[GRAPHIC OMITTED]
FINANCIAL INNOVATORS
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
USA Detergents, Inc., a Delaware corporation ("USA")
Big Cloud Powder Corporation, a Delaware corporation ("POWDER")
Chicago Management Powder Corp., a Delaware corporation ("MANAGEMENT")
Chicago Contract Powder Corporation, an Illinois corporation ("CONTRACT")
BORROWER
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 00000
ADDRESS
USA 00-0000000
Powder 00-0000000
Management 00-0000000
Contract 00-0000000
BORROWER FED ID TAX NO.
FINOVA Capital Corporation, a Delaware corporation
as AGENT AND LENDER
and the other LENDERS named herein
$60,000,000
CREDIT LIMIT
FEBRUARY 25, 1999
DATE
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CORPORATE FINANCE
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TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
1.1 Defined Terms......................................1
1.2 Other Terms........................................10
2. LOANS; INTEREST RATE AND OTHER CHARGES...............................10
2.1 Total Facility; Prior Agreements...................10
2.2 Loans; Joint and Several Obligations...............10
2.3 Overlines; Overadvances............................10
2.4 Letters of Credit..................................11
2.5 Loan Account.......................................11
2.6 Interest; Fees.....................................11
2.7 Default Interest Rate..............................11
2.8 Examination Fee....................................11
2.9 Excess Interest....................................12
2.10 Principal Payments; Proceeds of Collateral........12
2.11 Application of Collateral.........................14
2.12 Application of Payments............................14
2.13 Notification of Closing............................14
3. SECURITY.............................................................14
3.1 Security Interest in the Collateral................14
3.2 Perfection and Protection of Security Interest.....15
3.3 Preservation of Collateral.........................15
3.4 Insurance..........................................15
3.5 Collateral Reporting; Inventory....................15
3.6 Receivables........................................16
3.7 Equipment..........................................16
3.8 Other Liens; No Disposition of Collateral.........17
3.9 Collateral Security................................17
4. CONDITIONS OF CLOSING................................................17
4.1 Initial Advance....................................17
4.2 Subsequent Advances................................19
5. REPRESENTATIONS AND WARRANTIES.......................................20
5.1 Due Organization...................................20
5.2 Other Names........................................20
5.3 Due Authorization..................................20
5.4 Binding Obligation.................................20
5.5 Intangible Property................................20
5.6 Capital............................................20
5.7 Material Litigation................................20
5.8 Title; Security Interests of Agent.................20
5.9 Restrictive Agreements; Labor Contracts............21
5.10 Laws...............................................21
5.11 Consents...........................................21
5.12 Defaults...........................................21
5.13 Financial Condition................................21
5.14 ERISA..............................................21
5.15 Taxes..............................................21
5.16 Locations; Federal Tax ID No.......................21
5.17 Business Relations.................................21
5.18 Millennium Compliance..............................21
5.19 Reaffirmations.....................................22
6. COVENANTS............................................................22
6.1 Affirmative Covenants..............................22
6.1.1 Taxes.............................22
6.1.2 Notice of Litigation..............22
6.1.3 ERISA.............................22
6.1.4 Change in Location................22
6.1.5 Corporate Existence...............22
6.1.6 Labor Disputes....................22
6.1.7 Violations of Law.................22
6.1.8 Defaults..........................22
6.1.9 Capital Expenditures.............22
6.1.10 Books and Records.................22
6.1.11 Leases; Warehouse Agreements......22
6.1.12 Additional Documents..............23
6.1.13 Financial Covenants...............23
6.1.14 Millennium Compliance. ...........23
6.1.15 Bank Accounts.....................23
6.1.16 Rent Payments.....................23
6.1.17 Chicago Lease.....................23
6.2 Negative Covenants.................................23
6.2.1 Mergers, Etc......................23
6.2.2 Loans.............................23
6.2.3 Dividends.........................23
6.2.4 Adverse Transactions..............23
6.2.5 Indebtedness of Others............23
6.2.6 Repurchase........................23
6.2.7 Name..............................24
6.2.8 Prepayment........................24
6.2.9 Capital Expenditure...............24
6.2.10 Indebtedness......................24
6.2.11 Affiliate Transactions............24
6.2.12 Nature of Business................24
6.2.13 Agent's and Lenders' Names........24
6.2.14 Margin Security...................24
6.2.15 Real Property.....................24
6.2.16 PNC Warrant.......................25
6.2.17 Applications......................25
6.2.18 Non-Borrower Subsidiaries.........25
7. DEFAULT AND REMEDIES.................................................25
7.1 Events of Default..................................25
7.2 Remedies...........................................26
7.3 Standards for Determining Commercial Reasonableness26
8. EXPENSES AND INDEMNITIES.............................................27
8.1 Expenses...........................................27
8.2 Environmental Matters.............................27
9. MISCELLANEOUS........................................................27
9.1 Examination of Records; Financial Reporting........27
9.2 Term; Termination..................................29
9.3 Recourse to Security; Certain Waivers..............29
9.4 No Waiver by Agent or Lenders......................29
9.5 Binding on Successor and Assigns...................29
9.6 Severability.......................................29
9.7 Amendments; Assignments............................29
9.8 Integration........................................29
9.9 Survival...........................................29
9.10 Evidence of Obligations............................29
9.11 Loan Requests......................................30
9.12 Notices............................................30
9.13 Brokerage Fees.....................................30
9.14 Disclosure.........................................30
9.15 Publicity..........................................30
9.16 Captions...........................................30
9.17 Injunctive Relief..................................30
9.18 Counterparts; Facsimile Execution..................30
9.19 Construction.......................................30
9.20 Time of Essence....................................31
9.21 Limitation of Actions..............................31
9.22 Liability..........................................31
9.23 Notice of Breach by Agent or Lender................31
9.24 Power of Attorney..................................31
9.25 GOVERNING LAW; WAIVERS.............................32
9.26 MUTUAL WAIVER OF RIGHT TO JURY TRIAL...............32
9.27 Lien Termination...................................32
9.28 Releases; Indemnities..............................32
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (collectively with the
Schedule to Amended and Restated Loan Agreement (the "SCHEDULE") attached
hereto, the "AGREEMENT") dated the date set forth on the cover page, is entered
into by and between the co-borrowers named on the cover page (individually and
collectively and jointly and severally, the "BORROWER"), whose address is set
forth on the cover page and FINOVA Capital Corporation, in its capacity as
contractual representative for itself and the other Lenders from time to time a
party hereto, whose address is 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000.
1. DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the following terms have
the definitions set forth below:
"101 REALTY" means 101 Realty Associates, L.L.C., a New Jersey limited
liability company.
"101 REALTY RESERVE" has the meaning set forth in the Schedule.
"1998 101 REALTY PAYMENT" has the meaning set forth in the Schedule.
"1999 101 REALTY PAYMENT" has the meaning set forth in the Schedule.
"ADA" has the meaning set forth in Section 4.1(x) hereof.
"ADDITIONAL SUMS" has the meaning set forth in Section 2.9(a) hereof.
"AFFILIATE" means any Person controlling, controlled by or under common
control with Borrower. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause direction of
the management and policies of any Person, whether through ownership of common
or preferred stock or other equity interests, by contract or otherwise. Without
limiting the generality of the foregoing, each of the following shall be an
Affiliate: any executive officer or director of Borrower, and any subsidiary of
Borrower.
"AGENCY AGREEMENT" means that certain Amended and Restated Agency
Agreement of even date herewith by and among the Lenders, Agent and Borrower.
"AGENT" means FINOVA in its capacity as contractual representative, on
behalf of itself, as a Lender and the other institutions from time to time a
party hereto as Lenders, pursuant to the terms of the Agency Agreement and any
successor Agent appointed in accordance therewith.
"AGENT'S FEE" has the meaning set forth in the Schedule.
"AGREEMENT" has the meaning set forth in the preamble.
"APPLICABLE USURY LAW" has the meaning set forth in Section 2.9(b)
hereof.
"BLOCKED ACCOUNT" has the meaning set forth in Section 2.10(c) hereof.
"BUSINESS DAY" means any day on which commercial banks in Los Angeles,
California, Phoenix, Arizona and Philadelphia, Pennsylvania are open for
business.
"CAPITAL EXPENDITURES" means all expenditures made and liabilities
incurred for the acquisition of any fixed asset or improvement, replacement,
substitution or addition thereto, except replacements and substitutions which
are (i) expensed in accordance with GAAP, or (ii) paid for with insurance
proceeds under Section 3.4 hereof and which has a useful life of more than ONE
(1) year and including, without limitation, those arising in connection with
Capital Leases.
"CAPITAL LEASE" means any lease of property by Borrower that, in
accordance with GAAP, should be capitalized for financial reporting purposes and
reflected as a liability on the balance sheet of Borrower.
"CASH COLLATERAL AMOUNT" shall have the
meaning set forth in the Schedule.
"CASH AND CASH EQUIVALENTS" shall mean, at any time, any assets of
Borrower which are in the form of, or are readily convertible into money,
including, without limitation, cash, checks, and other negotiable instruments,
deposits with any bank or financial institution (whether as demand deposits or
time deposits, and whether or not
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evidenced by certificates of deposit), readily marketable securities of any type
and other cash equivalents consisting of (i) marketable direct obligations
issued or unconditionally guaranteed by the United States of America or any
agency thereof maturing within one year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one year from the date of creation
thereof and currently having the highest rating obtainable from either Standard
& Poor's Corporation or Xxxxx'x Investors Service, Inc., (iii) certificates of
deposit, maturing no more than one year from the date of creation thereof,
issued by commercial banks incorporated under the laws of the United Stats of
America, each having combined capital, surplus and undivided profits of not less
than $200,000,000 and having a rating of "B" or better by a nationally
recognized rating agency, and (iv) time deposits, maturing no more than 30 days
from the date of creation thereof with commercial banks or savings banks or
savings and loan associations each having membership either in the Federal
Deposit Insurance Corporation or in the Federal Savings and Loan Insurance
Corporation and in amounts not exceeding the maximum amounts of insurance
thereunder.
"CHANGE OF CONTROL" means (i) a "Person" or a "group" (within the
meaning of Sections 13(d) and 14(d)(ii) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), other than existing management and any Person
who was an officer or director of Borrower within twenty-four (24) months prior
to the Closing Date, becomes the ultimate "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than 50% of the total voting power of the
voting stock of the Borrower on a fully diluted basis or (ii) a majority of the
Board of Directors of the Borrower then in office shall not consist of
individuals who on the Closing Date constitute the Board of Directors of the
Borrower or new directors whose election or whose nomination for election by
stockholders, was approved by at least two thirds of the members of the Board of
Directors then in office who were either members of the Board of Directors on
the Closing Date or whose election or nomination was previously so approved.
"CHICAGO FACILITY" shall mean that certain manufacturing facility owned
by Contract, located at 0000 Xxxx 00xx Xxxxxx, Xxxxxxx, XX 00000 and which is
located on the real property subject to the Chicago Lease.
"CHICAGO LEASE" shall mean all of Borrower's interest, as assignee of
the tenant, in that certain ground lease for the Chicago Facility between Witco
Chemical Corporation and Purex Corporation, assigned to Contract by Purex
Corporation's successor on DECEMBER 28TH, 1995.
"CLOSING DATE" means the date set forth on the cover page of this
Agreement.
"CLOSING FEE" has the meaning set forth in the Schedule.
"CODE" means the Uniform Commercial Code as adopted and in effect in
the State of Arizona from time to time.
"COLLATERAL" has the meaning set forth in Section 3.1 hereof.
"COLLATERAL MONITORING FEE" has the meaning set forth in the Schedule.
"COMMITMENT" means the Dollar Commitment and Commitment Percentage set
forth opposite each Lender's name on the respective signature pages hereof under
the caption "Commitment".
"COMMITMENT PERCENTAGE" means the percentage set forth below each
Lender's name on the respective signature pages hereof under the caption
"Commitment".
"COMPLIANCE CERTIFICATE" has the meaning set forth in Section 9.1(b)
hereof.
"CONSOLIDATED" means each of USA, Powder, Management, Contract, NJMO,
NJMO Holdings and any Subsidiary of any one of them, taken together on a
consolidated basis.
"CURRENT ASSETS" at any date means the amount at which the current
assets of Borrower would be shown on a balance sheet of Borrower as at such
date, prepared in accordance with GAAP, provided that amounts due from any
unconsolidated Affiliates and investments in Affiliates shall be excluded
therefrom.
"CURRENT LIABILITIES" at any date means the amount at which the current
liabilities of Borrower would be shown on a balance sheet of Borrower as at such
date, prepared in accordance with GAAP.
"DEPOSIT ACCOUNTS" has the meaning set forth in Section 9-105 of the
Code.
"DILUTION RESERVE" means a Loan Reserve established by Agent in an
amount equal to the product of (x) the amount by which dilution in respect of
Borrower's
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Receivables exceeds FIVE PERCENT (5%) (expressed as a percentage with one
decimal place), based upon a THREE (3) month rolling average, or such other
period as the Borrower and the Agent shall agree, with such amount to be
calculated based upon the results of each audit examination by Agent, multiplied
by (y) the aggregate of Borrower's Eligible Receivables then outstanding (based
upon Borrower's monthly Collateral reports); which amount shall reduce the
amount of Revolving Credit Loans which would otherwise be available to Borrower
under the formula set forth in Section 2.2 of the Schedule to this Agreement.
"DISCOUNTED VALUE" has the meaning set forth in the Schedule.
"DOCUMENT CHECKLIST" means that certain Document Checklist listing the
Loan Documents and other documents, instruments and certificates to be delivered
to Agent on the Closing Date.
"DOLLAR COMMITMENT" means the dollar amounts set forth below each
Lender's name on the respective signature pages hereof under the caption
"Commitment".
"DOMINION ACCOUNT" has the meaning set forth in Section 2.10(c) hereof.
"EBITDA" means, for any period, Borrower's net income or loss
(excluding the effect of any extraordinary gains or losses), determined in
accordance with GAAP, plus or minus each of the following items, to the extent
deducted from or added to the revenues of Borrower in the calculation of net
income or loss: (i) interest expense paid or accrued; (ii) total federal and
state income tax expense determined as the accrued liability of Borrower in
respect of such period, regardless of what portion of such expense has actually
been paid by Borrower during such period; (iii) depreciation; (iv) amortization;
(v) the write off of deferred financing costs; and (vi) other non-cash charges
or non-cash income.
"ELIGIBLE DOMESTIC RECEIVABLES" means Receivables arising in the
ordinary course of Borrower's business from the sale of goods or rendition of
services, which Agent, in its Permitted Discretion, shall deem eligible based on
such considerations as Agent may from time to time deem appropriate. Without
limiting the foregoing, a Receivable shall not be deemed to be an Eligible
Domestic Receivable if (i) the account debtor has failed to pay the Receivable
within a period of SIXTY (60) days after due date or failed to pay the
Receivable within ONE HUNDRED TWENTY (120) days after invoice date (or in the
case of Receivables for Borrower's Country Air air freshener or candle line
products, ONE HUNDRED FIFTY (150) days after invoice date), to the extent of any
amount remaining unpaid after such periods; (ii) the account debtor has failed
to pay more than 50% of all outstanding Receivables owed by it to Borrower
within ONE HUNDRED TWENTY (120) days after invoice date; (iii) the account
debtor is an Affiliate of Borrower (except as otherwise permitted by Agent in
writing); (iv) the goods relating thereto are placed on consignment, guaranteed
sale, "xxxx and hold," "COD" or other terms pursuant to which payment by the
account debtor may be conditional; (v) the account debtor is not located in the
United States, Puerto Rico or Ontario, Canada, unless the Receivable is
supported by a letter of credit or other form of guaranty, security or credit
insurance (to the extent Agent in writing approves the underlying policy of
credit insurance) in each case in form and substance reasonably satisfactory to
Agent; (vi) the account debtor is the United States or any department, agency or
instrumentality thereof or any State, city or municipality of the United States,
except to the extent that the requirements of Section 6.1.12 have been
satisfied; (vii) Borrower is or may become liable to the account debtor for
goods sold or services rendered by the account debtor to Borrower (up to the
amount that Borrower is liable to the account debtor); (viii) the account
debtor's total obligations to Borrower exceed 15% of all Eligible Receivables
(or in the case of each of Wal-Mart, K-Mart and Walgreens, 20% of all Eligible
Receivables), to the extent of such excess; (ix) the account debtor disputes
liability or makes any claim with respect thereto (up to the amount of such
liability or claim), or is subject to any insolvency or bankruptcy proceeding,
or becomes insolvent, fails or goes out of a material portion of its business;
(x) the amount thereof consists of late charges or finance charges; (xi) the
amount thereof consists of a credit balance (i.e. "credits in prior") more than
SIXTY (60) days past due; (xii) the face amount thereof exceeds $20,000, unless
accompanied by evidence of shipment of the goods relating thereto satisfactory
to Agent in its Permitted Discretion; (xiii) the invoice constitutes a progress
billing on a project not yet completed, except that the final billing at such
time as the matter has been completed and delivered to the customer may be
deemed an Eligible Receivable; (xiv) the amount thereof is not yet represented
by an invoice or xxxx issued in the name of the applicable account debtor; (xv)
the account debtor is located in Puerto Rico and/or the goods were shipped to
Puerto Rico; or (xvi) such Receivable is not at all times subject to Agent's
duly perfected, first priority, security interest.
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"ELIGIBLE INVENTORY" means all Eligible Product Inventory and all
Eligible Packaging Inventory.
