EXHIBIT 10.2
LOAN AGREEMENT
THIS LOAN AGREEMENT, made as of this 8th day of May, 1998, between
MERCURY WASTE SOLUTIONS, INC., a Minnesota corporation ("Borrower"), and BANKERS
AMERICAN CAPITAL CORPORATION, a Minnesota corporation ("Lender").
WITNESSETH:
WHEREAS, Borrower has requested the Lender extend to Borrower a term
loan in the amount of $1,200,000 (the "Term Loan"), the proceeds of which Term
Loan are to be used by the Borrower for the purpose of financing the acquisition
of the New York Facility (as defined below) by MWS New York, Inc., a Minnesota
corporation wholly owned by Borrower ("MWSNY"), and a revolving credit loan in
the face principal amount of $800,000 (the "Revolving Loan"), the proceeds of
which Revolving Loan will be used to fund Borrower's general working capital
needs;
WHEREAS, Lender is willing to make such Term Loan and Revolving Loan
on the terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
"Advance" means an advance by the Lender to the Borrower
of the proceeds of either of the Notes in accordance with the terms
hereof.
"Affiliate" means any corporation, association,
partnership, joint venture or other business entity directly or
indirectly controlling or controlled by, or under direct or indirect
common control with, Borrower or any of its Subsidiaries.
"Agreement" means this Loan Agreement, as the same may
be amended, restated or modified from time to time hereafter.
"Assignments of Lease" means those certain Collateral
Assignments of Lease bearing even date herewith executed by Borrower
in favor of Lender assigning to Lender the Borrower's rights under
the Roseville Lease and the Union Grove Lease, and by MWSNY
assigning its rights under the the New York Lease, as the same may
be amended from time to time.
"Business Day" means a day on which Norwest Bank
Minnesota, National Association is open for business in Minneapolis,
Minnesota.
"Commitments" means the Revolving Loan Commitment, the
Term Loan Commitment.
"Default" means the occurrence of any event which with
the giving of notice and/or the lapse of any applicable grace period
would constitute an Event of Default hereunder.
"Event of Default" means the occurrence of an event as
described in Article VIII of this Agreement.
"Financing Statements" means that certain UCC-1
financing statement filed with the Secretary of State's Offices in
Minnesota, Wisconsin, New York, Indiana and Georgia.
"GAAP" means generally accepted accounting principles
consistently applied and maintained in the United States throughout
the period indicated, except for
changes mandated by the Financial Accounting Standards Board or any
similar accounting authority of comparable standing.
"Guaranty" means that certain Guaranty bearing even date
herewith executed by MWSNY in favor of the Lender, as the same may
be amended from time to time.
"Loan Documents" means this Agreement, the Notes, the
Financing Statements, the Guaranty, the Security Agreements, and the
Assignments of Lease.
"Material Adverse Occurrence" means any occurrence,
whether or not insured against, of whatsoever nature (including,
without limitation, any adverse deter mination in any litigation,
arbitration or governmental investigation or proceeding) which will
materially adversely affect the financial condition or operations of
Borrower or materially impair the ability of Borrower to perform its
obligations under this Agreement or any instrument executed pursuant
hereto.
"Maturity Date" means (i) May 1, 2000 with respect to
the Term Note, and (ii) May 1, 1999 with respect to the Revolving
Note..
"New York Facility" means the facility leased and
operated by MWSNY located at 00 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx.
"New York Lease" means that certain Lease Agreement
dated ________, 1998 executed by Mercury Refining Company, Inc. and
00 Xxxxxxxx Xxx., Inc., collectively as lessor, and MWSNY, as
lessee, together with all extensions, amendments and modifications
thereto.
"Notes" means collectively the Term Note and the
Revolving Note.
"Person" means any natural person, corporation,
partnership, joint venture, association, trust, unincorporated
organization, limited liability company, government, governmental
agency or political subdivision, or any other entity, whether acting
in an individual, fiduciary or other capacity.
"Prime Rate" means the rate of interest published from
time to time in the Money Rates Column of the Money & Investing
Section of the WALL STREET JOURNAL as the "Prime Rate", as the same
may change from time to time.
"Revolving Commitment Amount" means $800,000.
"Revolving Loan Commitment" means the obligation of the
Lender to make Advances pursuant to Section 3.4 hereof.
