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REVOLVING CREDIT, TERM LOAN
AND
SECURITY AGREEMENT
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IBJ XXXXXXXX BANK & TRUST COMPANY
(AS LENDER AND AS AGENT)
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WITH
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BATTERIES BATTERIES, INC.
XXXXXX ELECTRONICS, INC.
ADVANCED FOX ANTENNA, INC.
SPECIFIC ENERGY CORPORATION
BATTERY NETWORK, INC.
W.S. BATTERY & SALES COMPANY, INC.
BATTERY ACQUISITION CORP.
As of January 6, 1997
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TABLE OF CONTENTS
I. DEFINITIONS.................................................................................................. 1
1.1. Accounting Terms............................................................................... 1
1.2. General Terms.................................................................................. 19
1.3. Uniform Commercial Code Terms.................................................................. 19
1.4. Certain Matters of Construction................................................................ 19
II. ADVANCES, PAYMENTS........................................................................................... 19
2.1. (a) Revolving Advances.................................................................. 19
(b) Discretionary Rights................................................................ 20
2.2. Procedure for Revolving Advances Borrowing..................................................... 20
2.3. Disbursement of Advance Proceeds............................................................... 22
2.4. Term Loan...................................................................................... 23
2.5. Maximum Advances............................................................................... 23
2.6. Repayment of Advances.......................................................................... 23
2.7. Repayment of Excess Advances................................................................... 24
2.8. Statement of Account........................................................................... 24
2.9. Letters of Credit.............................................................................. 24
2.10. Issuance of Letters of Credit.................................................................. 25
2.11. Requirements For Issuance of Letters of Credit................................................. 25
2.12. Additional Payments............................................................................ 26
2.13. Manner of Borrowing and Payment................................................................ 27
2.14. Mandatory Prepayments.......................................................................... 28
2.15. Use of Proceeds................................................................................ 29
2.16. Defaulting Lender.............................................................................. 29
III. INTEREST AND FEES............................................................................................ 30
3.1. Interest....................................................................................... 30
3.2. Letter of Credit Fees.......................................................................... 31
3.3. (a) Closing Fee......................................................................... 31
(b) Facility Fee........................................................................ 32
3.4. (a) Collateral Evaluation Fee........................................................... 32
(b) Collateral Monitoring Fee........................................................... 32
3.5. Computation of Interest and Fees............................................................... 32
3.6. Maximum Charges................................................................................ 32
3.7. Increased Costs................................................................................ 32
3.8. Basis For Determining Interest Rate Inadequate or
Unfair......................................................................................... 33
3.9. Capital Adequacy............................................................................... 34
IV. COLLATERAL: GENERAL TERMS................................................................................... 35
4.1. Security Interest in the Collateral............................................................ 35
4.2. Perfection of Security Interest................................................................ 35
4.3. Disposition of Collateral...................................................................... 35
4.4. Preservation of Collateral..................................................................... 36
4.5. Ownership of Collateral........................................................................ 36
4.6. Defense of Agent's and Lenders' Interests...................................................... 36
4.7. Books and Records.............................................................................. 37
4.8. Financial Disclosure........................................................................... 37
4.9. Compliance with Laws........................................................................... 38
4.10. Inspection of Premises......................................................................... 38
4.11. Insurance...................................................................................... 38
4.12. Failure to Pay Insurance....................................................................... 39
4.13. Payment of Taxes............................................................................... 39
4.14. Payment of Leasehold Obligations............................................................... 40
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4.15. Receivables.................................................................................... 40
(a) Nature of Receivables............................................................... 40
(b) Solvency of Customers............................................................... 40
(c) Locations of Borrower............................................................... 40
(d) Collection of Receivables........................................................... 40
(e) Notification of Assignment of Receivables........................................... 41
(f) Power of Agent to Act on Borrowers' Behalf.......................................... 41
(g) No Liability........................................................................ 42
(h) Establishment of a Lockbox Account, Dominion
Account............................................................................. 42
(i) Adjustments......................................................................... 42
4.16. Inventory...................................................................................... 42
4.17. Maintenance of Equipment....................................................................... 43
4.18. Exculpation of Liability....................................................................... 43
4.19. Environmental Matters.......................................................................... 43
4.20. Financing Statements........................................................................... 45
V. REPRESENTATIONS AND WARRANTIES............................................................................... 45
5.1. Authority...................................................................................... 45
5.2. Formation and Qualification.................................................................... 46
5.3. Survival of Representations and Warranties..................................................... 46
5.4. Tax Returns.................................................................................... 46
5.5. Financial Statements........................................................................... 46
5.6. Corporate Name................................................................................. 47
5.7. O.S.H.A. and Environmental Compliance.......................................................... 47
5.8. Solvency; No Litigation, Violation, Indebtedness
or Default..................................................................................... 48
5.9. Patents, Trademarks, Copyrights and Licenses................................................... 49
5.10. Licenses and Permits........................................................................... 50
5.11. Default of Indebtedness........................................................................ 50
5.12. No Default..................................................................................... 50
5.13. No Burdensome Restrictions..................................................................... 50
5.14. No Labor Disputes.............................................................................. 50
5.15. Margin Regulations............................................................................. 50
5.16. Investment Company Act......................................................................... 50
5.17. Disclosure..................................................................................... 51
5.18. Delivery of Acquisition Agreement.............................................................. 51
5.19. Swaps.......................................................................................... 51
5.20. Conflicting Agreements......................................................................... 51
5.21. Application of Certain Laws and Regulations.................................................... 51
5.22. Business and Property of Borrower.............................................................. 51
5.23. Assets of BATS................................................................................. 52
VI. AFFIRMATIVE COVENANTS........................................................................................ 52
6.1. Payment of Fees................................................................................ 52
6.2. Conduct of Business and Maintenance of Existence
and Assets..................................................................................... 52
6.3. Violations..................................................................................... 52
6.4. Government Receivables......................................................................... 52
6.5. Net Worth...................................................................................... 52
6.6. Current Ratio.................................................................................. 53
6.7. Fixed Charge Coverage Ratio.................................................................... 53
6.8. EBITDA......................................................................................... 54
6.9. Execution of Supplemental Instruments.......................................................... 54
6.10. Payment of Indebtedness........................................................................ 54
6.11. Standards of Financial Statements.............................................................. 54
6.12. Exercise of Rights............................................................................. 54
6.13. Termination of ESOP............................................................................ 55
VII. NEGATIVE COVENANTS............................................................................. 55
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7.1. Merger, Consolidation, Acquisition and Sale of
Assets......................................................................................... 55
7.2. Creation of Liens.............................................................................. 55
7.3. Guarantees..................................................................................... 55
7.4. Investments.................................................................................... 55
7.5. Loans.......................................................................................... 55
7.6. Capital Expenditures........................................................................... 56
7.7. Dividends...................................................................................... 56
7.8. Indebtedness................................................................................... 56
7.9. Nature of Business............................................................................. 56
7.10. Transactions with Affiliates................................................................... 56
7.11. Leases......................................................................................... 56
7.12. Subsidiaries................................................................................... 57
7.13. Fiscal Year and Accounting Changes............................................................. 57
7.14. Pledge of Credit............................................................................... 57
7.15. Amendment of Articles of Incorporation, By-Laws................................................ 57
7.16. Compliance with ERISA.......................................................................... 57
7.17. Prepayment of Indebtedness..................................................................... 57
7.18. Other Agreements............................................................................... 58
7.19. Payments of Additional Cash Consideration...................................................... 58
7.20. Management Fees................................................................................ 58
VIII. CONDITIONS PRECEDENT......................................................................................... 58
8.1. Conditions to Initial Advances................................................................. 58
(a) Note................................................................................ 58
(b) Filings, Registrations and Recordings............................................... 58
(c) Corporate Proceedings of Borrowers.................................................. 58
(d) Incumbency Certificates of Borrowers................................................ 58
(e) Certificates........................................................................ 59
(f) Good Standing Certificates.......................................................... 59
(g) Legal Opinion....................................................................... 59
(h) No Litigation....................................................................... 59
(i) Financial Condition Certificates.................................................... 59
(j) Collateral Examination.............................................................. 59
(k) Fees................................................................................ 59
(l) Pro Forma Financial Statements...................................................... 59
(m) Financial Statements................................................................ 60
(n) Acquisition Documents............................................................... 60
(o) Capitalization...................................................................... 60
(p) Collateral Assignment and Other Documents........................................... 60
(q) Insurance........................................................................... 60
(r) Payment Instructions................................................................ 60
(s) Blocked Accounts.................................................................... 60
(t) Consents............................................................................ 60
(u) No Adverse Material Change.......................................................... 60
(v) Leasehold Agreements................................................................ 61
(w) Net Worth........................................................................... 61
(x) Contract Review..................................................................... 61
(y) Closing Certificate................................................................. 61
(z) Borrowing Base...................................................................... 61
(aa) Undrawn Availability................................................................ 61
(ab) Other............................................................................... 61
8.2. Conditions to Each Advance..................................................................... 61
(a) Representations and Warranties...................................................... 61
(b) No Default.......................................................................... 61
(c) Maximum Advances.................................................................... 62
IX. INFORMATION AS TO BORROWER................................................................................... 62
9.1. Disclosure of Material Matters................................................................. 62
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9.2. Schedules...................................................................................... 62
9.3. Environmental Reports.......................................................................... 62
9.4. Litigation..................................................................................... 63
9.5. Material Occurrences........................................................................... 63
9.6. Government Receivables......................................................................... 63
9.7. Annual Financial Statements.................................................................... 63
9.8. Monthly Financial Statements................................................................... 64
9.9. Other Reports.................................................................................. 64
9.10. Additional Information......................................................................... 64
9.11. Projected Operating Budget..................................................................... 65
9.12. Variances From Operating Budget................................................................ 65
9.13. Notice of Suits, Adverse Events................................................................ 65
9.14. ERISA Notices and Requests..................................................................... 65
9.15. Additional Documents........................................................................... 66
X. EVENTS OF DEFAULT............................................................................................ 66
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT................................................................... 69
11.1. Rights and Remedies............................................................................ 69
11.2. Agent's Discretion............................................................................. 70
11.3. Setoff......................................................................................... 70
11.4. Rights and Remedies not Exclusive.............................................................. 70
XII. WAIVERS AND JUDICIAL PROCEEDINGS............................................................................. 70
12.1. Waiver of Notice............................................................................... 70
12.2. Delay.......................................................................................... 70
12.3. Jury Waiver.................................................................................... 70
XIII. EFFECTIVE DATE AND TERMINATION............................................................................... 71
13.1. Term........................................................................................... 71
13.2. Termination.................................................................................... 71
XIV. REGARDING AGENT.............................................................................................. 71
14.1. Appointment.................................................................................... 71
14.2. Nature of Duties............................................................................... 72
14.3. Lack of Reliance on Agent and Resignation...................................................... 72
14.4. Certain Rights of Agent........................................................................ 73
14.5. Reliance....................................................................................... 73
14.6. Notice of Default.............................................................................. 73
14.7. Indemnification................................................................................ 74
14.8. Agent in its Individual Capacity............................................................... 74
14.9. Delivery of Documents.......................................................................... 74
14.10. Borrowers' Undertaking to Agent................................................................ 74
XV. BORROWING AGENCY............................................................................................. 74
15.1. Borrowing Agency Provisions.................................................................... 74
15.2. Waiver of Subrogation.......................................................................... 75
XVI. MISCELLANEOUS................................................................................................ 75
16.1. Governing Law.................................................................................. 75
16.2. Entire Understanding........................................................................... 76
16.3. Successors and Assigns; Participations; New
Lenders........................................................................................ 77
16.4. Application of Payments........................................................................ 79
16.5. Indemnity...................................................................................... 79
16.6. Notice......................................................................................... 79
16.7. Survival....................................................................................... 80
16.8. Severability................................................................................... 80
16.9. Expenses....................................................................................... 80
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16.10. Injunctive Relief.............................................................................. 81
16.11. Consequential Damages.......................................................................... 81
16.12. Captions....................................................................................... 81
16.13. Counterparts; Telecopied Signatures............................................................ 81
16.14. Construction................................................................................... 81
16.15. Confidentiality................................................................................ 81
16.16. Publicity...................................................................................... 82
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REVOLVING CREDIT, TERM LOAN
AND
SECURITY AGREEMENT
Revolving Credit, Term Loan and Security Agreement dated as
of January 6, 1997 among BATTERIES BATTERIES, INC., a corporation organized
under the laws of the State of Delaware ("BATS"), XXXXXX ELECTRONICS, INC., a
corporation organized under the laws of the State of California ("TEI")
ADVANCED FOX ANTENNA, INC., a corporation organized under the laws of the
State of Delaware ("AFA"), SPECIFIC ENERGY CORPORATION, a corporation
organized under the laws of the State of Arizona ("SEC"), BATTERY NETWORK,
INC., a corporation organized under the laws of the State of Illinois ("BN"),
W.S. BATTERY & SALES, COMPANY INC., a corporation organized under the laws of
the State of Illinois ("WSBS") and BATTERY ACQUISITION CORP., a corporation
organized under the laws of the State of New York ("BAC"), (BATS, TEI, AFA,
SEC, BN, WSBS and BAC, each a "Borrower" and collectively "Borrowers"), the
financial institutions which are now or which hereafter become a party hereto
(collectively, the "Lenders" and individually a "Lender") and IBJ XXXXXXXX
BANK & TRUST COMPANY ("IBJS"), a New York banking corporation, as agent for
Lenders (IBJS, in such capacity, the "Agent").
IN CONSIDERATION of the mutual covenants and undertakings
herein contained, Borrowers, Lenders and Agent hereby agree as follows:
I. DEFINITIONS.
1.1. Accounting Terms. As used in this Agreement, the Note, or
any certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP.
1.2. General Terms. For purposes of this Agreement the
following terms shall have the following meanings:
"Accountants" shall have the meaning set forth in
Section 9.7 hereof.
"Acquisition Agreement" shall mean collectively the
BN Acquisition Agreement, WSBS Acquisition Agreement and BAC
Acquisition Agreement.
"Advances" shall mean and include the Revolving
Advances, Letters of Credit and the Term Loan.
"Advance Rates" shall have the meaning set forth in
Section 2.1(a) hereof.
"Additional Cash Consideration" shall have the
meaning given to such term in the BN Acquisition Agreement which in no event
shall exceed an aggregate amount of $1,000,000.
"Additional Consideration" shall mean collectively,
the Additional Cash Consideration, the Additional Stock
Consideration, the Additional $4.50 Option Consideration and the
Additional $6.00 Option Consideration.
"Additional $4.50 Option Consideration" shall have
the meaning given to such term in the BN Acquisition Agreement which in no
event shall exceed options to purchase more than 125,000 shares of common
stock of BATS.
"Additional $6.00 Option Consideration" shall have
the meaning given to such term in the BN Acquisition Agreement which in no
event shall exceed options to purchase more than 125,000 shares of common
stock of BATS.
"Additional Stock Consideration" shall have the
meaning given to such term in the BN Acquisition Agreement, which in no event
shall exceed 350,000 shares of common stock of BATS.
"AFA" shall have the meaning set forth in the
preamble to this Agreement.
"Affiliate" of any Person shall mean (a) any Person
(other than a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, or (b) any Person
who is a director or officer (i) of such Person, (ii) of any Subsidiary of
such Person or (iii) of any Person described in clause (a) above. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect, (x) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person, or (y) to direct or cause
the direction of the management and policies of such Person whether by
contract or otherwise.
"Affiliated Leases" shall mean collectively, (a) the
Lease dated January 1, 1997 between J.W.S.Partnership and BN with respect to
the premises located at 0000 Xxxxxx Xxxxxx, XxXxxxx, (x) the Lease dated
January 1, 1997 between J.W.S. Partnership and BN with respect to the premises
located at 00 Xxxxxxx Xxxx, Xxxx 0, Xxxxx Xxxxxx, Xxx Xxxxxx and (c) the Lease
dated January 2, 1995 between Rare Limited Partnership and AFA with respect to
the premises located at 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx.
"Agent" shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
"Alternate Base Rate" shall mean, for any day, a rate
per annum equal to the higher of (i) the Base Rate in effect on
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such day and (ii) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
"Authority" shall have the meaning set forth in
Section 4.19(d).
"BAC" shall have the meaning set forth in the
preamble to this Agreement.
"BAC Acquisition Agreement" shall mean the Asset
Purchase Agreement dated January 3, 1997, as of Xxxxxxxx 00, 0000 xxxxx XXX,
XXXX, XXX Enterprises, Inc, Xxxxxxx X. Xxxx, Xxxxxxx Xxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxx Xxxx and Xxxxx Xxxx including all exhibits and schedules
thereto.
"Base Rate" shall mean the base commercial lending
rate of IBJS as publicly announced to be in effect from time to time, such
rate to be adjusted automatically, without notice, on the effective date of
any change in such rate. This rate of interest is determined from time to time
by IBJS as a means of pricing some loans to its customers and is neither tied
to any external rate of interest or index nor does it necessarily reflect the
lowest rate of interest actually charged by IBJS to any particular class or
category of customers of IBJS.
"BATS" shall have the meaning set forth in the
preamble to this Agreement.
"BATS on a combined basis" shall mean the combination
in accordance with GAAP of the accounts or other items of BATS and
its Subsidiaries.
"BATS on a consolidated basis" shall mean the
consolidation in accordance with GAAP of the accounts or other
items of BATS and its Subsidiaries.
"Blocked Accounts" shall have the meaning set forth
in Section 4.15(h).
"BN" shall have the meaning set forth in the preamble
to this Agreement.
"BN Acquisition Agreement" shall mean the Stock
Purchase Agreement dated January 3, 1997 dated as of December 31, 1996 among
BATS, BN, Xxxxxxx Xxxxxx Xxxx, Xxxxx Xxxxxx and Xxxxx Xxxx including all
exhibits and schedules thereto.
"Borrower" or "Borrowers" shall have the meaning set
forth in the preamble to this Agreement and shall extend to all permitted
successors and assigns of such Persons.
"Borrowers' Account" shall have the meaning set forth
in Section 2.8.
"Borrowing Agent" shall mean BATS.
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"Business Day" shall mean with respect to Eurodollar
Rate Loans, any day on which commercial banks are open for domestic and
international business, including dealings in Dollar deposits in London,
England and New York, New York and with respect to all other matters, any day
other than a day on which commercial banks in New York are authorized or
required by law to close.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. ss.ss.9601 et seq.
"Change of Control" shall mean (a) the occurrence of
any event (whether in one or more transactions) which results in a transfer of
control of any Borrower (other than BATS) to a Person who is not an Original
Owner; (b) any merger or consolidation of or with any Borrower or sale of all
or substantially all of the property or assets of any Borrower; or (c) a
Person or group of Persons acting in concert as a partnership, limited
partnership, syndicate or other group ("Group of Persons") shall together with
any Affiliates thereof, succeed in having a sufficient number of nominees
elected to the Board of Directors of BATS such that such nominees, when added
to any existing directors remaining on the Board of Directors of BATS after
such election, will constitute a majority of the Board of Directors of BATS.
For purposes of this definition, "control of Borrower" shall mean the power,
direct or indirect (x) to vote 50% or more of the securities having ordinary
voting power for the election of directors of any Borrower or (y) to direct or
cause the direction of the management and policies of any Borrower by contract
or otherwise.
"Charges" shall mean all taxes, charges, fees,
imposts, levies or other assessments, including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation and property taxes, custom duties, fees, assessments, liens, claims
and charges of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amounts, imposed by any taxing or
other authority, domestic or foreign (including, without limitation, the
Pension Benefit Guaranty Corporation or any environmental agency or
superfund), upon the Collateral or any Borrower.
"Closing Date" shall mean January 7, 1997 or such
other date as may be agreed to by the parties hereto.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time and the regulations promulgated
thereunder.
"Collateral" shall mean and include:
(a) all Receivables;
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(b) all Equipment;
(c) all General Intangibles;
(d) all Inventory;
(e) all Subsidiary Stock;
(f) all of each Borrower's right, title
and interest in and to (i) its respective goods and other property including,
but not limited to, all merchandise returned or rejected by Customers,
relating to or securing any of the Receivables; (ii) all of each Borrower's
rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or
other lienor, including stoppage in transit, setoff, detinue, replevin,
reclamation and repurchase; (iii) all additional amounts due to any Borrower
from any Customer relating to the Receivables; (iv) other property, including
warranty claims, relating to any goods securing this Agreement; (v) all of
each Borrower's contract rights, rights of payment which have been earned
under a contract right, instruments, documents, chattel paper, warehouse
receipts, deposit accounts, money and securities; (vi) if and when obtained by
any Borrower, all real and personal property of third parties in which such
Borrower has been granted a lien or security interest as security for the
payment or enforcement of Receivables; and (vii) any other goods, personal
property or real property now owned or hereafter acquired in which any
Borrower has expressly granted a security interest or may in the future grant
a security interest to Agent hereunder, or in any amendment or supplement
hereto or thereto, or under any other agreement between Agent and any
Borrower;
(g) all of each Borrower's ledger
sheets, ledger cards, files, correspondence, records, books of account,
business papers, computers, computer software (owned by any Borrower or in
which it has an interest), computer programs, tapes, disks and documents
relating to (a), (b), (c), (d), (e) or (f) of this Paragraph; and
(h) all proceeds and products of (a),
(b), (c), (d), (e), (f) and (g) in whatever form, including, but not limited
to: cash, deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds (including hazard, flood and
credit insurance), negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements, documents, eminent
domain proceeds, condemnation proceeds and tort claim proceeds.
"Collateral Assignment" shall mean the Collateral
Assignment of Rights dated as of the Closing Date executed by BATS and BAC
with respect to their respective rights under the Acquisition Agreement.
"Commitment Percentage" of any Lender shall mean the
percentage set forth below such Lender's name on the signature page
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hereof as same may be adjusted upon any assignment by a Lender pursuant to
Section 15.3(b) hereof.
"Commitment Transfer Supplement" shall mean a
document in the form of Exhibit 15.3 hereto, properly completed and otherwise
in form and substance satisfactory to Agent by which the Purchasing Lender
purchases and assumes a portion of the obligation of Lenders to make Advances
under this Agreement.
"Consents" shall mean all filings and all licenses,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and other third parties, domestic or foreign,
necessary to carry on any Borrower's business, including, without limitation,
any Consents required under all applicable federal, state or other applicable
law.
"Contract Rate" shall mean, as applicable, the
Revolving Interest Rate or the Term Loan Rate.
"Controlled Group" shall mean all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with any Borrower, are
treated as a single employer under Section 414 of the Code.
"Current Assets" at a particular date, shall mean all
cash, cash equivalents, accounts and inventory of BATS on a consolidated basis
and all other items which would, in conformity with GAAP, be included under
current assets on a balance sheet of BATS on a consolidated basis as at such
date; provided, however, that such amounts shall not include (a) any amounts
for any Indebtedness owing by an Affiliate of any Borrower, unless such
Indebtedness arose in connection with the sale of goods or rendition of
services in the ordinary course of business and would otherwise constitute
current assets in conformity with GAAP, (b) any shares of stock issued by an
Affiliate of any Borrower, or (c) the cash surrender value of any life
insurance policy.
"Current Liabilities" at a particular date, shall
mean all amounts which would, in conformity with GAAP, be included under
current liabilities on a balance sheet of BATS on a consolidated basis, as at
such date, but in any event including, without limitation, the amounts of (a)
all Indebtedness of BATS on a consolidated basis payable on demand, or, at the
option of the Person to whom such Indebtedness is owed, not more than twelve
(12) months after such date, (b) any payments in respect of any Indebtedness
of any Borrower (whether installment, serial maturity, sinking fund payment or
otherwise) required to be made not more than twelve (12) months after such
date, (c) all reserves in respect of liabilities or Indebtedness payable on
demand or, at the option of the Person to whom such Indebtedness is owed, not
more than twelve (12) months after such date, the validity of which is not
contested at such date, and (d) all accruals for federal or other taxes
measured by income payable within a twelve (12) month period and in any event
excluding (i) Revolving Advances and (ii)
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the payment in respect of the Term Loan required to be made at the
end of the Term.
"Customer" shall mean and include the account debtor
with respect to any Receivable and/or the prospective purchaser of goods,
services or both with respect to any contract or contract right, and/or any
party who enters into or proposes to enter into any contract or other
arrangement with any Borrower, pursuant to which such Borrower is to deliver
any personal property or perform any services.
"Default" shall mean an event which, with the giving
of notice or passage of time or both, would constitute an Event of
Default.
"Default Rate" shall have the meaning set forth in
Section 3.1 hereof.
"Defaulting Lender" shall have the meaning set forth
in Section 2.16(a) hereof.
"Depository Accounts" shall have the meaning set
forth in Section 4.15(h) hereof.
"Documents" shall have the meaning set forth in
Section 8.1(c) hereof.
"Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Domestic Rate Loan" shall mean any Advance that
bears interest based upon the Alternate Base Rate.
"Early Termination Date" shall have the meaning set
forth in Section 13.1 hereof.