"ELIGIBLE PACKAGING INVENTORY" means Packaging Inventory which Agent,
in its Permitted Discretion, deems Eligible Packaging Inventory, based on such
considerations as Agent may from time to time deem appropriate. Without limiting
the generality of the foregoing, no Packaging Inventory shall be Eligible
Packaging Inventory unless, in Agent's Permitted Discretion, such Packaging
Inventory (i) consists of Packaging Inventory in good, new and salable condition
which is not obsolete or unmerchantable and is not comprised of labels or
supplies (including, without limitation, pallets, stretch wrap, shrink film, hot
melt, glue, machine tape, air bags, spare parts, material handling equipment,
machinery and solar salt); (ii) meets all standards imposed by any governmental
agency or authority; (iii) conforms in all respects to the warranties and
representations set forth herein; (vi) is at all times subject to Agent's duly
perfected, first priority security interest; and (v) is at a location leased or
owned by Borrower (and not a third party processor location) for which Borrower
has delivered to Agent an executed landlord or mortgagee waiver, in form and
substance satisfactory to Agent.
"ELIGIBLE PRODUCT INVENTORY" means Product Inventory which Agent, in
its Permitted Discretion, deems Eligible Product Inventory, based on such
considerations as Agent may from time to time deem appropriate. Without limiting
the generality of the foregoing, no Product Inventory shall be Eligible Product
Inventory unless, in Agent's Permitted Discretion, such Product Inventory (i)
consists of raw materials and finished goods, in good, new and salable condition
which are not obsolete or unmerchantable, and are not comprised of work in
process, packaging materials, supplies or "finished goods rework" such as
cartons or cases of finished goods that have been damaged and are awaiting
rework; (ii) meets all standards imposed by any governmental agency or
authority; (iii) conforms in all respects to the warranties and representations
set forth herein; (iv) is at all times subject to Agent's duly perfected, first
priority security interest; and (v) is at a location leased or owned by Borrower
(and not a third party processor location) for which Borrower has delivered to
Agent an executed landlord or mortgagee waiver, in form and substance
satisfactory to Agent.
"ELIGIBLE PUERTO RICO RECEIVABLES" means any Receivable which would
have been an Eligible Domestic Receivable except for the fact that the
Receivable was excluded solely by subsection "(xv)" under the definition of
Eligible Domestic Receivable (i.e. the account debtor was located in Puerto Rico
and/or the goods were shipped to Puerto Rico.)
"ELIGIBLE RECEIVABLES" means all Eligible Domestic Receivables and all
Eligible Puerto Rico Receivables.
"EQUIPMENT" means all of Borrower's present and hereafter acquired
machinery, molds, machine tools, motors, furniture, equipment, furnishings,
trade fixtures, motor vehicles, tools, parts, dyes, jigs, goods and other
tangible personal property (other than Inventory) of every kind and description
used in Borrower's operations or owned by Borrower (excluding fixtures deemed to
be a part of the real property under applicable law) and any interest in any of
the foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing, wherever
located.
"ERISA" means the Employer Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
"ERISA AFFILIATE" means each trade or business (whether or not
incorporated and whether or not foreign) which is or may hereafter become a
member of a group of which Borrower is a member and which is treated as a single
employer under ERISA Section 4001(b)(1), or IRC Section 414.
"EVENT OF DEFAULT" means any of the events set forth in Section 7.1 of
this Agreement.
"EXAMINATION FEE" has the meaning set forth in the Schedule.
"EXCESS AVAILABILITY" means, as of the date of determination thereof,
the amount by which the average daily total principal balance of the Revolving
Credit Loans which Borrower would have been permitted to have outstanding over
the prior THIRTY (30) days (and as of the proposed date of any subject payment),
based on the formulas and reserves set forth in the Schedule, exceeds the sum of
the Receivable Loans and the Inventory Loans then actually outstanding, such
excess then being reduced by an amount necessary to provide for the payment of
all accounts payable of Borrower which are more than THIRTY (30) days past due
date and all book overdrafts, excluding all such accounts payable owing to
Xxxxx-Illinois Plastics Products, Inc. and its affiliates.
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"EXCESS CASH FLOW" means Operating Cash Flow/Permitted less Senior
Contractual Debt Service.
"FINOVA" means FINOVA Capital Corporation, a Delaware corporation, and
its successors and assigns.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Boards which are applicable to the circumstances
as of the date of determination consistently applied, except that, for the
financial covenants referred to in Section 6.1.13 of this Agreement, GAAP shall
be determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited financial
statements delivered to Agent prior to the date hereof, except to any extent
otherwise set forth in the Schedule.
"GENERAL INTANGIBLES" means all general intangibles of Borrower,
whether now owned or hereafter created or acquired by Borrower, including,
without limitation, all choses in action, causes of action, corporate or other
business records, Deposit Accounts, inventions, designs, drawings, blueprints,
Trademarks, Licenses and Patents, names, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, customer lists, security and other
deposits, rights in all litigation presently or hereafter pending for any cause
or claim (whether in contract, tort or otherwise), and all judgments now or
hereafter arising therefrom, all claims of Borrower against any Lender or Agent,
rights to purchase or sell real or personal property, rights as a licensor or
licensee of any kind, royalties, telephone numbers, proprietary information,
purchase orders, and all insurance policies and claims (including without
limitation credit, liability, property and other insurance) tax refunds and
claims, computer programs, discs, tapes and tape files, claims under guaranties,
security interests or other security held by or granted to Borrower to secure
payment of any of the Receivables by an account debtor, all contractual rights,
all rights to indemnification and all other intangible property of every kind
and nature (other than Receivables and applications for any tradename,
trademark, copyright and patent).
"INDEBTEDNESS" means all of Borrower's present and future obligations,
liabilities, debts, claims and indebtedness, contingent, fixed or otherwise,
however evidenced, created, incurred, acquired, owing or arising, whether under
written or oral agreement, operation of law or otherwise, and includes, without
limiting the foregoing (i) the Obligations, (ii) obligations and liabilities of
any Person secured by a lien, claim, encumbrance or security interest upon
property owned by Borrower, even though Borrower has not assumed or become
liable therefor, (iii) obligations and liabilities created or arising under any
Capital Leases or conditional sales contract or other title retention agreement
with respect to property used or acquired by Borrower, even though the rights
and remedies of the lessor, seller or lender are limited to repossession
(excluding operating leases), (iv) all unfunded pension fund obligations and
liabilities and (v) deferred tax liabilities.
"INDEBTEDNESS FOR BORROWED MONEY" means without duplication, all
Indebtedness: (i) in respect of borrowed money (including, without limitation,
pursuant to the Loan Documents or any Capital Leases), (ii) evidenced by a note,
debenture, or other like written obligation to pay money (including, without
limitation, all interest on the Obligations), (iii) for the deferred purchase
price of property (other than trade payables arising in the ordinary course of
business), or (iv) in respect of obligations under conditional sales or other
title retention agreements; and all guaranties of any or all of the foregoing.
"INITIAL TERM" has the meaning set forth in the Schedule.
"INVENTORY" means, collectively, all Product Inventory and all
Packaging Inventory.
"INVENTORY LOANS" has the meaning set forth in the Schedule.
"IRC" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"L/C FEE" has the meaning set forth in Section 2.4 hereof.
"L/C ISSUER" means FINOVA or any other Lender, to the extent agreed by
Agent and Borrower as provided in Section 2.4 hereof.
"L/C ISSUER FEE" has the meaning set forth in Section 2.4 hereof.
"LENDER" or "LENDERS" means the lending institutions, severally, from
time to time parties to this Agreement as lenders (as listed on the signature
pages
5
hereto) and their respective successors and assigns individually and
collectively, as the context requires.
"LENDERS' AFFILIATE" has the meaning set forth in Section 9.22 hereof.
"LETTERS OF CREDIT" has the meaning set forth in Section 2.4. hereof.
"LOAN PARTY" means Borrower and each other party liable for the
Obligations (other than the Lenders or Agent) pursuant to any Loan Document.
"LOAN DOCUMENTS" means, collectively, this Agreement, any note or notes
executed by Borrower and payable to the Lenders, the Mortgages and any other
present or future agreement entered into in connection with this Agreement,
including, without limitation, the documents identified on the Document
Checklist, together with all alterations, amendments, changes, extensions,
modifications, refinancings, refundings, renewals, replacements, restatements,
or supplements, of or to any of the foregoing.
"LOAN RESERVES" means, as of any date of determination, such amounts as
Agent may from time to time establish and revise in its Permitted Discretion
reducing the amount of Revolving Credit Loans and Letters of Credit which would
otherwise be available to Borrower under the lending formula(s) provided in
Section 2.2 of the Schedule: (a) to reflect events, conditions, contingencies or
risks which, as determined by Agent in good faith, do or may affect either (i)
the Collateral or any other property which is security for the Obligations or
its value, (ii) the assets, business or prospects of Borrower or (iii) the
security interests of Agent, for its benefit and the benefit of the Lenders and
other rights of Agent or any Lender in the Collateral (including the
enforceability, perfection and priority thereof) or (b) to reflect reserves for
accrued interest or (c) to reflect Agent's good faith belief that any collateral
report or financial information furnished by or on behalf of Borrower to Agent
or any Lender is or may have been incomplete, inaccurate or misleading in any
material respect or (d) in respect of any state of facts which Agent determines
in good faith constitutes an Event of Default or may, with notice or passage of
time or both, constitute an Event of Default; Loan Reserves shall include
without limitation the Dilution Reserve.
"LOAN YEAR" means each twelve month period commencing on the Closing
Date.
"LOANS" or "LOAN" has the meaning set forth in Section 2.2 hereof.
"MAKE WHOLE PREMIUM" has the meaning set forth in the Schedule.
"MAXIMUM INTEREST RATE" has the meaning set forth in Section 2.9(c)
hereof.
"MISSOURI FACILITY" means the real property located at 0000 Xxxxxxxx
Xxxx, Xxxxxxxxxxxxx, XX 00000 which is wholly owned by USA.
"MORTGAGES" means, collectively, that certain (i) Mortgage, Assignment
of Rents and Leases and Security Agreement on the Okonite Facility granted by
USA to Agent, for the benefit of the Lenders, and (ii) Missouri Future Advance
Deed of Trust, Assignment of Rents and Leases and Security Agreement on the
Missouri Facility granted by USA to Agent, for the benefit of the Lenders, each
of even date herewith.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in ERISA
Sections 3(37) or 4001(a)(3) or IRC Section 414(f) which covers employees of
Borrower or any ERISA Affiliate.
"NET WORTH" at any date means the Borrower's net worth as determined in
accordance with GAAP.
"OBLIGATIONS" means all present and future loans, advances, debts,
liabilities, obligations, covenants, duties and indebtedness at any time owing
by Borrower to Agent or any Lender whether evidenced by this Agreement, any note
or other instrument or document, whether arising from an extension of credit,
opening of a letter of credit, banker's acceptance, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment and any participation by Agent or any
Lender in Borrower's debts owing to others), absolute or contingent, due or to
become due, including, without limitation, all interest, charges, expenses,
fees, attorney's fees, expert witness fees, Examination Fees, L/C Fees,
Collateral Monitoring Fees, Closing Fees, facility fees, Agent's Fees, Unused
Line Fees, Termination Fees and any other sums chargeable to Borrower hereunder
or under any of the Loan Documents.
"OKONITE FACILITY" means the real property located at 0000 XX Xxxxx 0
Xxxxx, Xxxxx Xxxxxxxxx, XX 00000 which is wholly owned by USA.
6
"OPERATING CASH FLOW/ACTUAL" means, for any period, Borrower's net
income or loss (excluding the effect of any extraordinary gains or losses),
determined in accordance with GAAP, plus or minus each of the following items,
to the extent deducted from or added to the revenues of Borrower in the
calculation of net income or loss: (i) depreciation; (ii) amortization and other
non-cash charges; (iii) interest expense paid or accrued; and (iv) total federal
and state income tax expense determined as the accrued liability of Borrower in
respect of such period, regardless of what portion of such expense has actually
been paid by Borrower during such period, and after deduction for each of (a)
federal and state income taxes, to the extent actually paid during such period;
(b) any non-cash income; and (c) all actual Capital Expenditures made during
such period and not financed.
"OPERATING CASH FLOW/PERMITTED" means, for any period, Borrower's net
income or loss (excluding the effect of any extraordinary gains or losses),
determined in accordance with GAAP, plus or minus each of the following items,
to the extent deducted from or added to the revenues of Borrower in the
calculation of net income or loss: (i) depreciation; (ii) amortization and other
non-cash charges; (iii) interest expense paid or accrued; and (iv) total federal
and state income tax expense determined as the accrued liability of Borrower in
respect of such period, regardless of what portion of such expense has actually
been paid by Borrower during such period; and after deduction for each of (a)
federal and state income taxes, to the extent actually paid during such period;
(b) any non-cash income; and (c) all permitted Capital Expenditures (without
regard to any waiver given by the Agent with respect to any violation of the
limitation on such Capital Expenditures set forth in Section 6.2 of the
Schedule) actually made during such period and not financed.
"OVERADVANCE" has the meaning set forth in Section 2.3.
"OVERLINE" has the meaning set forth in Section 2.3.
"XXXXX COMFORT LETTER" shall have the meaning ascribed thereto under
the heading "Additional Provisions" set forth in the Schedule.
"PNC WARRANT" means that certain Amended and Restated Warrant for
purchase of common stock of USA, having an effective date of FEBRUARY 25, 1998,
of USA in favor of PNC Bank, National Association.
"PACKAGING INVENTORY" means all corrugated boxes, printed cardboard
boxes, bottles, caps, sprayers, labels, jars and other packaging materials now
owned and hereafter acquired, wherever located, which are intended to be used or
consumed in Borrower's business and all documents of title and other documents
relating thereto.
"PBGC" means the Pension Benefit Guarantee Corporation.
"PENSION PLAN" means any plan described in ERISA Section 3(2) which is
subject to Title IV of ERISA or Section 412 of the IRC which is maintained for
employees of Borrower or any ERISA Affiliate, other than a Multiemployer Plan.
"PERMITTED DISCRETION" means Agent's judgment exercised in good faith
based upon its consideration of any factor which Agent believes in good faith:
(i) could reasonably be expected to adversely affect the value of any
Collateral, the enforceability or priority of Agent's liens thereon or the
amount which Agent or any Lender would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral; (ii) suggests that any collateral report or financial
information delivered to Agent or any Lender by any Person on behalf of the
Borrower is incomplete, inaccurate or misleading in any material respect; (iii)
materially increases the likelihood of a bankruptcy, reorganization or other
insolvency proceeding involving the Borrower, any Loan Party or any of the
Collateral, or (iv) creates or reasonably could be expected to create an Event
of Default. In exercising such judgment, Agent may consider such factors already
included in or tested by the definition of Eligible Receivables or Eligible
Inventory, as well as any of the following: (i) the financial and business
climate of the Borrower's industry and general macroeconomic conditions, (ii)
changes in collection history and dilution with respect to the Receivables,
(iii) changes in demand for, and pricing of, Inventory, (iv) changes in any
concentration of risk with respect to Receivables and/or Inventory, and (v) any
other factors that change the credit risk of lending to the Borrower on the
security of the Receivables and Inventory. The burden of establishing lack of
good faith hereunder shall be on the Borrower.
"PERMITTED ENCUMBRANCE" means, collectively, the following: (i) liens,
security interests or other encumbrances for taxes, worker's compensation,
unemployment or social security insurance, assessments and other governmental
charges or levies arising by
7
operation of law in the ordinary course of business for sums which are not yet
due and payable and the enforcement of which are, at all times, effectively and
fully stayed or are being contested in good faith by appropriate proceedings
(with written notice thereof to Agent) diligently conducted, and for which
reserves as required under GAAP shall have been established by Borrower and Loan
Reserves have been established to the extent reasonably required by Agent in
respect thereof; (ii) liens arising in the ordinary course of business in
respect of claims or demands of landlords, carriers, warehousemen, mechanics,
laborers, materialmen, workers, repairmen and other similar Persons, whether
arising by operation of law, contractually or otherwise, provided that the
amounts respectively secured thereby are not past due or if past due, the
enforcement of any such liens are, at all times, stayed, and such liens are
being contested in good faith by appropriate proceedings (with written notice
thereof to Agent) diligently conducted and reserves as required under GAAP shall
have been established by Borrower and Loan Reserves have been established to the
extent reasonably required by Agent in respect thereof; (iii) liens securing
Capital Leases and purchase money Indebtedness to the extent permitted by
Section 6.2.10 hereof as set forth in the Schedule; and (iv) liens on the
Missouri Facility and the Okonite Facility as permitted by Agent and described
as "Permitted Encumbrances" in the Mortgages.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, government, or any agency or political division thereof, or
any other entity.
"PLAN" means any plan described in ERISA Section 3(2) which is
maintained for employees of Borrower or any ERISA Affiliate, other than a
Multiemployer Plan or a Pension Plan.
"PREPARED FINANCIALS" means (i) the audited financial statements of
Borrower dated DECEMBER 31, 1997, (ii) the financial statements filed with the
Securities and Exchange Commission (including without limitation 10Q reports and
10K reports) thereafter but prior to the Closing Date, and (iii) all financial
statements (audited and filed with the Securities and Exchange Commission) which
as of each subsequent date are delivered to Agent and the Lenders from time to
time pursuant to Section 9.1 hereof, and the related statements of operations,
changes in stockholder's equity and changes in cash flow for the periods ended
on such dates.
"PRIME RATE" has the meaning set forth in the Schedule.
"PRIOR AGREEMENTS" shall have the meaning set forth in Section 2.1(b).