"Revolving Note" means that certain Revolving Credit
Promissory Note bearing even date herewith in the face principal
amount of $800,000 made payable by Borrower to the order of the
Lender, as the same may be amended from time to time.
"Roseville Lease" means that certain Lease Agreement
dated February 25, 1993 executed by St. Xxxx Properties, Inc., as
lessor, and Professional Resources International, Ltd., as lessee,
which lessee's interest has been assigned to Borrower, as amended by
Amendment of Lease dated January 28, 1998, and as further amended
from time to time.
"Security Agreements" means those certain Security
Agreements bearing even date herewith executed by Borrower and by
MWSNY, each in favor of the Lender, as the same may be amended from
time to time.
"Security Interest" means any security interest, pledge,
lien, hypothecation or other encumbrance now or hereafter granted to
the Lender by the Borrower or MWSNY, including without limitation
pursuant to the Security Agreements and the Assignments of Leases.
"Subsidiary" means any corporation 50% or more of the
combined voting power of all classes of stock of which is owned by
Borrower either directly or indirectly through one or more
Subsidiaries.
"Term Loan Commitment" means the obligation of the
Lender to make the term loan pursuant to Section 3.1 hereof.
"Term Note" means that certain Promissory Note bearing
even date herewith, made payable to the Lender's order by the
Borrower in the original principal amount of $1,200,000, as the same
may be amended, restated or extended from time to time.
"Union Grove Lease" means that certain Lease Agreement
dated as of July 15, 1997 executed by Borrower, as lessee, and Xxxxx
Xxxx dba Duarnd Properties, as lessor, as amended from time to time.
1.2 Computation of Time Periods. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
unless otherwise stated the word "from" means "from and including" and the word
"to" or "until" each means "to but excluding".
1.3 Other Terms. The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; the
words "Section," "Schedule," "Exhibit" and like references are to this Agreement
unless otherwise clearly requires; and the word "or" has the inclusive meaning
represented by the phrase "and/or." The singular includes the plural and the
singular.
ARTICLE II.
DOCUMENTS DELIVERED HEREWITH
Prior to or contemporaneously with the execution of this Agreement,
Borrower has delivered to Lender the following documents and/or instruments, in
form and substance acceptable to the Lender:
2.1 The Loan Documents.
2.2 UCC-1 Financing Statement ("Financing Statement")
executed by the Borrower for filing with the Secretary of State of
each of Minnesota, New York, Wisconsin, Indiana and Georgia and by
MWSNY for filing with the Secretary of State of New York, and
covering the collateral described in the Security Agreements and
Assignments of Lease.
2.3 Certified Articles of Incorporation of each of
Borrower and MWSNY.
2.4 Certificate of Good Standing for the Borrower and
MWSNY issued by Secretary of State of Minnesota, and Certificate of
Authority to do Business for MWSNY from the Secretary of State of
New York.
2.5 Certified Resolutions of the Board of Directors of
the Borrower and of MWSNY.
(a) Authorizing the execution and delivery
by an officer or officers of Borrower and MWSNY, as
applicable, of the Loan Documents and any and all other
documents or instruments required to be executed and
delivered or delivered in connection herewith; and
(b) Identifying the officer or officers
having authority to execute and deliver the Loan
Documents and any and all other documents or instruments
required to be executed and delivered or delivered in
connection herewith.
2.6 Incumbency Certificate showing the names, title and
specimen signatures of the persons authorized to execute Loan
Documents on behalf of the Borrower and MWSNY.
2.7 Evidence of insurance covering the assets of
Borrower satisfactory to Lender.
2.8 Opinion of counsel of Borrower and MWSNY, in form
and substance acceptable to Lender and Lender's counsel.
2.9 Evidence satisfactory to Lender of the completion of
the conditions precedent to the closing of the acquisition of the
New York Facility.
2.10 Delivery to Lender of a warrant to purchase stock
of Borrower for 100,000 shares of common stock of Borrower at the
market price of such stock on the date of this Agreement.
ARTICLE III.
COMMITMENTS OF THE LENDER
3.1 Term Loan Commitment. Subject to the terms and
conditions of this Agreement and of the other Loan Documents, the
Lender agrees to loan to the Borrower and the Borrower agrees to
borrow from the Lender an amount not to exceed One Million Two
Hundred Thousand and No/100 U.S. Dollars ($1,200,000), pursuant to
the terms of the Term Note. The Lender shall disburse the proceeds
of the Term Note upon the terms and conditions set forth below.