"Earnings Before Interest and Taxes" shall mean for
any period an amount equal to the sum of (i) net income (or loss) of BATS on a
consolidated basis for such period (excluding extraordinary gains and losses),
plus (ii) all interest expense of BATS on a consolidated basis for such
period, plus (iii) all charges against income of BATS on a consolidated basis
for such period for federal, state and local taxes actually paid, plus (iv)
the after tax effect of the Additional Consideration, if any, in the event the
Additional Consideration is deemed to be treated as an expense.
"EBITDA" shall mean for any period the sum of (i)
Earnings Before Interest and Taxes for such period plus (ii) depreciation
expenses for such period, plus (iii) amortization expenses for such period.
"Eligible Inventory" shall mean and include Inventory
consisting of finished goods, with respect to each Borrower valued at the
lower of cost or market value, determined on a first-in-
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first-out basis, which is not, in Agent's reasonable opinion, obsolete, slow
moving or unmerchantable and which Agent, in its reasonable discretion, shall
not deem ineligible Inventory, based on such considerations as Agent may from
time to time deem appropriate including, without limitation, whether the
Inventory is subject to a perfected, first priority security interest in favor
of Agent and whether the Inventory conforms to all standards imposed by any
governmental agency, division or department thereof which has regulatory
authority over such goods or the use or sale thereof.
"Eligible Receivables" shall mean and include with
respect to each Borrower, each Receivable of such Borrower arising in the
ordinary course of such Borrower's business and which Agent, in its reasonable
credit judgment, shall deem to be an Eligible Receivable, based on such
considerations as Agent may from time to time deem appropriate. A Receivable
shall not be deemed eligible unless such Receivable is subject to Agent's
first priority perfected security interest and no other Lien (other than
Permitted Encumbrances), and is evidenced by an invoice or other documentary
evidence satisfactory to Agent. In addition, no Receivable shall be an
Eligible Receivable if:
(a) it arises out of a sale made by any Borrower
to an Affiliate of any Borrower or to a Person controlled by an Affiliate of
any Borrower;
(b) it is due or unpaid more than one hundred and
twenty (120) days after the original invoice date or more than sixty (60) days
after the due date;
(c) fifty percent (50%) or more of the
Receivables from such Customer are not deemed Eligible Receivables hereunder.
Such percentage may, in Agent's reasonable discretion, be increased or
decreased from time to time;
(d) any covenant, representation or warranty
contained in this Agreement with respect to such Receivable has
been breached;
(e) the Customer shall (i) apply for, suffer, or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property or call a meeting of its creditors, (ii) admit in writing its
inability, or be generally unable, to pay its debts as they become due or
cease operations of its present business, (iii) make a general assignment for
the benefit of creditors, (iv) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a
bankrupt or insolvent, (vi) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vii) acquiesce to, or fail to
have dismissed, any petition which is filed against it in any involuntary case
under such bankruptcy laws, or (viii) take any action for the purpose of
effecting any of the foregoing;
-8-
(f) the sale is to a Customer outside the
continental United States of America or Canada, unless the sale is on letter
of credit, guaranty or acceptance terms or covered by credit insurance, in
each case acceptable to Agent in its reasonable discretion;
(g) the sale to the Customer is on a xxxx-and-
hold, guaranteed sale, sale-and-return, sale on approval, consignment or
any other repurchase or return basis or is evidenced by chattel paper;
(h) Agent believes, in its reasonable credit
judgment, that collection of such Receivable is insecure or that such
Receivable may not be paid by reason of the Customer's financial inability to
pay;
(i) the Customer is the United States of America,
any state or any department, agency or instrumentality of any of
them, unless Borrower assigns its right to payment of such
Receivable to Agent pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.
Sub-Section 15 et seq.) or has otherwise complied with other
applicable statutes or ordinances;
(j) the goods giving rise to such Receivable have
not been shipped and delivered to and accepted by the Customer or the services
giving rise to such Receivable have not been performed by the applicable
Borrower and accepted by the Customer or the Receivable otherwise does not
represent a final sale;
(k) the Receivables of the Customer exceed a
credit limit determined by Agent, in its reasonable discretion, to the
extent such Receivable exceeds such limit;
(l) the Receivable is subject to any offset,
deduction, defense, dispute, or counterclaim, the Customer is also a creditor
or supplier of a Borrower or the Receivable is contingent in any respect or
for any reason; provided, however, the portion of each Receivable that would
otherwise be deemed an Eligible Receivable, which is not subject to offset,
deduction, defense, dispute, counterclaim or contingency shall be deemed an
Eligible Receivable;
(m) the applicable Borrower has made any agreement
with any Customer for any deduction therefrom, except for discounts or
allowances made in the ordinary course of business for prompt payment, all of
which discounts or allowances are reflected in the calculation of the face
value of each respective invoice related thereto;
(n) shipment of the merchandise or the rendition
of services has not been completed;
(o) any return, rejection or repossession of the
merchandise has occurred;
-9-
(p) such Receivable is not payable to a Borrower;
or
(q) such Receivable is not otherwise satisfactory
to Agent as determined in good faith by Agent in the exercise of its discretion
in a reasonable manner.
"Environmental Complaint" shall have the meaning set
forth in Section 4.19(d) hereof.
"Environmental Laws" shall mean all federal, state
and local environmental, land use, zoning, health, chemical use, safety and
sanitation laws, statutes, ordinances and codes relating to the protection of
the environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"Equipment" shall mean and include as to each
Borrower all of such Borrower's goods (other than Inventory) whether now owned
or hereafter acquired and wherever located including, without limitation, all
equipment, machinery, apparatus, motor vehicles, fittings, furniture,
furnishings, fixtures, parts, accessories and all replacements and
substitutions therefor or accessions thereto.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time and the rules and
regulations promulgated thereunder.
"ESOP" shall mean the W.S. Battery & Sales Co. Inc.
Employee Stock Ownership Plan and Trust.
"Eurodollar Rate Loan" shall mean an Advance at any
time that bears interest based on the Eurodollar Rate.
"Eurodollar Rate" shall mean for any Eurodollar Rate
Loan for the then current Interest Period relating thereto the rate per annum
(such Eurodollar Rate to be adjusted to the next higher 1/100 of one (1%)
percent) equal to the quotient of (a) LIBOR, divided by (b) a number equal to
1.00 minus the aggregate of the rates (expressed as a decimal) of reserve
requirements current on the day that is two Business Days prior to the
beginning of the Interest Period (including without limitation basic,
supplemental, marginal and emergency reserves) under any regulation
promulgated by the Board of Governors of the Federal Reserve System (or any
other governmental authority having jurisdiction of IBJS) as in effect from
time to time, dealing with reserve requirements prescribed for Eurocurrency
funding including any reserve requirements with respect to "Eurocurrency
liabilities" under Regulation D of the Board of Governors of the Federal
Reserve System.
-10-
"Event of Default" shall mean the occurrence of any
of the events set forth in Article X hereof.
"Federal Funds Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or if such
rate is not so published for any day which is a Business Day, the average of
quotations for such day on such transactions received by IBJS from three
Federal funds brokers of recognized standing selected by IBJS.
"Fixed Charge Coverage Ratio" shall mean and include,
with respect to any fiscal period, the ratio of (a) EBITDA, minus taxes
actually paid during such period, minus capitalized expenditures made during
such period to (b) all Senior Debt Payments during such period.
"Formula Amount" shall have the meaning set forth in
Section 2.1(a).
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from time to
time.
"General Intangibles" shall mean and include as to
each Borrower all of such Borrower's general intangibles, whether now owned or
hereafter acquired including, without limitation, all choses in action, causes
of action, corporate or other business records, inventions, designs, patents,
patent applications, equipment formulations, manufacturing procedures, quality
control procedures, trademarks, service marks, trade secrets, goodwill,
copyrights, design rights, registrations, licenses, franchises, customer
lists, tax refunds, tax refund claims, computer programs, all claims under
guaranties, security interests or other security held by or granted to such
Borrower to secure payment of any of the Receivables by a Customer all rights
of indemnification and all other intangible property of every kind and nature
(other than Receivables).
"Governmental Body" shall mean any nation or
government, any state or other political subdivision thereof or any entity
exercising the legislative, judicial, regulatory or administrative functions
of or pertaining to a government.
"Hazardous Discharge" shall have the meaning set
forth in Section 4.19(d) hereof.
"Hazardous Substance" shall mean, without limitation,
any flammable explosives, radon, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous
or Toxic Substances or related
-11-
materials as defined in CERCLA, the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Sections 1801, et seq.), RCRA, Articles 15 and 27 of the
New York State Environmental Conservation Law or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.
"Hazardous Wastes" shall mean all waste materials
subject to regulation under CERCLA, RCRA or applicable state law, and any
other applicable Federal and state laws now in force or hereafter enacted
relating to hazardous waste disposal.
"Indebtedness" of a Person at a particular date shall
mean all obligations of such Person which in accordance with GAAP would be
classified upon a balance sheet as liabilities (except capital stock and
surplus earned or otherwise) and in any event, without limitation by reason of
enumeration, shall include all indebtedness, debt and other similar monetary
obligations of such Person whether direct or guaranteed and all indebtedness
secured by a Lien on assets owned by such Person, whether or not such
indebtedness actually shall have been created, assumed or incurred by such
Person. Any indebtedness of such Person resulting from the acquisition by such
Person of any assets subject to any Lien shall be deemed, for the purposes
hereof, to be the equivalent of the creation, assumption and incurring of the
indebtedness secured thereby, whether or not actually so created, assumed or
incurred.
"Interest Period" shall mean the period provided for
any Eurodollar Rate Loan pursuant to Section 2.2(b).
"Inventory" shall mean and include as to each
Borrower all of such Borrower's now owned or hereafter acquired goods,
merchandise and other personal property, wherever located, to be furnished
under any contract of service or held for sale or lease, all raw materials,
work in process, finished goods and materials and supplies of any kind, nature
or description which are or might be used or consumed in such Borrower's
business or used in selling or furnishing such goods, merchandise and other
personal property, and all documents of title or other documents representing
them.
"Inventory Advance Rate" shall have the meaning set
forth in Section 2.1(a)(ii) hereof.
"Lender" and "Lenders" shall have the meaning ascribed
to such term in the preamble to this Agreement and shall include each Person
which is a transferee, successor or assign of any Lender.
"Letter of Credit Application" shall have the meaning
set forth in Section 2.10 hereof.
"Letters of Credit" shall have the meaning set forth
in Section 2.9.
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"Letter of Credit Fees" shall have the meaning set
forth in Section 3.2.
"LIBOR" shall mean for any Eurodollar Rate Loan for
the then current Interest Period relating thereto, the rate per annum quoted
by Agent to Borrowers two (2) Business Days prior to the first day of such
Interest Period as the rate available to Agent in the interbank market for
offshore Dollar deposits in immediately available funds for a period equal to
such Interest Period and in an amount equal to the amount of such Eurodollar
Rate Loan.
"Lien" shall mean any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien (whether statutory
or otherwise), Charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction.
"Management Agreement" shall mean the Management
Services Agreement dated as of June 6, 1995 and amended on March 21, 1996
between BATS and Founders Management Services, Inc.
"Material Adverse Effect" shall mean a material
adverse effect on (a) the condition, operations, assets, business or prospects
of the applicable Person or Persons, (b) any Borrower's ability to pay the
Obligations in accordance with the terms thereof, (c) the value of the
Collateral, or Agent's Liens on the Collateral or the priority of any such
Lien or (d) the practical realization of the benefits of Agent's and each
Lender's rights and remedies under this Agreement and the Other Documents.
"Maximum Loan Amount" shall mean $13,000,000 less
repayments of the Term Loan.
"Maximum Revolving Advance Amount" shall mean
$10,000,000.
"Monthly Advances" shall have the meaning set forth
in Section 3.1 hereof.
"Multiemployer Plan" shall mean a "multiemployer
plan" as defined in Sections 3(37) and 4001(a)(3) of ERISA.
"Net Cash Flow" of BATS on a consolidated basis for
any fiscal period shall mean (a) the sum of (i) net income of BATS on a
consolidated basis (excluding losses) for such period; plus (ii) depreciation
and amortization expenses of BATS on a consolidated basis for such period;
plus (iii) all tax refunds for prior fiscal years received in such period;
plus (iv) to the extent deducted in determining net income for such period,
the effect of
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issuing any Additional Stock Consideration, Additional $4.50 Option
Consideration and Additional $6.00 Option Consideration; minus (b) the sum of
(i) scheduled payments of the Term Loan during such period, plus (ii)
scheduled payments of all Indebtedness during such period including the
Preferred Stock Redemption, plus (iii) capital expenditures (net of
Indebtedness incurred to finance such expenditures) in an amount for such
period not to exceed the amount permitted under Section 7.6, plus (iv) the
Additional Cash Consideration to the extent included in net income for such
period.
"Net Worth" at a particular date, shall mean an
amount equal to (a) the aggregate amount of all assets of BATS on a
consolidated basis as may properly be classified as such in accordance with
GAAP consistently applied and such other assets as are properly classified as
"intangible assets", less (b) the aggregate amount of all Indebtedness of BATS
on a consolidated basis, plus (c) the repurchase of 20,000 shares of BATS
owned by Xxxxxx X. Xxxx for an aggregate purchase price not to exceed
$100,000.
"Note" shall mean collectively, the Term Note and the
Revolving Credit Note.
"Obligations" shall mean and include any and all of
each Borrower's Indebtedness and/or liabilities to Agent or Lenders or any
corporation that directly or indirectly controls or is controlled by or is
under common control with Agent or any Lender of every kind, nature and
description, direct or indirect, secured or unsecured, joint, several, joint
and several, absolute or contingent, due or to become due, now existing or
hereafter arising, contractual or tortious, liquidated or unliquidated,
regardless of how such indebtedness or liabilities arise or by what agreement
or instrument they may be evidenced or whether evidenced by any agreement or
instrument, including, but not limited to, any and all of any Borrower's
Indebtedness and/or liabilities under this Agreement, the Other Documents or
under any other agreement between Agent or Lenders and any Borrower and all
obligations of any Borrower to Agent or Lenders to perform acts or refrain
from taking any action.
"Original Owner" shall mean with respect (a) to any
Borrower (other than BATS), BATS and (b) to SEC, BAC.
"Other Documents" shall mean the Note, the Pledge
Agreement, the Questionnaire and any and all other agreements, instruments and
documents, including, without limitation, guaranties, pledges, powers of
attorney, consents, and all other writings heretofore, now or hereafter
executed by any Borrower and/or delivered to Agent or any Lender in respect of
the transactions contemplated by this Agreement.
"Parent" of any Person shall mean a corporation or
other entity owning, directly or indirectly at least 50% of the shares of
stock or other ownership interests having ordinary voting
-14-
power to elect a majority of the directors of the Person, or other Persons
performing similar functions for any such Person.
"Participant" shall mean each Person who shall be
granted the right by any Lender to participate in any of the Advances and who
shall have entered into a participation agreement in form and substance
satisfactory to such Lender.
"Payment Office" shall mean initially Xxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; thereafter, such other office of Agent, if
any, which it may designate by notice to Borrowing Agent and to each Lender to
be the Payment Office.
"Permitted Encumbrances" shall mean (a) Liens in
favor of Agent for the benefit of Agent and Lenders; (b) Liens for taxes,
assessments or other governmental charges not delinquent or being contested in
good faith and by appropriate proceedings and with respect to which proper
reserves have been taken by Borrowers; provided, that, the Lien shall have no
effect on the priority of the Liens in favor of Agent or the value of the
assets in which Agent has such a Lien and a stay of enforcement of any such
Lien shall be in effect; (c) Liens disclosed in the financial statements
referred to in Section 5.5, the existence of which Agent has consented to in
writing; (d) deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under unemployment
insurance; (e) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of any Borrower's business; (f) judgment Liens that have been
stayed or bonded and mechanics', workers', materialmen's or other like Liens
arising in the ordinary course of any Borrower's business with respect to
obligations which are not due or which are being contested in good faith by
the applicable Borrower; (g) Liens placed upon fixed assets hereafter acquired
to secure a portion of the purchase price thereof, provided that (x) any such
lien shall not encumber any other property of the Borrowers and (y) the
aggregate amount of Indebtedness secured by such Liens incurred as a result of
such purchases during any fiscal year shall not exceed the amount provided for
in Section 7.6; and (h) Liens disclosed on Schedule 1.2.
"Person" shall mean any individual, sole
proprietorship, partnership, corporation, business trust, joint stock company,
trust, unincorporated organization, association, limited liability company,
institution, public benefit corporation, joint venture, entity or government
(whether Federal, state, county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan within
the meaning of Section 3(3) of ERISA, maintained for employees of Borrowers or
any member of the Controlled Group or any such Plan to which any Borrower or
any member of the Controlled Group is required to contribute on behalf of any
of its employees.
-15-
"Pledge Agreement" shall mean, collectively, (a) the
Stock Pledge Agreement dated as of the Closing Date between BATS and Lender
pursuant to which BATS pledges all of the issued and outstanding common stock
of TEI, AFA, SEC, BN, WSBS and BAC and the Stock Pledge Agreement dated as of
the Closing Date between, BAC and Lender pursuant to which BAC pledges all of
the issued and outstanding common stock of SEC.
"Preferred Stock" shall mean 750,000 shares of Series
A Preferred Stock of BATS.
"Preferred Stock Redemption" shall mean the
redemption of the Preferred Stock at a price equal to $1.00 per share required
to be made by BATS on April 11, 1997.
"Pro Forma Balance Sheet" shall have the meaning set
forth in Section 5.5(a) hereof.
"Pro Forma Financial Statements" shall have the
meaning set forth in Section 5.5(b) hereof.
"Projections" shall have the meaning set forth in
Section 5.5(b) hereof.
"Purchasing Lender" shall have the meaning set forth
in Section 15.3 hereof.
"Questionnaire" shall mean the Documentation
Information Questionnaire and the responses thereto provided by Borrowers and
delivered to Agent.
"RCRA" shall mean the Resource Conservation and
Recovery Act, 42 U.S.C. xx.xx. 6901 et seq., as same may be amended
from time to time.
"Real Property" shall mean all real property owned,
leased or occupied by any Borrower.
"Receivables" shall mean and include as to each
Borrower all of such Borrower's accounts, contract rights, instruments
(including those evidencing indebtedness owed to Borrowers by their
Affiliates), documents, chattel paper, general intangibles relating to
accounts, drafts and acceptances, and all other forms of obligations owing to
such Borrower arising out of or in connection with the sale or lease of
Inventory or the rendition of services, all guarantees and other security
therefor, whether secured or unsecured, now existing or hereafter created, and
whether or not specifically sold or assigned to Agent hereunder.
"Receivables Advance Rate" shall have the meaning set
forth in Section 2.1(a)(i) hereof.
"Release" shall have the meaning set forth in Section
5.7(c)(i) hereof.
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"Reportable Event" shall mean a reportable event
described in Section 4043(b) of ERISA or the regulations
promulgated thereunder.
"Required Lenders" shall mean Lenders holding at
least sixty six and two-thirds percent (66 2/3%) of the Advances.
"Revolving Advances" shall mean Advances made other
than Letters of Credit or the Term Loan.
"Revolving Credit Note" shall mean, collectively, the
promissory notes referred to in Section 2.1(a) hereof.
"Revolving Interest Rate" shall mean an interest rate
per annum equal to (a) the sum of the Alternate Base Rate plus one quarter of
one percent (.25%) percent with respect to Domestic Rate Loans, or (b) the sum
of the Eurodollar Rate plus two percent (2%) percent with respect to
Eurodollar Rate Loans.
"SEC" shall have the meaning set forth in the
preamble to this Agreement.
"Senior Debt Payments" shall mean and include all
cash actually expended by Borrowers to make (a) interest payments on any
Advances hereunder, plus, (b) scheduled principal payments on the Term Loan,
plus (c) payments for all fees, commissions and charges set forth herein and
with respect to any Advances, plus (d) capitalized lease payments, plus (e)
payments with respect to any other Indebtedness for borrowed money.
"Settlement Date" shall mean the Closing Date and
thereafter Wednesday of each week unless such day is not a Business Day in
which case it shall be the next succeeding Business Day.
"Subsidiary" shall mean a corporation or other entity
of whose shares of stock or other ownership interests having ordinary voting
power (other than stock or other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the directors
of such corporation, or other Persons performing similar functions for such
entity, are owned, directly or indirectly, by such Person.
"Subsidiary Stock" shall mean all of the issued and
outstanding shares of stock owned by BATS of each Borrower (other than BATS)
and all of the issued and outstanding shares of stock owned by any Borrower
(other than BATS) in any subsidiary of such Borrower together with the
certificates representing the Subsidiary Stock and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any and
all of the Subsidiary Stock.
"TEI" shall have the meaning set forth in the
preamble to this Agreement.
-17-
"Term" shall have the meaning set forth in Section
13.1 hereof.
"Term Loan" shall mean the Advances made pursuant to
Section 2.4 hereof.
"Term Loan Rate" shall mean an interest rate per
annum equal to (a) the sum of the Alternate Base Rate plus three-quarters of
one percent (.75%) with respect to Domestic Rate Loans or, (b) the sum of the
Eurodollar Rate plus two and one-half percent (2.50%) with respect to
Eurodollar Rate Loans.
"Term Note" shall mean collectively, the promissory
notes described in Section 2.4 hereof.
"Termination Event" shall mean (i) a Reportable Event
with respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any
Borrower or any member of the Controlled Group from a Plan or Multiemployer
Plan during a plan year in which such entity was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of
intent to terminate a Plan in a distress termination described in Section
4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate
a Plan or Multiemployer Plan; (v) any event or condition (a) which is
reasonably likely to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan or
Multiemployer Plan, or (b) that is reasonably likely to result in termination
of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of any Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"Toxic Substance" shall mean and include any material
present on the Real Property or the Leasehold Interests which has been shown
to have significant adverse effect on human health or which is subject to
regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. xx.xx.
2601 et seq., applicable state law, or any other applicable Federal or state
laws now in force or hereafter enacted relating to toxic substances. "Toxic
Substance" includes but is not limited to asbestos, polychlorinated biphenyls
(PCBs) and lead-based paints.
"Transactions" shall have the meaning set forth in
Section 5.5 hereof.
"Transferee" shall have the meaning set forth in
Section 15.3(b) hereof.
"Undrawn Availability" at a particular date shall
mean an amount equal to (a) the lesser of (i) the Formula Amount or (ii) the
Maximum Revolving Advance Amount, minus (b) the sum of (i) the outstanding
amount of Advances (other than the Term Loan) plus (ii) all amounts due and
owing to Borrowers' trade creditors which are outstanding sixty (60) days or
more past due date trade terms,
-18-
plus (iii) fees and expenses for which Borrowers are liable but which have not
been paid or charged to Borrowers' Account.
"Week" shall mean the time period commencing with the
opening of business on a Wednesday and ending on the end of
business the following Tuesday.
"WSBS" shall have the meaning set forth in the
preamble to this Agreement.
"WSBS Acquisition Agreement" shall mean the Stock
Purchase Agreement dated January 3, 1997 as of December 31, 1996
among BATS, WSBS and Xxxxxxx X. Xxxx and Xxxxxxx Xxxx, as Trustees
of W.S. Battery & Sales Co. Inc. Employee Stock Ownership Plan and
Trust, including all exhibits and schedules thereto.
1.3. Uniform Commercial Code Terms. All terms used herein
and defined in the Uniform Commercial Code as adopted in the State
of New York shall have the meaning given therein unless otherwise
defined herein.
1.4. Certain Matters of Construction. The terms "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. Wherever
appropriate in the context, terms used herein in the singular also include the
plural and vice versa. All references to statutes and related regulations
shall include any amendments of same and any successor statutes and
regulations. Unless otherwise provided, all references to any instruments or
agreements to which Agent is a party, including, without limitation,
references to any of the Other Documents, shall include any and all
modifications or amendments thereto and any and all extensions or renewals
thereof.
II. ADVANCES, PAYMENTS.
2.1. (a) Revolving Advances. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and
not jointly, will make Revolving Advances to Borrowers in aggregate
amounts outstanding at any time equal to such Lender's Commitment
Percentage of the lesser of (x) the Maximum Revolving Advance
Amount less the aggregate amount of outstanding Letters of Credit
or (y) an amount equal to the sum of:
(i) up to 80%, subject to the provisions of
Section 2.1(b) hereof ("Receivables Advance Rate"), of
Eligible Receivables, plus
(ii) up to the lesser of (A) 50%, subject to the
provisions of Section 2.1(b) hereof ("Inventory
Advance Rate"), of the value of the Eligible
Inventory (the Receivables Advance Rate and the
Inventory Advance Rate shall be referred to
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collectively, as the "Advance Rates") or (B)
$6,000,000 in the aggregate at any one time, plus
(iii) the product of (a) the aggregate amount of
outstanding Letters of Credit times (b) the Inventory
Advance Rate, minus
(iv) the aggregate amount of outstanding Letters of
Credit, minus
(v) such reserves as Agent may reasonably deem
proper and necessary from time to time.
