LOAN AND SECURITY AGREEMENT, dated April 28, 1998, between DBAE Venture,
LLC, a Delaware limited liability company ("Lender"), and Xxxxx Investments,
Inc., an Illinois corporation (the "Borrower").
RECITALS:
A. The Borrower has requested the Lender to make a term loan to the
Borrower in the aggregate principal amount of Ten Million Dollars
($10,000,000.00), the proceeds of which will be used to fund a revolving loan
arrangement with Dominion Bridge Corporation, a Delaware corporation, and/or
its Affiliates.
B. The Lender is willing to make such loan to the Borrower on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower and
the Lender hereby agree as follows:
1. DEFINITIONS. As used herein:
"AFFILIATE" means: (a) any Person which, directly or indirectly,
controls, is controlled by or is under common control with, the Borrower; (b)
any Person which beneficially owns or holds, directly or indirectly, five
percent or more of any class of voting stock of the Borrower; or (c) any
Person, five percent or more of any class of the voting stock (or if such
Person is not a corporation, five percent or more of the equity interest) of
which is beneficially owned or held, directly or indirectly, by the Borrower.
The term control (including the terms "controlled by" and "under common
control with"), means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of the Person in
question.
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or day on
which banks in Chicago, Illinois are required or permitted to close.
"CAPITAL LEASE" means any lease of Property by the Borrower that, in
accordance with GAAP, should be reflected as a liability on the balance sheet
of the Borrower.
"CLOSING DATE" means the date on which the Term Loan is made hereunder.
"COLLATERAL" has the meaning given to such term in Section 6.1.
"DBC" means Dominion Bridge Corporation, a Delaware corporation.
"DBC COLLATERAL" means the collateral granted to the Borrower and
Wellgate International Ltd. under the DBC Credit Agreement.
"DBC CREDIT AGREEMENT" means the Credit Agreement dated the date hereof
among the Borrower, Wellgate International Ltd., Groupe Cedar Canada
Inc./Cedar Group Canada Inc., DBC and certain affiliates of DBC named therein.
"DBC OBLIGATIONS" means the obligations of Groupe Cedar Canada
Inc./Cedar Group Canada Inc., as borrower, under, and the guarantors of, the
DBC Credit Agreement.
"DEBT" means all liabilities, obligations and indebtedness of the
Borrower to any Person, of any kind or nature, now or hereafter owing,
arising, due or payable, howsoever evidenced, created, incurred, acquired or
owing, whether primary, secondary, direct, contingent, fixed or otherwise,
and including, without in any way limiting the generality of the foregoing:
(i) the Borrower's liabilities and obligations to trade creditors; (ii) all
Obligations; (iii) all obligations and liabilities of any Person secured by
any Lien on the Borrower's Property, even though the Borrower shall not have
assumed or become liable for the payment thereof; PROVIDED, HOWEVER, that all
such obligations and liabilities which are limited in recourse to such
Property shall be included in Debt only to the extent of the book value of
such Property as would be shown on a balance sheet of the Borrower prepared
in accordance with GAAP; (iv) all obligations or liabilities created or
arising under any Capital Lease or conditional sale or other title retention
agreement with respect to Property used or acquired by the Borrower, even if
the rights and remedies of the lessor, seller or lender thereunder are
limited to repossession of such Property; PROVIDED, HOWEVER, that all such
obligations and liabilities which are limited in recourse to such Property
shall be included in Debt only to the extent of the book value of such
Property as would be shown on a balance sheet of the Borrower prepared in
accordance with GAAP; (v) all accrued pension fund and other employee benefit
plan obligations and liabilities; (vi) all obligations and liabilities under
guaranties; and (vii) deferred taxes.
"EVENT" means any event or condition which, with notice, the passage of
time, the happening of any other condition or event, or any combination
thereof, would constitute an Event of Default.
"EVENT OF DEFAULT" has the meaning given to such term in Section 8.1.
"GAAP" means at any particular time with respect to the Borrower,
generally accepted accounting principles as in effect at such time,
consistently applied, PROVIDED, HOWEVER, that, if employment of more than one
principle shall be permissible at such time in respect of a particular
accounting matter, "GAAP" shall refer to the principle which is then employed
by the Borrower with the concurrence of its independent certified public
accountants, who are acceptable to the Lender.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement entered into
by the Borrower, Wellgate International Ltd. and the Bank of New York
relating to the payment of the DBC Obligations and to their relative rights
in and to the DBC Collateral.