"PRODUCT INVENTORY" means, excluding all Packaging Inventory, all of
Borrower's now owned and hereafter acquired goods, merchandise or other personal
property, wherever located, to be furnished under any contract of service or
held for sale or lease, all raw materials (including, without limitation, wick
assemblies, chemicals, dyes, fragrances, bleach, liquid detergent, household
cleaners and soap products), work in process (including, without limitation, all
chemicals in the mixing area), finished goods (including, without limitation,
all trays of candles and finished glass cleaner, liquid detergent, pine spray,
bleach powder soap and other household chemicals), and materials and supplies of
any kind, nature or description which are intended to be used or consumed in
Borrower's business or used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods, merchandise or other
personal property, and all documents of title and other documents relating
thereto.
"PROHIBITED TRANSACTION" means any transaction described in Section 406
of ERISA which is not exempt by reason of Section 408 of ERISA, and any
transaction described in Section 4975(c) of the IRC which is not exempt by
reason of Section 4975(c)(2) of the IRC.
"REAL ESTATE SUBSIDIARIES" means, collectively, NJMO Management Company
LLC, a Delaware limited liability company, and NJMO Holding Company LLC, a
Delaware limited liability company, and such other entities as may be approved
by Agent from time to time in its reasonable discretion.
"RECEIVABLE LOANS" has the meaning set forth in
the Schedule.
"RECEIVABLES" means all of Borrower's now owned and hereafter acquired
accounts (whether or not earned by performance), proceeds of any letters of
credit naming Borrower as beneficiary, contract rights, chattel paper,
instruments, documents and all other forms of obligations at any time owing to
Borrower, all guaranties and other security therefor, whether secured or
unsecured, all merchandise returned to or repossessed by Borrower, and all
rights of stoppage in transit and all other rights or remedies of an unpaid
vendor, lienor or secured party.
8
"REINVESTMENT YIELD" has the meaning set forth in the Schedule.
"REMAINING SCHEDULED PAYMENT AMOUNT" has the meaning set forth in the
Schedule.
"RENEWAL TERM" has the meaning set forth in the Schedule.
"REPORTABLE EVENT" means a reportable event described in Section 4043
of ERISA or the regulations thereunder, a withdrawal from a Plan or Pension Plan
described in Section 4063 of ERISA, or a cessation of operations described in
Section 4068(f) of ERISA.
"REQUIRED LENDERS" has the meaning set forth in the Agency Agreement.
"REVOLVING CREDIT LIMIT" has the meaning set forth in the Schedule.
"REVOLVING CREDIT LOANS" has the meaning set forth in the Schedule.
"REVOLVING INTEREST RATE" has the meaning set forth in the Schedule.
"SCHEDULE" has the meaning set forth in the preamble.
"SEC INVESTIGATION" means that certain pending formal investigation by
the United States Securities and Exchange Commission in connection with the
restatement by USA of its fiscal 1996 financial statements.
"SENIOR CONTRACTUAL DEBT SERVICE" means, for any period, the sum of
payments made or required to be made by Borrower during such period for (i)
interest, fees and scheduled principal payments due on the Term Loans (excluding
voluntary prepayment and payments made from Borrower's Excess Cash Flow, as
required pursuant to the Schedule), (ii) interest only payments due on the
Revolving Credit Loans facility plus the Collateral Monitoring Fee, the Agent's
Fee and the Unused Line Fee, Examination Fees and any other fees due to the
Agent for its account or the account of the lenders and (iii) scheduled interest
and principal payments due on any other Indebtedness for Borrowed Money
(including without limitation the Indebtedness permitted in clauses "(iii)",
"(v)" and "(vi)" of Section 6.2.10 hereof).
"SHAREHOLDER LITIGATION" means that certain litigation in the U.S.
District Court of New Jersey, captioned In re USA Detergents, Inc. Securities
Litigation, Master File No. 97-CV-2459 (MTB) and all other claims brought
against the Borrower predicated on the same or similar factual allegations.
"START DATE" has the meaning set forth in the Schedule.
"STOCK PLEDGE AGREEMENTS" has the meaning set forth in Section 4.1(y)
hereof.
"STOCK PLEDGORS" has the meaning set forth in Section 4.1(y) hereof.
"SUBORDINATED DEBT" means liabilities of Borrower for the repayment of
debt which is subordinated to the payment and performance of the Obligations,
pursuant to a subordination agreement acceptable to Agent in its sole
discretion, including without limitation, all of Borrower's liabilities to 101
Realty.
"SUBSIDIARIES" or "SUBSIDIARY" means, with respect to any Person, any
corporation of which an aggregate of more than FIFTY PERCENT (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of
the Board of Directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at the
time, directly or indirectly, owned, legally or beneficially, by such Person
and/or one or more Subsidiaries of such Person, including, without limitation,
the following Subsidiaries of USA Detergents, Inc., a Delaware corporation
("USA"): Big Cloud Powder Corporation, a Delaware corporation ("POWDER"),
Chicago Management Powder Corp., a Delaware corporation ("MANAGEMENT"), Chicago
Contract Powder Corporation, an Illinois corporation ("CONTRACT"), NJMO
Management Company LLC, a Delaware limited liability company ("NJMO") and NJMO
Holding Company LLC, a Delaware limited liability company ("NJMO Holdings").
"TERM LOANS" shall mean, collectively, Term Loan A, Term Loan B and
Term Loan C, each as defined in the Schedule.
"TERMINATION FEE" has the meaning set forth in Section 9.2(d) hereof.
9
"TOTAL FACILITY" has the meaning set forth in the Schedule.
"TRADEMARKS, COPYRIGHTS, LICENSES AND PATENTS" means all of Borrower's
right, title and interest in and to, whether now owned or hereafter acquired:
(i) trademarks, trademark registrations, trade names, trade name registrations,
including without limitation, such as are listed in the Schedule or any of the
other Loan Documents, as the same may be amended from time to time, and (a)
renewals thereof, (b) all income, royalties, damages and payments now and
hereafter due and/or payable with respect thereto, including without limitation,
damages and payments for past or future infringements thereof, (c) the right to
xxx for past, present and future infringements thereof, (d) all rights
corresponding thereto throughout the world, and (e) the goodwill of the business
operated by Borrower connected with and symbolized by any trademarks or trade
names; (ii) copyrights and copyright registrations, including without limitation
such as are listed in the Schedule or any of the other Loan Documents, as the
same may be amended from time to time, and (a) renewals thereof, (b) all income,
royalties, damages and payments now and hereafter due and/or payable with
respect thereto, including without limitation, damages and payments for past or
future infringements thereof, (c) the right to xxx for past, present and future
infringements thereof, and (d) all rights corresponding thereto throughout the
world; (iii) license agreements, including without limitation such as are listed
in the Schedule attached hereto and made a part hereof, and the right to prepare
for sale, sell and advertise for sale any Inventory now or hereafter owned by
Borrower and now or hereafter covered by such licenses; and (iv) patents
registered or pending, including without limitation such as are listed in the
Schedule or any of the other Loan Documents, together with all income,
royalties, shop rights, damages and payments thereto, the right to xxx for
infringements thereof, and all rights thereto throughout the world and all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof.
"UNUSED LINE FEE" has the meaning set forth in the Schedule.
"WATER COMPANY LITIGATION" means all claims made by the North Brunswick
Water Company against the Borrower.
"WEIGHTED AVERAGE LIFE TO MATURITY" has the meaning set forth in the
Schedule.
1.2 Other Terms. All accounting terms used in this Agreement, unless
otherwise indicated, shall have the meanings given to such terms in accordance
with GAAP. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meanings provided by the Code, to the extent such
terms are defined therein.
2. LOANS; INTEREST RATE AND
OTHER CHARGES.
2.1 Total Facility; Prior Agreements.
(a) Total Facility. Upon the terms and conditions set forth herein and
provided that no Event of Default or event which, with the giving of notice or
the passage of time, or both, would constitute an Event of Default, shall have
occurred and be continuing, each Lender severally and not jointly agrees to make
available to Borrower that Lender's Commitment Percentage of (i) the Revolving
Credit Loans and (ii) the Term Loans up to the maximum amount of that Lender's
Dollar Commitment as set forth on the signature pages hereto, subject to
deduction of such other Loan Reserves as Agent deems proper from time to time in
its Permitted Discretion, and less amounts Agent or any Lender may be obligated
to pay in the future on behalf of Borrower. The Schedule is an integral part of
this Agreement and all references to "herein", "herewith" and words of similar
import shall for all purposes be deemed to include the Schedule.
(b) Prior Agreements. This Agreement and the Loan Documents executed
and delivered in connection herewith are entered into and delivered to Agent for
the ratable benefit of the Lenders in replacement of and substitution for, and
not in payment of or satisfaction for, the following documents: (a) the Loan and
Security Agreement and the Schedule thereto; (b) $40,000,000 Revolving Loan
Notes; (c) $6,400,000 Term Loan A Notes; (d) $2,100,000 Term Loan B Notes; (e)
Environmental Certificate and Indemnity Agreement, and (f) Agency Agreement,
each dated AUGUST 14, 1998 (collectively, the "Prior Agreements"). Effective as
of the date hereof, those Lenders listed on the signature pages to the Loan and
Security Agreement dated August 14, 1998 shall and are hereby replaced with the
Lenders listed on the signature pages to this Agreement. All other instruments,
documents and agreements executed and delivered in connection with the Prior
Agreements are hereby reaffirmed and shall continue in full force and effect.
Borrower acknowledges that the Loans evidenced by the Prior Agreements have not
been satisfied but instead have become part of the Obligations of Borrower under
this Agreement. Borrower
10
further acknowledges that all of the liens and security interests granted by
Borrower under the Prior Agreements are hereby reaffirmed and shall continue
hereafter to secure Borrower's Obligations to Agent and the Lenders until all
Obligations are indefeasibly repaid in full in cash.
2.2 Loans; Joint and Several Obligations. Advances under the Total
Facility ("LOANS" and individually, a "LOAN") shall be comprised of the amounts
shown in the Schedule. Each of the following corporations shall be jointly and
severally liable for the Loans and all other Obligations hereunder: (i) USA,
(ii) Powder, (iii) Management and (iv) Contract. References in this Agreement
and any other Loan Document to "Borrower" shall mean each of the foregoing
corporations, jointly and severally, as co-borrowers, individually and
collectively, as the context requires. USA, Powder, Management and Contract are
together engaged in a collective business enterprise which relies upon the
particular contributions of each corporation thereto including, without
limitation, the manufacturing operations of Management, the fixed assets of
Contract and the manufacturing, distribution and administrative operations of
USA. The parties acknowledge that the Lenders would not make the Loans available
to any one of the Co-Borrowers separately and independently and that it is the
collective enterprise of the co-borrowers which has induced the Lenders to make
the Loans available to the co-borrowers.
2.3 Overlines; Overadvances. If at any time or for any reason the
outstanding amount of advances (including all Letters of Credit) extended or
issued pursuant hereto exceeds any of the dollar limitations ("OVERLINE") or
percentage limitations ("OVERADVANCE") in the Schedule, then Borrower shall,
upon Agent's demand, immediately pay, in cash, to Agent, for the ratable benefit
of the Lenders, the full amount of such Overline or Overadvance which, at
Agent's option, may be applied to reduce the outstanding principal balance of
the Loans and/or cash collateralize all or any part of any outstanding Letters
of Credit. Without limiting Borrower's obligation to repay to Agent, for the
ratable benefit of the Lenders, on demand the amount of any Overline or
Overadvance, Borrower agrees to pay to Agent, for the ratable benefit of the
Lenders, interest on the outstanding principal amount of any Overline or
Overadvance, on demand, at the rate set forth in the Schedule and applicable to
the Loan or Loans in respect to which any Overline or Overadvance exists.
2.4 Letters of Credit. At the request of Borrower, Agent may arrange
for the issuance of letters of credit for the account of Borrower and guarantees
of payment of such letters of credit, by the L/C Issuer, in each case in form
and substance satisfactory to the L/C Issuer and Agent (collectively, "LETTERS
OF CREDIT"). As of the Closing Date, no Letters of Credit shall be outstanding.
The aggregate face amount of all outstanding Letters of Credit from time to time
shall not exceed an amount to be mutually agreed between Agent and Borrower from
time to time, and shall be reserved against the availability of Revolving Credit
Loans as provided in Section 2.2 set forth in the Schedule. Borrower shall pay
all bank charges and fees for the issuance of Letters of Credit, as determined
by the L/C Issuer and reasonably acceptable to Agent (the "L/C ISSUER FEE"),
together with an additional fee to the Lenders equal to that percentage of the
aggregate face amount of each Letter of Credit outstanding from time to time
during the term of this Agreement as mutually determined by Agent and Borrower
(the "L/C FEE"). The L/C Fee shall be deemed to be fully earned upon the
issuance of each Letter of Credit and shall be due and payable on the first
Business Day of each month following a month during which any Letter of Credit
is outstanding, pro rated for any partial month. Any advance by any Lender, or
Agent for the account of the Lenders, under or in connection with a Letter of
Credit shall constitute an Obligation hereunder. Each Letter of Credit shall
have an expiry date no later than THIRTY (30) days prior to the last day of the
Initial Term or, if issued during any Renewal Term no later than THIRTY (30)
days prior to the last day of such Renewal Term. Immediately upon any
termination of this Agreement, Borrower shall either: (i) provide cash
collateral to Agent, for the benefit of the L/C Issuer, in an amount equal to
105% of the maximum amount of all obligations of the L/C Issuer under or in
connection with all then outstanding Letters of Credit, or (ii) cause to be
delivered to the L/C Issuer releases of all the L/C Issuer's obligations under
outstanding Letters of Credit. At Agent's discretion, any proceeds of Collateral
received by Agent may be held as the cash collateral required by this Section
2.4. Borrower hereby agrees to indemnify, save, and hold Agent, the L/C Issuer
and the Lenders harmless from any loss, cost, expense, or liability, including
payments made by Agent, the L/C Issuer or any Lender, expenses, and reasonable
attorneys' fees incurred by Agent, the L/C Issuer or any Lender arising out of
or in connection with any Letters of Credit. Borrower agrees to be bound by the
L/C Issuer's regulations and any reasonable interpretations of any Letters of
Credit opened for Borrower's account and Borrower understands and agrees that
none of the Agent, any L/C Issuer nor any Lender shall be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrower's instructions or those contained in the Letters of Credit or
11
any modifications, amendments, or supplements thereto, other than gross
negligence or willful misconduct. Borrower understands that the L/C Issuer may
indemnify the bank issuing a Letter of Credit for certain costs or liabilities
arising out of claims by Borrower against such issuing bank. Borrower hereby
agrees to indemnify and hold the L/C Issuer, Agent and the Lenders harmless with
respect to any loss, cost, expense, or liability incurred by the L/C Issuer,
Agent or any Lender under any such indemnification by the L/C Issuer, Agent or
any Lender to any issuing bank.
2.5 Loan Account. All advances made hereunder (including without
limitation all advances made by the L/C Issuer, or by Agent for the account of
the L/C Issuer or the Lenders, under or in connection with any Letter of Credit)
shall be added to and deemed part of the Obligations when made. Agent may from
time to time charge all Obligations of Borrower to Borrower's loan account.
2.6 Interest; Fees. Borrower shall pay to Agent, for the ratable
benefit of the Lenders, interest on the daily outstanding balance of the
Obligations at the per annum rate and payable monthly as set forth in the
Schedule, together with the Unused Line Fees and any L/C Fees, Termination Fees,
and Make Whole Premiums, to the extent applicable. Borrower shall also pay to
Agent, for its sole benefit, the Collateral Monitoring Fee, Agent's Fees and
Examination Fees as set forth in the Schedule.
2.7 Default Interest Rate. Upon the occurrence and during the
continuation of an Event of Default, Borrower shall pay to Agent, for the
ratable benefit of the Lenders, interest on the daily outstanding balance of the
Obligations and any L/C Fee at a rate per annum which is TWO PERCENT (2%) in
excess of the rate which would otherwise be applicable thereto pursuant to the
Schedule.
2.8 Examination Fee. Borrower agrees to pay to Agent, for its sole
account, the Examination Fee in the amount set forth in the Schedule in
connection with each audit or examination of Borrower performed by Agent prior
to or after the date hereof provided that, as set forth in the Schedule, so long
as no Event of Default exists, Borrower shall be required to pay the Examination
Fee for only one audit or examination in each fiscal quarter of Borrower.
Without limiting the generality of the foregoing, Borrower shall pay to Agent,
for its sole account, an initial Examination Fee in an amount equal to the
amount set forth in the Schedule. Such initial Examination Fee shall be deemed
fully earned at the time of payment and due and payable upon the closing of this
transaction, and shall be deducted from any good faith deposit paid by Borrower
to Agent prior to the date of this Agreement.
2.9 Excess Interest.
(a) The contracted for rate of interest of the Loans contemplated
hereby, without limitation, shall consist of the following: (i) the interest
rate set forth in the Schedule, calculated and applied to the principal balance
of the Obligations in accordance with the provisions of this Agreement; (ii)
interest after an Event of Default, calculated and applied to the amount of the
Obligations in accordance with the provisions hereof; and (iii) all Additional
Sums (as herein defined), if any. Borrower agrees to pay an effective contracted
for rate of interest which is the sum of the above-referenced elements. The
Examination Fees, attorneys' fees, expert witness fees, letter of credit fees,
collateral monitoring fees, closing fees, facility fees, Termination Fees,
Minimum Interest Charges, other charges, goods, things in action or any other
sums or things of value paid or payable by Borrower (collectively, the
"ADDITIONAL SUMS"), whether pursuant to this Agreement or any other documents or
instruments in any way pertaining to this lending transaction, or otherwise with
respect to this lending transaction, that under any applicable law may be deemed
to be interest with respect to this lending transaction, for the purpose of any
applicable law that may limit the maximum amount of interest to be charged with
respect to this lending transaction, shall be payable by Borrower as, and shall
be deemed to be, additional interest and for such purposes only, the agreed upon
and "contracted for rate of interest" of this lending transaction shall be
deemed to be increased by the rate of interest resulting from the inclusion of
the Additional Sums.