The amount derived from the sum of (x) Sections 2.1(a)(y)(i) (ii)
and (iii) minus (y) Section 2.1 (a)(y)(v) at any time and from time to time
shall be referred to as the "Formula Amount". The Revolving Advances shall be
evidenced by the secured promissory notes ("Revolving Credit Note")
substantially in the form attached hereto as Exhibit 2.1(a).
(b) Discretionary Rights. The Advance Rates may
be increased or decreased by Agent at any time and from time to time in the
exercise of its reasonable discretion. Each Borrower consents to any such
increases or decreases and acknowledges that decreasing the Advance Rates or
increasing the reserves may limit or restrict Advances requested by Borrowing
Agent.
2.2. Procedure for Revolving Advances Borrowing.
(a) Borrowing Agent on behalf of any Borrower may
notify Agent prior to 11:00 a.m. on a Business Day of a Borrower's request to
incur, on that day, a Revolving Advance hereunder. Should any amount required
to be paid as interest hereunder, or as fees or other charges under this
Agreement or any other agreement with Agent or Lenders, or with respect to any
other Obligation, become due, same shall be deemed a request for a Revolving
Advance as of the date such payment is due, in the amount required to pay in
full such interest, fee, charge or Obligation under this Agreement or any
other agreement with Agent or Lenders, and such request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above,
in the event any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing
Agent on behalf of any Borrower shall give Agent written notice prior to 11:00
a.m. on a Business Day at least three (3) Business Days' prior to the date of
the proposed borrowing, specifying (i) the date of the proposed borrowing
(which shall be a Business Day), (ii) the type of borrowing and the amount on
the date of such Advance to be borrowed, which amount shall be a minimum
amount of $500,000, and (iii) the duration of the first Interest Period
therefor. Interest Periods for Eurodollar Rate Loans shall be for one, two or,
three months. No Eurodollar Rate Loan shall be made available to Borrower
during the continuance of a Default or an Event of Default.
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(c) Each Interest Period of a Eurodollar Rate Loan
shall commence on the date such Eurodollar Rate Loan is made and shall end on
such date as Borrowing Agent may elect as set forth in (b)(iii) above provided
that the exact length of each Interest Period shall be determined in
accordance with the practice of the interbank market for offshore Dollar
deposits and no Interest Period shall end after the last day of the Term.
Borrowing Agent shall elect the initial Interest Period
applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent
pursuant to Section 2.2(b) or by its notice of conversion given to Agent
pursuant to Section 2.2(d), as the case may be. Borrowing Agent shall elect
the duration of each succeeding Interest Period by giving irrevocable written
notice to Agent of such duration not less than three (3) Business Days prior
to the last day of the then current Interest Period applicable to such
Eurodollar Rate Loan. If Agent does not receive timely notice of the Interest
Period elected by Borrowing Agent, Borrowers shall be deemed to have elected
to convert to a Domestic Rate Loan subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have
occurred and be continuing, any Borrower may, on the last Business Day of the
then current Interest Period applicable to any outstanding Eurodollar Rate
Loan, or on any Business Day with respect to Domestic Rate Loans, convert any
such loan into a loan of another type in the same aggregate principal amount
provided that any conversion of a Eurodollar Rate Loan shall be made only on
the last Business Day of the then current Interest Period applicable to such
Eurodollar Rate Loan. If a Borrower desires to convert a loan, Borrowing Agent
shall give Agent not less than three (3) Business Days' prior written notice
to convert from a Domestic Rate Loan to a Eurodollar Rate Loan or one (1)
Business Day's prior written notice to convert from a Eurodollar Rate Loan to
a Domestic Rate Loan, specifying the date of such conversion, the loans to be
converted and if the conversion is from a Domestic Rate Loan to any other type
of loan, the duration of the first Interest Period therefor. After giving
effect to each such conversion, there shall not be outstanding more than three
(3) Eurodollar Rate Loans, in the aggregate.
(e) At its option and upon three (3) Business
Days' prior written notice, any Borrower may prepay the Eurodollar Rate Loans
in whole at any time or in part from time to time, without premium or penalty,
but with accrued interest on the principal being prepaid to the date of such
repayment. Such Borrower shall specify the date of prepayment of Advances
which are Eurodollar Rate Loans and the amount of such prepayment. In the
event that any prepayment of a Eurodollar Rate Loan is required or permitted
on a date other than the last Business Day of the then current Interest Period
with respect thereto, such Borrower shall indemnify Agent and Lenders therefor
in accordance with Section 2.2(f) hereof.
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(f) Each Borrower shall indemnify Agent and
Lenders and hold Agent and Lenders harmless from and against any and all
losses or expenses that Agent and Lenders may sustain or incur as a
consequence of any prepayment, conversion of or any default by any Borrower in
the payment of the principal of or interest on any Eurodollar Rate Loan or
failure by any Borrower to complete a borrowing of, a prepayment of or
conversion of or to a Eurodollar Rate Loan after notice thereof has been
given, including, but not limited to, any interest payable by Agent or Lenders
to lenders of funds obtained by it in order to make or maintain its Eurodollar
Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by Agent or any Lender to
Borrowing Agent shall be conclusive absent manifest error.
(g) Notwithstanding any other provision hereof,
if any applicable law, treaty, regulation or directive, or any change therein
or in the interpretation or application thereof, shall make it unlawful for any
Lender (for purposes of this subsection (g), the term "Lender" shall include
any Lender and the office or branch where any Lender or any corporation or
bank controlling such Lender makes or maintains any Eurodollar Rate Loans) to
make or maintain its Eurodollar Rate Loans, the obligation of Lenders to make
Eurodollar Rate Loans hereunder shall forthwith be cancelled and Borrowers
shall, if any affected Eurodollar Rate Loans are then outstanding, promptly
upon request from Agent, either pay all such affected Eurodollar Rate Loans or
convert such affected Eurodollar Rate Loans into loans of another type. If any
such payment or conversion of any Eurodollar Rate Loan is made on a day that
is not the last day of the Interest Period applicable to such Eurodollar Rate
Loan, Borrowers shall pay Agent, upon Agent's request, such amount or amounts
as may be necessary to compensate Lenders for any loss or expense sustained or
incurred by Lenders in respect of such Eurodollar Rate Loan as a result of
such payment or conversion, including (but not limited to) any interest or
other amounts payable by Lenders to lenders of funds obtained by Lenders in
order to make or maintain such Eurodollar Rate Loan. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
Lenders to Borrowing Agent shall be conclusive absent manifest error.
2.3. Disbursement of Advance Proceeds. All Advances shall be
disbursed from whichever office or other place Agent may designate from time
to time and, together with any and all other Obligations of Borrowers to Agent
or Lenders, shall be charged to Borrowers' Account on Agent's books. During
the Term, Borrowers may use the Revolving Advances by borrowing, prepaying and
reborrowing, all in accordance with the terms and conditions hereof. The
proceeds of each Revolving Advance requested by Borrowers or deemed to have
been requested by Borrowers under Section 2.2(a) hereof shall, with respect to
requested Revolving Advances to the extent Lenders make such Revolving
Advances, be made available to the applicable Borrower on the day so requested
by way of credit to such Borrower's operating account at IBJS, or such other
bank as Borrowing Agent may designate following
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notification to Agent, in immediately available federal funds or other
immediately available funds or, with respect to Revolving Advances deemed to
have been requested by any Borrower, be disbursed to Agent to be applied to
the outstanding Obligations giving rise to such deemed request.
2.4. Term Loan. Subject to the terms and conditions of this
Agreement, each Lender, severally and not jointly, will make a Term Loan to
Borrowers in the sum equal to such Lender's Commitment Percentage of
$3,000,000. The Term Loan shall be advanced on the Closing Date and shall be,
with respect to principal, payable as follows, subject to acceleration upon
the occurrence of an Event of Default under this Agreement or termination of
this Agreement: equal monthly installments of $50,000 each commencing on
February 1, 1997 and on the first day of each month thereafter with the unpaid
principal balance due on the last day of the Term. The Term Loan shall be
evidenced by a secured promissory notes (collectively, "Term Note") in
substantially the form attached hereto as Exhibit 2.4.
2.5. Maximum Advances. The aggregate balance of Revolving
Advances outstanding at any time shall not exceed the lesser of (a) Maximum
Revolving Advance Amount, less outstanding Letters of Credit or (b) the
Formula Amount, less outstanding Letters of Credit.
2.6. Repayment of Advances.
(a) The Advances shall be due and payable in full
on the last day of the Term subject to earlier prepayment as herein provided.
The Term Loan shall be due and payable as provided in Section 2.4 hereof and in
the Term Note.
(b) Each Borrower recognizes that the amounts
evidenced by checks, notes, drafts or any other items of payment relating to
and/or proceeds of Collateral may not be collectible by Agent on the date
received. In consideration of Agent's agreement to conditionally credit
Borrowers' Account as of the Business Day on which Agent receives those items
of payment, each Borrower agrees that, in computing the charges under this
Agreement, all items of payment shall be deemed applied by Agent on account of
the Obligations one (1) Business Day after the Business Day Agent receives
such payments via wire transfer or electronic depository check. Agent is not,
however, required to credit Borrowers' Account for the amount of any item of
payment which is unsatisfactory to Agent and Agent may charge Borrowers'
Account for the amount of any item of payment which is returned to Agent
unpaid.
(c) All payments of principal, interest and other
amounts payable hereunder, or under any of the related agreements shall be
made to Agent at the Payment Office not later than 1:00 P.M. (New York Time)
on the due date therefor in lawful money of the United States of America in
federal funds or other funds immediately available to Agent. Agent shall have
the right to
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effectuate payment on any and all Obligations due and owing hereunder by
charging Borrowers' Account or by making Advances as provided in Section 2.2
hereof.
(d) Borrowers shall pay principal, interest, and
all other amounts payable hereunder, or under any related agreement, without
any deduction whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
2.7. Repayment of Excess Advances. The aggregate balance of
Advances outstanding at any time in excess of the maximum amount of Advances
permitted hereunder shall be immediately due and payable without the necessity
of any demand, at the Payment Office, whether or not a Default or Event of
Default has occurred.
2.8. Statement of Account. Agent shall maintain, in accordance
with its customary procedures, a loan account ("Borrowers' Account") in the
name of Borrowers in which shall be recorded the date and amount of each
Advance made by Lenders and the date and amount of each payment in respect
thereof; provided, however, the failure by Agent to record the date and amount
of any Advance shall not adversely affect Agent or any Lender. Each month,
Agent shall send to Borrowing Agent a statement showing the accounting for the
Advances made, payments made or credited in respect thereof, and other
transactions between Lenders and Borrowers, during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in the absence
of manifest error and shall constitute an account stated between Lenders and
Borrowers unless Agent receives a written statement of Borrowers' specific
exceptions thereto within thirty (30) days after such statement is received by
Borrowing Agent. The records of Agent with respect to the loan account shall
be conclusive evidence absent manifest error of the amounts of Advances and
other charges thereto and of payments applicable thereto.
2.9. Letters of Credit. Subject to the terms and conditions
hereof, Agent shall issue or cause the issuance of documentary Letters of
Credit ("Letters of Credit") on behalf of any Borrower; provided, however,
that Agent will not be required to issue or cause to be issued any Letters of
Credit to the extent that the face amount of such Letters of Credit would then
cause the sum of (i) the outstanding Revolving Advances plus (ii) outstanding
Letters of Credit (with the requested Letter of Credit being deemed to be
outstanding for purposes of this calculation) to exceed the lesser of (x) the
Maximum Revolving Advance Amount or (y) the Formula Amount which is calculated
as if the requested Letter of Credit has been issued. The maximum amount of
outstanding Letters of Credit shall not exceed $2,000,000 in the aggregate at
any time. All disbursements or payments related to Letters of Credit shall be
deemed to be Revolving Advances and shall bear interest at the Revolving
Interest Rate; Letters of Credit that have not been drawn upon shall not bear
interest. Letters of Credit shall be subject to the terms and conditions set
forth in the Letter of Credit and Security Agreement attached hereto as
Exhibit 2.9.
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2.10. Issuance of Letters of Credit.
(a) Borrowing Agent on behalf of Borrowers may
request Agent to issue or cause the issuance of a Letter of Credit by
delivering to Agent at the Payment Office, Agent's standard form of Letter of
Credit and Security Agreement together with Agent's standard form of Letter of
Credit Application (collectively, the "Letter of Credit Application")
completed to the satisfaction of Agent; and, such other certificates,
documents and other papers and information as Agent may reasonably request.
(b) Each Letter of Credit shall, among other
things, (i) provide for the payment of sight drafts when presented for honor
thereunder in accordance with the terms thereof and when accompanied by the
documents described therein and (ii) have an expiry date not later than six
(6) months after such Letter of Credit's date of issuance and in no event
later than the last day of the Term. Each Letter of Credit Application and
each Letter of Credit shall be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any amendments or revision thereof and, to the extent
not inconsistent therewith, the laws of the State of New York.
2.11. Requirements For Issuance of Letters of Credit.
(a) In connection with the issuance of any Letter
of Credit, Borrowers shall indemnify, save and hold Agent and each Lender
harmless from any loss, cost, expense or liability, including, without
limitation, payments made by Agent and any Lender, and expenses and reasonable
attorneys' fees incurred by Agent or any Lender arising out of, or in
connection with, any Letter of Credit to be issued or created for any
Borrower. Borrowers shall be bound by Agent's or any issuing or accepting
bank's regulations and good faith interpretations of any Letter of Credit
issued or created for Borrowers' Account, although this interpretation may be
different from its own; and, neither Agent nor any Lender, the bank which
opened the Letter of Credit, nor any of its correspondents shall be liable for
any error, negligence, or mistakes, whether of omission or commission, in
following Borrowing Agent's or any Borrower's instructions or those contained
in any Letter of Credit or of any modifications, amendments or supplements
thereto or in issuing or paying any Letter of Credit, except for Agent's or
any Lender's or such correspondents' willful misconduct.
(b) Borrowing Agent shall authorize and direct
any bank which issues a Letter of Credit to name the applicable Borrower as the
"Account Party" therein and to deliver to Agent all instruments, documents,
and other writings and property received by the bank pursuant to the Letter of
Credit and to accept and rely upon Agent's instructions and agreements with
respect to all matters arising in connection with the Letter of Credit, the
application therefor or any acceptance therefor.
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(c) In connection with all Letters of Credit
issued or caused to be issued by Agent under this Agreement, each Borrower
hereby appoints Agent, or its designee, as its attorney, with full power and
authority (i) to sign and/or endorse such Borrower's name upon any warehouse
or other receipts, letter of credit applications and acceptances; (ii) to sign
such Borrower's name on bills of lading; (iii) to clear Inventory through the
United States of America Customs Department ("Customs") in the name of such
Borrower or Agent or Agent's designee, and to sign and deliver to Customs
officials powers of attorney in the name of such Borrower for such purpose;
and (iv) to complete in such Borrower's name or Agent's, or in the name of
Agent's designee, any order, sale or transaction, obtain the necessary
documents in connection therewith, and collect the proceeds thereof. Neither
Agent nor its attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for Agent's or its
attorney's willful misconduct. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain outstanding.
(d) Each Lender shall to the extent of the
percentage amount equal to the product of such Lender's Commitment Percentage
times the aggregate amount of all unreimbursed reimbursement obligations
arising from disbursements made or obligations incurred with respect to the
Letters of Credit be deemed to have irrevocably purchased an undivided
participation in each such unreimbursed reimbursement obligation. In the event
that at the time a disbursement is made the unpaid balance of Revolving
Advances exceeds or would exceed, with the making of such disbursement, the
lesser of the Maximum Revolving Advance Amount or the Formula Amount, and such
disbursement is not reimbursed by Borrowers within two (2) Business Days,
Agent shall promptly notify each Lender and upon Agent's demand each Lender
shall pay to Agent such Lender's proportionate share of such unreimbursed
disbursement together with such Lender's proportionate share of Agent's
unreimbursed costs and expenses relating to such unreimbursed disbursement.
Upon receipt by Agent of a repayment from any Borrower of any amount disbursed
by Agent for which Agent had already been reimbursed by Lenders, Agent shall
deliver to each Lender that Lender's pro rata share of such repayment. Each
Lender's participation commitment shall continue until the last to occur of
any of the following events: (A) Agent ceases to be obligated to issue Letters
of Credit hereunder; (B) no Letter of Credit issued hereunder remains
outstanding and uncancelled or (C) all Persons (other than the applicable
Borrower) have been fully reimbursed for all payments made under or relating
to Letters of Credit.
2.12. Additional Payments. Any sums expended by Agent or any
Lender due to any Borrower's failure to perform or comply with its obligations
under this Agreement or any Other Document including, without limitation, any
Borrower's obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1
hereof, may be charged to Borrowers' Account as a Revolving Advance and added
to the Obligations.
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2.13. Manner of Borrowing and Payment.
(a) Each borrowing of Revolving Advances shall be
advanced according to the applicable Commitment Percentages of Lenders. The
Term Loan shall be advanced according to the Commitment Percentages of
Lenders.
(b) Each payment (including each prepayment) by
Borrowers on account of the principal of and interest on the Revolving
Advances, shall be applied to the Revolving Advances pro rata according to the
applicable Commitment Percentages of Lenders. Each payment (including each
prepayment) by Borrowers on account of the principal of and interest on the
Term Note, shall be made from or to, or applied to that portion of the Term
Loan evidenced by the Term Note pro rata according to the Commitment
Percentages of Lenders. Except as expressly provided herein, all payments
(including prepayments) to be made by Borrower on account of principal,
interest and fees shall be made without set off or counterclaim and shall be
made to Agent on behalf of the Lenders to the Payment Office, in each case on
or prior to 1:00 P.M., New York time, in Dollars and in immediately available
funds.
(c) (i) Notwithstanding anything to the
contrary contained in Sections 2.12(a) and (b) hereof, commencing with the
first Business Day following the Closing Date, each borrowing of Revolving
Advances shall be advanced by Agent and each payment by any Borrower on
account of Revolving Advances shall be applied first to those Revolving
Advances made by Agent. On or before 1:00 P.M., New York time, on each
Settlement Date commencing with the first Settlement Date following the
Closing Date, Agent and Lenders shall make certain payments as follows: (I) if
the aggregate amount of new Revolving Advances made by Agent during the
preceding Week (if any) exceeds the aggregate amount of repayments applied to
outstanding Revolving Advances during such preceding Week, then each Lender
shall provide Agent with funds in an amount equal to its applicable Commitment
Percentage of the difference between (w) such Revolving Advances and (x) such
repayments and (II) if the aggregate amount of repayments applied to
outstanding Revolving Advances during such Week exceeds the aggregate amount
of new Revolving Advances made during such Week, then Agent shall provide each
Lender with funds in an amount equal to its applicable Commitment Percentage
of the difference between (y) such repayments and (z) such Revolving Advances.
(ii) Each Lender shall be entitled to
earn interest at the applicable Contract Rate on outstanding Advances which it
has funded.
(iii) Promptly following each Settlement
Date, Agent shall submit to each Lender a certificate with respect to payments
received and Advances made during the Week immediately preceding such
Settlement Date. Such certificate of Agent shall be conclusive in the absence
of manifest error.
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(d) If any Lender or Participant (a "benefitted
Lender") shall at any time receive any payment of all or part of its Advances,
or interest thereon, or receive any Collateral in respect thereof (whether
voluntarily or involuntarily or by set-off) in a greater proportion than any
such payment to and Collateral received by any other Lender, if any, in
respect of such other Lender's Advances, or interest thereon, and such greater
proportionate payment or receipt of Collateral is not expressly permitted
hereunder, such benefitted Lender shall purchase for cash from the other
Lenders a participation in such portion of each such other Lender's Advances,
or shall provide such other Lender with the benefits of any such Collateral,
or the proceeds thereof, as shall be necessary to cause such benefitted Lender
to share the excess payment or benefits of such Collateral or proceeds ratably
with each of Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. Each Lender so
purchasing a portion of another Lender's Advances may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Lender were the direct holder of such
portion.
(e) Unless Agent shall have been notified by
telephone, confirmed in writing, by any Lender that such Lender will not make
the amount which would constitute its applicable Commitment Percentage of the
Advances available to Agent, Agent may (but shall not be obligated to) assume
that such Lender shall make such amount available to Agent and, in reliance
upon such assumption, make available to Borrowers a corresponding amount.
Agent will promptly notify Borrowers of its receipt of any such notice from a
Lender. If such amount is made available to Agent on a date after a Settlement
Date, such Lender shall pay to Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Rate (computed on the basis of a year
of 360 days) during such period as quoted by Agent, times (ii) such amount,
times (iii) the number of days from and including such Settlement Date to the
date on which such amount becomes immediately available to Agent. A
certificate of Agent submitted to any Lender with respect to any amounts owing
under this paragraph (e) shall be conclusive, in the absence of manifest
error. If such amount is not in fact made available to Agent by such Lender
within three (3) Business Days after such Settlement Date, Agent shall be
entitled to recover such an amount, with interest thereon at the rate per
annum then applicable to such Revolving Advances hereunder, on demand from
Borrowers; provided, however, that Agent's right to such recovery shall not
prejudice or otherwise adversely affect Borrowers' rights (if any) against
such Lender.
2.14. Mandatory Prepayments.
(a) When any Borrower sells or otherwise disposes
of any Collateral other than Inventory in the ordinary course of business,
Borrowers shall repay the Advances in an amount equal to
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the net proceeds of such sale (i.e., gross proceeds less the reasonable costs
of such sales or other dispositions), such repayments to be made promptly but
in no event more than one (1) Business Day following receipt of such net
proceeds, and until the date of payment, such proceeds shall be held in trust
for Agent. The foregoing shall not be deemed to be implied consent to any such
sale otherwise prohibited by the terms and conditions hereof. Such repayments
shall be applied first, to the outstanding principal installments on the Term
Loan in the inverse order of the maturities thereof and, second, to the
remaining Advances in such order as Agent may determine, subject to Borrowers'
ability to reborrow Revolving Advances in accordance with the terms hereof.
(b) Borrowers shall prepay the outstanding amount
of the Advances in an amount equal to fifty (50%) of Net Cash Flow for each
fiscal year commencing on or after January 1, 1997, payable upon delivery of
the financial statements to Agent referred to in and required by Section 9.7
for such fiscal year but in any event not later than one hundred and twenty
(120) days after the end of each such fiscal year, which amount shall be
applied first, to the outstanding principal installments in the inverse order
of the maturities thereof and, second, to the remaining Advances in such order
as Agent may determine subject to Borrowers' ability to reborrow Revolving
Advances in accordance with the terms hereof. In the event that the financial
statement is not so delivered, then a calculation based upon estimated amounts
shall be made by Agent upon which calculation Borrowers shall make the
prepayment required by this Section 2.14(b), subject to adjustment when the
financial statement is delivered to Agent as required hereby. The calculation
made by Agent shall not be deemed a waiver of any rights Agent or Lenders may
have as a result of the failure by Borrowers to deliver such financial
statement.
2.15. Use of Proceeds. Borrowers shall apply the proceeds of
Advances to (i) enable BATS to acquire the stock of BN and WSBS, (ii) enable
BAC to acquire the assets of WSJ Enterprises, Inc., (iii) repay existing
indebtedness of AFA owed to Fleet Bank, (iv) pay fees and expenses relating to
the transactions, and (v) to provide for their working capital needs.
2.16. Defaulting Lender.
(a) Notwithstanding anything to the contrary
contained herein, in the event any Lender (x) has refused (which refusal
constitutes a breach by such Lender of its obligations under this Agreement)
to make available its portion of any Advance or (y) notifies either Agent or
Borrowing Agent that it does not intend to make available its portion of any
Advance (if the actual refusal would constitute a breach by such Lender of its
obligations under this Agreement) (each, a "Lender Default"), all rights and
obligations hereunder of such Lender (a "Defaulting Lender") as to which a
Lender Default is in effect and of the other parties hereto shall be modified
to the extent of the express provisions of this Section 2.16 while such Lender
Default remains in effect.
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(b) Advances shall be incurred pro rata from
Lenders (the "Non-Defaulting Lenders") which are not Defaulting Lenders based
on their respective Commitment Percentages, and no Commitment Percentage of
any Lender or any pro rata share of any Advances required to be advanced by
any Lender shall be increased as a result of such Lender Default. Amounts
received in respect of principal of any type of Advances shall be applied to
reduce the applicable Advances of each Lender pro rata based on the aggregate
of the outstanding Advances of that type of all Lenders at the time of such
application; provided, that, such amount shall not be applied to any Advances
of a Defaulting Lender at any time when, and to the extent that, the aggregate
amount of Advances of any Non-Defaulting Lender exceeds such Non-Defaulting
Lender's Commitment Percentage of all Advances then outstanding.
(c) A Defaulting Lender shall not be entitled to
give instructions to Agent or to approve, disapprove, consent to or vote on
any matters relating to this Agreement and the Other Documents. All
amendments, waivers and other modifications of this Agreement and the Other
Documents may be made without regard to a Defaulting Lender and, for purposes
of the definition of "Required Lenders", a Defaulting Lender shall be deemed
not to be a Lender and not to have Advances outstanding.