3.2 Term Note. The Term Loan shall be evidenced by the
Term Note which matures on the Maturity Date. All prepayments on the
Note may be noted by the Lender on a schedule attached to the Term
Note and shall be entered by the Lender on its ledgers and computer
records. The entries made by the Lender on its ledgers and computer
records and any notations made by the Lender on any such schedule
annexed to the Term Note shall be presumed to be accurate until the
contrary is established.
3.3 Advances of Term Note. As long as no Event of
Default has occurred and is continuing, the Lender shall make an
Advance against the Term Note for the amount of the Term Loan for
the purpose of financing MWSNY's acquisition of the New York
Facility. Borrower acknowledges and agrees that the Term Note is not
a revolving loan, and any voluntary or mandatory prepayment thereof
may not be reborrowed hereunder.
3.4 Revolving Loan Commitment. From and after the date
hereof up to and including the Maturity Date, Lender agrees to lend
to Borrower and Borrower may borrow from Lender and repay and
reborrow, regardless of the cumulative amount of Advances against
the Revolving Note, up to the Revolving Commitment Amount, subject
to the terms hereof. Borrower may obtain Advances up to the
Revolving Credit Commitment Amount, less the principal balance
outstanding on the Revolving Note at the time of the request, by
giving the Lender telephonic notice of the requested Advance.
3.5 Termination of Revolving Loan Commitment. The
Revolving Loan Commitment may be terminated by Borrower at any time
upon written notice to Lender accompanied by payment in full of the
outstanding principal balance and accrued interest on the Revolving
Note and any accrued and unpaid fees. Upon receipt of such notice
and payment, Lender's obligations to make Advances hereunder shall
terminate. Lender may terminate the Revolving Loan Commitment upon
the occurrence of an Event of Default. In any event the Lender's
Revolving Loan Commitment shall automatically expire on the Maturity
Date.
3.6 General Terms.
(a) Computations. Interest on the Notes
shall be computed utilizing the actual number of days
elapsed in a year of 360 days.
(b) Time and Method of Payments. All
payments and prepayments by the Borrower on the Notes
shall be made in immediately available funds to the
Lender at its main office in Mankato, Minnesota, not
later than 2:00 p.m. (Mankato time) on the day such
payment is due. Funds received after such hour shall be
deemed to have been received by the Lender on the next
Business Day.
3.7 Interest. The unpaid principal amount outstanding on
the Notes, shall bear interest prior to maturity at a rate equal to
the Prime Rate plus six percent (6%) per annum (the "Applicable
Rate"). The Applicable Rate shall be readjusted on the first day of
each calendar quarter based upon the Prime Rate on such date.
3.8 Optional Prepayments. The Borrower may prepay the
Term Loan, in whole or in part, as provided in the Term Note. Each
partial prepayment shall be in an amount of $50,000 or an integral
multiple thereof. Each prepayment of the Term Loan shall be applied
first to accrued unpaid interest then to the unpaid installments of
the Term Loan in the inverse order of maturity.
3.9 Payments. Payments and prepayments of principal of,
and interest on, the Notes, and all fees, expenses and other
obligations under the Loan Documents payable to the Lender shall be
made without set-off or counterclaim in immediately
available funds not later than 2:00 p.m., Minneapolis time, on the
dates due at the main office of the Lender in Mankato, Minnesota.
Funds received on any day after such time shall be deemed to have
been received on the next Business Day. Whenever any payment to be
made hereunder or on the Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of any interest or fees.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement, Borrower
hereby represents and warrants that:
4.1 Organization, Qualification and Authorization. The
Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota, has the
corporate power and authority to own, lease and rent its assets and
to transact the business in which it is now engaged, and is duly
qualified and licensed to do business in every jurisdiction in which
the character of its properties or the nature of the business in
which it is engaged makes such qualification or licensing necessary.
MWSNY is a wholly owned Subsidiary of Borrower and MWSNY is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Minnesota, has the corporate power
and authority to own, lease and rent its assets and to transact the
business in which it is now engaged in Minnesota and New York.