(b) It is the intent of the parties to comply with the usury laws of
the State of Arizona (the "APPLICABLE USURY LAW"). Accordingly, it is agreed
that notwithstanding any provisions to the contrary in this Agreement, or in any
of the documents securing payment hereof or otherwise relating hereto, in no
event shall this Agreement or such documents require the payment or permit the
collection of interest in excess of the maximum contract rate permitted by the
Applicable Usury Law (the "MAXIMUM INTEREST RATE"). In the event (a) any such
excess of interest otherwise would be contracted for, charged or received from
Borrower or otherwise in connection with the loan evidenced hereby, or (b) the
maturity of the Obligations is accelerated in whole or in part, or (c) all or
part of the Obligations shall be prepaid, so
12
that under any of such circumstances the amount of interest contracted for,
shared or received in connection with the loan evidenced hereby, would exceed
the Maximum Interest Rate, then in any such event (1) the provisions of this
paragraph shall govern and control, (2) neither Borrower nor any other Person
now or hereafter liable for the payment of the Obligations shall be obligated to
pay the amount of such interest to the extent that it is in excess of the
Maximum Interest Rate, (3) any such excess which may have been collected shall
be either applied as a credit against the then unpaid principal amount of the
Obligations or refunded to Borrower, at Agent's option, and (4) the effective
rate of interest shall be automatically reduced to the Maximum Interest Rate. It
is further agreed, without limiting the generality of the foregoing, that to the
extent permitted by the Applicable Usury Law; (x) all calculations of interest
which are made for the purpose of determining whether such rate would exceed the
Maximum Interest Rate shall be made by amortizing, prorating, allocating and
spreading during the period of the full stated term of the loan evidenced
hereby, all interest at any time contracted for, charged or received from
Borrower or otherwise in connection with such loan; and (y) in the event that
the effective rate of interest on the loan should at any time exceed the Maximum
Interest Rate, such excess interest that would otherwise have been collected had
there been no ceiling imposed by the Applicable Usury Law shall be paid to
Agent, for its benefit and the benefit of the Lenders, as applicable, from time
to time, if and when the effective interest rate on the loan otherwise falls
below the Maximum Interest Rate, to the extent that interest paid to the date of
calculation does not exceed the Maximum Interest Rate, until the entire amount
of interest which would otherwise have been collected had there been no ceiling
imposed by the Applicable Usury Law has been paid in full. Borrower further
agrees that should the Maximum Interest Rate be increased at any time hereafter
because of a change in the Applicable Usury Law, then to the extent not
prohibited by the Applicable Usury Law, such increases shall apply to all
indebtedness evidenced hereby regardless of when incurred; but, again to the
extent not prohibited by the Applicable Usury Law, should the Maximum Interest
Rate be decreased because of a change in the Applicable Usury Law, such
decreases shall not apply to the indebtedness evidenced hereby regardless of
when incurred.
2.10 Principal Payments; Proceeds of Collateral.
(a) Principal Payments. Except where evidenced by notes or other
instruments issued or made by Borrower to any Lender specifically containing
payment provisions which are in conflict with this Section 2.10 (in which event
the conflicting provisions of said notes or other instruments shall govern and
control), that portion of the Obligations consisting of principal payable on
account of Loans shall be payable by Borrower to Agent, for the ratable benefit
of the Lenders, immediately upon the earliest of (i) the receipt by Agent or
Borrower of any proceeds of any of the Collateral, to the extent of said
proceeds, (ii) the occurrence of an Event of Default in consequence of which the
Agent elects to accelerate the maturity and payment of such Loans, or (iii) any
termination of this Agreement pursuant to Section 9.2 hereof; provided, however,
that any Overadvance or Overline shall be payable on demand pursuant to the
provisions of Section 2.3 hereof.
(b) Collections. Until Agent notifies Borrower to the contrary,
Borrower may make collection of all Receivables for Agent by directing all
account debtors and other third parties to remit all payments owing to Borrower
to the lockbox established in connection with the Blocked Account. In the event
Borrower shall nevertheless directly receive any payments or other financial
proceeds of any Collateral, Borrower shall receive all payments in trust for
Agent and Lenders and immediately deliver all payments to Agent, for its benefit
and the ratable benefit of the Lenders, in their original form as set forth
below, duly endorsed in blank or cause the same to be deposited into a Blocked
Account or Dominion Account. Agent or its designee may, at any time during the
existence of an Event of Default, notify account debtors that the Receivables
have been assigned to Agent, for its benefit and the benefit of the Lenders, and
of Agent's security interest therein, and may collect the Receivables directly
and charge the collection costs and expenses to Borrower's loan account.
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 TWO
(2) Business Days after receipt by Agent of good funds which have been credited
to Agent's account, whether such funds are received directly from Borrower or
from the Blocked Account bank or the Dominion Account bank, pursuant to Section
2.10(c) hereof, and this provision shall apply regardless of the amount of the
Obligations outstanding or whether any Obligations are outstanding; provided,
that if any such good funds are received after 2:00 P.M. Eastern time on any
Business Day or at any time on any day not constituting a Business Day, such
funds shall be deemed received on the immediately following Business Day. Agent
may charge Borrower's loan account for the amount of any item of payment which
is returned to Agent unpaid.
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(c) Establishment of a Lockbox Account or Dominion Account. Unless
Borrower shall be otherwise directed by Agent in writing, Borrower shall cause
all proceeds of Collateral to be deposited into a lockbox account, or such other
"blocked account" as Agent may require (each, a "BLOCKED ACCOUNT") pursuant to
an arrangement with such bank as may be selected by Borrower and be acceptable
to Agent which proceeds, unless otherwise provided herein, shall be applied in
payment of the Obligations in such order as set forth in Section 2.12 hereof.
Borrower 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 a Blocked Account shall immediately
become the sole property of Agent, for its benefit and the benefit of the
Lenders, 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 in the name of Agent, for its benefit and the benefit of the
Lenders, at a bank or banks for the deposit of such funds (each, a "DOMINION
ACCOUNT") and Borrower shall deposit all proceeds of Receivables and all cash
proceeds of any sale of Inventory or, to the extent permitted herein, Equipment
or cause same to be deposited, in kind, in such Dominion Accounts of Agent, for
its benefit and the benefit of the Lenders, in lieu of depositing same to
Blocked Accounts, and, unless otherwise provided herein, all such funds shall be
applied by Agent to the Obligations as provided in Section 2.12 hereof.
(d) Payments Without Deductions. Borrower shall pay principal,
interest, and all other amounts payable hereunder, or under any other Loan
Document, without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.
(e) Collection Days Upon Repayment. In the event Borrower repays the
Obligations in full at any time hereafter, such payment in full shall be
credited (conditioned upon final collection) to Borrower's loan account TWO (2)
Business Days after Agent's receipt
thereof.
(f) Monthly Accountings. Agent shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Agent or any Lender),
unless Borrower notifies Agent in writing to the contrary within THIRTY (30)
days after each account is rendered, describing the nature of any alleged errors
or omissions.
2.11 Application of Collateral. Except as otherwise provided herein,
Agent shall have the continuing and exclusive right to apply or reverse and
re-apply any and all payments to any portion of the Obligations as provided in
Section 2.12 hereof. To the extent that Borrower makes a payment or Agent or any
Lender receives any payment or proceeds of the Collateral for Borrower's benefit
which is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to any Person, including without limitation,
a trustee, debtor in possession, receiver or any other party under any
bankruptcy law, common law or equitable cause, or otherwise, 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, and Agent may adjust the balance of the Loans as Agent, in its sole
discretion, deems appropriate under the circumstances.
2.12 Application of Payments. The amount of all payments or amounts
received by Agent with respect to the Loan shall be applied as set forth in
Section 4.2 of the Agency Agreement. In calculating interest and applying
payments as set forth above: (a) interest shall be calculated and collected
through the date a payment is actually applied by Agent under the terms of this
Agreement; (b) interest on the outstanding balance shall be charged during any
grace period permitted hereunder; (c) at the end of each month, all accrued and
unpaid interest and other charges provided for hereunder shall be added to the
principal balance of the Revolving Credit Loan; and (d) to the extent that
Borrower makes a payment or Agent receives any payment or proceeds of the
Collateral for Borrower's benefit that is subsequently invalidated, set aside or
required to be repaid to any other Person, then, to such extent, the Obligations
intended to be satisfied shall be revived and continue as if such payment or
proceeds had not been received by Agent and Agent may adjust the Loan balances
as Agent, in its sole discretion, deems appropriate under the circumstances.
2.13 Notification of Closing. Borrower shall provide Agent with at
least forty-eight (48) hours prior written notice of the Closing Date, to enable
Agent to
14
arrange for the availability of funds with the Lender. In the event the closing
does not take place on the date specified in Borrower's notice to Agent, other
than through the fault of Agent or the Lenders, Borrower agrees to reimburse
Agent and the Lenders for Agent's and the Lenders' costs to maintain the
necessary funds available for the closing, at the applicable interest rate
described in the Schedule for each respective Loan which is to be made on the
Closing Date, for the number of days which elapse between the earlier of the
date specified in Borrower's notice and the date upon which the closing actually
occurs (which number of days shall not include the date specified in Borrower's
notice, but shall include the Closing Date) and two (2) days after any
subsequent notification of a later Closing Date.
3. SECURITY.
3.1 Security Interest in the Collateral. To secure the payment and
performance of the Obligations when due, Borrower hereby grants to Agent, for
its benefit and the benefit of the Lenders:
(a) a first priority security interest (subject only to Permitted
Encumbrances) in all of Borrower's now owned or hereafter acquired or arising
Inventory, Equipment, Receivables, life insurance policies and the proceeds
thereof, Trademarks, Copyrights, Licenses and Patents, Investment Property (as
defined in Section 9-115 of the Code) and General Intangibles, including,
without limitation, all of Borrower's interest in the Chicago Lease of the
Chicago Facility and all of Borrower's Deposit Accounts, money, fixtures, any
and all property now or at any time hereafter in Agent or any Lender's
possession (including claims and credit balances), and all proceeds (including
proceeds of any insurance policies, proceeds of proceeds and claims against
third parties), all products and all books and records and computer data related
to any of the foregoing;
(b) with respect to the Missouri Facility and the Okonite Facility, a
first perfected deed of trust or mortgage, respectively, on said real property;
a first perfected security interest in all personal property and fixtures used
in connection with the operation of the Missouri Facility and the Okonite
Facility, and all rents, issues, profits and revenues of the Missouri Facility
and the Okonite Facility, and the proceeds thereof; a first assignment to Agent,
for its benefit and the ratable benefit of the Lenders, of all leases and
subleases of the Missouri Facility and the Okonite Facility, and, upon default,
direct collection by Agent, for its benefit and the ratable benefit of the
Lenders, of the rents, issues and profits from the Missouri Facility and the
Okonite Facility, and the collateral assignment to Agent, for its benefit and
the ratable benefit of the Lenders, of Borrower's rights under all service or
other contracts related to the Missouri Facility and the Okonite Facility, all
as further set forth in the Mortgages;
All of the foregoing described in Section 3.1(a) and 3.1(b) above,
together with all other property in which Agent, for its benefit and the benefit
of the Lenders, may be granted a lien or security interest, is referred to
herein, collectively, as the "Collateral". Borrower and Agent hereby acknowledge
and agree that the security interest granted and/or reaffirmed herein in the
Collateral described in Section 3.1(a) above is intended to attach on the date
that the Prior Agreements were executed by the Borrower and delivered to Agent,
for its benefit and the benefit of the Lenders, and that the security interest
granted in the Collateral described in Section 3.1(b) above is intended to
attach on the date this Agreement is executed by the Borrower and delivered to
Agent, for its benefit and the benefit of the Lenders and that such security
interests shall attach to all Collateral acquired by Borrower hereafter on the
date that such Collateral is acquired by Borrower.
3.2 Perfection and Protection of Security Interest. Borrower shall, at
its expense, take all actions requested by Agent at any time to perfect,
maintain, protect and enforce Agent's first priority security interest and other
rights in the Collateral and the priority thereof from time to time, including,
without limitation, (i) executing and filing financing or continuation
statements and amendments thereof and executing and delivering such documents
and titles in connection with motor vehicles as Agent shall require, all in form
and substance reasonably satisfactory to Agent, (ii) maintaining a perpetual
inventory and complete and accurate inventory stock records, (iii) upon the
request of Agent, delivering to Agent warehouse receipts covering any portion of
the Collateral located in warehouses and for which warehouse receipts are
issued, and transferring Inventory to warehouses designated by Agent, (iv)
placing notations on Borrower's books of account to disclose Agent's security
interest therein and (v) delivering to Agent all letters of credit on which
Borrower is named beneficiary, upon the request of Agent. Agent (or any Lender,
if directed by Agent) may file, for its benefit and the benefit of the Lenders,
without Borrower's signature, one or more financing statements disclosing
Agent's security interest under this Agreement. Borrower agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement. If any Collateral is
at any time in the possession or control of any warehouseman,
15
bailee or any of Borrower's agents or processors, Borrower shall notify such
Person of Agent's security interest in such Collateral and, upon Agent's
request, instruct them to hold all such Collateral for Agent's and the Lenders'
account subject to Agent's instructions. From time to time, Borrower shall, upon
Agent's request, execute and deliver confirmatory written instruments pledging
the Collateral to Agent, for its benefit and the benefit of the Lenders, but
Borrower's failure to do so shall not affect or limit Agent's security interest
or other rights in and to the Collateral. Until the Obligations have been fully
satisfied and each Lender's obligation to make further advances hereunder has
terminated, Agent's security interest in the Collateral, for its benefit and the
benefit of the Lenders shall continue in full force and effect.
3.3 Preservation of Collateral. Agent may, in its Permitted Discretion,
at any time discharge any lien or encumbrance on the Collateral or bond the
same, pay any insurance, maintain guards, pay any service bureau, obtain any
record or take any other action to preserve the Collateral and charge the cost
thereof to Borrower's loan account as an Obligation.
3.4 Insurance. Borrower will maintain and deliver evidence to Agent of
such insurance as is required by Agent, written by insurers, in amounts, and
with lender's loss payee, additional insured, and other endorsements, reasonably
satisfactory to Agent and cause Agent for its benefit and the benefit of the
Lenders to be named as an additional insured on all liability policies. All
premiums with respect to such insurance shall be paid by Borrower as and when
due. Accurate copies of the policies shall be delivered by Borrower to Agent
(and if requested by Agent, certified copies of such policies shall be delivered
to Agent). If Borrower fails to comply with this Section, Agent may (but shall
not be required to) procure such insurance and endorsements at Borrower's
expense and charge the cost thereof to Borrower's loan account as an Obligation.
Except as otherwise provided in the Mortgages with respect to the Collateral
described therein, the net proceeds of any property or casualty insurance and
endorsements insuring the Collateral, after deducting all costs and expenses
(including attorneys' fees) of collection (to the extent such proceeds exceed
$250,000 in the aggregate or in any single instance in any fiscal year of
Borrower), shall be applied at Agent's option, either toward replacing or
restoring the Collateral, in a manner and on terms satisfactory to Agent and
acceptable to Borrower, in accordance with good business practice, or toward
payment of the Obligations in accordance with Section 2.12 hereof. Any proceeds
applied to the payment of Obligations shall be applied in such manner as Agent
may elect in its sole discretion. In no event shall such application relieve
Borrower from payment in full of all installments of principal and interest
which thereafter become due in the order of maturity thereof.
3.5 Collateral Reporting; Inventory.
(a) Invoices. Borrower shall not re-date any invoice or sale from the
original date thereof or make sales on extended terms beyond those customary in
Borrower's industry, or otherwise extend or modify the term of any Receivable
(except to the extent consistent with customary and good business practice). If
Borrower becomes aware of any matter materially adversely affecting any material
Receivable, including information affecting the credit of the account debtor
thereon, Borrower shall promptly notify Agent in writing.
(b) Instruments. In the event any Receivable is or becomes evidenced by
a promissory note, trade acceptance or any other instrument for the payment of
money, Borrower shall immediately upon the request of Agent deliver such
instrument to Agent appropriately endorsed to Agent, for its benefit and the
benefit of the Lenders.
(c) Physical Inventory. Borrower shall conduct a physical count of the
Inventory (i) at quarterly intervals prior to DECEMBER 31, 1998, (ii) annually
thereafter, and (iii) at such interval as Agent requests during the existence of
an Event of Default; and promptly supply Agent with a copy of such accounts
accompanied by a report of the value (calculated at the lower of cost or market
value on a first in, first out basis) of the Inventory and such additional
information with respect to the Inventory as Agent may request from time to
time.
(d) Returns. For so long as no Event of Default has occurred and is
continuing and subject to the provisions of Section 3.6(b), if any account
debtor returns any Inventory to Borrower in the ordinary course of its business,
Borrower shall promptly determine the reason for such return and promptly issue
a credit memorandum to the account debtor (sending a copy to Agent if the amount
thereof exceeds $20,000 in any one incident) in the appropriate amount. In the
event any attempted return occurs after the occurrence and during the
continuance of any Event of Default, Borrower shall upon the request of Agent
(i) hold the returned Inventory in trust for Agent, for its benefit and the
benefit of the Lenders, (ii) segregate all returned Inventory from all of
Borrower's other property,
16
(iii) conspicuously label the returned Inventory as Agent's property, and (iv)
immediately notify Agent of the return of any Inventory, specifying the reason
for such return, the location and condition of the returned Inventory, and on
Agent's request deliver such returned Inventory to Agent, for its benefit and
the benefit of the Lenders.