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"LIEN" means: (a) any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute, or contract, and including
without limitation, a security interest, charge, claim, or lien arising from
a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, agreement, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes; and (b) to
the extent not included under clause (a), any reservation, exception,
encroachment, easement, right-of-way, covenant, condition, restriction, lease
or other title exception or encumbrance affecting Property.
"LOAN DOCUMENTS" means this Agreement, the Term Note, and all other
agreements, instruments, and documents heretofore, now or hereafter
evidencing, securing, guaranteeing or otherwise relating to the Obligations,
the Collateral, the Security Interest, or any other aspect of the
transactions contemplated by this Agreement.
"OBLIGATIONS" means all present and future loans, advances, liabilities,
obligations, covenants, duties, and Debts owing by the Borrower to the
Lender, whether or not arising under this Agreement, whether or not evidenced
by any note, or other instrument or document, whether arising from an
extension of credit, opening of a letter of credit, acceptance, loan,
guaranty, indemnification or otherwise, whether direct or indirect
(including, without limitation, those acquired by assignment from others, and
any participation by the Lender in the Borrower's debts owing to others),
absolute or contingent, due or to become due, primary or secondary, as
principal or guarantor, and including, without limitation, all interest,
charges, expenses, fees, attorneys' fees, filing fees and any other sums
chargeable to the Borrower hereunder, under another Loan Document, or under
any other agreement or instrument with the Lender.
"PERMITTED LIENS" means: (a) Liens for taxes not yet payable or Liens
for taxes being contested in good faith and by proper proceedings diligently
pursued; (b) Liens in favor of the Lender; and (c) Liens reflected on EXHIBIT
A hereto.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, Public
Authority, or any other entity.
"PROCEEDS" means all products and proceeds (as defined in the UCC) of
any Collateral, and all proceeds of such proceeds and products, including,
without limitation, all cash and credit balances, all payments under any
indemnity, warranty, or guaranty payable with respect to any Collateral, all
awards for taking by eminent domain, all proceeds of fire or other insurance,
and all money and other Property obtained as a result of any claims against
third parties or any legal action or proceeding with respect to Collateral.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"PUBLIC AUTHORITY" means the government of any country or sovereign
state, or of any state, province, municipality, or other political
subdivision thereof, or any department, agency, public corporation or other
instrumentality of any of the foregoing.
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"SECURITY INTEREST" means collectively the Liens granted to the Lender
in the Collateral pursuant to this Agreement, the other Loan Documents, or
any other agreement or instrument.
"SOLVENT" shall mean when used with respect to any Person that: (a) the
fair value of all its Property is in excess of the total amount of its debts
(including contingent liabilities); (b) it is able to pay its debts as they
mature; and (c) it does not have unreasonably small capital for the business
in which it is engaged or for any business or transaction in which it is
about to engage.
"SUBSIDIARY" means any corporation of which more than 50% of the
outstanding securities of any class or classes, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directors (or Persons performing similar functions), is at the
time, directly or indirectly through one or more intermediaries, owned by the
Borrower and/or one or more of its Subsidiaries.
"TERM LOAN" has the meaning specified in Section 2.
"TERM NOTE" has the meaning specified in Section 2.
"UCC" means the Uniform Commercial Code (or any successor statute) of
the State of Illinois or of any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests.
ACCOUNTING TERMS. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given in accordance with GAAP, and all financial computations hereunder shall
be computed, unless otherwise specifically provided herein, in accordance
with GAAP as consistently applied and using the same method for inventory
valuation as used in the preparation of the Financial Statements.
OTHER TERMS. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for
by the UCC to the extent the same are used or defined therein. Wherever
appropriate in the context, terms used herein in the singular also include
the plural, and VICE VERSA, and each masculine, feminine, or neuter pronoun
shall also include the other genders.
2. LOAN. The Lender will make a term loan (the "TERM LOAN") to
Borrower on the date requested by Borrower. The Term Loan will be in the
aggregate principal amount of $10,000,000.00 repayable in accordance with the
terms of a promissory note (the "TERM NOTE"), which will be executed by the
Borrower and delivered to the Lender on the date of requested funding of the
Term Loan.