4.2 Power and Authority. The Borrower has full power,
right and authority to execute and deliver the Loan Documents, to
borrow the funds herein provided for, and to perform and observe
each and all of the matters and things provided for in said Loan
Documents. The execution and delivery of Loan Documents and such
other documents as are required hereby and the performance or
observance of the terms hereof and thereof have been duly authorized
by all necessary corporate action of the Borrower.
4.3 Ownership. The Borrower is or will be upon purchase,
the owner of all personal property described in the Security
Agreement executed by Borrower and delivered herewith as collateral,
and has no knowledge of any unrecorded claims, liens, and
encumbrances against such property.
4.4 Subsidiaries. As of the date hereof, the Borrower
has the following Subsidiaries: (i) MWSI Lamp & Ballast Recycling,
Inc., and (ii) MWS New York, Inc.
4.5 Validity of Obligations. This Agreement and each of
the other Loan Documents have been duly executed and delivered by
the duly authorized officer or officers of the Borrower and are the
legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with their respective terms,
subject only to bankruptcy, insolvency, reorganization, moratorium
or similar laws at the time in effect, affecting the enforceability
of rights of creditors generally.
4.6 Litigation. Except as set forth on Exhibit A, there
are no actions, suits or proceedings pending, or to the knowledge of
the Borrower threatened, against or affecting it, at law or in
equity, except actions, suits and proceedings fully covered by
insurance; and Borrower is not in default with respect to any order,
writ, injunction, decree or demand of any court or any governmental
authority.
4.7 No Conflict; No Default. The execution, delivery and
performance by the Borrower of this Agreement and the other Loan
Documents, does not and will not (a) violate any provision of any
law, statute, rule or regulation or any order, writ, judgment,
injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having
applicability to the Borrower, (b) violate or contravene any
provision of the articles of incorporation or bylaws of the Borrower
, or (c) result in a breach of or constitute a default under any
mortgage, indenture, loan or credit agreement or any other
agreement, lease or instrument to which the Borrower is a party or
by which it or any of its properties may be bound or result in the
creation of any lien thereunder. The is not currently in default
under or in violation of any such law, statute, rule or regulation,
order, writ, judgment, injunction, decree, determination or award or
any such indenture, loan or credit agreement or other agreement,
lease or instrument in any case in which the consequences of such
default or violation could have a material adverse effect on the
business, operations, properties, assets or condition (financial or
otherwise) of the Borrower.
4.8 Government Consent. No order, consent, approval,
license, authorization or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body
or authority is required on the part of the Borrower to authorize,
or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or
enforceability of, this Agreement or any of the other Loan
Documents, or to the extent such consent is required, such consent
has been obtained.
4.9 No Event of Default. No Event of Default (as
hereinafter defined) has occurred and is continuing as of the date
hereof and no event has occurred and is continuing which would be an
Event of Default hereunder were it not for any grace period
specified herein or which would become an Event of Default if notice
thereof were given to Lender.
4.10 Financial Statements. All financial statements
heretofore delivered to the Lender are true and correct in all
material respects, have been prepared in accordance with GAAP, and
fairly present the respective financial conditions of the subjects
thereof as of the respective dates thereof; no material adverse
change has occurred in the financial conditions reflected therein
since the respective dates thereof, and no additional term debt
borrowings have been made by Borrower since the date thereof other
than the borrowing contemplated hereby or term debt borrowings
previously acknowledged in writing by Lender.
4.11 Tax Returns. All Federal, State and other tax
returns of Borrower required by law to be filed have been duly filed
and all Federal, State and other taxes, assessments, and
governmental charges upon Borrower which to the knowledge of
Borrower are due and payable, have been paid.
4.12 Margin Stock. No part of the borrowings hereunder
shall be used at any time by Borrower to purchase or carry margin
stock (within the meaning of Regulation U or G promulgated by the
Board of Governors of the Federal Reserve System) or to extend
credit to others for the purpose of purchasing or carrying any
margin stock. Borrower will not use any proceeds of the Notes for
any purpose
which violates, or which is inconsistent with, any regulations
promulgated by the Board of Governors of the Federal Reserve System.
4.13 Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of
Borrower to the Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other
such factual information hereafter furnished by or on behalf of
Borrower to the Lender will be true and accurate in every material
respect on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading on such date.