(e) Borrower shall not consign any
Inventory.
3.6 Receivables.
(a) Eligibility. (i) Borrower represents and warrants that each
Receivable covers and shall cover a bona fide sale or lease and delivery by it
of goods or the rendition by it of services in the ordinary course of its
business, and shall be for a liquidated amount and Agent's security interest
shall not be subject to any offset, deduction, counterclaim, rights of return or
cancellation, lien or other condition (other than chargebacks). If any
representation or warranty herein is breached as to any Receivable or any
Receivable ceases to be an Eligible Receivable for any reason other than payment
thereof, then Agent may, in addition to its other rights hereunder, designate
any and all Receivables owing by that account debtor as not Eligible
Receivables, except to the extent otherwise provided in the definition of
Eligible Domestic Receivables; provided, that Agent shall in any such event
retain, for its benefit and the benefit of the Lenders, its security interest in
all Receivables, whether or not Eligible Receivables, until the Obligations have
been fully satisfied and each Lender's obligation to provide loans hereunder has
terminated.
(ii) Agent at any time shall, in the exercise of its Permitted
Discretion, be entitled to (i) establish and increase or decrease Loan Reserves
against Eligible Receivables and Eligible Inventory, (ii) reduce the advance
rates set forth in the Schedule or restore such advance rates to any level equal
to or below the advance rates set forth in the Schedule or (iii) impose
additional restrictions (or eliminate the same) to the standards of eligibility
set forth in the definitions of "Eligible Receivables" and "Eligible Inventory,"
in the exercise of its Permitted Discretion. Agent may but shall not be required
to rely on the schedules and/or reports delivered to Agent in connection
herewith in determining the then eligibility of Receivables and Inventory.
Reliance thereon by Agent from time to time shall not be deemed to limit the
right of Agent to revise advance rates or standards of eligibility as provided
above.
(b) Disputes. Borrower shall notify Agent promptly of all disputes or
claims and settle or adjust such disputes or claims at no expense to Agent or
any Lender, but no discount, credit or allowance shall be granted to any account
debtor and no returns of merchandise shall be accepted by Borrower without
Agent's consent, in all instances except for disputes, claims, settlements,
adjustments, discounts, credits and allowances made or given in the ordinary
course of Borrower's business which are not material. Agent may, at any time
after the occurrence of an Event of Default, settle or adjust disputes or claims
directly with account debtors for amounts and upon terms which Agent considers
advisable in its reasonable credit judgment and, in all cases, Agent shall
credit Borrower's loan account with only the net amounts received by Agent in
payment of any Receivables.
3.7 Equipment. Borrower shall keep and maintain the Equipment in good
operating condition and repair and make all necessary replacements thereto to
maintain and preserve the value and operating efficiency thereof at all times
consistent with Borrower's past practice, ordinary wear and tear excepted.
Borrower shall not permit any item of Equipment to become a fixture (other than
a trade fixture) to real estate or an accession to other property, except to the
extent otherwise determined by applicable law.
3.8 Other Liens; No Disposition of Collateral. Borrower represents,
warrants and covenants that (a) all Collateral is and shall continue to be owned
by it free and clear of all liens, claims and encumbrances whatsoever, except
for Agent's security interest, Permitted Encumbrances, and such other liens,
claims and encumbrances as may be permitted by the Agent in its sole discretion
from time to time in writing, and (b) Borrower shall not, without Agent's prior
written approval, sell, encumber or dispose of or permit the sale, encumbrance
or disposal of any Collateral or all or any substantial part of any of its other
assets (or any interest of Borrower therein), except for (i) the sale of
Inventory in the ordinary course of Borrower's business, (ii) and the
replacement of Equipment deemed by Borrower in good faith to be commercially
obsolete to Borrower's business and (iii) the sale of up to $100,000 of
Equipment, in the aggregate in any fiscal year of Borrower. In the event the
Agent gives any such prior written approval with respect to any such sale of
Collateral, the same may be conditioned on the sale price being equal to, or
greater than, an amount reasonably acceptable to the Agent. The proceeds of any
such sales of Collateral shall be remitted to the Agent pursuant to this
Agreement for
17
application to the Obligations in accordance with Section 2.12 hereof.
3.9 Collateral Security. The Obligations shall constitute one loan
secured by the Collateral. Agent may, in its sole discretion, (a) exchange,
enforce, waive or release any of the Collateral, and (b) during the existence of
an Event of Default (i) apply Collateral and direct the order or manner of sale
thereof as it may determine, and (ii) settle, compromise, collect or otherwise
liquidate any Collateral in any manner without affecting its right to take any
other action with respect to any other Collateral.
4. CONDITIONS OF CLOSING.
4.1 Initial Advance. The obligation of the Lenders to make the initial
advance hereunder is subject to the fulfillment, to the satisfaction of Agent
and the Lenders, and their respective counsel, of each of the following
conditions on or prior to the Closing Date:
(a) Loan Documents. Agent shall have received each of the following
Loan Documents: (i) this Agreement fully and properly executed by Borrower; (ii)
promissory notes, in such amounts and on such terms and conditions as Agent
shall specify, executed by Borrower; (iii) such security agreements,
intellectual property assignments, pledge agreements, mortgages and deeds of
trust as Agent may require with respect to this Agreement, executed by each of
the parties thereto and, if applicable, duly acknowledged for recording or
filing in the appropriate governmental offices; (iv) a Subordination Agreement
in form and substance acceptable to Agent, executed by 101 Realty, together with
copies of all instruments subject thereto showing a legend indicating such
subordination; (v) such Blocked Account, Dominion Account and other account
agreements as it shall determine; and (vi) such other documents, instruments and
agreements in connection herewith as described in the Document Checklist and as
Agent shall require, executed, certified and/or acknowledged by such parties as
Agent shall designate;
(b) Minimum Excess Availability. Intentionally Deleted.
(c) Terminations by Existing Lender. Borrower's existing lender(s)
shall have executed and delivered UCC termination statements and other
documentation evidencing the termination of its liens and security interests in
the assets of Borrower (other than 101 Realty's second mortgage lien on the
Okonite Facility) in form and substance reasonably satisfactory to Agent in its
sole discretion; with respect to PNC Bank, Borrower shall (i) terminate all
notes, options, warrants (other than the PNC Warrant), capital stock holdings
and other instruments of Borrower held by PNC Bank, (ii) pay all prepayment
penalties, fees and other amounts due PNC Bank, (iii) deliver to Agent executed
UCC termination statements terminating all personal property liens (excluding
101 Realty's interest in the Okonite Facility) of record in any jurisdiction
naming PNC Bank (or its predecessors in interest) as secured party and Borrower
as debtor, and (iv) deliver to Agent executed instruments terminating all
trademark and intellectual property liens held by PNC Bank;
(d) Charter Documents. Agent shall have received copies of the By-laws
and Articles or Certificate of Incorporation, as applicable, of Borrower as
amended, modified, or supplemented to the Closing Date, certified by the
Secretary or other officer, as applicable;
(e) Good Standing. Agent shall have received a certificate of corporate
or partnership status with respect to Borrower dated within FIFTEEN (15)
Business Days of the Closing Date, by the Secretary of State of the state of
organization of Borrower, which certificate shall indicate that Borrower is in
good standing in such state;
(f) Foreign Qualification. Agent shall have received certificates of
corporate or partnership status with respect to Borrower, each dated within
FIFTEEN (15) Business Days of the Closing Date, issued by the Secretary of State
of each state in which such party's failure to be duly qualified or licensed
would have a material adverse effect on its financial condition or assets,
indicating that such party is in good standing;
(g) Authorizing Resolutions and Incumbency. Agent shall have received a
certificate from the Secretary of Borrower attesting to (i) the adoption of
resolutions of Borrower's Board of Directors, (and shareholders if necessary),
authorizing the borrowing of money from the Lenders and execution and delivery
of this Agreement and the other Loan Documents to which Borrower is a party, and
authorizing specific officers of Borrower to execute same, and (ii) the
authenticity of original specimen signatures of such officers;
(h) Insurance. Agent shall have received the insurance certificates and
certified copies of policies to the extent required by Section 3.4 hereof, in
form and substance satisfactory to Agent and its counsel, together with an
additional insured endorsement in favor of Agent,
18
for its benefit and the benefit of the Lenders with respect to all liability
policies and a lender's loss payable endorsement in favor of Agent, for its
benefit and the benefit of the Lenders with respect to all casualty and business
interruption policies, each in form and substance reasonably acceptable to Agent
and its counsel;
(i) Searches; Certificates of Title. Agent shall have received searches
reflecting the filing of its financing statements and fixture filings in such
jurisdictions as it shall determine, and shall have received certificates of
title with respect to the Collateral which shall have been duly executed in a
manner sufficient to perfect all of the security interests granted to Agent;
(j) Landlord, Bailee and Mortgagee Waivers. Agent shall have received
landlord, bailee and/or mortgagee waivers from the lessors, bailees and/or
mortgagees of all locations where any material Collateral is located;
(k) Fees. Borrower shall have paid all fees payable by it on the
Closing Date pursuant to this Agreement;
(l) Opinion of Counsel. Agent shall have received an opinion of
Borrower's counsel covering such matters as Agent shall determine in its sole
discretion;
(m) Officer Certificate. Agent shall have received a certificate of the
Senior Vice President or the Chief Financial Officer or similar official of
Borrower, attesting to the accuracy of each of the representations and
warranties of Borrower set forth in this Agreement and the fulfillment of all
conditions precedent to the initial advance hereunder;
(n) Solvency Certificate. Agent shall have received a signed
certificate of the Borrower's duly elected Chief Financial Officer concerning
the solvency and financial condition of Borrower, on Agent's standard form;
(o) Blocked Account and/or other Account Agreements. The Blocked
Account and other accounts referred to in Section 2.10(c) hereof shall have been
established to the satisfaction of Agent in its sole discretion;
(p) Environmental Assessment. If required by Agent, Borrower shall have
caused a Phase I Environmental Assessment to be conducted on the property or
properties owned or occupied by Borrower, all at Borrower's own expense and the
results of such assessment(s) shall have been in form and substance satisfactory
to Agent in its sole discretion. Such assessment(s) shall have included, in
Agent's discretion, core samplings, and shall have been conducted by an
environmental engineer acceptable to Agent;
(q) Environmental Certificate. Agent shall have received an Amended and
Restated Environmental Certificate from Borrower, in form and substance
satisfactory to Agent in its discretion, with respect to all locations of
Collateral;
(r) Search and References. Agent shall have received and approved the
results of (i) UCC, tax lien, litigation, judgment, and bankruptcy searches, and
(ii) customer, vendor and credit reference checks, each with respect to
Borrower, members of the management of Borrower and other Loan Parties (as
determined by Agent);
(s) No Material Adverse Changes. Prior to the Closing Date, there shall
have occurred no material adverse change in the financial condition, operations,
assets or business of Borrower, or in the condition of the Collateral, from that
shown on the most recent financial statements for Borrower, including, without
limitation, the Prepared Financials. At the closing, Borrower shall deliver to
Agent an officer's certification confirming that Borrower is unaware of the
existence of any such material adverse change;
(t) Pending Litigation. Agent and the Lenders shall have received and
found acceptable, in its sole discretion, information and documents pertaining
to all pending litigation to which Borrower is a party as of the Closing Date,
which pending litigation is described in Exhibit F to the Schedule; and in
addition, counsel to Borrower shall have provided to Agent and the Lenders
summaries of the Shareholder Litigation and the Water Company Litigation and
such summaries shall include, without limitation, a description of the claim and
any defenses thereto Borrower intends to pursue and an estimate of the potential
loss in the event of an unfavorable outcome;
(u) Material Agreements. Agent shall have received, reviewed and
approved all material agreements to which Borrower shall be a party, (as of the
Closing Date);
(v) Projections. Borrower shall submit cash flow projections and pro
forma balance sheet with adjusting entries (i) showing that the proposed
financing will provide sufficient funds for the Borrower's projected working
19
capital needs, and (ii) showing: (1) that the Borrower will have reasonably
sufficient capital for the conduct of its business following the initial
funding, and (2) that the Borrower will not incur debts beyond its ability to
pay such debts as they mature;
(w) ADA Compliance. As of the Closing Date, with respect to all real
property owned or leased by Borrower involving a "public accommodation" within
the meaning of the Americans with Disabilities Act of 1990 ("ADA"), each such
real property is and shall be in compliance with the provisions of the ADA to
the extent applicable to such property;
(x) Subordination Agreement. Agent and 101 Realty shall have entered
into a Subordination Agreement, in form and substance satisfactory to Agent.
(y) Stock Pledge. Each of USA and Powder, as pledgors ("STOCK
PLEDGORS") under separate Stock Pledge Agreements dated AUGUST 14, 1998 ("STOCK
PLEDGE AGREEMENTS") executed and delivered the Stock Pledge Agreements, pledging
in favor of Agent, for its benefit and the benefit of the Lenders, all of the
issued and outstanding common capital stock of Powder, Management and Contract.
These Stock Pledge Agreements are hereby reaffirmed, pursuant to Section 2.1(b)
above, on the date hereof. Agent shall be in possession on the Closing Date of
original stock certificates evidencing the shares of stock so pledged to Agent,
and of undated stock Powers and Assignments Apart from Certificate, executed in
blank by Stock Pledgors with respect to all such shares;
(z) Asset Appraisal. Borrower shall have provided to Agent, at
Borrower's sole cost and expense, an asset appraisal of all Borrower's fixed
assets upon which Agent shall be granted a first priority lien and security
interest, for its benefit and the benefit of the Lenders, which appraisal must
be acceptable to Agent in all respects;
(aa) PNC Bank Documents. Borrower shall have entered into, and
delivered to Agent, true and complete copies of termination documents pertaining
to its Indebtedness to PNC Bank, N.A., in form and substance acceptable to
Agent;
(bb) 101 Realty Documents. Borrower shall have entered into, and
delivered to Agent, true and complete copies of modification documents
pertaining to its Indebtedness to 101 Realty, in form and substance acceptable
to Agent;
(cc) Collateral Assignment. Borrower shall have delivered a Collateral
Assignment of Indemnification Agreement to Agent, acknowledged by The Okonite
Company, in respect of that certain Environmental Indemnification Agreement
dated March 31, 1997; and Agent shall, if requested by Borrower, acknowledge a
written notice from Borrower to The Okonite Company confirming and agreeing to
the termination of such Collateral Assignment following the payment by Borrower
to the Lenders of all Obligations in respect of Term Loan C and Agent's
obligation to do so will survive the termination of this Agreement).
(dd) Environmental Insurance. Borrower shall, within THIRTY (30) days
after the Closing Date, deliver to Agent an insurance certificate, together with
a certified copy of the policy, evidencing coverage effective on or prior to the
Closing Date, of environmental liability for hazards existing prior to the date
of acquisition by USA of the NJ Facility, by an insurer, with such coverage and
in amounts acceptable to Agent and naming Agent, for its benefit and the benefit
of the Lenders, as an additional insured on such policy.
(ee) Other Matters. All other documents and legal matters in connection
with the transactions contemplated by this Agreement shall have been delivered,
executed and recorded and shall be in form and substance satisfactory to Agent
and its counsel including, without limitation, each of the documents listed on
the Document Checklist.
4.2 Subsequent Advances. The obligation of the Lenders to make any
advance or the L/C Issuer to issue or cause any Letter of Credit to be issued
hereunder shall be subject to the further conditions precedent that, on and as
of the date of such advance or Letter of Credit issuance: (a) the
representations and warranties of Borrower set forth in this Agreement shall be
accurate, before and after giving effect to such advance or issuance and to the
application of any proceeds thereof; (b) no Event of Default and no event which,
with notice or passage of time or both, would constitute an Event of Default has
occurred and is continuing, or would result from such advance or issuance or
from the application of any proceeds thereof; (c) no material adverse change has
occurred in the Borrower's business, operations, financial condition, in the
condition of the Collateral or other assets of Borrower or in the prospect of
repayment of the Obligations; and (d) Agent shall have received such other
approvals, opinions or documents as Agent shall reasonably request.