(d) Other than as expressly set forth in this
Section 2.16, the rights and obligations of a Defaulting Lender (including the
obligation to indemnify Agent) and the other parties hereto shall remain
unchanged. Nothing in this Section 2.16 shall be deemed to release any
Defaulting Lender from its obligations under this Agreement and the Other
Documents, shall alter such obligations, shall operate as a waiver of any
default by such Defaulting Lender hereunder, or shall prejudice any rights
which any Borrower, Agent or any Lender may have against any Defaulting Lender
as a result of any default by such Defaulting Lender hereunder.
(e) In the event a Defaulting Lender
retroactively cures to the satisfaction of Agent the breach which caused a
Lender to become a Defaulting Lender, such Defaulting Lender shall no longer
be a Defaulting Lender and shall be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
3.1. Interest. Interest on Advances shall be payable in arrears
on the first day of each month with respect to the preceding month with
respect to Domestic Rate Loans and, with respect to Eurodollar Rate Loans at
the end of each Interest Period. Interest charges shall be computed on the
actual principal amount of Advances outstanding during the month (the "Monthly
Advances") at a rate per annum equal to (i) with respect to Revolving
Advances, the applicable Revolving Interest Rate and (ii) with respect to the
applicable Term Loan, the Term Loan Rate. Whenever, subsequent to the date of
this Agreement, the Alternate
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Base Rate is increased or decreased, the applicable Contract Rate shall be
similarly changed without notice or demand of any kind by an amount equal to
the amount of such change in the Alternate Base Rate during the time such
change or changes remain in effect. Upon and after the occurrence of an Event
of Default, and during the continuation thereof, the Obligations shall bear
interest at the applicable Contract Rate plus two percent (2%) per annum (the
"Default Rate").
3.2. Letter of Credit Fees.
Borrowers shall pay Agent (i) for the ratable benefit
of Lenders for issuing or causing the issuance of a Letter of Credit, a fee
equal to 1% of the original and each increase in the face amount thereof for
each 120 days or part thereof of its term (the "Letter of Credit Fees"), and
(ii) the issuing bank's other customary charges payable in connection with
Letters of Credit as in effect from time to time. A current schedule of such
charges is attached hereto as Exhibit 3.2. Such fees and charges shall be
payable (i) on the opening of such Letter of Credit and (ii) at the time of
each increase in face amount thereof. Any such charge in effect at the time of
a particular transaction shall be the charge for that transaction,
notwithstanding any subsequent change in the issuing bank's prevailing charges
for that type of transaction. All Letter of Credit Fees payable hereunder
shall be deemed earned in full on the date when the same are due and payable
hereunder and shall not be subject to rebate or proration upon the termination
of this Agreement for any reason.
Upon occurrence of an Event of Default and during the
continuation thereof upon the request of Agent, and upon termination of this
Agreement Borrowers will cause cash to be deposited and maintained in an
account with Agent, as cash collateral, in an amount equal to one hundred and
five percent (105%) of the outstanding Letters of Credit, and each Borrower
hereby irrevocably authorizes Agent, in its discretion, on such Borrower's
behalf and in such Borrower's name, to open such an account and to make and
maintain deposits therein, or in an account opened by such Borrower, in the
amounts required to be made by such Borrower, out of the proceeds of
Receivables or other Collateral or out of any other funds of such Borrower
coming into any Lender's possession at any time. Agent will invest such cash
collateral (less applicable reserves) in such short-term money-market items as
to which Agent and such Borrower mutually agree and the net return on such
investments shall be credited to such account and constitute additional cash
collateral. No Borrower may withdraw amounts credited to any such account
except upon payment and performance in full of all Obligations and termination
of this Agreement.
3.3. (a) Closing Fee. Upon the execution of this
Agreement, Borrowers shall pay to Agent for the ratable benefit of
Lenders a closing fee of $50,000 less that portion of the
commitment fee of $25,000 heretofore paid by Borrowers to Agent.
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(b) Facility Fee. If, for any month during the Term, the
average daily unpaid balance of the Revolving Advances for each day of such
month does not equal the Maximum Revolving Advance Amount, then Borrowers
shall pay to Agent for the ratable benefit of Lenders a fee at a rate equal
to three eights of one percent (3/8 of 1%) per annum on the amount by which
the Maximum Revolving Advance Amount exceeds such average daily unpaid
balance. Such fee shall be payable to Agent in arrears on the first day of
each month with respect to the preceding month.
3.4. (a) Collateral Evaluation Fee. Borrowers shall pay Agent a
collateral evaluation fee equal to $1,500 per month commencing on the first
day of the month following the Closing Date and on the first day of each month
thereafter during the Term. The collateral evaluation fee shall be deemed
earned in full on the date when same is due and payable hereunder and shall
not be subject to rebate or proration upon termination of this Agreement for
any reason.
(b) Collateral Monitoring Fee. Borrowers shall pay to Agent
on the first day of each month following any month in which Agent performs any
collateral monitoring - namely any field examination, collateral analysis or
other business analysis, the need for which is to be determined by Agent and
which monitoring is undertaken by Agent or for Agent's benefit - a collateral
monitoring fee in an amount equal to $600 per day for each person employed to
perform such monitoring, plus all costs and disbursements incurred by Agent in
the performance of such examination or analysis.
3.5. Computation of Interest and Fees. Interest and fees
hereunder shall be computed on the basis of a year of 360 days and for the
actual number of days elapsed. If any payment to be made hereunder becomes due
and payable on a day other than a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and interest thereon shall be
payable at the applicable Contract Rate during such extension.
3.6. Maximum Charges. In no event whatsoever shall interest and
other charges charged hereunder exceed the highest rate permissible under law.
In the event interest and other charges as computed hereunder would otherwise
exceed the highest rate permitted under law, such excess amount shall be first
applied to any unpaid principal balance owed by Borrowers, and if the then
remaining excess amount is greater than the previously unpaid principal
balance, Lenders shall promptly refund such excess amount to Borrowers and the
provisions hereof shall be deemed amended to provide for such permissible
rate.
3.7. Increased Costs. In the event that any applicable law,
treaty or governmental regulation, or any change therein or in the
interpretation or application thereof, or compliance by any Lender (for
purposes of this Section 3.7, the term "Lender" shall include Agent or any
Lender and any corporation or bank controlling Agent or any Lender) and the
office or branch where Agent or any
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Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive (whether or not having the force of law) from any central
bank or other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any
kind whatsoever with respect to this Agreement or change the basis of taxation
of payments to Agent or any Lender of principal, fees, interest or any other
amount payable hereunder or under any Other Documents (except for changes in
the rate of tax on the overall net income of Agent or any Lender by the
jurisdiction in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve,
special deposit, assessment or similar requirement against assets held by, or
deposits in or for the account of, advances or loans by, or other credit
extended by, any office of Agent or any Lender, including (without limitation)
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System; or
(c) impose on Agent or any Lender or the London
interbank Eurodollar market any other condition with respect to
this Agreement or any Other Documents;
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems to be material or to reduce the amount of any
payment (whether of principal, interest or otherwise) in respect of any of the
Advances by an amount that Agent or such Lender reasonably deems to be
material, then, in any case Borrowers shall promptly pay Agent or such Lender,
upon its demand, such additional amount as will compensate Agent or such
Lender for such additional cost or such reduction, as the case may be. Agent
or such Lender shall certify the amount of such additional cost or reduced
amount to Borrowers, and such certification shall be conclusive absent
manifest error.
3.8. Basis For Determining Interest Rate Inadequate or
Unfair. In the event that Agent or any Lender shall have
determined that:
(a) reasonable means do not exist for ascertaining
the Eurodollar Rate applicable pursuant to Section 2.2 hereof for
any Interest Period; or
(b) Dollar deposits in the relevant amount and for
the relevant maturity are not available in the London interbank Eurodollar
market, with respect to an outstanding Eurodollar Rate Loan, a proposed
Eurodollar Rate Loan, or a proposed conversion of a Domestic Rate Loan into a
Eurodollar Rate Loan, then Agent shall give Borrowing Agent prompt written,
telephonic or telegraphic notice of such determination. If such notice is
given, (i) any such requested Eurodollar Rate Loan shall be made as a Domestic
Rate Loan, unless Borrowing Agent shall notify Agent no later than 10:00 a.m.
(New York City time) two (2) Business Days prior to the
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date of such proposed borrowing, that its request for such borrowing shall be
cancelled or made as an unaffected type of Eurodollar Rate Loan, (ii) any
Domestic Rate Loan or Eurodollar Rate Loan which was to have been converted to
an affected type of Eurodollar Rate Loan shall be continued as or converted
into a Domestic Rate Loan, or, if Borrowing Agent shall notify Agent, no later
than 10:00 a.m. (New York City time) two (2) Business Days prior to the
proposed conversion, shall be maintained as an unaffected type of Eurodollar
Rate Loan, and (iii) any outstanding affected Eurodollar Rate Loans shall be
converted into a Domestic Rate Loan, or, if Borrowing Agent shall notify
Agent, no later than 10:00 a.m. (New York City time) two (2) Business Days
prior to the last Business Day of the then current Interest Period applicable
to such affected Eurodollar Rate Loan, shall be converted into an unaffected
type of Eurodollar Rate Loan, on the last Business Day of the then current
Interest Period for such affected Eurodollar Rate Loans. Until such notice has
been withdrawn, Lenders shall have no obligation to make an affected type of
Eurodollar Rate Loan or maintain outstanding affected Eurodollar Rate Loans
and no Borrower shall have the right to convert a Domestic Rate Loan or an
unaffected type of Eurodollar Rate Loan into an affected type of Eurodollar
Rate Loan.
3.9. Capital Adequacy.
(a) In the event that Agent or any Lender shall
have determined that any applicable law, rule, regulation or guideline
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or any Lender (for purposes of
this Section 3.9, the term "Lender" shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) and the office or branch
where Agent or any Lender (as so defined) makes or maintains any Eurodollar
Rate Loans with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on Agent or any Lender's capital as a consequence of its obligations hereunder
to a level below that which Agent or such Lender could have achieved but for
such adoption, change or compliance (taking into consideration Agent's and
each Lender's policies with respect to capital adequacy) by an amount deemed
by Agent or any Lender to be material, then, from time to time, Borrowers
shall pay upon demand to Agent or such Lender such additional amount or
amounts as will compensate Agent or such Lender for such reduction. In
determining such amount or amounts, Agent or such Lender may use any
reasonable averaging or attribution methods. The protection of this Section
3.9 shall be available to Agent and each Lender regardless of any possible
contention of invalidity or inapplicability with respect to the applicable
law, regulation or condition.
(b) A certificate of Agent or such Lender setting
forth such amount or amounts as shall be necessary to compensate
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Agent or such Lender with respect to Section 3.9(a) hereof when delivered to
Borrowers shall be conclusive absent manifest error.
IV. COLLATERAL: GENERAL TERMS
4.1. Security Interest in the Collateral. To secure the prompt
payment and performance to Agent and each Lender of the Obligations, each
Borrower hereby assigns, pledges and grants to Agent for the ratable benefit
of each Lender a continuing security interest in and to all of its Collateral,
whether now owned or existing or hereafter acquired or arising and wheresoever
located. Each Borrower shall xxxx its books and records as may be necessary or
appropriate to evidence, protect and perfect Agent's security interest and
shall cause its financial statements to reflect such security interest.
4.2. Perfection of Security Interest. Each Borrower shall take
all action that may be necessary or desirable, or that Agent may request, so
as at all times to maintain the validity, perfection, enforceability and
priority of Agent's security interest in the Collateral or to enable Agent to
protect, exercise or enforce its rights hereunder and in the Collateral,
including, but not limited to, (i) immediately discharging all Liens other
than Permitted Encumbrances, (ii) obtaining landlords' or mortgagees' lien
waivers, (iii) delivering to Agent, endorsed or accompanied by such
instruments of assignment as Agent may specify, and stamping or marking, in
such manner as Agent may specify, any and all chattel paper, instruments,
letters of credits and advices thereof and documents evidencing or forming a
part of the Collateral, (iv) entering into warehousing, lockbox and other
custodial arrangements satisfactory to Agent, and (v) executing and delivering
financing statements, instruments of pledge, mortgages, notices and
assignments, in each case in form and substance satisfactory to Agent,
relating to the creation, validity, perfection, maintenance or continuation of
Agent's security interest under the Uniform Commercial Code or other
applicable law. Agent is hereby authorized to file financing statements signed
by Agent instead of Borrower in accordance with Section 9-402(2) of Uniform
Commercial Code as adopted in the State of New York. All charges, expenses and
fees Agent may incur in doing any of the foregoing, and any local taxes
relating thereto, shall be charged to Borrowers' Account as a Revolving
Advance and added to the Obligations, or, at Agent's option, shall be paid to
Agent for the ratable benefit of Lenders immediately upon demand.
4.3. Disposition of Collateral. Each Borrower will safeguard and
protect all Collateral for Agent's general account and make no disposition
thereof whether by sale, lease or otherwise except (a) the sale of Inventory
in the ordinary course of business and (b) the disposition or transfer of
obsolete and worn-out Equipment in the ordinary course of business during any
fiscal year having an aggregate fair market value of not more than $250,000
and only to the extent that (i) the proceeds of any such disposition are used
to acquire replacement Equipment which is subject to
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Agent's first priority security interest or (ii) the proceeds of which are
remitted to Agent as a prepayment on the Term Loan to be applied in the manner
set forth in Section 2.14(a).
4.4. Preservation of Collateral. Following the occurrence of a
Default or Event of Default in addition to the rights and remedies set forth
in Section 11.1 hereof, Agent: (a) may at any time take such steps as Agent
deems necessary to protect Agent's interest in and to preserve the Collateral,
including the hiring of such security guards or the placing of other security
protection measures as Agent may deem appropriate; (b) may employ and maintain
at any of Borrower's premises a custodian who shall have full authority to do
all acts necessary to protect Agent's interests in the Collateral; (c) may
lease warehouse facilities to which Agent may move all or part of the
Collateral; (d) may use any Borrower's owned or leased lifts, hoists, trucks
and other facilities or equipment for handling or removing the Collateral; and
(e) shall have, and is hereby granted, a right of ingress and egress to the
places where the Collateral is located, and may proceed over and through any
of Borrower's owned or leased property. Each Borrower shall cooperate fully
with all of Agent's efforts to preserve the Collateral and will take such
actions to preserve the Collateral as Agent may direct. All of Agent's
expenses of preserving the Collateral, including any expenses relating to the
bonding of a custodian, shall be charged to Borrowers' Account as a Revolving
Advance and added to the Obligations.
4.5. Ownership of Collateral. With respect to the Collateral, at
the time the Collateral becomes subject to Agent's security interest: (a) each
Borrower shall be the sole owner of and fully authorized and able to sell,
transfer, pledge and/or grant a first priority security interest in each and
every item of the its respective Collateral to Agent; and, except for
Permitted Encumbrances the Collateral shall be free and clear of all Liens and
encumbrances whatsoever; (b) each document and agreement executed by each
Borrower or delivered to Agent or any Lender in connection with this Agreement
shall be true and correct in all respects; (c) all signatures and endorsements
of each Borrower that appear on such documents and agreements shall be genuine
and each Borrower shall have full capacity to execute same; (d) each
Borrower's Equipment and Inventory shall be located as set forth on Schedule
4.5 and shall not be removed from such location(s) without the prior written
consent of Agent except with respect to the sale of Inventory in the ordinary
course of business and Equipment to the extent permitted in Section 4.3
hereof; and (f) Borrowers shall not consign Inventory to or keep Inventory
having an aggregate fair market value in excess of $85,000 at Control
Products, Inc., Automotive Technologies and Magnacharge.
4.6. Defense of Agent's and Lenders' Interests. Until (a)
payment and performance in full of all of the Obligations and (b)
termination of this Agreement, Agent's interests in the Collateral
shall continue in full force and effect. During such period no
Borrower shall, without Agent's prior written consent, pledge, sell
(except Inventory in the ordinary course of business and Equipment
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to the extent permitted in Section 4.3 hereof), assign, transfer, create or
suffer to exist a Lien upon or encumber or allow or suffer to be encumbered in
any way except for Permitted Encumbrances, any part of the Collateral. Each
Borrower shall defend Agent's interests in the Collateral against any and all
Persons whatsoever. At any time following demand by Agent for payment of all
Obligations, Agent shall have the right to take possession of the indicia of
the Collateral and the Collateral in whatever physical form contained,
including without limitation: labels, stationery, documents, instruments and
advertising materials. If Agent exercises this right to take possession of the
Collateral, Borrowers shall, upon demand, assemble it in the best manner
possible and make it available to Agent at a place reasonably convenient to
Agent. In addition, with respect to all Collateral, Agent and Lenders shall be
entitled to all of the rights and remedies set forth herein and further
provided by the Uniform Commercial Code or other applicable law. Each Borrower
shall, and Agent may, at its option, instruct all suppliers, carriers,
forwarders, warehouses or others receiving or holding cash, checks, Inventory,
documents or instruments in which Agent holds a security interest to deliver
same to Agent and/or subject to Agent's order and if they shall come into any
Borrower's possession, they, and each of them, shall be held by such Borrower
in trust as Agent's trustee, and such Borrower will immediately deliver them
to Agent in their original form together with any necessary endorsement.
4.7. Books and Records. Each Borrower shall (a) keep proper books
of record and account in which full, true and correct entries will be made of
all dealings or transactions of or in relation to its business and affairs;
(b) set up on its books accruals with respect to all taxes, assessments,
charges, levies and claims; and (c) on a reasonably current basis set up on
its books, from its earnings, allowances against doubtful Receivables,
advances and investments and all other proper accruals (including without
limitation by reason of enumeration, accruals for premiums, if any, due on
required payments and accruals for depreciation, obsolescence, or amortization
of properties), which should be set aside from such earnings in connection
with its business. All determinations pursuant to this subsection shall be
made in accordance with, or as required by, GAAP consistently applied in the
opinion of such independent public accountant as shall then be regularly
engaged by Borrowers.
4.8. Financial Disclosure. Each Borrower hereby irrevocably
authorizes and directs all accountants and auditors employed by such Borrower
at any time during the Term to exhibit and deliver to Agent and each Lender
copies of any of the Borrower's financial statements, trial balances or other
accounting records of any sort in the accountant's or auditor's possession,
and to disclose to Agent and each Lender any information such accountants may
have concerning such Borrower's financial status and business operations. Each
Borrower hereby authorizes all federal, state and municipal authorities to
furnish to Agent and each Lender copies of reports or examinations relating to
such
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Borrower, whether made by such Borrower or otherwise; however, Agent and each
Lender will attempt to obtain such information or materials directly from such
Borrower prior to obtaining such information or materials from such
accountants or such authorities.
4.9. Compliance with Laws. Each Borrower shall comply with all
acts, rules, regulations and orders of any legislative, administrative or
judicial body or official applicable to its respective Collateral or any part
thereof or to the operation of such Borrower's business the non-compliance
with which could reasonably be expected to have a Material Adverse Effect on
Borrowers taken as a whole. The Collateral at all times shall be maintained in
accordance with the requirements of all insurance carriers which provide
insurance with respect to the Collateral so that such insurance shall remain
in full force and effect.
4.10. Inspection of Premises. At all reasonable times Agent and
each Lender shall have full access to and the right to audit, check, inspect
and make abstracts and copies from each Borrower's books, records, audits,
correspondence and all other papers relating to the Collateral and the
operation of each Borrower's business. Agent, any Lender and their agents may
enter upon any of Borrower's premises at any time during business hours and at
any other reasonable time, and from time to time, for the purpose of
inspecting the Collateral and any and all records pertaining thereto and the
operation of such Borrower's business.
4.11. Insurance. Each Borrower shall bear the full risk of
any loss of any nature whatsoever with respect to the Collateral. At each
Borrower's own cost and expense in amounts and with carriers acceptable to
Agent, each Borrower shall (a) keep all its insurable properties and
properties in which each Borrower has an interest insured against the hazards
of fire, flood, sprinkler leakage, those hazards covered by extended coverage
insurance and such other hazards, and for such amounts, as is customary in the
case of companies engaged in businesses similar to such Borrower's including,
without limitation, business interruption insurance;, (b) maintain a bond in
such amounts as is customary in the case of companies engaged in businesses
similar to such Borrower insuring against larceny, embezzlement or other
criminal misappropriation of insured's officers and employees who may either
singly or jointly with others at any time have access to the assets or funds
of such Borrower either directly or through authority to draw upon such funds
or to direct generally the disposition of such assets; (c) maintain public and
product liability insurance against claims for personal injury, death or
property damage suffered by others; (d) maintain all such worker's
compensation or similar insurance as may be required under the laws of any
state or jurisdiction in which Borrower is engaged in business; (e) furnish
Agent with (i) copies of all policies and evidence of the maintenance of such
policies by the renewal thereof at least thirty (30) days before any
expiration date, and (ii) appropriate loss payable endorsements in form and
substance satisfactory to Agent, naming Agent as a co-insured and loss payee
as its interests may appear with respect to all insurance coverage referred to
in clauses (a) and c) above, and
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providing (A) that all proceeds thereunder shall be payable to Agent, (B) no
such insurance shall be affected by any act or neglect of the insured or owner
of the property described in such policy, and (C) that such policy and loss
payable clauses may not be cancelled, amended or terminated unless at least
thirty (30) days' prior written notice is given to Agent. In the event of any
loss thereunder, the carriers named therein hereby are directed by Agent and
the applicable Borrower to make payment for such loss to Agent and not to such
Borrower and Agent jointly. If any insurance losses are paid by check, draft
or other instrument payable to any Borrower and Agent jointly, Agent may
endorse such Borrower's name thereon and do such other things as Agent may
deem advisable to reduce the same to cash. Agent is hereby authorized to
adjust and compromise claims under insurance coverage referred to in clauses
(a) and (c) above. All loss recoveries received by Agent upon any such
insurance may be applied to the Obligations, in such order as Agent in its
sole discretion shall determine. Any surplus shall be paid by Agent to
Borrowers or applied as may be otherwise required by law. Any deficiency
thereon shall be paid by Borrowers to Agent, on demand.
4.12. Failure to Pay Insurance. If any Borrower fails to obtain
insurance as hereinabove provided, or to keep the same in force, Agent, if
Agent so elects, may obtain such insurance and pay the premium therefor for
Borrowers' Account, and charge Borrowers' Account therefor and such expenses
so paid shall be part of the Obligations.
4.13. Payment of Taxes. Each Borrower will pay, when due, all
taxes, assessments and other Charges lawfully levied or assessed upon such
Borrower or any of the Collateral including, without limitation, real and
personal property taxes, assessments and charges and all franchise, income,
employment, social security benefits, withholding, and sales taxes. If any tax
by any governmental authority is or may be imposed on or as a result of any
transaction between any Borrower and Agent or any Lender which Agent or any
Lender may be required to withhold or pay or if any taxes, assessments, or
other Charges remain unpaid after the date fixed for their payment, or if any
claim shall be made which, in Agent's or any Lender's opinion, may possibly
create a valid Lien on the Collateral, Agent may without notice to Borrowers
pay the taxes, assessments or other Charges and each Borrower hereby
indemnifies and holds Agent and each Lender harmless in respect thereof. Agent
will not pay any taxes, assessments or Charges to the extent that any Borrower
has contested or disputed those taxes, assessments or Charges in good faith,
by expeditious protest, administrative or judicial appeal or similar
proceeding provided that any related tax lien is stayed and sufficient
reserves are established to the reasonable satisfaction of Agent to protect
Agent's security interest in or Lien on the Collateral. The amount of any
payment by Agent under this Section 4.13 shall be charged to Borrowers'
Account as a Revolving Advance and added to the Obligations and, until
Borrowers shall furnish Agent with an indemnity therefor (or supply Agent with
evidence satisfactory to Agent that due provision for the payment thereof has
been made),
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Agent may hold without interest any balance standing to Borrowers' credit and
Agent shall retain its security interest in any and all Collateral held by
Agent.
4.14. Payment of Leasehold Obligations. Each Borrower shall at
all times pay, when and as due, its rental obligations under all leases under
which it is a tenant, and shall otherwise comply, in all material respects,
with all other terms of such leases and keep them in full force and effect
and, at Agent's request will provide evidence of having done so.
4.15. Receivables.
(a) Nature of Receivables. Each of the
Receivables shall be a bona fide and valid account representing a bona fide
indebtedness incurred by the Customer therein named, for a fixed sum as set
forth in the invoice relating thereto (provided immaterial or unintentional
invoice errors shall not be deemed to be a breach hereof) with respect to an
absolute sale or lease and delivery of goods upon stated terms of a Borrower,
or work, labor or services theretofore rendered by a Borrower as of the date
each Receivable is created. Same shall be due and owing in accordance with the
applicable Borrower's standard terms of sale without dispute, setoff or
counterclaim except as may be stated on the accounts receivable schedules
delivered by Borrowers to Agent.
(b) Solvency of Customers. Each Customer, to the
best of each Borrower's knowledge, as of the date each Receivable is created,
is and will be solvent and able to pay all Receivables on which the Customer
is obligated in full when due or with respect to such Customers of any
Borrower who are not solvent such Borrower has set up on its books and in its
financial records bad debt reserves adequate to cover such Receivables.