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3. INTEREST AND OTHER CHARGES.
3.1 INTEREST. The Borrower shall pay the Lender interest on the unpaid
principal balance of the Term Loan at the rate of two and one-half percent
(2-1/2%) per calendar month, prorated for a partial month, payable on the
Maturity Date (as hereinafter defined), and from and after the occurrence of
a default in payment of principal or interest on the Term Note, the Borrower
shall pay the Lender interest on the unpaid principal amount hereof until
payment in full at the rate of three and one-half percent (3-1/2%) per
calendar month, prorated for a partial month. Interest charges shall be
computed on the basis of a month of 30 days and actual days elapsed and will
be payable to the Lender on maturity of the Loan.
3.2 MAXIMUM INTEREST RATE. In no event shall the interest rate and
other charges hereunder exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that a court determines that the Lender has
received interest and other charges hereunder in excess of the highest rate
applicable hereto, such excess shall be deemed received on account of, and
shall automatically be applied to reduce, the Obligations, other than
interest in the inverse order of maturity, and the provisions hereof shall be
deemed amended to provide for the highest permissible rate. If there are no
Obligations outstanding, the Lender shall refund to the Borrower such excess.
4. PAYMENTS AND PREPAYMENTS.
4.1 REPAYMENT OF TERM LOAN. The Borrower shall repay the principal of
the Term Loan in full 120 days following the issue date thereof (the
"Maturity Date").
4.2 VOLUNTARY PREPAYMENTS OF TERM LOAN. The Borrower may prepay the
principal of the Term Loan in whole or in part at any time after the 30th day
following issuance of the Term Note and from time to time thereafter without
penalty. All voluntary prepayments of the principal of the Term Loan shall
be accompanied by the payment of all accrued but unpaid interest on the Term
Loan to the date of prepayment. Any voluntary prepayment under this Section
of less than all of the outstanding principal of the Term Loan shall be
applied to the installments of principal of the Term Loan in the inverse
order of maturity.
4.3 PLACE AND FORM OF PAYMENTS; EXTENSION OF TIME. All payments of
principal, interest, premium, and other sums due to the Lender shall be made
at the Lender's address set forth in or specified pursuant to Section 9.6.
If any payment of principal, interest, premium, or other sum to be made
hereunder becomes due and payable on a day other than a Business Day, the due
date of such payment shall be extended to the next succeeding Business Day
and interest thereon shall be payable at the applicable interest rate during
such extension.
4.4 APPLICATION AND REVERSAL OF PAYMENTS. The Lender shall determine
in its reasonable discretion the order and manner in which Proceeds of
Collateral and other payments that the Lender receives are applied to the
Term Loan, interest thereon, and the other Obligations.
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4.5 INDEMNITY FOR RETURNED PAYMENTS. If after receipt of any payment
of, or Proceeds applied to the payment of, all or any part of the
Obligations, the Lender is for any reason compelled to surrender such payment
or Proceeds to any Person, because such payment or Proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continue and this Agreement shall continue in full force
as if such payment or Proceeds had not been received by the Lender; and the
Borrower shall be liable to Pay to the Lender, and hereby does indemnify the
Lender and hold the Lender harmless for, the amount of such payment or
Proceeds surrendered. The provisions of this Section 4.5 shall be and remain
effective notwithstanding any contrary action which may have been taken by
the Lender in reliance upon such payment or Proceeds, and any such contrary
action so taken shall be without prejudice to the Lender's rights under this
Agreement and shall be deemed to have been conditioned upon such payment or
Proceeds having become final and irrevocable. The provisions of this Section
4.5 shall survive the termination of this Agreement.
6. COLLATERAL.
6.1 GRANT OF SECURITY INTEREST.
(a) As security for all Obligations, the Borrower hereby grants to
the Lender a continuing security interest in, lien on, and assignment of:
(i) all instruments evidencing indebtedness to the Borrower by Dominion
Bridge Corporation, a Delaware corporation ("DBC") and/or any of its
Affiliates; (ii) all interests granted by DBC and its Affiliates to the
Borrower to secure repayment and performance of DBC's or its Affiliates'
obligations ("DBC OBLIGATIONS") to the Borrower; and (iii) all books,
records and other Property relating to or referring to any of the foregoing
(all of the foregoing, together with all other property in which the Lender
may at any time be granted a Lien, being herein collectively referred to as
the "COLLATERAL"). The Lender shall have all of the rights of a secured
party with respect to the Collateral under the UCC and the other laws of
the State of Illinois and any other applicable jurisdiction.