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5. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants that:
5.1 Due Organization. It is a corporation duly organized, validly
existing and in good standing under the laws of the State set forth in the
Schedule, is qualified and authorized to do business and is in good standing in
all states in which such qualification and good standing are necessary in order
for it to conduct its business and own its property (except when the failure to
be so qualified would not individually or in the aggregate materially and
adversely affect Borrower's financial condition, assets, the Collateral or
Borrower's ability to repay the Obligations), and has all requisite power and
authority to conduct its business as presently conducted, to own its property
and to execute and deliver each of the Loan Documents to which it is a party and
perform all of its Obligations thereunder, and has not taken any steps to
wind-up, dissolve or otherwise liquidate its assets;
5.2 Other Names. Borrower has not, during the preceding FIVE (5) years,
been known by or used any other corporate or fictitious name except as set forth
in the Schedule, nor has Borrower been the surviving corporation of a merger or
consolidation or acquired all or substantially all of the assets of any Person
during such time;
5.3 Due Authorization. The execution, delivery and performance by
Borrower of the Loan Documents to which it is a party have been authorized by
all necessary corporate action and do not and shall not constitute a violation
of any applicable law or of Borrower's Articles or Certificate of Incorporation
or By-Laws, or other organizational or governing documents, as applicable, or
any other document, agreement or instrument to which Borrower is a party or by
which Borrower or its assets are bound;
5.4 Binding Obligation. Each of the Loan Documents to which Borrower is
a party is the legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms except as may be limited by
principles of equity and bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally;
5.5 Intangible Property. Borrower possesses adequate assets, licenses,
patents, patent applications, copyrights, trademarks, trademark applications and
trade names for the present conduct of its business without any known conflict
with the rights of others, and each is valid and has been duly registered or
filed with the appropriate governmental authorities; as of the Closing Date,
Borrower has no patents, patent rights, patent applications or patent licenses
and Borrower shall notify Agent in writing in the event that after the Closing
Date Borrower acquires any patents, patent rights, patent applications or patent
licenses, and execute and deliver to Agent, for its benefit and the benefit of
the Lenders, security agreements and related documents evidencing the lien of
Agent thereon; and each of Borrower's copyrights, trademarks and trademark
applications which have been registered or filed with any governmental authority
(including the U.S. Patent and Trademark Office and the Library of Congress) are
listed by name, date and filing number in Exhibit A to the Schedule;
5.6 Capital. Borrower has capital sufficient to conduct its business,
is able to pay its debts as they mature, and owns property having a fair salable
value greater than the amount required to pay all of its debts as required to be
accounted for under GAAP;
5.7 Material Litigation. Borrower has no pending or overtly threatened
litigation, actions or proceedings which would materially and adversely affect
its business, assets, operations, prospects or condition, financial or
otherwise, or the Collateral or any of Agent's interests therein, except for the
Shareholder Litigation and the Water Company Litigation;
5.8 Title; Security Interests of Agent. Borrower has good, indefeasible
and merchantable title to the Collateral and, upon the execution and delivery of
the Loan Documents, the filing of UCC-1 Financing Statements and the Mortgages,
delivery of the certificate(s) evidencing any pledged securities, the filing of
any collateral assignments or security agreements regarding Borrower,
Trademarks, Copyrights, Licenses and/or Patents, if any, with the appropriate
governmental offices, in each case in the appropriate offices, this Agreement
and such documents shall create in Agent, for its benefit and the benefit of the
Lenders, valid and perfected first priority liens in the Collateral, subject
only to Permitted Encumbrances;
5.9 Restrictive Agreements; Labor Contracts. Borrower is not a party or
subject to any contract or subject to any charge, corporate restriction,
judgment, decree or order materially and adversely affecting its business,
assets, operations, prospects or condition, financial or otherwise,
21
or which restricts its right or ability to incur Indebtedness. In addition, no
labor contract (other than employment agreements with individual employees) is
scheduled to expire during the Initial Term of this Agreement, except as
disclosed to Agent in writing prior to the date hereof and Borrower is not party
to any labor dispute;
5.10 Laws. Borrower is not in violation of any applicable statute,
regulation, ordinance or any order of any court, tribunal or governmental
agency, in any respect materially and adversely affecting the Collateral or its
business, assets, operations, prospects or condition, financial or otherwise;
5.11 Consents. Borrower has obtained or caused to be obtained or issued
any required consent of a governmental agency or other Person in connection with
the financing contemplated hereby;
5.12 Defaults. Borrower is not in default with respect to any note,
indenture, loan agreement, mortgage, lease, deed or other material agreement to
which it is a party or by which it or its assets are bound (including, without
limitation, the Subordinated Debt), nor has any event occurred which, with the
giving of notice or the lapse of time, or both, would cause such a default;
5.13 Financial Condition. The Prepared Financials fairly present
Borrower's financial condition and results of operations and those of such other
Persons described therein as of the date thereof in accordance with GAAP; there
are no material omissions from the Prepared Financials or other facts or
circumstances not reflected in the Prepared Financials; and there has been no
material and adverse change in such financial condition or operations since the
date of the initial Prepared Financials delivered to Agent and the Lenders
hereunder;
5.14 ERISA. None of Borrower, any ERISA Affiliate, any Plan or Pension
Plan is or has been in violation of any of the provisions of ERISA, any of the
qualification requirements of IRC Section 401(a) or any of the published
interpretations thereunder, nor has Borrower or any ERISA Affiliate received any
notice to such effect, which has resulted or will result in a material
liability. No notice of intent to terminate a Pension Plan has been filed under
Section 4041 of ERISA, nor has any Plan or Pension Plan been terminated under
ERISA. The PBGC has not instituted proceedings to terminate, or appointed a
trustee to administer, a Pension Plan. No lien upon the assets of Borrower has
arisen with respect to a Pension Plan. Except as described in Exhibit B to the
Schedule (i) no prohibited transaction with respect to a Plan or Pension Plan,
and no Reportable Event (for which notice is required) with respect to a Pension
Plan, has occurred, (ii) neither Borrower nor any ERISA Affiliate has incurred
any withdrawal liability with respect to any Multiemployer Plan, (iii) Borrower
and each ERISA Affiliate have made all contributions required to be made by them
to any Plan, Pension Plan or Multiemployer Plan when due, and (iv) there is no
accumulated funding deficiency in any Pension Plan, whether or not waived;
5.15 Taxes. Borrower has filed all tax returns and such other reports
as it is required by law to file and has paid or made adequate provision for the
payment on or prior to the date when due (including applicable extensions) of
all taxes, assessments and similar charges that are due and payable;
5.16 Locations; Federal Tax ID No. Borrower's chief executive office
and the offices and locations where it keeps the Collateral (except for
Inventory in transit) are only at the locations set forth in Exhibit C to the
Schedule, except to the extent that such locations may have been changed after
written notice to Agent in accordance with Section 9.12 hereof; Borrower's
federal tax identification number is as shown in the Schedule;
5.17 Business Relations. There exists no actual or threatened
termination, cancellation or limitation of, or, to the knowledge of Borrower,
any modification or change in, the business relationship between Borrower and
any customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrower, or with any material
supplier, and, to the knowledge of Borrower, there exists no present condition
or state of facts or circumstances which would materially and adversely affect
Borrower or prevent Borrower from conducting such business after the
consummation of the transactions contemplated by this Agreement in substantially
the same manner in which it has heretofore been conducted;
5.18 Millennium Compliance. Borrower has commenced all action necessary
to assure that there will be no material adverse change to Borrower's business
by reason of the advent of the year 2000, including, without limitation, that
all computer-based systems, embedded microchips and other processing
capabilities will effectively recognize and process dates after APRIL 1, 1999;
and
22
5.19 Reaffirmations. Each request for a Loan made by Borrower pursuant
to this Agreement shall constitute (i) an automatic representation and warranty
by Borrower to Agent and the Lenders that there does not then exist any Event of
Default and (ii) a reaffirmation as of the date of said request and each Loan
advance of all of the representations and warranties of Borrower contained in
this Agreement and the other Loan Documents.
6. COVENANTS.
6.1 Affirmative Covenants. Borrower covenants that, so long as any
Obligation remains outstanding and this Agreement is in effect, it shall:
6.1.1 Taxes. File all tax returns and pay or make adequate
provision for the payment of all taxes, assessments and other charges on or
prior to the date when due (including any extensions);
6.1.2 Notice of Litigation. Promptly notify Agent in writing
of any litigation, suit or administrative proceeding which may materially and
adversely affect the Collateral or Borrower's business, assets, operations,
prospects or condition, financial or otherwise, whether or not the claim is
covered by insurance;
6.1.3 ERISA. Notify Agent in writing (i) promptly upon the
occurrence of any event described in, and for which notice is required under,
Section 4043 of ERISA, other than a termination, partial termination or merger
of a Pension Plan or a transfer of a Pension Plan's assets and (ii) prior to any
termination, partial termination or merger of a Pension Plan or a transfer of a
Pension Plan's assets;
6.1.4 Change in Location. Notify Agent in writing FORTY-FIVE
(45) days prior to any change in the location of Borrower's chief executive
office or the location of any Collateral, or Borrower's opening or closing of
any other place of business;
6.1.5 Corporate Existence. Maintain its corporate existence
and its qualification to do business and good standing in all states necessary
for the conduct of its business and the ownership of its property (except where
the failure to be so qualified would not individually or in the aggregate
materially and adversely affect Borrower's financial condition, assets, the
Collateral or Borrower's ability to repay the Obligations) and maintain adequate
assets, licenses, patents, copyrights, trademarks and trade names for the
conduct of its business;
6.1.6 Labor Disputes. Promptly notify Agent in writing of any
labor dispute (other than disputes in the ordinary course of business which are
not material to Borrower's labor relations) to which Borrower is or may become
subject and the expiration of any collective bargaining labor contract to which
Borrower is a party or bound;
6.1.7 Violations of Law. Promptly notify Agent in writing of
any violation of any law, statute, regulation or ordinance of any governmental
entity, or of any agency thereof, applicable to Borrower which may materially
and adversely affect the Collateral or Borrower's business, assets, prospects,
operations or condition, financial or otherwise;
6.1.8 Defaults. Notify Agent in writing within FIVE (5)
Business Days of Borrower's default under any note, indenture, loan agreement,
mortgage, lease or other agreement to which Borrower is a party or by which
Borrower is bound, or of any other default under any Indebtedness for Borrowed
Money of Borrower, in each case involving obligations of Borrower in excess of
$100,000;
6.1.9 Capital Expenditures. Promptly notify Agent in writing
of the making of any Capital Expenditure materially affecting Borrower's
business, assets, prospects, operations or condition, financial or otherwise,
except to the extent permitted in the Schedule;
6.1.10 Books and Records. Keep adequate records and books of
account with respect to its business activities in which proper entries are made
in accordance with GAAP, reflecting all of its financial transactions;
6.1.11 Leases; Warehouse Agreements. Provide Agent with (i)
copies of all agreements between Borrower and any landlord, warehouseman or
bailee which owns any premises at which any Collateral may, from time to time,
be located (whether for processing, storage or otherwise), and (ii) without
limiting the landlord, bailee and/or mortgagee waivers to be provided pursuant
to Section 4.1(j) hereof, additional landlord, bailee and/or mortgagee waivers
in form acceptable to Agent with respect to (a) all locations where any material
Collateral is hereafter located, and (b) any location for which Borrower has
delivered to Agent a landlord, mortgagee or bailee
23
agreement if such landlord, mortgagee or bailee transfers its interests in the
underlying premises after the date of such delivery to Agent, in each case
promptly after Borrower's knowledge thereof;
6.1.12 Additional Documents. At Agent's request, promptly
execute or cause to be executed and delivered to Agent any and all documents,
instruments or agreements deemed necessary by Agent to facilitate the collection
of the Obligations or the Collateral or otherwise to give effect to or carry out
the terms or intent of this Agreement or any of the other Loan Documents.
Without limiting the generality of the foregoing, if any of the Receivables with
a face value in excess of $25,000 arises out of a contract with the United
States of America or any department, agency, subdivision or instrumentality
thereof, Borrower shall promptly notify Agent of such fact in writing and, to
the extent Borrower requests such Receivable to qualify as an Eligible
Receivable, shall execute any instruments and take any other action required or
requested by Agent to comply with the provisions of the Federal Assignment of
Claims Act;
6.1.13 Financial Covenants. Comply with the financial
covenants set forth in the Schedule;
6.1.14 Millennium Compliance. Borrower shall take all action
necessary to assure that there will be no material adverse change to Borrower's
business by reason of the advent of the year 2000, including without limitation
that all computer-based systems, embedded microchips and other processing
capabilities effectively recognize and process dates after APRIL 1, 1999. At
Agent's request, Borrower shall provide to Agent assurance reasonably acceptable
to Agent that Borrower's computer-based systems, embedded microchips and other
processing capabilities are year 2000 compatible;
6.1.15 Bank Accounts. Notify Agent in writing prior to
establishing any bank account not listed on Exhibit D to the Schedule, and
deliver to Agent, for its benefit and the benefit of the Lenders, an Assignment
of Bank Accounts Agreement, in form and substance reasonably satisfactory to
Agent, acknowledged by the bank at which such account is to be established; and
6.1.16 Rent Payments. Deliver to Agent a canceled check (or
certified check copy) or other evidence satisfactory to Agent, evidencing the
payment of Borrower's monthly rent for its facility at 1735 Jersey Avenue, North
Brunswick, New Jersey, on or prior to the FIFTEENTH (15TH) day of each calendar
month with respect to the immediately preceding calendar month, until the
earlier of (i) the date that all of the Obligations of Borrower have been paid
in full, or (ii) the date that Borrower delivers to Agent a Landlord Agreement,
in form and substance satisfactory to Agent (including, without limitation, for
a cure period in favor of Agent of at least THIRTY (30) days) with respect to
such facility.
6.1.17 Chicago Lease. With respect to the Chicago Lease for
the Chicago Facility (for which Borrower has delivered to Agent a Collateral
Assignment and Assumption Agreement and a Landlord Agreement), provide Agent
with a replacement acknowledgment by landlord to the Collateral Assignment and
Assumption Agreement and a replacement Landlord Agreement, each in form and
substance acceptable to Agent, if the landlord to the Chicago Lease transfers or
sells its interests in the Chicago Facility after the date hereof, promptly (but
not later than THIRTY (30) days) after Borrower's knowledge of any such sale or
transfer.
6.2 Negative Covenants. Without the prior written consent of Agent,
which consent Agent may withhold in its sole discretion, so long as any
Obligation remains outstanding and this Agreement is in effect, Borrower shall
not:
6.2.1 Mergers, Etc.. Merge or consolidate with or acquire any
other Person, create any Subsidiary, or make any other material change in its
capital structure or in its business or operations which might adversely affect
the repayment of the Obligations;
6.2.2 Loans. Make advances, loans or extensions of credit to,
or invest in, any Person except for loans or cash advances to employees not to
exceed, an aggregate amount of $205,000 in any fiscal year of Borrower, on a
Consolidated basis;
6.2.3 Dividends. Declare or pay cash dividends upon any of its
stock or ownership interests or distribute any of its property or redeem,
retire, purchase or acquire directly or indirectly any of its stock or ownership
interests;
6.2.4 Adverse Transactions. Enter into any transaction
which materially and adversely affects the Collateral or its ability to repay
the Obligations in full as and when due;
6.2.5 Indebtedness of Others. Guarantee or become directly
or contingently liable for the Indebtedness of any Person, on a Consolidated
basis, except
24
by endorsement of instruments for deposit and except for the existing guarantees
made by Borrower prior to the date hereof if described in Exhibit E to the
Schedule;
6.2.6 Repurchase. Make a sale to any customer on a
xxxx-and-hold, guaranteed sale, sale and return, sale on approval, consignment,
or any other repurchase or return basis;
6.2.7 Name. Use any corporate or fictitious name other than
its corporate name as set forth in its Articles or Certificate of Incorporation
on the date hereof or as set forth in the Schedule;
6.2.8 Prepayment. Prepay any Indebtedness other than (i) trade
payables, (ii) the Obligations, and (iii) Indebtedness to 101 Realty , upon and
subject to terms satisfactory to Agent (as provided in paragraph 3 of the
"Additional Provisions" portion of the Schedule);
6.2.9 Capital Expenditure. Make or incur any Capital
Expenditure if, after giving effect thereto, the aggregate amount of all Capital
Expenditures by Borrower in any fiscal year would exceed the amount set forth in
the Schedule;
6.2.10 Indebtedness. On a Consolidated basis, create, incur,
assume or permit to exist any Indebtedness other than (i) the Obligations, (ii)
trade payables and other contractual obligations to suppliers and customers and
operating leases, all incurred in the ordinary course of business, (iii)
Indebtedness in respect of Capital Leases and purchase money Indebtedness not in
excess of $50,000 in the aggregate in any fiscal year, (iv) Indebtedness
described in the Xxxxx Comfort Agreement, (v) Intentionally Deleted; (vi)
Subordinated Debt to 101 Realty on the Okonite Facility (as described in the
Subordination Agreement), (vii) Indebtedness existing in connection with the
Shareholder Litigation including that certain promissory note of USA to be
issued in connection therewith pursuant to the JUNE, 1998 Memorandum of
Understanding entered into by USA in connection with such Shareholder
Litigation, and (viii) other Indebtedness existing on the date of this Agreement
and described in Exhibit E to the Schedule (except Indebtedness paid on the date
of this Agreement from proceeds of the initial advances hereunder);
6.2.11 Affiliate Transactions. Except as set forth below,
sell, transfer, distribute or pay any money or property to any Affiliate, or
invest in (by capital contribution or otherwise) or purchase or repurchase any
stock or Indebtedness, or any property, of any Affiliate, or become liable on
any guaranty of the indebtedness, dividends or other obligations of any
Affiliate except loans and advances to employees to the extent permitted by
Section 6.2.2 hereof. If no Event of Default exists, Borrower may (i) engage in
transactions with Affiliates in the normal course of business, in amounts and
upon terms which are fully disclosed to Agent and which are no less favorable to
Borrower than would be obtainable in a comparable arm's length transaction with
a Person who is not an Affiliate, and (ii) make regularly scheduled monthly
interest payments (but no prepayments) to 101 Realty, and certain principal
prepayments, subject to and only to the extent expressly permitted in the
Schedule and in the Subordination Agreement between 101 Realty and Agent;
6.2.12 Nature of Business. Enter into any new unrelated
business or make any material change in any of Borrower's business objectives,
purposes or operations;
6.2.13 Agent's and Lenders' Names. Use the name of Agent or
any Lender in connection with any of Borrower's business or activities, except
in connection with (i) internal business matters, (ii) as required in dealings
with governmental agencies and financial institutions or with trade creditors of
Borrower, solely for credit reference purposes, (iii) public financial reporting
required by law, (iv) press releases with the prior approval of Agent, which
shall not be unreasonably withheld, and (v) investor relations in the ordinary
course of business;
6.2.14 Margin Security. Borrower will not (and has not in the
past) engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation G or Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Loan or other
advance will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock, or in any
manner which might cause such Loan or other advance or the application of such
proceeds to violate (or require any regulatory filing under) Regulation G,
Regulation T, Regulation U, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System, in each case as in effect on the date
or dates of such Loan or other advance and such use of proceeds. Further, no
proceeds of any Loan or other advance will be used to acquire any security of a
class
25
which is registered pursuant to Section 12 of the Securities Exchange Act of
1934;
6.2.15 Real Property. Purchase or acquire any real property
without Agent's prior written consent. A condition precedent to any request for
such consent shall include delivery of appropriate environmental reports and
analysis, in form and substance satisfactory to Agent and its counsel;
6.2.16 PNC Warrant. With respect to USA, make any payment or
distribution, directly or indirectly, of cash or other property (other than
common stock) in respect of the exercise of the PNC Warrant other than as may be
made to all stockholders of USA generally;
6.2.17 Applications. Grant or permit to exist any lien or
security interest, in favor of any Person other than Agent, in any applications
for any tradename, trademark, copyright and patent; or
6.2.18 Non-Borrower Subsidiaries. Make any payment,
distribution or transfer of any money (including, without limitation, Loan
proceeds), directly or indirectly, from Borrower to any Subsidiary of Borrower
which is not a Borrower under this Agreement; and no Real Estate Subsidiary
shall have any assets or operations or own any property or Collateral, without
the prior written consent of Agent.
