 302(f)(1) of ERISA), PROVIDED that the Lender determines in its
reasonable discretion that such event (A) could be expected to result
in liability of the Borrower or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $50,000
and (B) could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC, for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed
Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United States
District Court of a trustee to administer such Guaranteed Pension Plan;
or (iii) the institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;
(m) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
fourteen (14) days;
(n) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty, which in any such case causes the
cessation or substantial curtailment of revenue producing activities at
any facility of the Borrower or any of its Subsidiaries if such event
or circumstance is not covered by business interruption insurance and
would have in the opinion of the Lender a material adverse effect on
the business or financial condition of the Borrower or such Subsidiary;
(o) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have in the
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opinion of the Lender a material adverse effect on the business or
financial condition of the Borrower or such Subsidiary; and
(p) the Borrower or any of its Subsidiaries shall fail to
observe or perform, in any material respect, any covenant, agreement or
obligation contained in any of the Merger Documents or the Bridgestone
Acquisition Documents;
then, and in any such event, so long as the same may be continuing, the
Lender may by notice in writing to the Borrower declare all amounts owing
with respect to this Loan Agreement, the Note and the other Loan Documents to
be, and they shall thereupon forthwith become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower; PROVIDED that in the event
of any Event of Default specified in Section 10.1(g), 10.1(h), 10.1(i), all
such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Lender.
10.2. REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Lender shall
have accelerated the maturity of the Loan pursuant to Section 10.1, the
Lender, if owed any amount with respect to the Loan, may proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Loan Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to the Lender are evidenced,
and, if such amount shall have become due, by declaration or otherwise,
proceed to enforce the payment thereof or any other legal or equitable right
of the Lender. No remedy herein conferred upon the Lender or the holder of
the Note is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
10.3. DISTRIBUTION OF COLLATERAL PROCEEDS. If following the occurrence
or during the continuance of any Default or Event of Default, the Lender
receives any monies in connection with the enforcement of any the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Lender for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Lender in connection with the collection of such
monies by the Lender, for the exercise, protection or enforcement by
the Lender of all or any of the rights, remedies, powers and privileges
of the Lender under this Loan Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Lender against any taxes or
liens which by law shall have, or may have, priority over the rights of
the Lender to such monies;
(b) Second, to all other Obligations in such order or
preference as the Lender may determine;
(c) Third, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
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11. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from the
Lender to the Borrower and any securities or other property of the Borrower in
the possession of the Lender may be applied to or set off by the Lender against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to the Lender.
12. EXPENSES AND INDEMNIFICATION.
12.1. EXPENSES. The Borrower agrees to pay (a) any taxes (including any
interest and penalties in respect thereto) payable by the Lender (other than
taxes based upon the Lender's net income) on or with respect to the transactions
contemplated by this Loan Agreement (the Borrower hereby agreeing to indemnify
the Lender with respect thereto), (b) the fees, expenses and disbursements of
the Lender or any of its affiliates incurred by the Lender or such affiliate in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, including all
title insurance premiums and surveyor, engineering and appraisal charges, (c)
all reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of the Lender, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by the Lender in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or any of its Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to the
Lender's relationship with the Borrower or any of its Subsidiaries and (d) all
reasonable fees, expenses and disbursements of he Lender incurred in connection
with UCC searches, UCC filings or mortgage recordings.
12.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Lender and its affiliates from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any
and all liabilities, losses, damages and expenses of every nature and
character arising out of this Loan Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without
limitation, (a) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of any of the Loan, (b) the Borrower or any of
its Subsidiaries entering into or performing this Loan Agreement or any of
the other Loan Documents or (c) with respect to the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not
limited to, claims with respect to wrongful death, personal injury or damage
to property), in each case including, without limitation, the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred
in connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Lender and its affiliates shall
be entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this Section 12.2 are unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.
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12.3. SURVIVAL. The covenants contained in this Section 12 shall
survive payment or satisfaction in full of all other Obligations.