(c) Locations of Borrower. Each Borrower's chief
executive office is located at the addresses set forth on Schedule 4.15(c)
hereto. Until written notice is given to Agent by Borrowing Agent of any other
office at which any Borrower keeps its records pertaining to Receivables, all
such records shall be kept at such executive office.
(d) Collection of Receivables. Until any
Borrower's authority to do so is terminated by Agent (which notice Agent may
give at any time following the occurrence of an Event of Default or a Default
or when Agent in its reasonable discretion deems it to be in Lenders' best
interest to do so), each Borrower will, at such Borrower's sole cost and
expense, but on Agent's behalf and for Agent's account, collect as Agent's
property and in trust for Agent all amounts received on Receivables, and shall
not commingle such collections with any Borrower's funds or use the same
except to pay Obligations. Each Borrower shall, upon request, deliver to
Agent, or deposit in the Blocked Account, in original form and on the date of
receipt thereof, all checks, drafts, notes, money orders, acceptances, cash
and other evidences of Indebtedness.
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(e) Notification of Assignment of Receivables.
At any time following the occurrence of an Event of Default or a Default, Agent
shall have the right to send notice of the assignment of, and Agent's security
interest in, the Receivables to any and all Customers or any third party
holding or otherwise concerned with any of the Collateral. Thereafter, Agent
shall have the sole right to collect the Receivables, take possession of the
Collateral, or both. Agent's actual collection expenses, including, but not
limited to, stationery and postage, telephone and telegraph, secretarial and
clerical expenses and the salaries of any collection personnel used for
collection, may be charged to Borrowers' Account and added to the Obligations.
(f) Power of Agent to Act on Borrowers' Behalf.
Agent shall have the right to receive, endorse, assign and/or deliver in the
name of Agent or any Borrower any and all checks, drafts and other instruments
for the payment of money relating to the Receivables, and each Borrower hereby
waives notice of presentment, protest and non-payment of any instrument so
endorsed. Each Borrower hereby constitutes Agent or Agent's designee as such
Borrower's attorney with power (i) to endorse such Borrower's name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
or Collateral; (ii) to sign such Borrower's name on any invoice or xxxx of
lading relating to any of the Receivables, drafts against Customers,
assignments and verifications of Receivables; (iii) to send verifications of
Receivables to any Customer; (iv) to sign such Borrower's name on all
financing statements or any other documents or instruments deemed necessary or
appropriate by Agent to preserve, protect, or perfect Agent's interest in the
Collateral and to file same; (v) to demand payment of the Receivables; (vi) to
enforce payment of the Receivables by legal proceedings or otherwise; (vii) to
exercise all of Borrowers' rights and remedies with respect to the collection
of the Receivables and any other Collateral; (viii) to settle, adjust,
compromise, extend or renew the Receivables; (ix) to settle, adjust or
compromise any legal proceedings brought to collect Receivables; (x) to
prepare, file and sign such Borrower's name on a proof of claim in bankruptcy
or similar document against any Customer; (xi) to prepare, file and sign such
Borrower's name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables; and (xii) to do all other
acts and things necessary to carry out this Agreement. All acts of said
attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission nor for
any error of judgment or mistake of fact or of law, unless done maliciously or
with gross (not mere) negligence; this power being coupled with an interest is
irrevocable while any of the Obligations remain unpaid. Agent shall have the
right at any time following the occurrence of an Event of Default or Default,
to change the address for delivery of mail addressed to any Borrower to such
address as Agent may designate and to receive, open and dispose of all mail
addressed to any Borrower.
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(g) No Liability. Neither Agent nor any Lender
shall, under any circumstances or in any event whatsoever, have any liability
for any error or omission or delay of any kind occurring in the settlement,
collection or payment of any of the Receivables or any instrument received in
payment thereof, or for any damage resulting therefrom, except for Agent's or
such Lender's gross (not mere) negligence or willful misconduct. Following the
occurrence of an Event of Default or Default, Agent may, without notice or
consent from any Borrower, xxx upon or otherwise collect, extend the time of
payment of, compromise or settle for cash, credit or upon any terms any of the
Receivables or any other securities, instruments or insurance applicable
thereto and/or release any obligor thereof. Agent is authorized and empowered
to accept, following the occurrence of an Event of Default or Default, the
return of the goods represented by any of the Receivables, without notice to
or consent by any Borrower, all without discharging or in any way affecting
any Borrower's liability hereunder.
(h) Establishment of a Lockbox Account, Dominion
Account. All proceeds of Collateral shall, at the direction of Agent, be
deposited by Borrowers into a lockbox account, dominion account or such other
"blocked account" ("Blocked Accounts") as Agent may require pursuant to an
arrangement with such bank as may be selected by Borrowers and be acceptable
to Agent. Borrowers shall issue to any such bank, an irrevocable letter of
instruction directing said bank to transfer such funds so deposited to Agent,
either to any account maintained by Agent at said bank or by wire transfer to
appropriate account(s) of Agent. All funds deposited in the Blocked Account
shall immediately become the property of Agent and Borrower shall obtain the
agreement by such bank to waive any offset rights against the funds so
deposited. Neither Agent nor any Lender assumes any responsibility for any
Blocked Account arrangement, including without limitation, any claim of accord
and satisfaction or release with respect to deposits accepted by any bank
thereunder. Alternatively, Agent may establish depository accounts
("Depository Accounts") in the name of Agent at a bank or banks for the
deposit of such funds and Borrowers shall deposit all proceeds of Collateral
or cause same to be deposited, in kind, in such Depository Accounts of Agent
in lieu of depositing same to the Blocked Accounts.
(i) Adjustments. No Borrower will, without
Agent's consent, compromise or adjust any Receivables (or extend the time for
payment thereof) or accept any returns of merchandise or grant any additional
discounts, allowances or credits thereon except for those compromises,
adjustments, returns, discounts, credits and allowances as have been
heretofore customary in the business of such Borrower.
4.16. Inventory. To the extent Inventory held for sale or
lease has been produced by any Borrower, it has been and will be
produced by such Borrower in accordance with the Federal Fair Labor
Standards Act of 1938, as amended, and all rules, regulations and
orders thereunder.
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4.17. Maintenance of Equipment. The Equipment shall be maintained
in good operating condition and repair (reasonable wear and tear excepted) and
all necessary replacements of and repairs thereto shall be made so that the
value and operating efficiency of the Equipment shall be maintained and
preserved. No Borrower shall use or operate the Equipment in violation of any
law, statute, ordinance, code, rule or regulation. Each Borrower shall have
the right to sell Equipment to the extent set forth in Section 4.3 hereof.
4.18. Exculpation of Liability. Nothing herein contained shall be
construed to constitute Agent or any Lender as any Borrower's agent for any
purpose whatsoever, nor shall Agent or any Lender be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause
thereof. Neither Agent nor any Lender, whether by anything herein or in any
assignment or otherwise, assume any of Borrower's obligations under any
contract or agreement assigned to Agent or such Lender, and neither Agent nor
any Lender shall be responsible in any way for the performance by Borrower of
any of the terms and conditions thereof.
4.19. Environmental Matters. (a) Borrowers shall ensure
that the Real Property remains in compliance with all Environmental
Laws and they shall not place or permit to be placed any Hazardous
Substances on any Real Property except as not prohibited by applicable law or
appropriate governmental authorities.
(b) Borrowers shall establish and maintain a
system to assure and monitor continued compliance with all applicable
Environmental Laws which system shall include periodic reviews of such
compliance.
(c) Borrowers shall (i) employ in connection with
the use of the Real Property appropriate technology necessary to maintain
compliance with any applicable Environmental Laws and (ii) dispose of any and
all Hazardous Waste generated at the Real Property only at facilities and with
carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws. Borrowers shall use their best efforts to obtain
certificates of disposal, such as hazardous waste manifest receipts, from all
treatment, transport, storage or disposal facilities or operators employed by
Borrowers in connection with the transport or disposal of any Hazardous Waste
generated at the Real Property.
(d) In the event any Borrower obtains, gives or
receives notice of any Release or threat of Release of a reportable quantity
of any Hazardous Substances at the Real Property (any such event being
hereinafter referred to as a "Hazardous Discharge") or receives any notice of
violation, request for information or notification that it is potentially
responsible for investigation or cleanup of environmental conditions at the
Real Property, demand letter or complaint, order, citation, or other written
notice with regard to any Hazardous Discharge or violation of Environmental
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Laws affecting the Real Property or any Borrower's interest therein (any of
the foregoing is referred to herein as an "Environmental Complaint") from any
Person, including any state agency responsible in whole or in part for
environmental matters in the state in which the Real Property is located or
the United States Environmental Protection Agency (any such person or entity
hereinafter the "Authority"), then Borrowing Agent shall, within five (5)
Business Days, give written notice of same to Agent detailing facts and
circumstances of which any Borrower is aware giving rise to the Hazardous
Discharge or Environmental Complaint. Such information is to be provided to
allow Agent to protect its security interest in the Real Property and is not
intended to create nor shall it create any obligation upon Agent or any Lender
with respect thereto.
(e) Borrowers shall promptly forward to Agent
copies of any request for information, notification of potential liability,
demand letter relating to potential responsibility with respect to the
investigation or cleanup of Hazardous Substances at any other site owned,
operated or used by any Borrower to dispose of Hazardous Substances and shall
continue to forward copies of correspondence between any Borrower and the
Authority regarding such claims to Agent until the claim is settled. Borrowers
shall promptly forward to Agent copies of all documents and reports concerning
a Hazardous Discharge at the Real Property that any Borrower is required to
file under any Environmental Laws. Such information is to be provided solely
to allow Agent to protect Agent's security interest in the Real Property and
the Collateral.
(f) Borrowers shall respond promptly to any
Hazardous Discharge or Environmental Complaint and take all necessary action
in order to safeguard the health of any Person and to avoid subjecting the
Collateral or Real Property to any Lien. If any Borrower shall fail to respond
promptly to any Hazardous Discharge or Environmental Complaint or any Borrower
shall fail to comply with any of the requirements of any Environmental Laws,
Agent on behalf of Lenders may, but without the obligation to do so, for the
sole purpose of protecting Agent's interest in Collateral: (A) give such
notices or (B) enter onto the Real Property (or authorize third parties to
enter onto the Real Property) and take such actions as Agent (or such third
parties as directed by Agent) deem reasonably necessary or advisable, to clean
up, remove, mitigate or otherwise deal with any such Hazardous Discharge or
Environmental Complaint. All reasonable costs and expenses incurred by Agent
and Lenders (or such third parties) in the exercise of any such rights,
including any sums paid in connection with any judicial or administrative
investigation or proceedings, fines and penalties, together with interest
thereon from the date expended at the Default Rate for Domestic Rate Loans
constituting Revolving Advances shall be paid upon demand by Borrowers, and
until paid shall be added to and become a part of the Obligations secured by
the Liens created by the terms of this Agreement or any other agreement
between Agent, any Lender and any Borrower.
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(g) Promptly upon the written request of Agent
from time to time, Borrowers shall provide Agent, at Borrowers' expense, with
an environmental site assessment or environmental audit report prepared by an
environmental engineering firm acceptable in the reasonable opinion of Agent,
to assess with a reasonable degree of certainty the existence of a Hazardous
Discharge and the potential costs in connection with abatement, cleanup and
removal of any Hazardous Substances found on, under, at or within the Real
Property. Any report or investigation of such Hazardous Discharge proposed and
acceptable to an appropriate Authority that is charged to oversee the clean-up
of such Hazardous Discharge shall be acceptable to Agent. If such estimates,
individually or in the aggregate, exceed $100,000, Agent shall have the right
to require Borrowers to post a bond, letter of credit or other security
reasonably satisfactory to Agent to secure payment of these costs and
expenses.
(h) Borrowers shall defend and indemnify Agent
and Lenders and hold Agent, Lenders and their respective employees, agents,
directors and officers harmless from and against all loss, liability, damage
and expense, claims, costs, fines and penalties, including attorney's fees,
suffered or incurred by Agent or Lenders under or on account of any
Environmental Laws, including, without limitation, the assertion of any Lien
thereunder, with respect to any Hazardous Discharge, the presence of any
Hazardous Substances affecting the Real Property, whether or not the same
originates or emerges from the Real Property or any contiguous real estate,
including any loss of value of the Real Property as a result of the foregoing
except to the extent such loss, liability, damage and expense is attributable
to any Hazardous Discharge resulting from actions on the part of Agent or any
Lender. Borrowers' obligations under this Section 4.19 shall arise upon the
discovery of the presence of any Hazardous Substances at the Real Property,
whether or not any federal, state, or local environmental agency has taken or
threatened any action in connection with the presence of any Hazardous
Substances. Borrowers' obligation and the indemnifications hereunder shall
survive the termination of this Agreement.
4.20. Financing Statements. Except as respects the
financing statements filed by Agent and the financing statements described on
Schedule 1.2, no financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office.
V. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants as follows:
5.1. Authority. Such Borrower has full power, authority
and legal right to enter into this Agreement and the Other Documents and to
perform all its respective Obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and of the Other
Documents (a) are within such Borrower's
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corporate powers, have been duly authorized, are not in contravention of law
or the terms of such Borrower's by-laws, certificate of incorporation or other
applicable documents relating to such Borrower's formation or to the conduct
of such Borrower's business or of any material agreement or undertaking to
which such Borrower is a party or by which such Borrower is bound, and (b)
will not conflict with nor result in any breach in any of the provisions of or
constitute a default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of such Borrower under the provisions of
any agreement, charter document, instrument, by-law, or other instrument to
which such Borrower or its property is a party or by which it may be bound.
5.2. Formation and Qualification. (a) Such Borrower is duly
incorporated and in good standing under the laws of the state listed on
Schedule 5.2(a) and is qualified to do business and is in good standing in the
states listed on Schedule 5.2(a) which constitute all states in which
qualification and good standing are necessary for such Borrower to conduct its
business and own its property and where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect on such Borrower.
Each Borrower has delivered to Agent true and complete copies of its
certificate of incorporation and by-laws and will promptly notify Agent of any
amendment or changes thereto.
(b) The only Subsidiaries of each Borrower are
listed on Schedule 5.2(b).
5.3. Survival of Representations and Warranties. All
representations and warranties of such Borrower contained in this Agreement
and the Other Documents shall be true at the time of such Borrower's execution
of this Agreement and the Other Documents, and shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.
5.4. Tax Returns. Such Borrower's federal tax identification
number is set forth on Schedule 5.4. Each Borrower has filed all federal,
state and local tax returns and other reports each is required by law to file
and has paid all taxes, assessments, fees and other governmental charges that
are due and payable. The provision for taxes on the books of each Borrower are
adequate for all years not closed by applicable statutes, and for its current
fiscal year, and no Borrower has any knowledge of any deficiency or additional
assessment in connection therewith not provided for on its books.
5.5. Financial Statements.
(a) The pro forma balance sheet of BATS on a
combined basis (the "Pro Forma Balance Sheet") furnished to Agent on the
Closing Date reflects the consummation of the transactions contemplated by the
Acquisition Agreement and under this Agreement (the "Transactions") fairly
reflects the financial condition of BATS on a combined basis as of the Closing
Date after giving effect
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to the Transactions, and has been prepared in accordance with GAAP,
consistently applied. The Pro Forma Balance Sheet has been certified to the
best of their knowledge, as fairly reflecting the financial condition of BATS
on a combined basis as of the Closing Date after giving effect to the
Transactions in all material respects by the Vice-President and Chief
Financial Officer of BATS. All financial statements referred to in this
subsection 5.5(a), including the related schedules and notes thereto, have
been prepared, in accordance with GAAP, except as may be disclosed in such
financial statements.
(b) The twelve-month cash flow projections of BATS
on a consolidated basis and their projected balance sheets as of the Closing
Date, copies of which are annexed hereto as Exhibit 5.5(b) (the "Projections")
were prepared by Agent are based on underlying assumptions which provide a
reasonable basis for the projections contained therein. The cash flow
Projections together with the Pro Forma Balance Sheet, are referred to as the
"Pro Forma Financial Statements".
5.6. Corporate Name. No Borrower has been known by any other
corporate name in the past five years and does not sell Inventory under any
other name except as set forth on Schedule 5.6, nor has any Borrower been the
surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person during the preceding five (5)
years.
5.7. O.S.H.A. and Environmental Compliance.
(a) Each Borrower has duly complied with, and its
facilities, business, assets, property, leaseholds and Equipment are in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act, the Environmental Protection Act, RCRA and
all other Environmental Laws; there have been no outstanding citations,
notices or orders of non-compliance issued to any Borrower or relating to its
business, assets, property, leaseholds or Equipment under any such laws, rules
or regulations.
(b) Each Borrower has been issued all required
federal, state and local licenses, certificates or permits relating to all
applicable Environmental Laws.
(c) (i) There are no visible signs of releases,
spills, discharges, leaks or disposal (collectively referred to as "Releases")
of Hazardous Substances at, upon, under or within any Real Property; (ii)
there are no underground storage tanks or polychlorinated biphenyls on the
Real Property; (iii) the Real Property has never been used as a treatment,
storage or disposal facility of Hazardous Waste; and (iv) no Hazardous
Substances are present on the Real Property or any premises leased by
Borrower, excepting such quantities as are handled in accordance with all
applicable manufacturer's instructions and governmental regulations and in
proper storage containers and as are necessary for the
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operation of the commercial business of any Borrower or of its tenants.
5.8. Solvency; No Litigation, Violation, Indebtedness or
Default.
(a) After giving effect to the Transactions, each
Borrower will be solvent, able to pay its debts as they mature, have capital
sufficient to carry on its business and all businesses in which it is about to
engage, and (i) as of the Closing Date, the fair present saleable value of its
assets, calculated on a going concern basis, is in excess of the amount of
their liabilities and (ii) subsequent to the Closing Date, the fair saleable
value of its assets (calculated on a going concern basis) will be in excess of
the amount of their liabilities.
(b) Except as disclosed in Schedule 5.8(b), no
Borrower has (i) any pending or threatened litigation, arbitration, actions or
proceedings which involve the possibility of having a Material Adverse Effect
on Borrowers taken as a whole, and (ii) any liabilities nor indebtedness for
borrowed money other than the Obligations.
(c) No Borrower is in violation of any applicable
statute, regulation or ordinance in any respect which could reasonably be
expected to have a Material Adverse Effect on Borrowers taken as a whole, nor
is any Borrower in violation of any order of any court, governmental authority
or arbitration board or tribunal.
(d) No Borrower nor any member of the Controlled
Group maintains or contributes to any Plan other than those listed on Schedule
5.8(d) hereto. Except as set forth in Schedule 5.8(d), (i) no Plan has
incurred any "accumulated funding deficiency," as defined in Section 302(a)(2)
of ERISA and Section 412(a) of the Code, whether or not waived, and each
Borrower and each member of the Controlled Group has met all applicable
minimum funding requirements under Section 302 of ERISA in respect of each
Plan, (ii) each Plan which is intended to be a qualified plan under Section
401(a) of the Code as currently in effect has been determined by the Internal
Revenue Service to be qualified under Section 401(a) of the Code and the trust
related thereto is exempt from federal income tax under Section 501(a) of the
Code, (iii) no Borrower nor any member of the Controlled Group has incurred
any liability to the PBGC other than for the payment of premiums, and there
are no premium payments which have become due which are unpaid, (iv) no Plan
has been terminated by the plan administrator thereof nor by the PBGC, and
there is no occurrence which would cause the PBGC to institute proceedings
under Title IV of ERISA to terminate any Plan, (v) at this time, the current
value of the assets of each Plan exceeds the present value of the accrued
benefits and other liabilities of such Plan and no Borrower nor any member of
the Controlled Group knows of any facts or circumstances which would
materially change the value of such assets and accrued benefits and other
liabilities, (vi) no Borrower or any member of
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the Controlled Group has breached any of the responsibilities, obligations or
duties imposed on it by ERISA with respect to any Plan, (vii) no Borrower nor
any member of a Controlled Group has incurred any liability for any excise tax
arising under Section 4972 or 4980B of the Code, and no fact exists which
could give rise to any such liability, (viii) no Borrower nor any member of
the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has
engaged in a "prohibited transaction" described in Section 406 of the ERISA or
Section 4975 of the Code nor taken any action which would constitute or result
in a Termination Event with respect to any such Plan which is subject to
ERISA, (ix) each Borrower and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan, (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period contained in 29 CFR ss.2615.3 has not been waived, (xi) no
Borrower nor any member of the Controlled Group has any fiduciary
responsibility for investments with respect to any plan existing for the
benefit of persons other than employees or former employees of any Borrower
and any member of the Controlled Group, and (xii) no Borrower nor any member
of the Controlled Group has withdrawn, completely or partially, from any
Multiemployer Plan so as to incur liability under the Multiemployer Pension
Plan Amendments Act of 1980.
(e) Borrowers have received copies of letters
from all of the participants in the ESOP agreeing to receive their
distribution from the sale by the trustees of the ESOP of the stock of WSBS to
BATS pursuant to the WSBS Acquisition Agreement only in cash and approving
such sale.
5.9. Patents, Trademarks, Copyrights and Licenses. All
patents, patent applications, trademarks, trademark applications, service
marks, service xxxx applications, copyrights, copyright applications, design
rights, tradenames, assumed names, trade secrets and licenses owned or
utilized by any Borrower are set forth on Schedule 5.9, are valid and have
been duly registered or filed with all appropriate governmental authorities
and constitute all of the intellectual property rights which are necessary for
the operation of its business; there is no objection to or pending challenge
to the validity of any such material patent, trademark, copyright, design
right, tradename, trade secret or license and no Borrower is aware of any
grounds for any challenge, except as set forth in Schedule 5.9 hereto. Each
patent, patent application, patent license, trademark, trademark application,
trademark license, service xxxx, service xxxx application, service xxxx
license, copyright, copyright application and copyright license owned or held
by any Borrower and all trade secrets used by any Borrower consist of original
material or property developed by such Borrower or was lawfully acquired by
such Borrower from the proper and lawful owner thereof. Each of such items has
been maintained so as to preserve the value thereof from the date of creation
or acquisition thereof. With respect to all software used by any Borrower,
such Borrower is in possession of all source and object codes related to each
piece of software or is the beneficiary of a
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source code escrow agreement, each such source code escrow agreement being
listed on Schedule 5.9 hereto.
5.10. Licenses and Permits. Except as set forth in Schedule 5.10,
each Borrower (a) is in compliance with and (b) has procured and is now in
possession of, all material licenses or permits required by any applicable
federal, state or local law or regulation for the operation of its business in
each jurisdiction wherein it is now conducting or proposes to conduct business
and where the failure to procure such licenses or permits could have a
Material Adverse Effect on Borrowers taken as a whole.
5.11. Default of Indebtedness. No Borrower is in default in the
payment of the principal of or interest on any Indebtedness or under any
instrument or agreement under or subject to which any Indebtedness has been
issued and no event has occurred under the provisions of any such instrument
or agreement which with or without the lapse of time or the giving of notice,
or both, constitutes or would constitute an event of default thereunder.
5.12. No Default. No Borrower is in default in the payment
or performance of any of its contractual obligations which default
could have a Material Adverse Effect Borrowers taken as a whole.
5.13. No Burdensome Restrictions. No Borrower, to its knowledge,
is party to any contract or agreement the performance of which could have a
Material Adverse Effect Borrowers taken as a whole. No Borrower has agreed or
consented to cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien which is not a Permitted Encumbrance.
5.14. No Labor Disputes. No Borrower is involved in any labor
dispute; there are no strikes or walkouts or union organization of any
Borrower's employees in existence or to any Borrower's knowledge threatened
and no labor contract is scheduled to expire during the Term other than as set
forth on Schedule 5.14 hereto.
5.15. Margin Regulations. No Borrower is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U or Regulation G of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part of the
proceeds of any Advance will be used for "purchasing" or "carrying" "margin
stock" as defined in Regulation U of such Board of Governors.
5.16. Investment Company Act. No Borrower is an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, nor is it controlled by such a company.
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5.17. Disclosure. No representation or warranty made by any
Borrower in this Agreement or in the Acquisition Agreement, or in any
financial statement, report, certificate or any other document furnished in
connection herewith or therewith contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements
herein or therein not misleading. There is no fact known to any Borrower or
which reasonably should be known to any Borrower which Borrowers have not
disclosed to Agent in writing with respect to the transactions contemplated by
the Acquisition Agreement, or this Agreement which could reasonably be
expected to have a Material Adverse Effect on Borrowers taken as a whole.
5.18. Delivery of Acquisition Agreement. Agent has received
complete copies of the Acquisition Agreement (including all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto, waivers relating thereto and
other side letters or agreements affecting the terms thereof. None of such
documents and agreements has been amended or supplemented, nor have any of the
provisions thereof been waived, except pursuant to a written agreement or
instrument which has heretofore been delivered to Agent.