4.14 Investment Company Act. To the knowledge of
Borrower, the Borrower is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
4.15 Environmental, Health and Safety Laws. There does
not exist any violation by the Borrower of any applicable federal,
state or local law, rule, or regulation or order of any government,
governmental department, board, agency or other instrumentality
relating to environmental, pollution, health or safety matters which
will or threatens to impose a material liability on the Borrower or
which would require a material expenditure by the Borrower to cure.
The Borrower has not received any notice to the effect that any part
of its operations or properties is not in material compliance with
any such law, rule, regulation or order of notice that it or its
property is the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to any release of
any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be expected
to have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of the
Borrower taken as a whole.
4.16 Survival of Representations. All representations
and warranties contained in this Article IV shall survive the
delivery of the Notes and any investigation at any time made by or
on behalf of the Lender shall not diminish its rights to rely
thereon.
ARTICLE V.
AFFIRMATIVE COVENANTS
To further induce Lender to make the requested loans, Borrower
hereby covenants and agrees that as long as any obligations are outstanding
hereunder, it will:
5.1 Use of Proceeds. Use the proceeds of the Term Note
solely for the acquisition of the New York Facility by MWSNY.
5.2 Insurance. Maintain insurance with financially sound
and reputable insurance companies or associations in such amounts
and covering such risks as are usually carried by companies engaged
in the same or a similar business and similarly situated, which
insurance may provide for reasonable deductibility from coverage
thereof, and furnish to the Lender upon request appropriate evidence
of the carrying of such insurance. Borrower will obtain loss payable
endorsements on applicable insurance policies in favor of the
Borrower and the Lender as their interests appear. Borrower shall
cause each issuer to agree to provide the Lender with thirty (30)
days prior written notice of cancellation or nonrenewal.
5.3 Taxes. Promptly pay and discharge all taxes,
assessments and other governmental charges imposed upon it or upon
its income and profits, and any and all claims for labor, material
or supplies or rental charges or charges of any other kind which, if
unpaid, might by law become a lien or charge upon the Borrower's
property, provided, however, that Borrower shall not be required to
pay any such tax, assessment, charge or claim so long as the
validity thereof shall be contested in good faith, by appropriate
proceedings and Borrower shall have set aside on its books adequate
reserves therefor.
5.4 Maintenance of Assets. Maintain, keep and preserve
all of its assets, properties and equipment necessary or useful in
the proper conduct of its business in good repair, working order and
condition, ordinary wear and tear excepted, and from time to time
make or cause to be made all needed renewals, replacements and
repairs so that at all times Borrower's business can be operated
efficiently.
5.5 Access to Records. At any reasonable time and from
time to time, upon reasonable notice and during normal business
hours, permit the Lender or any agent or representative thereof, to
examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, Borrower, and to discuss
the affairs, finances, and accounts of Borrower with any of its
officers and members.
5.6 Financial Statements. Furnish to Lender:
(a) As soon as available and in any event
within one hundred twenty (120) days after the close of
each of its fiscal years (which may be calendar year)
the audited financial statements of the Borrower (which
shall be consolidated with all subsidiaries) at the end
of such year, all in reasonable detail, prepared by
nationally recognized independent certified public
accountants, selected by the Borrower and acceptable to
the Lender, together with such accountant's
certification to the effect that (a) as to Borrower has
been prepared in accordance with GAAP and (b) the same
fairly represent the financial condition of the Borrower
as of such date;
(b) As soon as available, but in no event
later than forty-five (45) days after the end of each of
Borrower's first three fiscal quarters, the internally
prepared balance sheet and statement of profit and loss
and surplus income and retained earnings of the Borrower
for the previous quarter and the portion of the fiscal
year then ended;
(c) From time to time such other information
pertaining to Borrower and its properties and financial
condition as Lender may reasonably request.
5.7 Notification of Changes. Promptly notify the Lender
in writing of:
(i) Any litigation which might materially
and adversely affect Borrower and any of the properties
of Borrower;
(ii) The occurrence of any Event of Default
under this Agreement or under any other loan agreement,
debenture, note, purchase agreement or any other
agreement providing for the borrowing of money by
Borrower or any event of which Borrower has knowledge
and which, with the passage of time or giving of notice,
or both, would constitute an Event of Default under this
Agreement or under such other agreements; and
(iii) Any material adverse change in the
operations, business, properties, assets or conditions,
financial or otherwise, of Borrower;
5.8 Existence. Preserve and maintain the corporate
existence and good standing of the Borrower or its Subsidiaries in
Minnesota, Wisconsin and New York and continue in compliance in all
material respects with all applicable statutes, laws, rules and
regulations.