7. DEFAULT AND REMEDIES.
7.1 Events of Default. Any one or more of the following events shall
constitute an Event of Default under this Agreement:
(a) Borrower fails to pay when due and payable any portion of the
Obligations at stated maturity, upon acceleration or otherwise;
(b) Borrower or any other Loan Party (i) fails to perform any of the
covenants contained in Sections 6.1.2 (Notice of Litigation), 6.1.3 (ERISA),
6.1.6 (Labor Disputes), 6.1.7 (Violations of Law), 6.1.9 (Capital Expenditures),
6.1.12 (Additional Documents), or 9.1(b) and 9.1(c) (Reporting Requirements) of
this Agreement and such failure shall continue for FIVE (5) Business Days;
provided, however, that such period shall not apply in the case of: (A) any
failure to observe any such covenant which is not capable of being cured at all
within such FIVE (5) day period or which has been the subject of a prior failure
within a six (6) month period or (B) an intentional breach by Borrower or any
other Loan Party of any such covenant, or (ii) fails or neglects to perform,
keep, or observe any Obligation including, but not limited to, any term,
provision, condition, covenant or agreement contained in any Loan Document to
which Borrower or such other Loan Party is a party, other than those described
in Sections 7.1(a), 7.1(b)(i);
(c) Any material adverse change occurs in Borrower's business, assets,
operations, prospects or condition, financial or otherwise;
(d) The prospect of repayment of any portion of the Obligations or the
value or priority of Agent's security interest in the Collateral is materially
impaired;
(e) Any portion of Borrower's assets in excess of $25,000 is seized,
attached, subjected to a writ or distress warrant, is levied upon or comes into
the possession of any judicial officer, and is not released or terminated within
FORTY-FIVE (45) days thereafter;
(f) Borrower or any Real Estate Subsidiary (subject to Section 6.2.18)
shall generally not pay its debts as they become due or shall enter into any
agreement (whether written or oral), or offer to enter into any agreement, with
all or a significant number of its creditors regarding any moratorium or other
indulgence with respect to its debts or the participation of such creditors or
their representatives in the supervision, management or control of the business
of Borrower or any Real Estate Subsidiary (subject to Section 6.2.18);
(g) Any bankruptcy or other insolvency proceeding is commenced by
Borrower or any Real Estate Subsidiary or any such proceeding is commenced
against Borrower or any Real Estate Subsidiary and remains undischarged or
unstayed for FORTY-FIVE (45) days;
(h) Any notice of lien, levy or assessment is filed of record (other
than Permitted Encumbrances) with respect to any of Borrower's assets in excess
of $25,000 is not released or terminated within FORTY-FIVE (45) days after the
date of such filing;
(i) Any judgments (except in respect of the Shareholder Litigation) are
entered against Borrower in an aggregate amount exceeding $250,000 in any fiscal
year, on a Consolidated basis; that are not covered by insurance and all such
judgments shall not have been satisfied, stayed or bonded pending appeal within
FORTY-FIVE (45) days from the entry thereof, provided that all rights of
execution on
26
any attachment or judgment lien or other action by such judgment creditor
against Borrower and the Collateral have been discharged or stayed;
(j) Any default shall occur (after expiration of any applicable cure
period) under any material agreement (including, without limitation, any
agreement pertaining to Subordinated Debt) between Borrower and any third party
which would result in a right by such third party to accelerate the maturity of
any Indebtedness of Borrower to such third party;
(k) Any representation or warranty made or deemed to be made by
Borrower, any Affiliate or any other Loan Party in any Loan Document or any
other statement, document or report made or delivered to Agent or any Lender in
connection therewith shall prove to have been misleading in any material
respect;
(l) Except as described in Exhibit B to the Schedule (i) any Prohibited
Transaction with respect to a Plan or Pension Plan, or any Reportable Event with
respect to a Pension Plan, shall occur which could have a material adverse
effect on the financial condition of Borrower; any lien upon the assets of
Borrower in connection with any Pension Plan shall arise, (ii) Borrower or any
of its ERISA Affiliates shall fail to make full payment when due of all amounts
which Borrower or any of its ERISA Affiliates are required to pay to any Plan,
Pension Plan, or any Multiemployer Plan as one or more contributions thereto, or
(iii) Borrower or any of its ERISA Affiliates creates or permits the creation of
any accumulated funding deficiency, with respect to a Pension Plan, whether or
not waived;
(m) Borrower agrees to pay or pays amounts in connection with the
Shareholder Litigation which amounts are in excess of the payments required
under the Order and Final Judgment described under the "Shareholder Litigation
Settlement" provisions of paragraph 5 of the "Additional Provisions" set forth
in the Schedule;
(n) Borrower breaches or fails to comply with any payment obligations
or other material terms of the Xxxxx Comfort Letter;
(o) Any transfer by USA of any issued and outstanding capital stock of
any direct or indirect Subsidiary of USA, except as between any one of them; or
(p) Any Change of Control of USA which after written notice thereof, is
not acceptable to Agent.
(q) Any Event of Default occurs under any of the Mortgages.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE LENDERS RESERVE
THE RIGHT TO CEASE MAKING ANY ADVANCES OR LOANS DURING ANY CURE PERIOD STATED
ABOVE, AND THEREAFTER IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.
7.2 Remedies. Upon the occurrence of an Event of Default, the Lenders
may, at their option and in their sole discretion and in addition to all other
rights under the Loan Documents, cease making Loans, terminate this Agreement
and/or declare all of the Obligations to be immediately payable in full.
Borrower agrees that Agent and the Lenders shall also have all of its rights and
remedies under applicable law, including, without limitation, the default rights
and remedies of a secured party under the Code, and upon the occurrence of an
Event of Default Borrower hereby consents to the appointment of a receiver by
Agent in any action initiated by Agent pursuant to this Agreement and to the
jurisdiction and venue set forth in Section 9.25 hereof, and Borrower waives
notice and posting of a bond in connection therewith. Further, Agent may, at any
time, take possession of the Collateral and keep it on Borrower's premises, at
no cost to Agent or any Lender, or remove any part of it to such other place(s)
as Agent may desire, or Borrower shall, upon Agent's demand, at Borrower's sole
cost, assemble the Collateral and make it available to Agent at a place
reasonably convenient to Agent. Agent 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 Agent deems advisable, at Agent's discretion, and may, if
Agent 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. Borrower agrees that neither the Agent
nor any Lender has any obligation to preserve rights to the Collateral or
xxxxxxxx any Collateral for the benefit of any Person. Agent, for its benefit
and the benefit of the Lenders, is hereby granted a license or other right to
use, without charge, Borrower's labels, patents, copyrights, name, trade
secrets, trade names, trademarks and advertising matter, or any similar
property, in completing production, advertising or selling any Collateral and
Borrower's rights under all licenses and all franchise agreements shall inure to
Agent,
27
for its benefit and the benefit of the Lenders. Any requirement of reasonable
notice shall be met if such notice is mailed postage prepaid to Borrower at its
address set forth in the heading to this Agreement at least FIVE (5) days before
sale or other disposition. The proceeds of sale shall be applied, first, to all
attorneys fees and other expenses of sale, and second, to the Obligations in
such order as Agent shall elect, in its sole discretion. Agent shall return any
excess to Borrower and Borrower shall remain liable for any deficiency to the
fullest extent permitted by law.
7.3 Standards for Determining Commercial Reasonableness. Borrower and
Agent and each Lender agree that the following conduct by Agent with respect to
any disposition of Collateral shall conclusively be deemed commercially
reasonable (but other conduct by Agent, including, but not limited to, Agent's
use in its sole discretion of other or different times, places and manners of
noticing and conducting any disposition of Collateral shall not per se be deemed
unreasonable): Any public or private disposition: (i) as to which on no later
than the FIFTH (5TH) calendar day prior thereto written notice thereof is mailed
or personally delivered to Borrower and, with respect to any public disposition,
on no later than the FIFTH (5TH) calendar day prior thereto notice thereof
describing in general non-specific terms, the Collateral to be disposed of is
published once in a newspaper of general circulation in the county where the
sale is to be conducted (provided that no notice of any public or private
disposition need be given to the Borrower or published if the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market); (ii) which is conducted at any place designated by
Agent, with or without the Collateral being present; and (iii) which commences
at any time between 8:00 A.M. and 5:00 P.M. Without limiting the generality of
the foregoing, Borrower expressly agrees that, with respect to any disposition
of accounts, instruments and general intangibles, it shall be commercially
reasonable for Agent to direct any prospective purchaser thereof to ascertain
directly from Borrower any and all information concerning the same, including,
but not limited to, the terms of payment, aging and delinquency, if any, the
financial condition of any obligor or account debtor thereon or guarantor
thereof, and any collateral therefor.
8. EXPENSES AND INDEMNITIES.
8.1 Expenses. Borrower covenants that, so long as any Obligation
remains outstanding and this Agreement remains in effect, it shall promptly
reimburse Agent and each Lender for all reasonable costs, fees and expenses
incurred by Agent in connection with the negotiation, preparation, execution,
delivery, administration of each of the Loan Documents, and incurred by Agent
and the Lenders in connection with the enforcement of each of the Loan
Documents, including, but not limited to, the attorneys' and paralegals' fees of
in-house and outside counsel, expert witness fees, lien, title search and
insurance fees, appraisal fees, all charges and expenses incurred in connection
with any and all environmental reports and environmental remediation activities,
and all other costs, expenses, taxes and filing or recording fees payable in
connection with the transactions contemplated by this Agreement, including
without limitation all such costs, fees and expenses as Agent shall incur or for
which Agent shall become obligated in connection with (i) any inspection or
verification of the Collateral, (ii) any proceeding relating to the Loan
Documents or the Collateral, (iii) actions taken with respect to the Collateral
and Agent's security interest therein, including, without limitation, the
defense or prosecution of any action involving Agent, or any Lender, and
Borrower or any third party, (iv) enforcement of any of Agent's and the Lenders'
rights and remedies with respect to the Obligations or Collateral and (v)
consultation with Agent's and the Lender's attorneys and participation in any
workout, bankruptcy or other insolvency or other proceeding involving any Loan
Party or any Affiliate, whether or not suit is filed or the issues are peculiar
to federal bankruptcy or state insolvency laws in all instances in accordance
with the terms hereof. Borrower shall also pay Agent, for its benefit and the
ratable benefit of the Lenders, charges in connection with bank wire transfers,
forwarding of loan proceeds, deposits of checks and other items of payment,
returned checks, establishment and maintenance of lockboxes and other Blocked
Accounts, and all other bank and administrative matters, in accordance with
Agent's schedule of bank and administrative fees and charges in effect from time
to time.
8.2 Environmental Matters.
The Environmental Certificate dated on or about the date of this
Agreement is incorporated herein for all purposes as if fully stated in this
Agreement.
9. MISCELLANEOUS.
9.1 Examination of Records; Financial Reporting.
(a) Examinations. Agent and the Lenders shall at all reasonable times
and with reasonable notice to Borrower (unless an Event of Default shall then
exist) have
28
full access to and the right to examine, audit, make abstracts and copies from
and inspect Borrower's records, computer data, files, books of account and all
other documents, instruments and agreements relating to the Collateral and the
right to check, test and appraise the Collateral, using good faith efforts to
minimize disruption to Borrower's business. Borrower shall deliver to Agent and
the Lenders any instrument necessary for Agent and the Lenders to obtain records
from any service bureau maintaining records for Borrower. All instruments and
certificates prepared by Borrower showing the value of any of the Collateral
shall be accompanied, upon request, by copies of related purchase orders and
invoices. Agent may, at any time after the occurrence and during the continuance
of an Event of Default, remove from Borrower's premises Borrower's books and
records (or copies thereof) or require Borrower to deliver such books and
records or copies to Agent. Agent may, without expense to Agent or the Lenders,
use such of Borrower's personnel, supplies and premises as may be reasonably
necessary for maintaining or enforcing Agent's security interest.
(b) Reporting Requirements. Borrower shall furnish Agent and the
Lenders, upon request, such information and statements as Agent and the Lenders
shall reasonably request from time to time regarding Borrower's business
affairs, financial condition and the results of its operations. Without limiting
the generality of the foregoing, Borrower shall provide Agent with:
(i) at least as frequently as Borrower requests Revolving Credit Loans,
but not less frequently than on a weekly basis, Agent's standard form collateral
and loan report, together with accounts receivable certifications and notice of
assignment documents together with cash receipt and revenue reports;
(ii) upon Agent's request, copies of sales journals, cash receipt
journals, deposit slips, copies of invoices, customer statements and credit
memoranda issued, remittance advices and reports, evidence of billing and copies
of shipping and delivery documents;
(iii) within TEN (10) Business Days after the end of each month, (1)
monthly agings (aged from due date) and reconciliations of Receivables (with
listings of concentrated accounts and reconciliations to collateral reports),
(2) monthly agings (aged from due date) of accounts payable, with outstanding
and held check registers and (3) monthly perpetual inventory reports for the
Inventory valued on a first-in, first-out basis at the lower of cost or market
(in accordance with GAAP) or such other inventory reports as are reasonably
requested by Agent;
(iv) for each month other than December in each year, within THIRTY
(30) days after the end of each month, Consolidated unaudited financial
statements with respect to the prior month prepared on a basis consistent with
such statements prepared in prior months and otherwise in accordance with GAAP,
provided that for the months of JANUARY AND FEBRUARY 1999, unaudited financial
statements within FORTY-FIVE (45) days after the end of such months and for each
of March, June and September of each fiscal year of Borrower, Borrower may
deliver such Consolidated unaudited financial statements in accordance with
subparagraph "(v)" below;
(v) within FIFTY (50) days after the end of each quarter but in no
event more than FIVE (5) days after the date of filing with the Securities and
Exchange Commission, Consolidated unaudited financial statements with respect to
the prior quarter prepared on a basis consistent with such statements prepared
in prior quarters and otherwise in accordance with GAAP, it being acknowledged
that Borrower's delivery of its 10Q report will satisfy the foregoing reporting
requirement;
(vi) audited annual Consolidated financial statements, prepared in
accordance with GAAP applied on a basis consistent with the most recent Prepared
Financials provided to Agent by Borrower, including balance sheets, income and
cash flow statements, accompanied by the unqualified report thereon of
independent certified public accountants reasonably acceptable to Agent as soon
as available, and in any event, within ONE HUNDRED (100) days after the end of
each fiscal year of Borrower, it being acknowledged that Borrower's delivery of
its 10K report will satisfy the foregoing reporting requirement, together with
the management letter, in the form provided to the auditors and shareholders of
Borrower within ONE HUNDRED FIFTY (150) days after the end of each fiscal year
of Borrower;
(vii) at least FIFTEEN (15) days prior to the end of each fiscal year
of Borrower, annual operating budgets (including income statements, balance
sheets and cashflow statements, by month) for the upcoming fiscal year of
Borrower; and
(viii) such certificates relating to the foregoing as Agent may
reasonably request, including, without limitation, a certificate from the
president or the chief financial officer of Borrower ("COMPLIANCE CERTIFICATE")
29
QUARTERLY with regard to Borrower's compliance with each of the financial
covenants set forth in this Agreement (as required by Section 6.1.13 of the
Schedule), and MONTHLY with regard to all other covenants, in each case also
stating whether any Event of Default has occurred or event which, with giving of
notice or the passage of time, or both, would constitute an Event of Default,
and if so, the steps being taken to prevent or cure such Event of Default, and
such other certificates relating to the reporting requirements set forth in this
Section 9.1 as Agent shall reasonably request. All reports or financial
statements submitted by Borrower shall be in reasonable detail and shall be
certified by the chief financial officer of Borrower as being complete and
correct.
(c) Public Company Reporting. In addition to the reporting requirements
under Section 9.1(b) above, Borrower shall deliver to Agent, (i) all press
releases made available generally by USA or any of its Subsidiaries to the
public concerning material developments in the business of USA or any such
Subsidiary and all notifications received from the Securities and Exchange
Commission by USA or its Subsidiaries which are of public record pursuant to the
Securities Exchange Act of 1934 and the rules promulgated thereunder, and (ii)
true and complete copies of all financial statements, reports, notices and
documents sent or made available by USA to its securities holders or publicly
filed with the Securities and Exchange Commission, any other federal agency at
any time administering United States securities laws and with any other
governmental agency (including, without limitation, 10Q reports, 10K reports,
proxy statements and registration statements), within FIVE (5) Business Days
after such reports are filed; but in no event more than FIVE (5) Business Days
after the due date of such documents.