5.19. Swaps. No Borrower is a party to, nor will it be a party
to, any swap agreement whereby such Borrower has agreed or will agree to swap
interest rates or currencies unless same provides that damages upon
termination following an event of default thereunder are payable on an
unlimited "two-way basis" without regard to fault on the part of either party.
5.20. Conflicting Agreements. No provision of any mortgage,
indenture, contract, agreement, judgment, decree or order binding on any
Borrower or affecting the Collateral conflicts with, or requires any Consent
which has not already been obtained to, or would in any way prevent the
execution, delivery or performance of, the terms of this Agreement or the
Other Documents.
5.21. Application of Certain Laws and Regulations. No Borrower
nor any Affiliate of any Borrower is subject to any statute, rule or
regulation which regulates the incurrence of any Indebtedness, including
without limitation, statutes or regulations relative to common or interstate
carriers or to the sale of electricity, gas, steam, water, telephone,
telegraph or other public utility services.
5.22. Business and Property of Borrower. Upon and after the
Closing Date, Borrowers do not propose to engage in any business other than
the distribution of batteries and cellular accessories to commercial,
industrial and retail markets and activities necessary to conduct the
foregoing. On the Closing Date, each Borrower will own all the property and
possess all of the rights and Consents necessary for the conduct of the
business of such Borrower.
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5.23. Assets of BATS. BATS has no assets other than the
Subsidiary Stock owned by BATS on the Closing Date.
VI. AFFIRMATIVE COVENANTS.
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1. Payment of Fees. Pay to Agent on demand all usual and
customary fees and expenses which Agent incurs in connection with (a) the
forwarding of Advance proceeds and (b) the establishment and maintenance of
any Blocked Accounts or Depository Accounts as provided for in Section
4.15(h). Agent may, without making demand, charge Borrowers' Account for all
such fees and expenses.
6.2. Conduct of Business and Maintenance of Existence and Assets.
(a) Conduct continuously and operate actively its business according to good
business practices and maintain all of its properties useful or necessary in
its business in good working order and condition (reasonable wear and tear
excepted and except as may be disposed of in accordance with the terms of this
Agreement), including, without limitation, all licenses, patents, copyrights,
design rights, tradenames, trade secrets and trademarks and take all actions
necessary to enforce and protect the validity of any intellectual property
right or other right included in the Collateral; (b) keep in full force and
effect its existence and comply in all material respects with the laws and
regulations governing the conduct of its business where the failure to do so
could reasonably be expected to have a Material Adverse Effect on Borrowers
taken as a whole; and (c) make all such reports and pay all such franchise and
other taxes and license fees and do all such other acts and things as may be
lawfully required to maintain its rights, licenses, leases, powers and
franchises under the laws of the United States or any political subdivision
thereof where the failure to do so could reasonably be expected to have a
Material Adverse Effect on Borrowers taken as a whole.
6.3. Violations. Promptly notify Agent in writing of any
violation of any law, statute, regulation or ordinance of any Governmental
Body, or of any agency thereof, applicable to any Borrower which could
reasonably be expected to have a Material Adverse Effect on Borrowers taken as
a whole.
6.4. Government Receivables. Take all steps necessary to
protect Agent's interest in the Collateral under the Federal Assignment of
Claims Act or other applicable state or local statutes or ordinances and
deliver to Agent appropriately endorsed, any instrument or chattel paper
connected with any Receivable arising out of contracts between any Borrower
and the United States, any state or any department, agency or instrumentality
of any of them.
6.5. Net Worth. Maintain at (a) at the Closing Date a Net
Worth in an amount not less than $9,250,000, (b) the end of each
fiscal quarter commencing with the fiscal quarter ending March 31,
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1997, a Net Worth in an amount not less than the amount of Net Worth on the
last day of the prior fiscal quarter minus the payment, if any, of the
Additional Cash Consideration which was not deducted in determining Net Worth
for such fiscal quarter provided, however, this covenant shall not be deemed
breached unless BATS on a consolidated basis shall have failed to maintain the
required minimum Net Worth for two (2) consecutive fiscal quarters and (c) the
end of each fiscal year commencing with the fiscal year ending December 31,
1997, a Net Worth in an amount not less than the amount of Net Worth on the
last day of the prior fiscal year minus the payment, if any, of the Additional
Cash Consideration which was not deducted in determining Net Worth for such
fiscal year.
6.6. Current Ratio. Maintain at all times a ratio of
Current Assets to Current Liabilities of not less than 3.0 to 1.0.
6.7. Fixed Charge Coverage Ratio. Maintain as of the end
of each fiscal period set forth below a Fixed Charge Coverage Ratio
of not less than the ratio set opposite each fiscal period below:
================================================================================
FIXED CHARGE
FISCAL PERIOD COVERAGE RATIO
--------------------------------------------------------------------------------
January 1, 1997 - June 30, 1997 1.00 to 1.0
--------------------------------------------------------------------------------
January 1, 1997 - September 30, 1997 1.00 to 1.0
--------------------------------------------------------------------------------
January 1, 1997 - December 31, 1997 1.00 to 1.0
--------------------------------------------------------------------------------
April 1, 1997 - March 31, 1998 1.00 to 1.0
--------------------------------------------------------------------------------
July 1, 1997 - June 30, 1998 1.05 to 1.0
--------------------------------------------------------------------------------
October 1, 1997 - September 30, 1998 1.10 to 1.0
--------------------------------------------------------------------------------
January 1, 1998 - December 31, 1998 1.20 to 1.0
--------------------------------------------------------------------------------
April 1, 1998 - March 31, 1999 1.20 to 1.0
--------------------------------------------------------------------------------
July 1, 1998 - June 30, 1999 1.20 to 1.0
--------------------------------------------------------------------------------
October 1, 1998 - December 31, 1999 1.20 to 1.0
================================================================================
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6.8. EBITDA. Maintain as of the end of each fiscal period
set forth below, EBITDA of at least the amount set opposite such fiscal period
below:
================================================================================
FISCAL PERIOD EBITDA
--------------------------------------------------------------------------------
January 1, 1997 - June 30, 1997 $1,425,000
--------------------------------------------------------------------------------
January 1, 1997 - September 30, 1997 $2,150,000
--------------------------------------------------------------------------------
January 1, 1997 - December 31, 1997 $2,850,000
--------------------------------------------------------------------------------
April 1, 1997 - March 31, 1998 $3,000,000
--------------------------------------------------------------------------------
July 1, 1997 - June 30, 1998 $3,300,000
--------------------------------------------------------------------------------
October 1, 1997 - September 30, 1998 $3,600,000
--------------------------------------------------------------------------------
January 1, 1998 - December 31, 1998 $3,700,000
--------------------------------------------------------------------------------
April 1, 1998 - March 31, 1999 $4,000,000
--------------------------------------------------------------------------------
July 1, 1998 - June 30, 1999 $4,000,000
--------------------------------------------------------------------------------
October 1, 1998 - December 31, 1999 $4,000,000
================================================================================
6.9. Execution of Supplemental Instruments. Execute and deliver
to Agent from time to time, upon demand, such supplemental agreements,
statements, assignments and transfers, or instructions or documents relating
to the Collateral, and such other instruments as Agent may request, in order
that the full intent of this Agreement may be carried into effect.
6.10. Payment of Indebtedness. Pay, discharge or otherwise
satisfy at or before maturity (subject, where applicable, to specified grace
periods and, in the case of the trade payables, to normal payment practices)
all its obligations and liabilities of whatever nature, except when the
failure to do so could not reasonably be expected to have a Material Adverse
Effect on Borrowers taken as a whole or when the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and each
Borrower shall have provided for such reserves as Agent may reasonably deem
proper and necessary, subject at all times to any applicable subordination
arrangement in favor of Lenders.
6.11. Standards of Financial Statements. Cause all financial
statements referred to in Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12 and 9.13 as
to which GAAP is applicable to be complete and correct in all material
respects (subject, in the case of interim financial statements, to normal
year-end audit adjustments) and to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein (except as concurred in by such reporting accountants or officer, as
the case may be, and disclosed therein).
6.12. Exercise of Rights. Enforce all of its rights under
the Acquisition Agreement, including, but not limited to, all
indemnification rights and pursue all remedies available to it with
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diligence and in good faith in connection with the enforcement of any such
rights.
6.13. Termination of ESOP. Promptly following the Closing Date,
(a) terminate the ESOP, (b) obtain an updated fair market valuation of WSBS
with respect to the fairness to the participants of the ESOP of the
transactions contemplated by the WSBS Acquisition Agreement and (c) apply for
a favorable determination letter from the Internal Revenue Service regarding
the termination of the ESOP.
VII. NEGATIVE COVENANTS.
No Borrower shall, without the prior written consent of Agent,
until satisfaction in full of the Obligations and termination of this
Agreement:
7.1. Merger, Consolidation, Acquisition and Sale of Assets.
(a) Enter into any merger, consolidation or other
reorganization with or into any other Person other than a Borrower or acquire
all or a substantial portion of the assets or stock of any Person other than a
Borrower or permit any other Person to consolidate with or merge with it other
than a borrower.
(b) Sell, lease, transfer or otherwise dispose of
any of its properties or assets, except in the ordinary course of its business.
7.2. Creation of Liens. Create or suffer to exist any
Lien or transfer upon or against any of its property or assets now owned or
hereafter acquired, except Permitted Encumbrances.
7.3. Guarantees. Become liable upon the obligations of
any Person by assumption, endorsement or guaranty thereof or otherwise (other
than to Lenders) except the endorsement of checks in the ordinary course of
business.
7.4. Investments. Purchase or acquire obligations or stock of, or
any other interest in, any Person, except (a) obligations issued or guaranteed
by the United States of America or any agency thereof, (b) commercial paper
with maturities of not more than 180 days and a published rating of not less
than A-1 or P-1 (or the equivalent rating), (c) certificates of time deposit
and bankers' acceptances having maturities of not more than 180 days and
repurchase agreements backed by United States government securities of a
commercial bank if (i) such bank has a combined capital and surplus of at
least $500,000,000, or (ii) its debt obligations, or those of a holding
company of which it is a Subsidiary, are rated not less than A (or the
equivalent rating) by a nationally recognized investment rating agency, and
(d) U.S. money market funds that invest solely in obligations issued or
guaranteed by the United States of America or an agency thereof.
7.5. Loans. Make advances, loans or extensions of credit
to any Person, including without limitation, any Parent, Subsidiary or
Affiliate except with respect to (a) the extension of commercial
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trade credit in connection with the sale of Inventory in the ordinary course
of its business and (b) advances, loans or extensions of credit to another
Borrower.
7.6. Capital Expenditures. Contract for, purchase or make
any expenditure or commitments for fixed or capital assets (including
capitalized leases) in any fiscal year in an amount in excess of $1,000,000.
7.7. Dividends. Declare, pay or make any dividend or distribution
on any shares of the common stock or preferred stock of any Borrower (other
than dividends or distributions payable in its stock, or split-ups or
reclassifications of its stock) or apply any of its funds, property or assets
to the purchase, redemption or other retirement of any common or preferred
stock, or of any options to purchase or acquire any such shares of common or
preferred stock of any Borrower except that so long as (a) a notice of
termination with regard to this Agreement shall not be outstanding, (b) no
Event of Default or Default shall have occurred and be continuing prior to or
after giving effect to any such redemption or payment, and (c) the purpose for
such redemption or payment shall be as set forth in writing to Agent at least
ten (10) days prior to such redemption and such redemption shall in fact be
used for such purpose, BATS shall be permitted to (i) redeem the Preferred
Stock in accordance with the terms of the Preferred Stock as in effect on the
Closing Date and make the payments required in connection with the Preferred
Stock Redemption and (ii) make payments of accrued dividends on the Preferred
Stock not to exceed $100,000 in the aggregate.
7.8. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness (exclusive of trade debt) of Borrower except in respect of (i)
Indebtedness to Lenders; (ii) Indebtedness incurred for capital expenditures
permitted under Section 7.6 hereof; (iii) Indebtedness assumed under the
Acquisition Agreement; and (iv) other Indebtedness not to exceed at any time
outstanding the maximum amount of $250,000.
7.9. Nature of Business. Substantially change the nature of the
business in which it is presently engaged, nor except as specifically
permitted hereby purchase or invest, directly or indirectly, in any assets or
property other than in the ordinary course of business for assets or property
which are useful in, necessary for and are to be used in its business as
presently conducted.
7.10. Transactions with Affiliates. Directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, or otherwise deal with, any Affiliate, except (a) transactions
disclosed in the ordinary course of business, on an arm's-length basis on
terms no less favorable than terms which would have been obtainable from a
Person other than an Affiliate; (b) the Management Agreement and (c) the
Affiliated Leases.
7.11. Leases. Enter as lessee into any lease arrangement
for real or personal property (unless capitalized and permitted under Section
7.6 hereof) if after giving effect thereto, aggregate
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annual rental payments for all leased property would exceed $1,250,000 in any
one fiscal year.
7.12. Subsidiaries.
(a) Form any Subsidiary.
(b) Enter into any partnership, joint venture or
similar arrangement.
7.13. Fiscal Year and Accounting Changes. Change its
fiscal year from December 31 or make any change (i) in accounting treatment
and reporting practices except as required by GAAP or (ii) in tax reporting
treatment except as required by law.
7.14. Pledge of Credit. Now or hereafter pledge Agent's or any
Lender's credit on any purchases or for any purpose whatsoever or use any
portion of any Advance in or for any business other than such Borrower's
business as conducted on the date of this Agreement or as permitted pursuant
to the terms of this Agreement.
7.15. Amendment of Articles of Incorporation, By-Laws.
Amend, modify or waive any term or material provision of its Articles of
Incorporation or By-Laws unless required by law.
7.16. Compliance with ERISA. (i) (x) Maintain, or permit any
member of the Controlled Group to maintain, or (y) become obligated to
contribute, or permit any member of the Controlled Group to become obligated
to contribute, to any Plan, other than those Plans disclosed on Schedule
5.8(d), (ii) engage, or permit any member of the Controlled Group to engage,
in any non-exempt "prohibited transaction", as that term is defined in section
406 of ERISA and Section 4975 of the Code, (iii) incur, or permit any member
of the Controlled Group to incur, any "accumulated funding deficiency", as
that term is defined in Section 302 of ERISA or Section 412 of the Code, (iv)
terminate, or permit any member of the Controlled Group to terminate, any Plan
where such event could result in any liability of any Borrower or any member
of the Controlled Group or the imposition of a lien on the property of any
Borrower or any member of the Controlled Group pursuant to Section 4068 of
ERISA, (v) assume, or permit any member of the Controlled Group to assume, any
obligation to contribute to any Multiemployer Plan not disclosed on Schedule
5.8(d), (vi) incur, or permit any member of the Controlled Group to incur, any
withdrawal liability to any Multiemployer Plan; (vii) fail promptly to notify
Agent of the occurrence of any Termination Event, (viii) fail to comply, or
permit a member of the Controlled Group to fail to comply, with the
requirements of ERISA or the Code or other applicable laws in respect of any
Plan, (ix) fail to meet, or permit any member of the Controlled Group to fail
to meet, all minimum funding requirements under ERISA or the Code or postpone
or delay or allow any member of the Controlled Group to postpone or delay any
funding requirement with respect of any Plan.
7.17. Prepayment of Indebtedness. At any time, directly or
indirectly, prepay any Indebtedness (other than to Lenders), or repurchase,
redeem, retire or otherwise acquire any Indebtedness of any Borrower except
for the Preferred Stock Redemption made in accordance with the terms of
Section 7.7.
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7.18. Other Agreements. Enter into any material amendment,
waiver or modification of the Acquisition Agreement or any related agreements.
7.19. Payments of Additional Cash Consideration. Directly
or indirectly make payments with respect to the Additional Cash Consideration
which exceed $1,000,000 in the aggregate.
7.20. Management Fees. Directly or indirectly make any
payments under the Management Agreement except in accordance with the terms of
the Management Agreement as in effect on the Closing Date.
VIII. CONDITIONS PRECEDENT.
8.1. Conditions to Initial Advances. The agreement of
Lenders to make the initial Advances requested to be made on the Closing Date
is subject to the satisfaction, or waiver by Lenders, immediately prior to or
concurrently with the making of such Advances, of the following conditions
precedent:
(a) Note. Agent shall have received the Note
duly executed and delivered by an authorized officer of each Borrower;
(b) Filings, Registrations and Recordings. Each
document (including, without limitation, any Uniform Commercial Code financing
statement) required by this Agreement, any related agreement or under law or
reasonably requested by the Agent to be filed, registered or recorded in order
to create, in favor of Agent, a perfected security interest in or lien upon
the Collateral shall have been properly filed, registered or recorded in each
jurisdiction in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy,
or other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;
(c) Corporate Proceedings of Borrowers. Agent
shall have received a copy of the resolutions in form and substance reasonably
satisfactory to Agent, of the Board of Directors of each Borrower authorizing
(i) the execution, delivery and performance of this Agreement, the Other
Documents and the Acquisition Agreement (collectively the "Documents") and
(ii) the granting by each Borrower of the security interests in and liens upon
the Collateral in each case certified by the Secretary or an Assistant
Secretary of each Borrower as of the Closing Date; and, such certificate shall
state that the resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate;
(d) Incumbency Certificates of Borrowers. Agent
shall have received a certificate of the Secretary or an Assistant Secretary
of each Borrower, dated the Closing Date, as to the incumbency and signature
of the officers of each Borrower executing this Agreement, any certificate or
other documents to be delivered by it pursuant hereto, together with evidence
of the incumbency of such Secretary or Assistant Secretary;
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(e) Certificates. Agent shall have received a
copy of the Articles or Certificate of Incorporation of each Borrower, and all
amendments thereto, certified by the Secretary of State or other appropriate
official of its jurisdiction of incorporation together with copies of the
By-Laws of each Borrower and all agreements of each Borrower's shareholders
certified as accurate and complete by the Secretary of each Borrower;
(f) Good Standing Certificates. Agent shall have
received good standing certificates for each Borrower dated not more than ten
(10) days prior to the Closing Date, issued by the Secretary of State or other
appropriate official of each Borrower's jurisdiction of incorporation and each
jurisdiction where the conduct of each Borrower's business activities or the
ownership of its properties necessitates qualification;
(g) Legal Opinion. Agent shall have received the
executed legal opinions of Brock, Fensterstock, Xxxxxxxxxxx, XxXxxxxxx & Xxxx,
LLC and Xxxxxx, Newmark & Xxxxxxx, P.C. in form and substance satisfactory to
Agent which shall cover such matters incident to the transactions contemplated
by this Agreement, the Other Documents and the Acquisition Agreement as Agent
may reasonably require and each Borrower hereby authorizes and directs such
counsel to deliver such opinions to Agent and Lenders;
(h) No Litigation. (i) No litigation,
investigation or proceeding before or by any arbitrator or Governmental Body
shall be continuing or threatened against any Borrower or against the officers
or directors of any Borrower (A) in connection with this Agreement, the Other
Documents, the Acquisition Agreement or any of the transactions contemplated
thereby and which, in the reasonable opinion of Agent, is deemed material or
(B) which could, in the reasonable opinion of Agent, have a Material Adverse
Effect on Borrowers taken as a whole; and (ii) no injunction, writ,
restraining order or other order of any nature materially adverse to Borrower
or the conduct of its business or inconsistent with the due consummation of
the Transactions shall have been issued by any Governmental Body;
(i) Financial Condition Certificates. Agent
shall have received an executed Financial Condition Certificate in the form of
Exhibit 8.1(i);
(j) Collateral Examination. Agent shall have
completed Collateral examinations and received appraisals, the results of
which shall be satisfactory in form and substance to Lenders, of the
Receivables, Inventory, General Intangibles and Equipment of each Borrower and
all books and records in connection therewith;
(k) Fees. Agent shall have received all fees
payable to Agent and Lenders on or prior to the Closing Date
pursuant to Article III hereof;
(l) Pro Forma Financial Statements. Agent shall
have received a copy of the Pro Forma Financial Statements which shall be
satisfactory in all respects to Lenders;
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(m) Financial Statements. Agent shall have
received in form and substance satisfactory to it the financial statements of
BN, WSBS and WSJ Enterprises, Inc. for the fiscal years ending December 31,
1994, and December 31, 1995 and the nine month period ending September 30,
1996, prepared in accordance with GAAP and reported upon without qualification
by Deloitte & Touche LLC;
(n) Acquisition Documents. Agent shall have
received final executed copies of the Acquisition Agreement and all related
agreements, documents and instruments as in effect on the Closing Date and the
transactions contemplated by such documentation shall be consummated
simultaneous with the making of the initial Advance;
(o) Capitalization. Agent shall have received
evidence satisfactory to Agent that after giving effect to the Transactions,
BATS shall have a capitalization of at least $10,000,000 consisting of common
and preferred stock;
(p) Collateral Assignment and Other Documents.
Agent shall have received executed by each Party thereto the Collateral
Assignment, the Pledge Agreement together with the applicable stock
certificates and stock powers executed in blank and all Other Documents, each
in form and substance satisfactory to Lenders;
(q) Insurance. Agent shall have received in form
and substance satisfactory to Agent, certified copies of Borrowers' casualty
insurance policies, together with loss payable endorsements on Agent's
standard form of loss payee endorsement naming Agent as loss payee, and
certified copies of Borrowers' liability insurance policies, together with
endorsements naming Agent as a co-insured;
(r) Payment Instructions. Agent shall have
received written instructions from Borrowers directing the application of
proceeds of the initial Advances made pursuant to this Agreement;
(s) Blocked Accounts. Agent shall have received
duly executed agreements establishing the Blocked Accounts or Depository
Accounts with financial institutions acceptable to Agent for the collection or
servicing of the Receivables and proceeds of the Collateral;
(t) Consents. Agent shall have received any and
all Consents necessary to permit the effectuation of the transactions
contemplated by this Agreement and the Other Documents; and, Agent shall have
received such Consents and waivers of such third parties as might assert
claims with respect to the Collateral, as Agent and its counsel shall deem
necessary;
(u) No Adverse Material Change. (i) Since
September 30, 1996, there shall not have occurred any event, condition or
state of facts which could reasonably be expected to have a Material Adverse
Effect on Borrowers taken as a whole and (ii) no representations made or
information supplied to Lenders shall have been proven to be inaccurate or
misleading in any material respect;
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(v) Leasehold Agreements. Agent shall have
received landlord, mortgagee or warehouseman agreements satisfactory to Agent
with respect to all premises leased by Borrowers at which Inventory is
located;
(w) Net Worth. Agent shall have received the Pro
Forma Balance Sheet reflecting a Net Worth after giving effect to the
Transactions of at least $9,250,000;
(x) Contract Review. Agent shall have reviewed
all material contracts of Borrowers including, without limitation, leases,
union contracts, labor contracts, vendor supply contracts, license agreements
and distributorship agreements and such contracts and agreements shall be
satisfactory in all respects to Agent;
(y) Closing Certificate. Agent shall have
received a closing certificate signed by the Chief Financial Officer of each
Borrower dated as of the date hereof, stating that (i) all representations and
warranties set forth in this Agreement and the Other Documents are true and
correct on and as of such date, (ii) Borrowers are on such date in compliance
with all the terms and provisions set forth in this Agreement and the Other
Documents and (iii) on such date no Default or Event of Default has occurred
or is continuing;
(z) Borrowing Base. Agent shall have received
evidence from Borrowers that the aggregate amount of Eligible Receivables and
Eligible Inventory is sufficient in value and amount to support Advances in
the amount requested by Borrowers on the Closing Date;
(aa) Undrawn Availability. After giving effect to
the initial Advances hereunder, Borrowers shall have Undrawn
Availability of at least $2,500,000; and
(ab) Other. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
Transactions shall be satisfactory in form and substance to Agent, Lenders and
their counsel.
8.2. Conditions to Each Advance. The agreement of Lenders
to make any Advance requested to be made on any date (including, without
limitation, the initial Advance), is subject to the satisfaction of the
following conditions precedent as of the date such Advance is made:
(a) Representations and Warranties. Each of the
representations and warranties made by any Borrower in or pursuant to this
Agreement and any related agreements to which it is a party, and each of the
representations and warranties contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any related agreement shall be true and correct in all
material respects on and as of such date as if made on and as of such date;
(b) No Default. No Event of Default or Default
shall have occurred and be continuing on such date, or would exist after
giving effect to the Advances requested to be made, on such
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date and, in the case of the initial Advance, after giving effect to the
consummation of the transactions contemplated by the Acquisition Agreement;
provided, however that Lenders, in their sole discretion, may continue to make
Advances notwithstanding the existence of an Event of Default or Default and
that any Advances so made shall not be deemed a waiver of any such Event of
Default or Default; and
(c) Maximum Advances. In the case of any
Advances requested to be made, after giving effect thereto, the aggregate
Advances shall not exceed the maximum amount of Advances permitted under
Section 2.1 hereof.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance
that the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AS TO BORROWERS.
Each Borrower shall, until satisfaction in full of the Obligations
and the termination of this Agreement:
9.1. Disclosure of Material Matters. Immediately upon learning
thereof, report to Agent all matters materially affecting the value,
enforceability or collectibility of any portion of the Collateral including,
without limitation, any Borrower's reclamation or repossession of, or the
return to any Borrower of, a material amount of goods or claims or disputes
asserted by any Customer or other obligor.