5.9 Conduct of Business. Continue to engage in a
business of the same general type as that now being conducted by
Borrower on the date of this Agreement, provided, however, that
nothing contained in this Section shall prevent Borrower from
discontinuing any part of the business of Borrower, if the
discontinuance is, in the opinion of the Borrower, in the best
interests of Borrower, and such discontinuance shall not be
disadvantageous to the Lender.
5.10 Leases. Notify the Borrower promptly of the
occurrence of a default under the terms of any of the New York
Lease, the Roseville Lease or the Union Grove Lease, and to the
extent Borrower or MWSNY, as the case may be, is unable to cure any
such default diligently, permit Borrower to undertake the cure of
any such default in accordance with the terms of such Leases.
5.11 Compliance with Laws. Carry on its business
activities in substantial compliance with all applicable federal or
state laws and all applicable rules,
regulations and orders of all governmental bodies and offices having
power to regulate or supervise its business activities.
ARTICLE VI.
NEGATIVE COVENANTS
Borrower covenants and agrees that for so long as it is indebted to
Lender, it will not, without Lender's prior written consent, which consent will
not be unreasonably withheld:
6.1 Merge, Consolidate or Sell. Merge or consolidate
with or into any other entity, or lease, assign or sell all or
substantially all of its property and business to any other entity
or entities other than in the ordinary course of business.
6.2 Acquisition. Purchase or otherwise acquire the
assets of any person, firm or corporation, other than in the
ordinary course of Borrower's business.
6.3 Inconsistent Agreements. Enter into any agreement
containing any provision which would be violated or breached by any
borrowing by Borrower hereunder or by the performance by Borrower of
its obligations hereunder or under any Instrument executed pursuant
hereto.
6.4 Liens and Encumbrances. Incur or permit to exist any
liens or encumbrances, whether voluntary or involuntary, on any of
the collateral covered by the Security Agreement.
6.5 Guarantees and Other Liabilities. Other than in
favor of the Lender, become or be a guarantor or surety of, or
otherwise become or be responsible in any manner (whether by
agreement to purchase any obligations, stock, assets, goods or
services, or to supply or advance any funds, assets, goods or
services, or otherwise) with respect to, any undertaking of any
other Person.
6.6 Indebtedness. Incur, create, issue, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness under this Agreement;
(b) Current liabilities, other than for
borrowed money, incurred in the ordinary course of
business;
(c) Indebtedness existing on the date of
this Agreement and disclosed on Schedule 6.6(c) hereto;
and
(d) Indebtedness secured by liens permitted
under Section 6.7 hereof.
6.7 Liens. Create, incur, assume or suffer to exist any
Lien with respect to any property, revenues or assets now owned or
hereafter arising or acquired, except:
(a) liens in connection with the acquisition
of property after the date hereof by way of purchase
money mortgage, conditional sale or other title
retention agreement,and attaching only to the property
being acquired if the indebtedness secured thereby does
not exceed the fair market value of such property at the
time of acquisition thereof nor $50,000 in the aggregate
for the Borrower and any Subsidiary at any one time
outstanding;
(b) liens existing on the date of this
Agreement and disclosed on Schedule 6.7(b) hereto;
(c) Deposits or pledges to secure payment of
workers' compensation, unemployment insurance, old age
pensions or other social security obligations, in the
ordinary course of business of the Borrower;
(d) liens for taxes, fees, assessments and
governmental charges not delinquent; and
(e) liens of carriers, warehousemen,
mechanics and materialmen, and other like liens arising
in the ordinary course of business, for sums not due or
to the extent that payment therefor shall not at the
time be required to be made.
6.8 Transactions with Affiliates. Enter into or be a
party to any transaction or arrangement, including, without
limitation, the purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliates, except in the
ordinary course of and pursuant to the reasonable requirements of
the Borrower's business and upon fair and reasonable terms no less
favorable to the Borrower than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
ARTICLE VII.