(b) All Obligations shall constitute a single loan secured by the
Collateral. The Lender may, in its sole discretion, (i) exchange, waive,
or release any of the Collateral, (ii) apply Collateral and direct the
order or manner of sale thereof as the Lender may determine, and (iii)
settle, compromise, collect, or otherwise liquidate any Collateral in any
manner, all without affecting the Obligations or the Lender's right to take
any other action with respect to any other Collateral.
6.2 PERFECTION AND PROTECTION OF SECURITY INTEREST. The Borrower
shall, at its expense, perform all steps requested by the Lender at any time
to perfect, maintain, protect, and enforce the Security Interest, including
the filing of UCC financing statements and Canadian assignments as requested
in writing from time to time by the Lender.
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6.3 RIGHT TO CURE. The Lender may, in its sole discretion and at any
time, for the Borrower's account and expense, pay any amount or do any act
required of the Borrower hereunder or requested by the Lender to preserve,
protect, maintain or enforce the Obligations, the Collateral or the Security
Interest. All payments that the Lender makes under this Section and all
out-of-pocket costs and expenses that the Lender pays or incurs in connection
with any action taken by it hereunder shall be charged to the Borrower and
shall become Obligations hereunder. Any payment made or other action taken
by the Lender under this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to proceed thereafter as herein
provided.
6.4 LENDER'S RIGHTS, DUTIES, AND LIABILITIES. The Borrower assumes all
responsibility and liability arising from or relating to the use, sale, or
other disposition of the Collateral. Neither the Lender nor any of its
officers, directors, employees, and agents shall be liable or responsible in
any way for the safekeeping of any of the Collateral, or for any act or
failure to act with respect to the Collateral, or for any loss or damage
thereto, or for any diminution in the value thereof, or for any act of
default or any warehouseman, carrier, forwarding agency or other person
whomsoever, all of which shall be at the Borrower's sole risk. The
Obligations shall not be affected by any failure of the Lender to take any
steps to perfect the Security Interest or to collect or realize upon the
Collateral, nor shall loss of or damage to the Collateral release the
Borrower from any of the Obligations. Subject to the terms of the
Intercreditor Agreement, the Lender may (but shall not be required to),
without notice to or consent from the Borrower, xxx upon or otherwise
collect, extend the time for payment of, modify or amend the terms of,
compromise or settle for cash, credit, or otherwise upon any terms, grant
other indulgences, extensions, renewals, compositions, or releases, and take
or omit to take any other action with respect to the Collateral, any security
therefor, any agreement relating thereto, any insurance applicable thereto,
or any Person liable directly or indirectly in connection with any of the
foregoing, without discharging or otherwise affecting the liability of the
Borrower for the Obligations or under this Agreement or any other agreement
now or hereafter existing between the Lender and the Borrower.
7. GENERAL WARRANTIES AND REPRESENTATIONS. The Borrower continuously
warrants and represents to the Lender, at all times during the term of this
Agreement and until all Obligations have been satisfied, that, except as
hereafter disclosed to and accepted by the Lender in writing:
7.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS AGREEMENT AND
THE LOAN DOCUMENTS. The Borrower has the power and authority to execute,
deliver and perform this Agreement and the other Loan Documents, to incur the
Obligations, and to grant the Security Interest. The Borrower has taken all
necessary corporate action (including, without limitation, obtaining approval
of its members) to authorize its execution, delivery, and performance of this
Agreement and the other Loan Documents. No consent, approval, or
authorization of, or declaration or filing with, any Public Authority, and no
consent of any other Person, is required in connection with the Borrower's
execution, delivery, and performance of this Agreement and the other Loan
Documents, except for those already duly obtained. Each of this Agreement
and the other Loan Documents has been duly executed and delivered by the
Borrower, and
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constitutes the legal, valid and binding obligation of the Borrower,
enforceable against it in accordance with its terms without defense, setoff,
or counterclaim. The Borrower's execution, delivery, and performance of this
Agreement and the other Loan Documents do not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or result
in the creation or imposition of any Lien upon the Property of the Borrower
or any of its Subsidiaries (except as contemplated by this Agreement and the
other Loan Documents) by reason of the terms of (a) any contract, mortgage,
lien, lease, agreement, indenture, or instrument to which the Borrower or any
of its Subsidiaries is a party or which is binding upon it, (b) any judgment,
law, statute, rule or governmental regulation applicable to the Borrower or
any of its Subsidiaries, or (c) the Articles of Incorporation and the By-Laws
of the Borrower.