9.2. Schedules. Deliver to Agent on or before the fifteenth
(15th) day of each month as and for the prior month (a) accounts receivable
ageings, (b) accounts payable schedules and (c) Inventory reports. In
addition, each Borrower will deliver to Agent at such intervals as Agent may
require: (i) confirmatory assignment schedules, (ii) copies of Customer's
invoices, (iii) evidence of shipment or delivery, and (iv) such further
schedules, documents and/or information regarding the Collateral as Agent may
require including, without limitation, trial balances and test verifications.
Agent shall have the right to confirm and verify all Receivables by any manner
and through any medium it considers advisable and do whatever it may deem
reasonably necessary to protect its interests hereunder. The items to be
provided under this Section are to be in form satisfactory to Agent and
executed by each Borrower and delivered to Agent from time to time solely for
Agent's convenience in maintaining records of the Collateral, and any
Borrower's failure to deliver any of such items to Agent shall not affect,
terminate, modify or otherwise limit Agent's Lien with respect to the
Collateral.
9.3. Environmental Reports. Furnish Agent, concurrently with the
delivery of the financial statements referred to in Sections 9.7 and 9.8, with
a certificate signed by the President, a Vice-President or Chief Financial
Officer of each Borrower stating, to the best of his knowledge, that each
Borrower is in compliance in all material respects with all federal, state and
local laws relating to environmental protection and control and occupational
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safety and health. To the extent any Borrower is not in compliance with the
foregoing laws, the certificate shall set forth with specificity all areas of
non-compliance and the proposed action Borrower will implement in order to
achieve full compliance.
9.4. Litigation. Promptly notify Agent in writing of any
litigation, suit or administrative proceeding affecting any Borrower, whether
or not the claim is covered by insurance, and of any suit or administrative
proceeding, which in any such case could reasonably be expected to have a
Material Adverse Effect on Borrowers taken as a whole.
9.5. Material Occurrences. Promptly notify Agent in writing upon
the occurrence of (a) any Event of Default or Default; (b) any event,
development or circumstance whereby any financial statements or other reports
furnished to Agent fail in any material respect to present fairly, in
accordance with GAAP consistently applied, the financial condition or
operating results of any Borrower as of the date of such statements; (c) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Code, could subject any Borrower to a tax imposed by Section 4971 of
the Code; (d) each and every default by any Borrower which might result in the
acceleration of the maturity of any Indebtedness, including the names and
addresses of the holders of such Indebtedness with respect to which there is a
default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (e) any other
development in the business or affairs of any Borrower which could reasonably
be expected to have a Material Adverse Effect on Borrowers taken as a whole;
in each case describing the nature thereof and the action Borrowers propose to
take with respect thereto.
9.6. Government Receivables. Notify Agent immediately if
any of its Receivables arise out of contracts between any Borrower and the
United States, any state, or any department, agency or instrumentality of any
of them.
9.7. Annual Financial Statements. Furnish Agent within one
hundred and twenty (120) days after the end of each fiscal year of Borrowers,
financial statements of BATS on a consolidated basis together with
consolidating schedules including, but not limited to, statements of income
and stockholders' equity and cash flow from the beginning of the current
fiscal year to the end of such fiscal year and the balance sheet as at the end
of such fiscal year, all prepared in accordance with GAAP applied on a basis
consistent with prior practices, and in reasonable detail and reported upon
without qualification by an independent certified public accounting firm
selected by Borrowers and satisfactory to Agent (the "Accountants"). The
report of the Accountants shall be accompanied by a statement of the
Accountants certifying that (i) they have caused the Loan Agreement to be
reviewed, (ii) in making the examination upon which such report was based
either no information came to their attention which to their knowledge
constituted an Event of Default or a Default under this Agreement or any
related agreement or, if such information came to their attention, specifying
any such Default or Event of Default, its nature, when it occurred and whether
it is continuing, and such
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report shall contain or have appended thereto calculations which set forth
Borrowers' compliance with the requirements or restrictions imposed by
Sections 6.5, 6.6, 6.7, 6.8, 7.6 and 7.11 hereof. In addition, the reports
shall be accompanied by a certificate of each Borrower's Chief Financial
Officer which shall state that, based on an examination sufficient to permit
him to make an informed statement, no Default or Event of Default exists, or,
if such is not the case, specifying such Default or Event of Default, its
nature, when it occurred, whether it is continuing and the steps being taken
by Borrower with respect to such event, and such certificate shall have
appended thereto calculations which set forth Borrowers' compliance with the
requirements or restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 7.6 and
7.11 hereof.
9.8. Monthly Financial Statements. During the first twelve (12)
months of the Term, within forty five (45) days after the end of each month
and at all other times, within thirty (30) days after the end of each month,
furnish Agent an unaudited balance sheet of BATS on a consolidated basis and
BATS on a consolidating basis and unaudited statements of income and
stockholders' equity and cash flow of BATS on a consolidated basis and BATS on
a consolidating basis reflecting results of operations from the beginning of
the fiscal year to the end of such month and for such month, prepared on a
basis consistent with prior practices and complete and correct in all material
respects, subject to normal year end adjustments; provided, however, the
monthly financial statements for the month ending January 31, 1997 shall not
be required to be delivered until March 31, 1997 and the monthly financial
statements for the month ending December 31, 1997 shall not be required to be
delivered until March 31, 1998. The reports shall be accompanied by a
certificate of each Borrower's Chief Financial Officer of each Borrower, which
shall state that, based on an examination sufficient to permit him to make an
informed statement, no Default or Event of Default exists, or, if such is not
the case, specifying such Default or Event of Default, its nature, when it
occurred, whether it is continuing and the steps being taken by Borrowers with
respect to such event and, such certificate shall have appended thereto
calculations which set forth Borrowers' compliance with the requirements or
restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 7.6 and 7.11 hereof.
9.9. Other Reports. Furnish Agent as soon as available, but in
any event within ten (10) days after the issuance thereof, (i) with copies of
such proxy statements, financial statements, reports and returns as each
Borrower shall send to its stockholders and (ii) copies of all regular,
periodic and special reports or registration statements which any Borrower
files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or any national securities
exchange.
9.10. Additional Information. Furnish Agent with such additional
information as Agent shall reasonably request in order to enable Agent to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Other Documents have been complied with by Borrowers
including, without limitation and without the necessity of any request by
Agent, (a) copies of all environmental audits and reviews, (b) at least thirty
(30) days prior thereto, notice of any Borrower's opening of any new office
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or place of business or any Borrower's closing of any existing office or place
of business, and (c) promptly upon any Borrower's learning thereof, notice of
any labor dispute to which any Borrower may become a party, any strikes or
walkouts relating to any of its plants or other facilities, and the expiration
of any labor contract to which any Borrower is a party or by which any
Borrower is bound.
9.11. Projected Operating Budget. Furnish Agent, (a) no later
than February 28, 1997 for Borrowers' fiscal year 1997 and (b) no later than
thirty (30) days prior to the beginning of each Borrower's fiscal years
commencing with fiscal year 1998, a month by month projected operating budget
and cash flow of BATS on a consolidated and consolidating basis for such
fiscal year (including an income statement for each month and a balance sheet
as at the end of the last month in each fiscal quarter), such projections to
be accompanied by a certificate signed by the President or Chief Financial
Officer of each Borrower to the effect that such projections have been
prepared on the basis of sound financial planning practice consistent with
past budgets and financial statements and that such officer has no reason to
question the reasonableness of any material assumptions on which such
projections were prepared.
9.12. Variances From Operating Budget. Furnish Agent,
concurrently with the delivery of the financial statements referred to in
Section 9.7 and each monthly report, a written report summarizing all material
variances from budgets submitted by Borrowers pursuant to Section 9.11 and a
discussion and analysis by management with respect to such variances.
9.13. Notice of Suits, Adverse Events. Furnish Agent with prompt
notice of (i) any lapse or other termination of any Consent issued to any
Borrower by any Governmental Body or any other Person that is material to the
operation of any Borrower's business, (ii) any refusal by any Governmental
Body or any other Person to renew or extend any such Consent; and (iii) copies
of any periodic or special reports filed by any Borrower with any Governmental
Body or Person, if such reports indicate any material change in the business,
operations, affairs or condition of any Borrower, or if copies thereof are
requested by Lender, and (iv) copies of any material notices and other
communications from any Governmental Body or Person which specifically relate
to any Borrower.
9.14. ERISA Notices and Requests. Furnish Agent with immediate
written notice in the event that (i) any Borrower or any member of the
Controlled Group knows or has reason to know that a Termination Event has
occurred, together with a written statement describing such Termination Event
and the action, if any, which such Borrower or member of the Controlled Group
has taken, is taking, or proposes to take with respect thereto and, when
known, any action taken or threatened by the Internal Revenue Service,
Department of Labor or PBGC with respect thereto, (ii) any Borrower or any
member of the Controlled Group knows or has reason to know that a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred together with a written statement describing such transaction and the
action which such Borrower or any member of the Controlled Group has taken, is
taking or proposes to take with respect thereto, (iii) a funding waiver
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request has been filed with respect to any Plan together with all
communications received by any Borrower or any member of the Controlled Group
with respect to such request, (iv) any increase in the benefits of any
existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any member of the
Controlled Group was not previously contributing shall occur, (v) any Borrower
or any member of the Controlled Group shall receive from the PBGC a notice of
intention to terminate a Plan or to have a trustee appointed to administer a
Plan, together with copies of each such notice, (vi) any Borrower or any
member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Code, together with copies
of each such letter; (vii) any Borrower or any member of the Controlled Group
shall receive a notice regarding the imposition of withdrawal liability,
together with copies of each such notice; (viii) any Borrower or any member of
the Controlled Group shall fail to make a required installment or any other
required payment under Section 412 of the Code on or before the due date for
such installment or payment; (ix) any Borrower or any member of the Controlled
Group knows that (a) a Multiemployer Plan has been terminated, (b) the
administrator or plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (c) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.
9.15. Additional Documents. Execute and deliver to Agent,
upon request, such documents and agreements as Agent may, from time to time,
reasonably request to carry out the purposes, terms or conditions of this
Agreement.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default":
10.1. failure by any Borrower to pay any principal or interest on
the Obligations when due, whether at maturity or by reason of acceleration
pursuant to the terms of this Agreement or by notice of intention to prepay,
or by required prepayment or failure to pay any other liabilities or make any
other payment, fee or charge provided for herein when due or in any Other
Document;
10.2. any representation or warranty made or deemed made by any
Borrower in this Agreement or any related agreement or in any certificate,
document or financial or other statement furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material
respect on the date when made or deemed to have been made;
10.3. failure by any Borrower to (i) furnish financial
information when due or within ten (10) days after Borrowing Agent receives
notice from Agent of such request when requested, or (ii) permit the
inspection of its books or records;
10.4. issuance of a notice of Lien, levy, assessment,
injunction or attachment against a material portion of any
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Borrower's property which is not satisfied, stayed or discharged of record
within thirty (30) days ;
10.5. except as otherwise provided for in Sections 10.1 and 10.3,
(a) failure or neglect of any Borrower to perform, keep or observe any term,
provision, condition, covenant in Sections 4.6, 4.7, 4.9, 4.11, 6.1, 6.3, 6.4,
9.4 or 9.6 hereof which is not cured within the earlier of thirty (30) days
from the occurrence of such failure or neglect or fifteen (15) days from the
date Borrowing Agent is notified by Agent of the occurrence of such failure or
neglect and (b) a failure or neglect of any Borrower to perform, keep or
observe any other term, provision, condition, covenant herein contained or
contained in any other Document.
10.6. any judgment is rendered or judgment liens filed
against any Borrower for an aggregate amount in excess of $250,000
which within forty (40) days of such rendering or filing is not
either satisfied, stayed or discharged of record;
10.7. any Borrower shall (i) apply for, consent to or suffer the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator or similar fiduciary of itself or of all or a substantial
part of its property, (ii) make a general assignment for the benefit of
creditors, (iii) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a
bankrupt or insolvent, (v) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vi) acquiesce to, or fail to
have dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (vii) take any action for the
purpose of effecting any of the foregoing;
10.8. any Borrower shall admit in writing its inability, or
be generally unable, to pay its debts as they become due or cease
operations of its present business;
10.9. any Subsidiary of any Borrower shall (i) apply for, consent
to or suffer the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar fiduciary of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of
its present business, (iii) make a general assignment for the benefit of
creditors, (iv) commence a voluntary case under any state or federal
bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt
or insolvent, (vi) file a petition seeking to take advantage of any other law
providing for the relief of debtors, (vii) acquiesce to, or fail to have
dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
10.10. any change in any Borrower's condition or affairs
(financial or otherwise) which in Agent's opinion has a Material Adverse Effect
on Borrowers taken as a whole;
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10.11. any Lien created hereunder or provided for hereby or
under any related agreement for any reason ceases to be or is not a valid and
perfected Lien having a first priority interest;
10.12. a default of the obligations of any Borrower under
any other agreement to which it is a party shall occur which default is not
cured within any applicable grace period and has a Material Adverse Effect on
Borrowers taken as a whole;
10.13. any Change of Control to which Agent shall have not
consented shall occur;
10.14. any material provision of this Agreement shall, for
any reason, cease to be valid and binding on any Borrower, or any Borrower
shall so claim in writing to Agent;
10.15. (i) any Governmental Body shall (A) revoke, terminate,
suspend or adversely modify any license, permit, patent trademark or tradename
of any Borrower, the continuation of which is material to the continuation of
any Borrower's business, or (B) commence proceedings to suspend, revoke,
terminate or adversely modify any such license, permit, trademark, tradename
or patent and such proceedings shall not be dismissed or discharged within
sixty (60) days, or (c) schedule or conduct a hearing on the renewal of any
license, permit, trademark, tradename or patent necessary for the continuation
of any Borrower's business and the staff of such Governmental Body issues a
report recommending the termination, revocation, suspension or material,
adverse modification of such license, permit, trademark, tradename or patent;
(ii) any agreement which is necessary or material to the operation of any
Borrower's business shall be revoked or terminated and not replaced by a
substitute acceptable to Agent within thirty (30) days after the date of such
revocation or termination, and such revocation or termination and
non-replacement would reasonably be expected to have a Material Adverse Effect
on Borrowers taken as a whole;
10.16. any portion of the Collateral shall be seized or taken by
a Governmental Body, or any Borrower or the title and rights of any Borrower
which is the owner of any material portion of the Collateral shall have become
the subject matter of litigation which might, in the reasonable opinion of
Agent, upon final determination, result in impairment or loss of the security
provided by this Agreement or the Other Documents;
10.17. the operations of any three of the facilities of AFA, BN
or TEI are interrupted at any time for a period of fourteen (14) consecutive
days, unless such Borrower shall (i) be entitled to receive for such period of
interruption, proceeds of business interruption insurance sufficient to assure
that its per diem cash needs during such period is at least equal to its
average per diem cash needs for the consecutive three month period immediately
preceding the initial date of interruption and (ii) receive such proceeds in
the amount described in clause (i) preceding not later than thirty (30) days
following the initial date of any such interruption; provided, however, that
notwithstanding the provisions of clauses (i) and (ii) of this section, an
Event of Default shall be deemed to have occurred if such Borrower shall be
receiving the proceeds of business interruption insurance for a period of
thirty (30) consecutive days; or
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10.18. an event or condition specified in Sections 7.16 or 9.14
hereof shall occur or exist with respect to any Plan and, as a result of such
event or condition, together with all other such events or conditions, any
Borrower or any member of the Controlled Group shall incur, or in the opinion
of Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or
both) which, in the reasonable judgment of Agent, would have a Material
Adverse Effect on Borrowers taken as a whole.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
11.1. Rights and Remedies. Upon the occurrence of (i) an Event of
Default pursuant to Section 10.7 all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances
shall be deemed terminated; and, (ii) any of the other Events of Default and
at any time thereafter (such default not having previously been cured), at the
option of Required Lenders all Obligations shall be immediately due and
payable and Lenders shall have the right to terminate this Agreement and to
terminate the obligation of Lenders to make Advances. Upon the occurrence of
any Event of Default, Agent shall have the right to exercise any and all other
rights and remedies provided for herein, under the Uniform Commercial Code and
at law or equity generally, including, without limitation, the right to
foreclose the security interests granted herein and to realize upon any
Collateral by any available judicial procedure and/or to take possession of
and sell any or all of the Collateral with or without judicial process. Agent
may enter any of Borrower's premises or other premises without legal process
and without incurring liability to any Borrower therefor, and Agent may
thereupon, or at any time thereafter, in its discretion without notice or
demand, take the Collateral and remove the same to such place as Agent may
deem advisable and Agent may require Borrowers to make the Collateral
available to Agent at a convenient place. With or without having the
Collateral at the time or place of sale, Agent may sell the Collateral, or any
part thereof, at public or private sale, at any time or place, in one or more
sales, at such price or prices, and upon such terms, either for cash, credit
or future delivery, as Agent may elect subject to compliance with applicable
laws. Except as to that part of the Collateral which is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, Agent shall give Borrowers reasonable notification of such
sale or sales, it being agreed that in all events written notice mailed to
Borrowers at least five (5) days prior to such sale or sales is reasonable
notification. At any public sale Agent or any Lender may bid for and become
the purchaser, and Agent, any Lender or any other purchaser at any such sale
thereafter shall hold the Collateral sold absolutely free from any claim or
right of whatsoever kind, including any equity of redemption and such right
and equity are hereby expressly waived and released by each Borrower. In
connection with the exercise of the foregoing remedies, Agent is granted
permission to use all of each Borrower's trademarks, trade styles, trade
names, patents, patent applications, licenses, franchises and other
proprietary rights which are used in connection with (a) Inventory for the
purpose of disposing of such Inventory and (b) Equipment for the purpose of
completing the manufacture of unfinished goods. The proceeds realized from the
sale of any Collateral shall be applied
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as follows: first, to the reasonable costs, expenses and attorneys' fees and
expenses incurred by Agent for collection and for acquisition, completion,
protection, removal, storage, sale and delivery of the Collateral; second, to
interest due upon any of the Obligations; and, third, to the principal of the
Obligations. If any deficiency shall arise, Borrowers shall remain liable to
Agent and Lenders therefor.
11.2. Agent's Discretion. Agent shall have the right in its sole
discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take
any other action with respect thereto and such determination will not in any
way modify or affect any of Agent's or Lenders' rights hereunder.
11.3. Setoff. In addition to any other rights which Agent or any
Lender may have under applicable law, upon the occurrence of an Event of
Default hereunder, Agent and such Lender shall have a right to apply any
Borrower's property held by Agent and such Lender to reduce the Obligations.
11.4. Rights and Remedies not Exclusive. The enumeration of the
foregoing rights and remedies is not intended to be exhaustive and the
exercise of any right or remedy shall not preclude the exercise of any other
right or remedies provided for herein or otherwise provided by law, all of
which shall be cumulative and not alternative.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1. Waiver of Notice. Each Borrower hereby waives notice of
non-payment of any of the Receivables, demand, presentment, protest and notice
thereof with respect to any and all instruments, notice of acceptance hereof,
notice of loans or advances made, credit extended, Collateral received or
delivered, or any other action taken in reliance hereon, and all other demands
and notices of any description, except such as are expressly provided for
herein.
12.2. Delay. No delay or omission on Agent's or any
Lender's part in exercising any right, remedy or option shall operate as a
waiver of such or any other right, remedy or option or of any default.
12.3. Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND
EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS
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WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1. Term. This Agreement, which shall inure to the benefit of
and shall be binding upon the respective successors and permitted assigns of
each Borrower, Agent and each Lender, shall become effective on the date
hereof and shall continue in full force and effect until January 7, 2000 (the
"Term") unless sooner terminated as herein provided. Borrowers may terminate
this Agreement at any time upon ninety (90) days' prior written notice upon
payment in full of the Obligations. In the event the Obligations are prepaid
in full prior to the last day of the Term (the date of such prepayment
hereinafter referred to as the "Early Termination Date"), Borrowers shall pay
to Agent for the benefit of Lenders an early termination fee in an amount
equal to (x) $260,000 if the Early Termination Date occurs on or after the
Closing Date to and including the date immediately preceding the first
anniversary of the Closing Date and, (y) $130,000 if the Early Termination
Date occurs on or after the first anniversary of the Closing Date to and
including the date immediately preceding the second anniversary of the Closing
Date.
13.2. Termination. The termination of the Agreement shall not
affect any Borrower's, Agent's or any Lender's rights, or any of the
Obligations having their inception prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or
Obligations have been fully disposed of, concluded or liquidated. The security
interests, Liens and rights granted to Agent and Lenders hereunder and the
financing statements filed hereunder shall continue in full force and effect,
notwithstanding the termination of this Agreement or the fact that Borrowers'
Account may from time to time be temporarily in a zero or credit position,
until all of the Obligations of each Borrower have been paid or performed in
full after the termination of this Agreement or each Borrower has furnished
Agent and Lenders with an indemnification satisfactory to Agent and Lenders
with respect thereto. Accordingly, each Borrower waives any rights which it
may have under Section 9-404(1) of the Uniform Commercial Code to demand the
filing of termination statements with respect to the Collateral, and Agent
shall not be required to send such termination statements to each Borrower, or
to file them with any filing office, unless and until this Agreement shall
have been terminated in accordance with its terms and all Obligations paid in
full in immediately available funds. All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination
hereof until all Obligations are paid or performed in full.
XIV. REGARDING AGENT.
14.1. Appointment. Each Lender hereby designates IBJS to
act as Agent for such Lender under this Agreement and the Other Documents.
Each Lender hereby irrevocably authorizes Agent to take such action on its
behalf under the provisions of this Agreement
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and the Other Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and Agent shall hold all Collateral, payments of principal
and interest, fees (except the fees set forth in Sections 3.3(a) and 3.4),
charges and collections (without giving effect to any collection days)
received pursuant to this Agreement, for the ratable benefit of Lenders. Agent
may perform any of its duties hereunder by or through its agents or employees.
As to any matters not expressly provided for by this Agreement (including
without limitation, collection of the Note) Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; provided, however, that Agent shall not be
required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless
Agent is furnished with an indemnification reasonably satisfactory to Agent
with respect thereto.
14.2. Nature of Duties. Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Documents. Neither Agent nor any of its officers, directors, employees
or agents shall be (i) liable for any action taken or omitted by them as such
hereunder or in connection herewith, unless caused by their gross (not mere)
negligence or willful misconduct, or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or
any officer thereof contained in this Agreement, or in any of the Other
Documents or in any certificate, report, statement or other document referred
to or provided for in, or received by Agent under or in connection with, this
Agreement or any of the Other Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement,
or any of the Other Documents or for any failure of Borrower to perform its
obligations hereunder. Agent shall not be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any of the Other
Documents, or to inspect the properties, books or records of any Borrower. The
duties of Agent as respects the Advances to Borrowers shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon Agent any obligations in respect of this Agreement except as
expressly set forth herein.
14.3. Lack of Reliance on Agent and Resignation. Independently
and without reliance upon Agent or any other Lender, each Lender has made and
shall continue to make (i) its own independent investigation of the financial
condition and affairs of each Borrower in connection with the making and the
continuance of the Advances hereunder and the taking or not taking of any
action in connection herewith, and (ii) its own appraisal of the
creditworthiness of each Borrower. Agent shall have no duty or responsibility,
either initially or on a continuing basis, to
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provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before making of the Advances or at any
time or times thereafter except as shall be provided by any Borrower pursuant
to the terms hereof. Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any agreement, document, certificate or a statement delivered in connection
with or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Other
Document, or of the financial condition of any Borrower, or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Note, the Other
Documents or the financial condition of any Borrower, or the existence of any
Event of Default or any Default.
Agent may resign on sixty (60) days' written notice to each of
Lenders and Borrowing Agent and upon such resignation, the Required Lenders
will promptly designate a successor Agent reasonably satisfactory to
Borrowers.
Any such successor Agent shall succeed to the rights, powers and
duties of Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and
duties as Agent shall be terminated, without any other or further act or deed
on the part of such former Agent. After any Agent's resignation as Agent, the
provisions of this Article XIV shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
14.4. Certain Rights of Agent. If Agent shall request
instructions from Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any Other Document, Agent shall
be entitled to refrain from such act or taking such action unless and until
Agent shall have received instructions from the Required Lenders; and Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, Lenders shall not have any right of action whatsoever
against Agent as a result of its acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders.
14.5. Reliance. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
order or other document or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person or entity,
and, with respect to all legal matters pertaining to this Agreement and the
Other Documents and its duties hereunder, upon advice of counsel selected by
it. Agent may employ agents and attorneys-in-fact and shall not be liable for
the default or misconduct of any such agents or attorneys-in-fact selected by
Agent with reasonable care.
14.6. Notice of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder or under the Other Documents, unless Agent has received notice from
a Lender or a Borrower referring to this Agreement or the Other Documents,
describing such Default or Event
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of Default and stating that such notice is a "notice of default". In the event
that Agent receives such a notice, Agent shall give notice thereof to Lenders.