EVENTS OF DEFAULT AND EFFECT THEREOF
7.1 Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default" hereunder:
(a) Borrower fails to pay any installment of
principal or interest on the Note within ten (10) days
after such installment becomes due; or
(b) Borrower fails to duly and punctually
perform the covenants contained herein, or in any Loan
Document executed or delivered hereunder and such
failure to perform continues for a period of thirty (30)
days after Lender gives written notice to Borrower of
such default; or
(c) Any financial statement, certificate,
representation, or warranty furnished pursuant to or
made under this Agreement proves to be materially false
as of the date thereof or any representation made herein
is materially untrue when made; or
(d) Borrower makes a general assignment for
the benefit of creditors, admits in writing its
inability to pay its debts generally as they mature,
files or has filed against it a petition in bankruptcy
or a petition or answer seeking a reorganization,
arrangement with creditors or other similar relief under
the Federal Bankruptcy Laws or under any other
applicable law of the United States of America, or any
state thereof, consents to the appointment of a trustee
or receiver for Borrower
or for its property; or takes any action for the purpose
of effecting or consenting to any of the foregoing; or
(e) An order, judgment or decree shall be
entered appointing, without Borrower's consent, a
trustee or receiver for Borrower, or a substantial part
of its property, or approving a petition filed against
Borrower seeking a reorganization, arrangement with
creditors or other similar relief under the Federal
bankruptcy laws or under any other applicable law of the
United States of America or any state thereof, and such
order, judgment or decree shall not be vacated or set
aside or stayed within sixty (60) days from the date of
entry thereof; or
(f) Judgment for the payment of money in
excess of $50,000.00 (and not covered fully by insurance
which is not subject to dispute) shall be docketed
against Borrower and remains unsatisfied for a period of
thirty (30) days after the entry thereof; or
(g) Borrower shall be dissolved or
liquidated or suspend business; or
(h) Borrower shall default under the terms
of any other agreement, indenture, deed of trust,
mortgage, promissory note or security agreement
governing the borrowing of money by the Borrower and
such default shall have resulted in a notice of
acceleration of the maturity of any amount borrowed
under such document or instrument which would have a
material adverse impact on Borrower; or
(i) The occurrence of a material default
under the terms of either of the Union Grove Lease or
the New York Lease.
7.2 Remedies. Upon the occurrence of an Event of
Default, Lender may, at its option, take any one or more of the
following actions (which remedies shall be cumulative):
(a) If an Event of Default described in
Section 7.1(d) shall occur, the full unpaid principal
amount of the Notes shall automatically be due and
payable without any declaration, notice, presentment,
protest or demand of any kind (all of which are
hereby waived) and the obligation of the Lender to make
additional Advances shall automatically terminate, and
Lender may exercise any other available rights and
remedies described in Section 7.2 hereof.
(b) Upon the occurrence of an Event of
Default (other than as described in Section 7.1(d)),
the obligation of the Lender to make additional Advances
shall automatically terminate and, Lender may declare
all sums then outstanding on the Notes and all other
obligations of Borrower hereunder to be immediately due
and payable in full, whereupon the same shall be
immediately due and payable, and Lender may exercise any
other available rights and remedies described in Section
7.2 hereof.
(c) If any other Event of Default shall
occur and be continuing, the Lender may (unless
precluded from doing so by operation of law, an order of
a court of competent jurisdiction or stay imposed by
law):
(i) Terminate the obligation of Lender to
make additional Advances and declare the Revolving Loan
Commitment terminated,
(ii) Declare the outstanding principal
amount and any unpaid accrued interest on the Notes to
be immediately due and payable and any or all other
obligations of Borrower to Lender outstanding hereunder
or under any of the Loan Documents to be due and payable
in full, without notice, presentment, protest or demand
of any kind (all of which are hereby waived), whereupon
the full unpaid amount of the Notes, which shall be so
declared due and payable, shall be immediately due and
payable.
(iii) Advance such sums as Lender deems
necessary or appropriate to preserve or protect any
collateral and Borrower shall reimburse Lender, upon
demand, for all sums so advanced together with interest
thereon at the rate set forth in the Revolving Note from
the date so advanced until paid in full; provided,
however, that nothing herein shall be interpreted or
construed as requiring Lender to advance any such
amounts.
(iv) Exercise any of Lender's rights and
remedies under the Loan Documents or under law or
equity.
ARTICLE VIII.