7.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all
the Collateral in the Lender's favor, and when all proper filings,
recordings, assignments and other actions necessary to perfect such Liens
have been made or taken in the appropriate jurisdictions, such Liens will
constitute perfected and continuing Liens on all the Collateral, having
priority over all other Liens on the Collateral except Permitted Liens,
securing all the Obligations, and enforceable against the Borrower and all
third parties.
7.3 ORGANIZATION AND QUALIFICATION. The Borrower: (a) is duly
organized and validly existing in good standing under the laws of the State
of Illinois; and (b) has all requisite power and authority to conduct its
business and to own its Property.
7.4 CORPORATE NAME; PRIOR TRANSACTIONS. The Borrower has not, during
the past five years, been known by or used any other corporate or fictitious
name, or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its
Property out of the ordinary course of business
7.5 RESTRICTIVE AGREEMENTS. The Borrower is not a party to any
contract or agreement, and is not subject to any charter or other corporate
restriction, which affects its ability to execute, deliver, and perform the
Loan Documents and repay the Obligations or which materially and adversely
affects or, insofar as the Borrower can reasonably foresee, could materially
and adversely affect, the Borrower's Property, business, operations, or
condition (financial or otherwise), would in any respect materially and
adversely affect the Collateral, the repayment of the Obligations, the
Lender's rights under the Loan Documents, or the Borrower's Property,
business, operations, or condition (financial or otherwise).
7.6 NO VIOLATION OF LAW. The Borrower is not in violation of any law,
statute, regulation, ordinance, judgment, order, or decree applicable to it
which violation would in any respect materially and adversely affect the
Collateral, the repayment of the Obligations, the Lender's rights under the
Loan Documents, or the Borrower's Property, business, operations, or
condition (financial or otherwise).
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8. DEFAULT; REMEDIES.
8.1 EVENTS OF DEFAULT. It shall constitute an event of default ("EVENT
OF DEFAULT") if any one or more of the following shall occur for any reason:
(a) any failure to pay the principal of or interest or premium on any
of the Obligations when due, whether upon demand or otherwise;
(b) any representation or warranty made by the Borrower in this
Agreement, any of the other Loan Documents, or any certificate furnished by
the Borrower at any time to the Lender shall prove to be untrue in any
material respect as of the date on which made;
(c) default shall occur in the observance or performance of any of
the covenants and agreements contained in this Agreement, the Term Note,
the other Loan Documents, or any other agreement entered into at any time
to which the Borrower and the Lender are party, or if any such. agreement,
instrument or document shall terminate (other than in accordance with its
terms or the terms hereof or with the written consent of the Lender) or
become void or unenforceable without the written consent of the Lender;
(d) the Borrower shall: (i) file a voluntary petition in bankruptcy
or file a voluntary petition or an answer or otherwise commence any action
or proceeding seeking reorganization, arrangement or readjustment of its
debts or for any other relief under the Federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing, or consent to, approve of, or acquiesce
in, any such petition, action or proceeding; (ii) apply for or acquiesce in
the appointment of a receiver, assignee, liquidator, sequestrator,
custodian, trustee or similar officer for it or for all or any part of its
Property; (iii) make an assignment for the benefit of creditors; or (iv) be
unable generally to pay its debts as they become due;
(e) an involuntary petition shall be filed or an action or proceeding
otherwise commenced seeking reorganization, arrangement or readjustment of
the Borrower's debts or for any other relief under the Federal Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency act or law,
state or federal, now or hereafter existing;
(f) a receiver, assignee, liquidator, sequestrator, custodian,
trustee or similar officer for the Borrower or for all or any part of its
Property shall be appointed involuntarily; or a warrant of attachment,
execution or similar process shall be issued against any part of the
Property of the Borrower;
(g) the Borrower shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up or shall
commence or have commenced against it any action or proceeding for
dissolution, winding-up or liquidation, or shall take any corporate action
in furtherance thereof;
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(h) all or any part of the Property of the Borrower shall be
nationalized, expropriated or condemned, seized or otherwise appropriated,
or custody or control of such Property or of the Borrower shall be assumed
by any Public Authority or any court of competent jurisdiction at the
instance of any Public Authority, except where contested in good faith by
proper proceedings diligently pursued where a stay of enforcement is in
effect;