12.4. CONSEQUENTIAL DAMAGES. Notwithstanding any provision to the
contrary contained herein, in no event shall the Borrower be liable to the
Lender or any third party for any consequential damages; PROVIDED, that the
foregoing shall not impair the payment and satisfaction in full of the
Obligations hereunder.
13. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
13.1. CONFIDENTIALITY. The Lender agrees, on behalf of itself and
each of its affiliates, directors, officers, employees and representatives,
to use reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of the same nature
and in accordance with safe and sound banking practices, any non-public
information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Loan Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Lender, PROVIDED that
nothing herein shall limit the disclosure of any such information (a) after
such information shall have become public other than through a violation of
this Section 13, (b) to the extent required by statute, rule, regulation or
judicial process, (c) to counsel for any of the Lender, (d) to any regulatory
authority having jurisdiction over the Lender, or to auditors or accountants,
(e) in connection with any litigation to which the Lender is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, or (f) to a Subsidiary or affiliate of the Lender.
13.2. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, the Lender shall, prior to disclosure thereof, notify the
Borrower of any request for disclosure of any such non-public information by any
governmental agency or representative thereof or pursuant to legal process.
13.3. OTHER. In no event shall the Lender be obligated or required
to return any materials furnished to it by the Borrower or any of its
Subsidiaries. The obligations of the Lender under this Section 13 shall
supersede and replace the obligations of the Lender under any confidentiality
letter in respect of this financing signed and delivered by the Lender to the
Borrower prior to the date hereof.
14. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Note, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Lender,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lender of the Loan, as herein contemplated,
and shall continue in full force and effect so long as any amount due under this
Loan Agreement or the Note or any of the other Loan Documents remains
outstanding or the Lender has any obligation to make the Loan, and for such
further time as may be otherwise expressly specified in this Loan Agreement. All
statements contained in any certificate or other paper delivered to the Lender
at any time by or on behalf of the Borrower or any of its Subsidiaries pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary
hereunder.
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15. NOTICES, ETC.
Except as otherwise expressly provided in this Loan Agreement, all
notices and other communications made or required to be given pursuant to this
Loan Agreement or the Note shall be in writing and shall be delivered in hand,
mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, facsimile or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at 000 00xx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000, XXX, Attention: Xxxxxxx X. Xxxx and Xxxx X. Xxxxxxx, or
at such other address for notice as the Borrower shall last have
furnished in writing to the Person giving the notice; and
(b) if to the Lender, at the Lender's Head Office Attention:
Xxxxxxx Xxxxx, Finance Director, or such other address for notice as
the Lender shall last have furnished in writing to the Person giving
the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, at
the time of the receipt thereof.
16. GOVERNING LAW.
THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF
THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT
FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY CERTIFIED OR REGULAR MAIL AT THE ADDRESS SPECIFIED IN SECTION 15.
THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT.
17. HEADINGS.
The captions in this Loan Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
18. COUNTERPARTS.
This Loan Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In
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proving this Loan Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom enforcement is
sought.
19. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Loan Agreement nor
any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 21.
20. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Loan
Agreement, the Note or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of such rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of the Lender has
represented, expressly or otherwise, that the Lender would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that the
Lender has been induced to enter into this Loan Agreement, the other Loan
Documents to which it is a party by, among other things, the waivers and
certifications contained herein.
21. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Loan Agreement, any
consent or approval required or permitted by this Loan Agreement to be given by
the Lender may be given, and any term of this Loan Agreement or of any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Loan Agreement or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon. No course of dealing or delay or omission on the
part of the Lender in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Borrower shall
entitle the Borrower to other or further notice or demand in similar or other
circumstances.
22. SEVERABILITY.
The provisions of this Loan Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Loan Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Loan
Agreement as a sealed instrument as of the date first set forth above.
APPLIED HOLOGRAPHICS PLC
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------
Title: Finance Director
-------------------------------------
OPTICAL SECURITY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxx X. Xxxx
-------------------------------------
Title: Chief Executive Officer
-------------------------------------