MISCELLANEOUS
8.1 Survival of Representations and Warranties. The
representations and warranties contained herein or made in writing
by or on behalf of Borrower in connection with the transactions
contemplated hereby shall survive the execution and delivery of this
Agreement and the advances hereunder. All statements contained in
any certificate or other instrument delivered by or on behalf of
Borrower pursuant thereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties
by Borrower.
8.2 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the
parties hereto except that Borrower's rights hereunder are not
assignable.
8.3 Amendments. No amendment, change, waiver or
modification of this Agreement shall be valid unless the same be in
writing and signed by all of the parties hereto, and no waiver by
Lender of any breach or default by Borrower of any of its
obligations, agreements or covenants under this Agreement shall be
deemed to be a waiver of any subsequent breach of the same, or any
other obligation, agreement or covenant, nor shall any forbearance
by Lender to seek or enforce a remedy for such breach be deemed a
waiver of its rights and remedies with respect to such breach.
8.4 No Waivers. No failure or delay on the part of
Lender in exercising any right, power or privilege hereunder and no
course of dealing between Borrower and Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude an other or further
exercise thereof or the exercise of any other right, power or
privilege.
8.5 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
an original, but all of which shall constitute one agreement.
8.6 Governing Law. This Agreement shall be governed by,
interpreted, and construed in accordance with the laws of the State
of Minnesota.
8.7 Effectiveness. This Loan Agreement shall remain
effective so long as there are any sums remaining outstanding on the
Notes.
8.8 Notices. Any notices required or contemplated
hereunder shall be effective upon the placing thereof in the United
States mails, certified mail, return receipt requested, postage
prepaid, or with a nationally recognized overnight carrier, and
addressed as follows:
If to Borrower: Mercury Waste Solutions, Inc.
000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
With a copy to: Maslon, Edelman, Xxxxxx and Brand, LLP
0000 Xxxxxxx Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
If to Lender: Bankers American Capital Corporation
000 X. Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
With a copy to: Xxxxxx and Xxxxxx
2400 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx
8.9 Superseding Effect. This Agreement, from and after
the date hereof, supersedes and has merged into it all prior oral
and written agreements on the same
subjects by or between the parties hereto with the effect that this
Agreement shall control.
8.10 Participants. Lender may sell participations to
financial institutions in the Note and other Loan Documents to third
parties and may provide any financial information concerning
Borrower and MWSNY to such participants, provided Borrower shall be
advised in writing of such participants.
8.11 Complementary Documents. The Loan Documents are
intended to be complementary and supplementary one to the other. In
the event of any conflict between the terms of one or more of the
Loan Documents with one or more of the other Loan Documents, such
terms shall, to the fullest extent reasonably possible, be construed
to be complementary one to the other. However, if such terms cannot
be construed as complementary, then the terms of this Agreement
shall govern.
8.12 Consent to Jurisdiction. AT THE OPTION OF THE
LENDER, THIS AGREEMENT AND THE NOTE MAY BE ENFORCED IN ANY FEDERAL
COURT OR MINNESOTA STATE COURT SITTING IN MINNEAPOLIS OR ST.
XXXX, MINNESOTA; AND THE BORROWER CONSENTS TO THE JURISDICTION AND
VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH
FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT
THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED
BY THIS AGREEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO
HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER
APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
IN WITNESS WHEREOF, the parties hereto have caused this
Loan Agreement to be executed the date and year first above written.
MERCURY WASTE SOLUTIONS,
INC.
A MINNESOTA CORPORATION
BY: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxx
-----------------------------------
ITS: Chief Financial Officer
-------------------------------
BANKERS AMERICAN CAPITAL
CORPORATION
A MINNESOTA CORPORATION
BY: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
-----------------------------------
ITS: Chairman, President & CEO
-------------------------------
Certain related exhibits and schedules to the Loan Agreement (Exhibit
10.2) are not being filed herewith. The Registrant undertakes to
furnish a copy of any omitted exhibit or schedule to the Commission
upon request. Pursuant to Item 601(b)(2) of Regulation S-K, the
following is a list of omitted exhibits and schedules:
Exhibit A Outstanding litigation
Schedule 6.6(c) Schedule of indebtness existing on the date of the
Loan Agreement
Schedule 6.7(b) Schedule of Liens existing on the date of the Loan
Agreement