8.2 REMEDIES.
(a) If an Event of Default exists, the Lender may, without notice to
or demand on the Borrower, declare any or all Obligations to be immediately
due and payable (provided however that upon the occurrence of any Event of
Default described in Sections 8.1(d). 8.l(e), 8.l(f), or 8.l(g), all
Obligations shall automatically become immediately due and payable); and
pursue its other rights and remedies under the Loan Documents and
applicable law.
(b) If an Event of Default exists, in all cases subject to the terms
of the Intercreditor Agreement: (i) the Lender shall have, in addition to
all other rights, the rights and remedies of a secured party under the UCC;
(ii) the Lender may, at any time, take possession of the Collateral and
keep it on the Borrower's premises, at no cost to the Lender, or remove any
part of it to such other place or places as the Lender may desire, or the
Borrower shall, upon the Lender's demand, at the Borrower's cost, assemble
the Collateral and make it available to the Lender at a place reasonably
convenient to the Lender; and (iii) the Lender may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise,
at such prices and upon such terms as the Lender deems advisable, in its
sole discretion, and may, if the Lender deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place
of sale or of such postponed or adjourned sale without giving a new notice
of sale. Without in any way requiring notice to be given in the following
manner, the Borrower agrees that any notice by the Lender of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, shall constitute reasonable
notice to the Borrower if such notice is mailed by registered or certified
mail, return receipt requested, postage prepaid, or is delivered personally
against receipt, at least five (5) days prior to such action to the
Borrower's address specified in or pursuant to Section 9.6. If any
Collateral is sold on terms other than payment in full at the time of sale,
no credit shall be given against the Obligations until the Lender receives
payment, and if the buyer defaults in payment, the Lender may resell the
Collateral without further notice to the Borrower. In the event the Lender
seeks to take possession of all or any portion of the Collateral by
judicial process, the Borrower irrevocably waives: (a) the posting of any
bond, surety or security with respect thereto which might otherwise be
required; (b) any demand for possession prior to the commencement of any
suit or action to recover the Collateral; and (c) any requirement that the
Lender retain possession and not dispose of any Collateral until after
trial or final judgment. The Borrower agrees that the Lender has no
obligation to preserve rights to the Collateral or xxxxxxxx any Collateral
for the benefit of any Person. The Lender is hereby granted a
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license or other right to use, without charge, the Borrower's labels,
patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrower's rights under all
licenses and all franchise agreements shall inure to the Lender's benefit.
The proceeds of sale shall be applied first to all expenses of sale,
including attorneys' fees, and second, in whatever order the Lender elects,
to all Obligations. The Lender will return any excess to the Borrower or
such other Person as shall be legally entitled thereto and the Borrower
shall remain liable for any deficiency.
(c) If an Event of Default occurs, the Borrower hereby waives all
rights to notice and hearing prior to the exercise by the Lender, subject
to the Intercreditor Agreement, of the Lender's rights to repossess the
Collateral without judicial process or to replevy, attach or levy upon the
Collateral without notice or hearing.
9. MISCELLANEOUS.
9.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration herein of the Lender's rights and remedies is not intended to be
exclusive, and such rights and remedies are in addition to and not by way of
limitation of any other rights or remedies that the Lender may have under the
UCC or other applicable law. The Lender shall have the right, in its sole
discretion, to determine which rights and remedies are to be exercised and in
which order. The exercise of one right or remedy shall not preclude the
exercise of any others, all of which shall be cumulative. The Lender may,
without limitation, proceed directly against the Borrower to collect the
Obligations without any prior recourse to the Collateral.
9.2 NO IMPLIED WAIVERS. No act, failure or delay by the Lender shall
constitute a waiver of any of its rights and remedies. No single or partial
waiver by the Lender of any provision of this Agreement or any other Loan
Document, or of breach or default hereunder or thereunder, or of any right or
remedy which the Lender may have, shall operate as a waiver of any other
provision, breach, default, right or remedy or of the same provision, breach,
default, right or remedy on a future occasion. No waiver by the Lender shall
affect its rights to require strict performance of this Agreement.