Agent shall take such action with respect to such Default or Event of Default
as shall be reasonably directed by the Required Lenders; provided, that,
unless and until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of Lenders.
14.7. Indemnification. To the extent Agent is not reimbursed and
indemnified by Borrowers, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of the Advances (or, if no Advances are
outstanding, according to its Commitment Percentage), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent in performing its
duties hereunder, or in any way relating to or arising out of this Agreement
or any Other Document; provided that, Lenders shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's
gross (not mere) negligence or willful misconduct.
14.8. Agent in its Individual Capacity. With respect to the
obligation of Agent to lend under this Agreement, the Advances made by it
shall have the same rights and powers hereunder as any other Lender and as if
it were not performing the duties as Agent specified herein; and the term
"Lender" or any similar term shall, unless the context clearly otherwise
indicates, include Agent in its individual capacity as a Lender. Agent may
engage in business with any Borrower as if it were not performing the duties
specified herein, and may accept fees and other consideration from any
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.
14.9. Delivery of Documents. To the extent Agent receives
documents and information from any Borrower pursuant to the terms of this
Agreement, Agent will promptly furnish such documents and information to
Lenders.
14.10. Borrowers' Undertaking to Agent. Without prejudice to
their respective obligations to Lenders under the other provisions of this
Agreement, each Borrower hereby undertakes with Agent to pay to Agent from
time to time on demand all amounts from time to time due and payable by it for
the account of Agent or Lenders or any of them pursuant to this Agreement to
the extent not already paid. Any payment made pursuant to any such demand
shall pro tanto satisfy the relevant Borrower's obligations to make payments
for the account of Lenders or the relevant one or more of them pursuant to
this Agreement.
XV. BORROWING AGENCY.
15.1. Borrowing Agency Provisions.
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(a) Each Borrower hereby irrevocably designates
Borrowing Agent to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now or hereafter required hereunder, on behalf
of such Borrower or Borrowers, and hereby authorizes Agent to pay over or
credit all loan proceeds hereunder in accordance with the request of Borrowing
Agent.
(b) The handling of this credit facility as a co-
borrowing facility with a borrowing agent in the manner set forth in this
Agreement is solely as an accommodation to Borrowers and at their request.
Neither Agent nor any Lender shall incur liability to Borrowers as a result
thereof. To induce Agent and Lenders to do so and in consideration thereof,
each Borrower hereby indemnifies Agent and each Lender and holds Agent and
each Lender harmless from and against any and all liabilities, expenses,
losses, damages and claims of damage or injury asserted against Agent or any
Lender by any Person arising from or incurred by reason of the handling of the
financing arrangements of Borrowers as provided herein, reliance by Agent or
any Lender on any request or instruction from Borrowing Agent or any other
action taken by Agent or any Lender with respect to this Section 15.1 except
due to willful misconduct or gross (not mere) negligence by the indemnified
party.
(c) All Obligations shall be joint and several,
and each Borrower shall make payment upon the maturity of the Obligations by
acceleration or otherwise, and such obligation and liability on the part of
each Borrower shall in no way be affected by any extensions, renewals and
forbearance granted to Agent or any Lender to any Borrower, failure of Agent
or any Lender to give any Borrower notice of borrowing or any other notice,
any failure of Agent or any Lender to pursue or preserve its rights against
any Borrower, the release by Agent or any Lender of any Collateral now or
thereafter acquired from any Borrower, and such agreement by each Borrower to
pay upon any notice issued pursuant thereto is unconditional and unaffected by
prior recourse by Agent or any Lender to the other Borrowers or any Collateral
for such Borrower's Obligations or the lack thereof.
15.2. Waiver of Subrogation. Each Borrower expressly waives any
and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution of any other claim which such Borrower may now or hereafter have
against the other Borrowers or other Person directly or contingently liable
for the Obligations hereunder, or against or with respect to the other
Borrowers' property (including, without limitation, any property which is
Collateral for the Obligations), arising from the existence or performance of
this Agreement, until termination of this Agreement and repayment in full of
the Obligations.
XVI. MISCELLANEOUS.
16.1. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York. Any judicial
proceeding brought by or against any Borrower
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with respect to any of the Obligations, this Agreement or any related
agreement may be brought in any court of competent jurisdiction in the State
of New York, United States of America, and, by execution and delivery of this
Agreement, each Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement. Each Borrower hereby
waives personal service of any and all process upon it and consents that all
such service of process may be made by registered mail (return receipt
requested) directed to Borrowing Agent at its address set forth in Section
16.6 and service so made shall be deemed completed five (5) days after the
same shall have been so deposited in the mails of the United States of
America, or, at the Agent's and/or any Lender's option, by service upon
Borrowing Agent which each Borrower irrevocably appoints as such Borrower's
Agent for the purpose of accepting service within the State of New York.
Nothing herein shall affect the right to serve process in any manner permitted
by law or shall limit the right of Agent or any Lender to bring proceedings
against any Borrower in the courts of any other jurisdiction. Each Borrower
waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon FORUM NON CONVENIENS. Any judicial proceeding by any
Borrower against Agent or any Lender involving, directly or indirectly, any
matter or claim in any way arising out of, related to or connected with this
Agreement or any related agreement, shall be brought only in a federal or
state court located in the City of New York, State of New York.
16.2. Entire Understanding. (a) This Agreement and the documents
executed concurrently herewith contain the entire understanding between each
Borrower, Agent and each Lender and supersedes all prior agreements and
understandings, if any, relating to the subject matter hereof. Any promises,
representations, warranties or guarantees not herein contained and hereinafter
made shall have no force and effect unless in writing, signed by each
Borrower's, Agent's and each Lender's respective officers. Neither this
Agreement nor any portion or provisions hereof may be changed, modified,
amended, waived, supplemented, discharged, cancelled or terminated orally or
by any course of dealing, or in any manner other than by an agreement in
writing, signed by the party to be charged. Each Borrower acknowledges that it
has been advised by counsel in connection with the execution of this Agreement
and Other Documents and is not relying upon oral representations or statements
inconsistent with the terms and provisions of this Agreement.
(b) The Required Lenders, Agent with the consent
in writing of the Required Lenders, and Borrowers may, subject to the provisions
of this Section 16.2 (b), from time to time enter into written supplemental
agreements to this Agreement or the Other Documents executed by Borrowers, for
the purpose of adding or deleting any provisions or otherwise changing,
varying or waiving in any manner the rights of Lenders, Agent or Borrowers
thereunder or the conditions, provisions or terms thereof of waiving any Event
of Default thereunder, but only to the extent specified in such written
agreements; PROVIDED, HOWEVER, that no such supplemental agreement shall,
without the consent of all Lenders:
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(i) increase the Commitment Percentage
of any Lender;
(ii) extend the maturity of any Note or
the due date for any amount payable hereunder, or decrease the rate of
interest or reduce any fee payable by Borrowers to Lenders pursuant to this
Agreement;
(iii) alter the definition of the term
Required Lenders or alter, amend or modify this Section 16.2(b);
(iv) release any Collateral during any
calendar year (other than in accordance with the provisions of this Agreement)
having an aggregate value in excess of $1,000,000; or
(v) change the rights and duties of
Agent.
Any such supplemental agreement shall apply equally to each Lender and shall
be binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, Borrowers, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or
not the subsequent Event of Default is the same as the Event of Default which
was waived), or impair any right consequent thereon.
16.3. Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and
inure to the benefit of Borrowers, Agent, each Lender, all future holders of
the Obligations and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of Agent and each Lender.
(b) Each Borrower acknowledges that in the
regular course of commercial banking business one or more Lenders may at any
time and from time to time sell participating interests in the Advances to
other financial institutions (each such transferee or purchaser of a
participating interest, a "Transferee"). Each Transferee may exercise all
rights of payment (including without limitation rights of set-off) with
respect to the portion of such Advances held by it or other Obligations
payable hereunder as fully as if such Transferee were the direct holder
thereof provided that Borrowers shall not be required to pay to any Transferee
more than the amount which it would have been required to pay to Lender which
granted an interest in its Advances or other Obligations payable hereunder to
such Transferee had such Lender retained such interest in the Advances
hereunder or other Obligations payable hereunder and in no event shall
Borrowers be required to pay any such amount arising from the same
circumstances and with respect to the same Advances or other Obligations
payable hereunder to both such Lender and such Transferee. Each Borrower
hereby grants to any Transferee a continuing security interest in any
deposits, moneys or other property actually or constructively held by such
Transferee as security for the Transferee's interest in the Advances.
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(c) Any Lender may with the consent of Agent
which shall not be unreasonably withheld or delayed sell, assign or transfer
all or any part of its rights under this Agreement and the Other Documents to
one or more additional banks or financial institutions and one or more
additional banks or financial institutions may commit to make Advances
hereunder (each a "Purchasing Lender"), in minimum amounts of not less than
$5,000,000 (except with respect to a sale, assignment or transfer made by IBJS
in which no minimum shall apply), pursuant to a Commitment Transfer
Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent
and delivered to Agent for recording. Upon such execution, delivery,
acceptance and recording, from and after the transfer effective date
determined pursuant to such Commitment Transfer Supplement, (i) Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the extent provided in such Commitment
Transfer Supplement, be released from its obligations under this Agreement,
the Commitment Transfer Supplement creating a novation for that purpose. Such
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of the Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of the
rights and obligations of such transferor Lender under this Agreement and the
Other Documents. Borrowers hereby consent to the addition of such Purchasing
Lender and the resulting adjustment of the Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the Other
Documents. Borrowers shall execute and deliver such further documents and do
such further acts and things in order to effectuate the foregoing.
(d) Agent shall maintain at its address a copy of
each Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Advances
owing to each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and Borrowers, Agent and Lenders
may treat each Person whose name is recorded in the Register as the owner of
the Advance recorded therein for the purposes of this Agreement. The Register
shall be available for inspection by Borrowers or any Lender at any reasonable
time and from time to time upon reasonable prior notice. Agent shall receive a
fee in the amount of $2,500 payable by the applicable Purchasing Lender upon
the effective date of each transfer or assignment to such Purchasing Lender.
(e) Borrowers authorize each Lender to disclose
to any Transferee or Purchasing Lender and any prospective Transferee or
Purchasing Lender any and all financial information in such Lender's
possession concerning Borrowers which has been delivered to such Lender by or
on behalf of Borrowers pursuant to this Agreement or in connection with such
Lender's credit evaluation of Borrowers.
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16.4. Application of Payments. Agent shall have the continuing
and exclusive right to apply or reverse and re-apply any payment and any and
all proceeds of Collateral to any portion of the Obligations. To the extent
that any Borrower makes a payment or Agent or any Lender receives any payment
or proceeds of the Collateral for any Borrower's benefit, which are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, debtor in possession, receiver,
custodian or any other party under any bankruptcy law, common law or equitable
cause, then, to such extent, the Obligations or part thereof intended to be
satisfied shall be revived and continue as if such payment or proceeds had not
been received by Agent or such Lender.
16.5. Indemnity. Each Borrower shall indemnify Agent, each Lender
and each of their respective officers, directors, Affiliates, employees and
agents from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against Agent or any Lender in any litigation, proceeding or investigation
instituted or conducted by any governmental agency or instrumentality or any
other Person with respect to any aspect of, or any transaction contemplated
by, or referred to in, or any matter related to, this Agreement or the Other
Documents, whether or not Agent or any Lender is a party thereto, except to
the extent that any of the foregoing arises out of the willful misconduct of
the party seeking indemnification or being indemnified.
16.6. Notice. Any notice or request hereunder may be given to any
Borrower or to Agent or any Lender at their respective addresses set forth
below or at such other address as may hereafter be specified in a notice
designated as a notice of change of address under this Section. Any notice or
request hereunder shall be given by (a) hand delivery, (b) overnight courier,
(c) registered or certified mail, return receipt requested, (d) telex or
telegram, subsequently confirmed by registered or certified mail, or (e)
telecopy to the number set out below (or such other number as may hereafter be
specified in a notice designated as a notice of change of address) with
electronic confirmation of its receipt. Any notice or other communication
required or permitted pursuant to this Agreement shall be deemed given (a)
when personally delivered to any officer of the party to whom it is addressed,
(b) on the earlier of actual receipt thereof or three (3) days following
posting thereof by certified or registered mail, postage prepaid, or (c) upon
actual receipt thereof when sent by a recognized overnight delivery service or
(d) upon actual receipt thereof when sent by telecopier to the number set
forth below with electronic confirmation of its receipt, in each case
addressed to each party at its address set forth below or at such other
address as has been furnished in writing by a party to the other by like
notice:
(A) If to Agent or IBJ Xxxxxxxx Bank & Trust Company
IBJS at: Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
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Telecopier: (000) 000-0000
with a copy to: Xxxx & Hessen LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(B) If to a Lender other than Agent, as specified on the
signature pages hereof
(C) If to Borrowing Agent
or any Borrower, at: Batteries Batteries, Inc.
c/o Founders Equity, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Brock, Fensterstock, Xxxxxxxxxxx,
XxXxxxxxx & Xxxx, LLC
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
16.7. Survival. The obligations of Borrowers under Sections
2.2(f), 3.7, 3.8, 3.9, 4.19(h), 14.7 and 16.5 shall survive termination of
this Agreement and the Other Documents and payment in full of the Obligations.
16.8. Severability. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated
thereby and shall be given effect so far as possible.
16.9. Expenses. All costs and expenses including, without
limitation, reasonable attorneys' fees and disbursements incurred by Agent,
Agent on behalf of Lenders and Lenders (a) in all efforts made to enforce
payment of any Obligation or effect collection of any Collateral, or (b) in
connection with the entering into, modification, amendment, administration and
enforcement of this Agreement or any consents or waivers hereunder and all
related agreements, documents and instruments, or (c) in instituting,
maintaining, preserving, enforcing and foreclosing on Agent's security
interest in or Lien on any of the Collateral, whether through judicial
proceedings or otherwise, or (d) in defending or prosecuting any actions or
proceedings arising out of or relating to Agent's or any Lender's transactions
with any Borrower, or (e) in connection with any advice given to Agent or any
Lender with respect to its rights and obligations under this Agreement and all
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related agreements, may be charged to Borrowers' Account and shall be part of
the Obligations.
16.10. Injunctive Relief. Each Borrower recognizes that, in the
event any Borrower fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, any remedy at law may prove
to be inadequate relief to Lenders; therefore, Agent, if Agent so requests,
shall be entitled to temporary and permanent injunctive relief in any such
case without the necessity of proving that actual damages are not an adequate
remedy.
16.11. Consequential Damages. Neither Agent nor any Lender,
nor any agent or attorney for any of them, shall be liable to any Borrower for
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the
Obligations.
16.12. Captions. The captions at various places in this
Agreement are intended for convenience only and do not constitute and shall
not be interpreted as part of this Agreement.
16.13. Counterparts; Telecopied Signatures. This Agreement may be
executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed to be
an original signature hereto.
16.14. Construction. The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement
or any amendments, schedules or exhibits thereto.
16.15. Confidentiality. Agent, each Lender and each Transferee
shall hold all non-public information obtained by Agent, such Lender or such
Transferee pursuant to the requirements of this Agreement in accordance with
Agent's, such Lender's and such Transferee's customary procedures for handling
confidential information of this nature; provided, however, Agent, each Lender
and each Transferee may disclose such confidential information (a) to its
examiners, affiliates, outside auditors, counsel and other professional
advisors, (b) to Agent, any Lender or to any prospective Transferees and
Purchasing Lenders, and (c) as required or requested by any Governmental Body
or representative thereof or pursuant to legal process; provided, further that
(i) unless specifically prohibited by applicable law or court order, Agent,
each Lender and each Transferee shall use its best efforts prior to disclosure
thereof, to notify Borrower of the applicable request for disclosure of such
non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the
financial condition of a Lender or a Transferee by such Governmental Body) or
(B) pursuant to legal process and (ii) in no event shall Agent, any Lender or
any Transferee be obligated to return any materials furnished by any Borrower
other than those documents and instruments in possession of Agent or any
Lender in order to perfect its Lien on
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the Collateral once the Obligations have been paid in full and this Agreement
has been terminated.
16.16. Publicity. Each Borrower hereby authorizes Agent and
Lenders to make appropriate announcements of the financial arrangement entered
into among Borrowers, Agent and Lenders, including, without limitation,
announcements which are commonly known as tombstones, in such publications and
to such selected parties as Agent or Lenders shall in its sole and absolute
discretion deem appropriate.
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Each of the parties has signed this Agreement as of the day and
year first above written.
BATTERIES BATTERIES, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX ELECTRONICS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
00000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
ADVANCED FOX ANTENNA, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxxx Xxxxxx, XX 00000
SPECIFIC ENERGY CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
0000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
-00-
XXXXXXX XXXXXXX, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
0000 Xxxxxx Xxxxxx
XxXxxxx, Xxxxxxxx 00000
W.S. BATTERY & SALES COMPANY, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
0000 Xxxxxx Xxxxxx
XxXxxxx, Xxxxxxxx 00000
BATTERY ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
-------------------------------
Xxxxxx Xxxxx, Chief Operating
Officer
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Lender and as Agent
By: /s/ Xxxxx Xxxx
-------------------------------
Xxxxx Xxxx, Vice-President
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Commitment Percentage: 100%
-00-
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
On this 6th day of January, 1997, before me personally came
Xxxxxx Xxxxx, to me known, who, being by me duly sworn, did depose and say
that he is the Chief Operating Officer of Batteries Batteries, Inc., Xxxxxx
Electronics, Inc., Advanced Fox Antenna, Inc., Specific Energy Corporation,
Battery Network, Inc., W.S. Battery & Sales Company, Inc. and Battery
Acquisition Corp., the corporations described in and which executed the
foregoing instrument; and that he was authorized to sign his name thereto on
behalf of said corporations.
/s/ Xxxx X. Xxxxxxx
------------------------------
NOTARY PUBLIC
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On this 6th day of January, 1997, before me personally came Xxxxx
Xxxx, to me known, who, being by me duly sworn, did depose and say that he is
the Vice-President of IBJ Xxxxxxxx Bank & Trust Company, the corporation
described in and which executed the foregoing instrument; and that he was
authorized to sign his name thereto on behalf of said corporation.
/s/ Xxxx X. Xxxxxxx
------------------------------
NOTARY PUBLIC
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List of Exhibits and Schedules
Exhibits
Exhibit 2.1(a) Revolving Credit Note
Exhibit 2.4 Term Note
Exhibit 2.9 Letter of Credit and Security Agreement
Exhibit 3.2 Letter of Credit Fees
Exhibit 5.5(b) Financial Projections
Exhibit 8.1(i) Financial Condition Certificate
Exhibit 15.3 Commitment Transfer Supplement
Schedules
Schedule 1.2 Permitted Encumbrances
Schedule 4.5 Equipment and Inventory Locations
Schedule 4.15(c) Location of Executive Offices
Schedule 5.2(a) States of Qualification and Good Standing
Schedule 5.2(b) Subsidiaries
Schedule 5.4 Federal Tax Identification Numbers
Schedule 5.6 Prior Names
Schedule 5.8(b) Litigation
Schedule 5.8(d) Plans
Schedule 5.9 Intellectual Property, Source Code Escrow
Agreements
Schedule 5.10 Licenses and Permits
Schedule 5.14 Labor Disputes
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SCHEDULE 1.2
Permitted Encumbrances:
None.
SCHEDULE 4.5
Equipment and Inventory Locations:
(a) 0000 000xx Xxxxxx, X.X., Xxxxxxx, Xxxxxxxxxx 00000 (Warehouse)
(b) 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, San Diego County
(Warehouse)
(c) 00 Xxxxxxx Xxxx, Xxxx 0, Xxxxx Xxxxxx, Xxx Xxxxxx 00000 (Warehouse)
(d) 000 Xxxxxxx Xxxxxx, XxXxxxxxx, Xxxxxxx 00000 (Warehouse)
(e) 0000 Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxx 00000 (Retail)
(f) 0000 X. Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxx 00000 (Retail)
(g) 0000 X. Xxxx Xxxx, Xxxxxxx Xxxxxxx 00000 (Retail)
(h) 0000 X. Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 (Retail)
(i) 00000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (Retail)
(j) 000 Xxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxx 00000 (Retail)
(k) 00000 Xxxxxxx Xxxx, Xxxx 00000 (Retail)
(l) 0000 Xxxxxxxxx 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 (Office)
(m) 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000 (Office
and 2 Warehouses)
(n) 00000 Xxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 (Distribution
Center)
SCHEDULE 4.15(c)
Location of Executive Offices:
(a) Batteries Batteries, Inc.
c/o Founders Equity Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
New York County
(b) Advanced Fox Antenna, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxxxxx County
(c) Xxxxxx Electronics Inc.
00000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
San Diego County
(d) Specific Energy Corporation
0000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
(e) Battery Network, Inc.
0000 Xxxxxx Xxxxxx
XxXxxxx, Xxxxxxxx 00000
XxXxxxx County
(f) W.S. Battery & Sales Company, Inc.
0000 Xxxxxx Xxxxxx
XxXxxxx, Xxxxxxxx 00000
XxXxxxx County
(g) Battery Acquisition Corp.
c/o Founders Equity Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SCHEDULE 5.2(a)
States of Qualification and Good Standing:
Batteries Batteries Inc. -- Delaware
Battery Acquisition Corp. -- New York
Advanced Fox Antenna -- Delaware, Pennsylvania
Xxxxxx Electronics, Inc. -- California
Specific Energy Corporation -- Arizona
Battery Network, Inc. -- Illinois
W.S. Battery & Sales Company, Inc. -- Illinois
SCHEDULE 5.2(b)
Subsidiaries of Batteries Batteries, Inc.:
(a) Advanced Fox Antenna, Inc.
(b) Xxxxxx Electronics Inc.
(c) Battery Network, Inc.
(d) W.S. Battery & Sales Company, Inc.
Subsidiary of Battery Acquisition Corp.
(e) Specific Energy Corporation
SCHEDULE 5.4
Federal Tax Identification Numbers:
(a) Batteries Batteries, Inc. -- 00-000-0000
(b) Advanced Fox Antenna, Inc. -- 00-000-0000
(c) Xxxxxx Electronics Inc. -- 00-0000000
(d) Specific Energy Corporation -- 00-0000000
(e) Battery Network, Inc. -- 00-0000000
(f) W.S. Battery & Sales Company, Inc. -- 00-0000000
(g) Battery Acquisition Corp. -- 00-0000000
SCHEDULE 5.6
Prior Names:
(a) Specific Energy Corporation was previously doing business as
"Lynntronics Corp." It now conducts business under the name
"Batteries Batteries for everything."
(b) WSJ Enterprises, Inc. was previously named Alexander Battery
Co., Inc.
(c) Batteries Batteries, Inc. was previously "Founders Associates Inc."
The amendment to the Certificate of Incorporation changing the name
was filed in June 1995. Founders Associates Inc. was previously
"China Capital Corporation," having changed its name in July 1994.
Batteries Batteries, Inc. did not conduct any business until the
acquisition by Battery Acquisition Corp. of the shares of capital
stock of Specific Energy.
(d) Specific Energy Corporation applied for, in Arizona, and was granted,
the Trade Name "Batteries Batteries for everything" on March 28,
1996.
(d) Battery Network, Inc. uses the tradename "Absolute Battery."
SCHEDULE 5.8(b)
Litigation:
Blenheim Group USA, Inc. vs. Battery Network involving a claim for
approximately $6,456.11 in connection with a vendor dispute.
SCHEDULE 5.8(d)
Plans:
o Alexander Battery Co. East, Inc. Specimen Profit Sharing Plan Adoption
Agreement and
o Alexander Battery Co. East, Inc. Specimen Profit Sharing Plan & Trust
o Alexander Battery Co. West, Inc. Specimen Profit Sharing Plan & Trust
o Alexander Battery Co. South, Inc. Specimen Profit Sharing Plan Adoption
Agreement and Alexander Battery Co. South Inc. Profit Sharing Plan &
Trust
o W.S. Battery & Sales Co., Inc. Employee Stock Ownership Plan and Trust
and W.S. Battery & Sales Co., Inc. Specimen Money Purchase Pension
Plan & Trust
o Battery Network, Inc. Specimen Profit Sharing Plan Adoption Agreement
and Battery Network, Inc. Specimen Profit Sharing Plan & Trust
SCHEDULE 5.9
Intellectual Property, Source Code Escrow Agreements:
"Batteries Batteries for Everything" Trademark application filing date
August 21, 1995 status pending
"Battery Network" Trademark registration granted on July 4, 1995 U.S. Trademark
Registration No. 1,903,4646.
"Absolute" Trademark registration application filed February 4, 1994, trademark
file number 74/487,834
SCHEDULE 5.10
Licenses and Permits:
California -- Sellers Permit, California City of Escondido
New Jersey -- Sales and Use Tax Recycling Permit
Illinois -- Illinois Department of Revenue
Washington -- Certificate of Coverage -- Master License
License Agreement -- De Pew Engineering Inc.
SCHEDULE 5.14
Labor Disputes:
None