9.3 SEVERABILITY. If any provision of this Agreement shall be
prohibited or invalid, under applicable law, it shall be is effective only to
such extent, without invalidating the remainder of this Agreement.
9.4 GOVERNING LAW. This Agreement shall be deemed to have been made in
the State of Illinois and shall be governed by and interpreted in accordance
with the laws of such state, except that no doctrine of choice of law shall
be used to apply the laws of any other state or jurisdiction.
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9.5 OTHER SECURITY AND GUARANTIES. The Lender may, without notice or
demand and without affecting the Borrower's obligations hereunder, from time
to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and
exchange, enforce or release such collateral or any part thereof; and (b)
accept and hold any endorsement or guaranty of payment of all or any part of
the Obligations and release or substitute any such endorser or guarantor, or
any Person who has given any Lien in any other collateral as security for the
payment of all or any part of the Obligations, or any other Person in any way
obligated to pay all or any part of the Obligations.
9.6 FEES AND EXPENSES. The Borrower shall pay to the Lender on demand
costs and expenses (including attorneys' and paralegals' fees and
disbursements) paid or incurred to obtain payment of the Obligations, enforce
the Security Interest, sell or otherwise realize upon the Collateral, and
otherwise enforce the provisions of the Loan Documents, or to defend any
claims made or threatened against the Lender arising of the transactions
contemplated hereby (including without limitation, preparations for and
consultations concerning any such matters). The foregoing shall not be
construed to limit any other provisions of the Loan Documents regarding costs
and expenses to be paid by the Borrower. Except as otherwise provided herein,
all notices, demands and requests that either party is required or elects to
give to the other shall be in writing, shall be delivered personally against
receipt, or sent by recognized overnight courier service, or mailed by
registered or certified mail, return receipt requested, postage prepaid, and
shall be addressed to the party to be notified as follows:
If to the Lender: DBAE Venture, LLC
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx, L.L.C., Manager
If to the Borrower: Xxxxx Investments, Inc.
000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
or to such other address as each party may designate for itself by like
notice. Any such notice, demand, or request shall be deemed given when
received, if personally delivered or sent by overnight courier, or when
deposited in the United States mails, postage paid, if sent by registered or
certified mail.
9.7 WAIVER OF NOTICES. Unless otherwise expressly provided herein, the
Borrower waives presentment, protest and notice of demand or dishonor and
protest as to any instrument, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the Borrower which
the Lender may elect to give shall entitle the Borrower to any or further
notice or demand in the same, similar or other circumstances.
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9.8 WARRANTS. The Borrower agrees to assign to Lender one-third of the
Warrants to purchase Common Stock of DBC when, as and if received by Borrower
pursuant to the terms of the DBC Credit Agreement.
9.9 BINDING EFFECT; ASSIGNMENT. The provisions of this Agreement shall
be binding upon and inure to the benefit of the respective representatives,
successors and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrower without the prior written
consent of the Lender. The rights and benefits of the Lender hereunder
shall, if the Lender so agrees, inure to any party acquiring any interest in
the Obligations or any part thereof.
9.10 MODIFICATION. This Agreement is intended by the Borrower and the
Lender to be the final, complete, and exclusive expression of the agreement
between them. This Agreement supersedes any and all prior oral or written
agreements relating to the subject matter hereof. No modification,
rescission, waiver, release, or amendment of any provision of this Agreement
shall be made, except by a written agreement signed by the Borrower and a
duly authorized officer of the Lender.
9.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the Lender and the Borrower in separate counterparts,
each of which shall be an original, but all of which shall together
constitute one and the same agreement.
9.12 CAPTIONS. The captions contained in this Agreement are for
convenience only, are without substantive meaning and should not be construed
to modify, enlarge, or restrict any provision.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
XXXXX INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------
Title: Attorney-in-Fact for Xxxxxxx
Xxxxxxx, Pres. of Xxxxx Investments, Inc.
DBAE VENTURE, LLC
By: XXXXXX, L.L.C., as Manager
----------------------------
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Title: Attorney-in-Fact for Xxxxxxx X. Xxxxxxx
Administrative Member of Xxxxxx, L.L.C.
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EXHIBIT A
PERMITTED LIENS
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