9.2 Term; Termination.
(a) Term. The initial term of this Agreement shall be as set forth in
the Schedule (the "INITIAL TERM") and shall be automatically renewed for one or
more successive periods of ONE (1) year (each, a "RENEWAL TERM"), unless earlier
terminated as provided herein.
(b) Prior Notice. Each party shall have the right to terminate this
Agreement effective at the end of the Initial Term or at the end of any Renewal
Term by giving the other party written notice not less than SIXTY (60) days
prior to the effective date of such termination, by registered or certified
mail.
(c) Payment in Full. Upon the effective date of termination, the
Obligations shall become immediately due and payable in full in cash.
(d) Early Termination; Termination Fee. In addition to the procedure
set forth in Section 9.2(b), Borrower may terminate this Agreement at any time
but only upon SIXTY (60) days' prior written notice and prepayment of the
Obligations. Upon any such early termination by Borrower or any termination of
this Agreement by the Lenders upon the occurrence of an Event of Default, then,
and in any such event, Borrower shall pay to Agent, for the ratable benefit of
the Lenders, upon the effective date of such termination a fee (the "TERMINATION
FEE") in an amount equal to the amount set forth in the Schedule.
9.3 Recourse to Security; Certain Waivers. All Obligations shall be
payable by Borrower as provided for herein and, in full, at the termination of
this Agreement; recourse to security shall not be required at any time. Borrower
waives presentment and protest of any instrument and notice thereof, notice of
default and, to the extent permitted by applicable law, all other notices to
which Borrower might otherwise be entitled.
9.4 No Waiver by Agent or Lenders. Neither Agent's nor any Lenders
failure to exercise any right, remedy or option under this Agreement, any
supplement, the Loan Documents or other agreement between Agent, and/or any
Lender, and Borrower nor any delay by Agent or any Lender in exercising the same
shall operate as a waiver. No waiver by Agent nor any waiver by the Lenders
shall be effective unless in writing and then only to the extent stated. No
waiver by Agent nor any Lender shall affect their right to require strict
performance of this Agreement. The rights and remedies of Agent and the Lenders
shall be cumulative and not exclusive.
9.5 Binding on Successor and Assigns. All terms, conditions, promises,
covenants, provisions and warranties shall inure to the benefit of and bind the
respective representatives, successors and assigns of Borrower, Agent and the
Lenders.
9.6 Severability. If any provision of this Agreement shall be
prohibited or invalid under applicable law, it shall be ineffective only to such
extent, without invalidating the remainder of this Agreement.
9.7 Amendments; Assignments. This Agreement may not be modified,
altered or amended,
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except by an agreement in writing signed by Borrower, Agent, and the Lenders to
the extent required by the Agency Agreement. Borrower may not sell, assign or
transfer any interest in this Agreement or any other Loan Document, or any
portion thereof, including, without limitation, any of Borrower's rights, title,
interests, remedies, powers and duties hereunder or thereunder. Borrower hereby
consents to any Lender's participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this Agreement and any of the
other Loan Documents, or of any portion hereof or thereof, including, without
limitation, such Lender's rights, title, interests, remedies, powers and duties
hereunder or thereunder in accordance with the provisions of the Agency
Agreement. In connection therewith, the Lenders may disclose all documents and
information which the Lenders now or hereafter may have relating to Borrower or
Borrower's business.
9.8 Integration. This Agreement, together with the Schedule (which is a
part hereof) and the other Loan Documents, reflect the entire understanding of
the parties with respect to the transactions contemplated hereby and supersedes
the Prior Agreements.
9.9 Survival. All of the representations and warranties of Borrower
contained in this Agreement shall survive the execution, delivery and acceptance
of this Agreement by the parties. No termination of this Agreement or of any
guaranty of the Obligations shall affect or impair the powers, obligations,
duties, rights, representations, warranties or liabilities of the parties hereto
and all shall survive such termination.
9.10 Evidence of Obligations. Each Obligation may be evidenced by notes
or other instruments issued or made by Borrower to the Lenders. If not so
evidenced, such Obligation shall be evidenced solely by entries upon the books
and records of the Lenders.
9.11 Loan Requests. Each oral or written request for a loan by any
Person who purports to be any employee, officer or authorized agent of Borrower
shall be made to Agent on or prior to 11:00 A.M., Eastern time, on the Business
Day on which the proceeds thereof are requested to be paid to Borrower and shall
be conclusively presumed to be made by a Person authorized by Borrower to do so
and the crediting of a loan to Borrower's operating account shall conclusively
establish Borrower's obligation to repay such loan. Unless and until Borrower
otherwise directs Agent in writing, all loans shall be wired to Borrower's
operating account set forth in the Schedule.
9.12 Notices. Any notice required hereunder shall be in writing and
addressed to the Borrower and Agent at their addresses set forth at the
beginning of this Agreement; and
with respect to notice to Borrower, with a copy to:
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Fax: (000) 000-0000
and with respect to Agent, with a copy to:
FINOVA Capital Corporation
0000 Xxxxx Xxxxxxx Xxxxxx--XX0000
Xxxxxxx, XX 00000
Attn: Group Counsel--Corporate Finance
Fax: (000) 000-0000
All notices to the Lenders shall be directed to the address for each Lender set
forth on the signature page hereof or in any Assignment and Acceptance Agreement
in connection herewith. Notices hereunder shall be deemed received on the
earlier of receipt, whether by mail, personal delivery, facsimile, or otherwise,
or upon deposit in the United States mail, postage prepaid.
9.13 Brokerage Fees. Borrower represents and warrants to Agent and the
Lenders that, with respect to the financing transaction herein contemplated, no
Person is entitled to any brokerage fee or other commission, except for the fees
of First Capital Advisors, which shall be paid by Borrower on the Closing Date
and thereafter as described in the Broker Estoppel Letter. Borrower agrees to
indemnify and hold Agent and the Lenders harmless against any and all such
claims.
9.14 Disclosure. No representation or warranty made by Borrower in this
Agreement, or in any financial statement, report, certificate or any other
document furnished in connection herewith 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 Borrower
or which reasonably should be known to Borrower which Borrower has not disclosed
to Agent and the Lenders in writing with respect to the transactions
contemplated by this Agreement which materially and adversely affects the
31
business, assets, operations, prospects or condition (financial or otherwise),
of Borrower.
9.15 Publicity. The Lenders are hereby authorized to issue appropriate
press releases and to cause a tombstone to be published announcing the
consummation of this transaction and the aggregate amount thereof. Borrower may
issue appropriate press releases pertaining to the Loans and the transactions
contemplated by this Agreement with the prior approval and review of Agent, not
to be unreasonably withheld.
9.16 Captions. The Section titles contained in this Agreement are
without substantive meaning and are not part of this Agreement.
9.17 Injunctive Relief. Borrower recognizes that, in the event Borrower
fails to perform, observe or discharge any of its Obligations under this
Agreement, any remedy at law may prove to be inadequate relief to Agent and the
Lenders. Therefore, Agent and the Lenders, if requested, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
9.18 Counterparts; Facsimile Execution. This Agreement may be executed
in one or more counterparts, each of which taken together shall constitute one
and the same instrument, admissible into evidence. Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of a manually executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile shall also
deliver a manually executed counterpart of this Agreement, but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
9.19 Construction. The parties acknowledge that each party and its
counsel have reviewed this Agreement, have participated jointly in the
negotiation and drafting of this Agreement and hereby agree 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 or exhibits hereto.
9.20 Time of Essence. Time is of the essence for the performance by
Borrower of the Obligations set forth in this Agreement.
9.21 Limitation of Actions. Borrower agrees that any claim or cause of
action by Borrower against Agent, the Lenders or any of their respective
directors, officers, employees, agents, accountants or attorneys, based upon,
arising from, or relating to this Agreement, or any other present or future
agreement, or any other transaction contemplated hereby or thereby or relating
hereto or thereto, or any other matter, cause or thing whatsoever, whether or
not relating hereto or thereto, occurred, done, omitted or suffered to be done
by Agent, the Lenders or any of their respective directors, officers, employees,
agents, accountants or attorneys, whether sounding in contract or in tort or
otherwise, shall be barred unless asserted by Borrower by the commencement of an
action or proceeding in a court of competent jurisdiction by the filing of a
complaint within one year after the first act, occurrence or omission upon which
such claim or cause of action, or any part thereof, is based and service of a
summons and complaint on an officer of Agent or any Lender, as applicable, or
any other Person authorized to accept service of process on behalf of Agent or
any Lender, as applicable, within THIRTY (30) days thereafter. Borrower agrees
that such one-year period of time is a reasonable and sufficient time for
Borrower to investigate and act upon any such claim or cause of action. The
one-year period provided herein shall not be waived, tolled, or extended except
by a specific written agreement of Agent or any Lender. This provision shall
survive any termination of this Loan Agreement or any other agreement.
9.22 Liability. None of the Lenders, Agent nor any Affiliate of any one
of them shall be liable for any indirect, special, incidental or consequential
damages in connection with any breach of contract, tort or other wrong relating
to this Agreement or the Obligations or the establishment, administration or
collection thereof (including without limitation damages for loss of profits,
business interruption, or the like), whether such damages are foreseeable or
unforeseeable, even if Agent or any Lender has been advised of the possibility
of such damages. None of the Lenders, Agent, nor any Affiliate of any one of
them shall be liable for any claims, demands, losses or damages, of any kind
whatsoever, made, claimed, incurred or suffered by the Borrower through the
ordinary negligence of Agent, any Lender, or any Affiliate of any one of them.
"LENDERS' AFFILIATE" shall mean Agent's and each Lender's directors, officers,
employees, agents, attorneys or any other Person or entity affiliated with or
representing Agent or any Lender.
9.23 Notice of Breach by Agent or Lender. Borrower agrees to give Agent
written notice of (i) any
32
action or inaction by Agent, or any Lender, or any attorney of Agent, or any
Lender, in connection with any Loan Documents that may be actionable against
Agent, or any Lender, or any attorney of Agent, or any Lender, or (ii) any
defense to the payment of the Obligations for any reason, including, but not
limited to, commission of a tort or violation of any contractual duty or duty
implied by law. Borrower agrees that unless such notice is fully given as
promptly as possible (and in any event within NINETY (90) days) after Borrower
has actual knowledge, or with the exercise of reasonable diligence should have
had knowledge, of any such action, inaction or defense, Borrower shall not
assert, and Borrower shall be deemed to have waived, any claim or defense
arising therefrom.
9.24 Power of Attorney. Borrower appoints Agent and its designees as
Borrower's attorney, with the power to endorse Borrower's name on any checks,
notes, acceptances, money orders or other forms of payment or security that come
into Agent's possession; during the continuance of an Event of Default, to sign
Borrower's name on any invoice or xxxx of lading relating to any Receivable, on
drafts against customers, on assignments of Receivables, on notices of
assignment, financing statements and other public records, on verifications of
accounts and on notices to customers or account debtors; during the continuance
of an Event of Default, to send requests for verification of Receivables to
customers or account debtors; during the continuance of an Event of Default, to
notify the post office authorities to change the address for delivery of
Borrower's mail to an address designated by Agent and to open and dispose of all
mail addressed to Borrower; and to do all other things Agent deems reasonably
necessary or desirable to carry out the terms of this Agreement. Borrower hereby
ratifies and approves all acts of such attorney. Neither Agent nor any Lender,
nor any of their designees shall be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law while Agent is acting as Borrower's
attorney except for gross negligence and wilful misconduct. This power, being
coupled with an interest, is irrevocable until the Obligations have been fully
satisfied and the obligations of the Lenders to provide loans hereunder shall
have terminated
9.25 GOVERNING LAW; WAIVERS. THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION ENFORCEMENT OF THE OBLIGATIONS, SHALL BE INTERPRETED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE CONFLICT OF LAWS RULES) OF THE STATE OF
ARIZONA GOVERNING CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. BORROWER
HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF MARICOPA IN THE STATE OF ARIZONA OR, AT THE SOLE
OPTION OF AGENT, IN ANY OTHER COURT IN WHICH AGENT OR ANY LENDER SHALL INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER
THE MATTER IN CONTROVERSY. BORROWER WAIVES ANY OBJECTION OF FORUM NON CONVENIENS
AND VENUE. BORROWER FURTHER WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE IN THE MANNER SET
FORTH IN SECTION 9.12 HEREOF FOR THE GIVING OF NOTICE. BORROWER FURTHER WAIVES
ANY RIGHT IT MAY OTHERWISE HAVE TO COLLATERALLY ATTACK ANY JUDGMENT ENTERED
AGAINST IT.
9.26 MUTUAL WAIVER OF RIGHT TO JURY TRIAL. AGENT, EACH LENDER AND
BORROWER EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (I) THIS
AGREEMENT; (II) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
AGENT, AND/OR ANY LENDER, AND BORROWER; OR (III) ANY CONDUCT, ACTS OR OMISSIONS
OF AGENT, AND/OR ANY LENDER, OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH AGENT, ANY
LENDER OR BORROWER; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE.
9.27 Lien Termination. In recognition of Agent's and each Lender's
right to have all attorneys' fees and other expenses incurred in connection with
this Agreement secured by the Collateral, notwithstanding the payment in full of
the Obligations, Agent shall not be required to record any terminations or
satisfactions of any of its liens on the Collateral unless and until Borrower
and any other Loan Party (to the extent required by Agent) have executed and
delivered to Agent general releases of all claims against Agent, each Lender and
the Lenders' Affiliates, in form and substance satisfactory to Agent.
33
9.28 Releases; Indemnities.
(a) To the fullest extent permitted by applicable law, in consideration
of Agent, and the other Lenders entering into this Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which Borrower hereby
acknowledges, Borrower, on its own behalf and on behalf of its successors
(including, without limitation, any receiver or trustee acting on behalf of
Borrower and any debtor-in-possession with respect to Borrower), assigns,
subsidiaries and Affiliates (collectively, the "RELEASORS"), hereby forever
release, discharge and acquit Agent, and all Lenders at any time a party to this
Agreement or the Prior Agreements and their respective shareholders, Affiliates,
partners, trustees, officers, employees, directors, agents and attorneys,
successors and assigns (collectively, the "RELEASEES") from any and all claims,
demands, liabilities, responsibilities, disputes, causes, damages, actions and
causes of actions (whether at law or in equity) indebtedness and obligations
(collectively, "CLAIMS") of every type, kind, nature, description or character,
including, without limitation, any so-called "lender liability" claims or
defenses, and irrespective of how, why or by reason of what facts, whether such
Claims have heretofore arisen, are now existing or hereafter arise, or which
could, might or be claimed to exist, of whatever kind or nature, whether known
or unknown, suspected or unsuspected, liquidated or unliquidated, matured or
unmatured, fixed or contingent, each as though fully set forth herein at length,
which may in any way arise out of, are connected with or in any way relate to
actions or omissions which occurred on or prior to the date hereof with respect
to Borrower, this Agreement, the Obligations, any Collateral, the Prior
Agreements, any other Loan Document and any third parties liable in whole or in
part for the Obligations. This provision shall survive and continue in full
force and effect whether or not Borrower shall satisfy all other provisions of
this Agreement or the Loan Documents including payment in full of the
Obligations.
(b) Each of the Releasors (other than Affiliates who are individuals)
further agrees to indemnify the Releasees and hold the Releasees harmless from
and against any and all such Claims (as such term is defined in the immediately
preceding paragraph) which may be brought against any of the Releasees on behalf
of any entity or Person, including, without limitation, officers, directors,
agents, trustees, creditors, partners or shareholders of any of the Releasors,
whether threatened or initiated, asserting any claim for legal or equitable
remedy under any statutes, regulation or common law principle arising from or in
connection with the negotiation, preparation, execution, delivery, performance,
administration and enforcement of this Agreement or any other Loan Document, the
Obligations, any Collateral or the Prior Agreements. The foregoing indemnity
shall survive the payment in full of the Obligations and the termination of this
Agreement and the other Loan Documents.
[SIGNATURE PAGES FOLLOW]
34
Signature Page to Amended and Restated Loan and Security Agreement
BORROWER: USA DETERGENTS, INC., a Delaware corporation;
BIG CLOUD POWDER CORPORATION, a Delaware
corporation;
CHICAGO MANAGEMENT POWDER CORP., a
Delaware corporation
CHICAGO CONTRACT POWDER CORPORATION, an
Illinois corporation
By /s/ Uri Evan
-----------------------------------
Uri Evan, President and Chief
Executive Officer of, and intending to
legally bind, each of the above
corporations.
[Notary certification for Borrower attached]
Signature Page to Amended and Restated Loan and Security Agreement
AGENT:
FINOVA CAPITAL CORPORATION, a Delaware corporation
By /s/ Xxxxx X. Xxxxxx
------------------------
Vice President
LENDERS:
FINOVA CAPITAL CORPORATION, a Delaware corporation
By /s/ Xxxxx X. Xxxxxx
------------------------
Vice President
Notice Address: 0000 Xxxxx Xxxxxx--Xxxxx 000
Xxxx xx Xxxxxxx, XX 000000
Attn: Xx. Xxxxxxx Xxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to: FINOVA Capital Corporation
Attn: Group Counsel - Corporate
Finance
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Fax No.: (000) 000-0000
COMMITMENT
INITIAL REVOLVING CREDIT LOANS: $16,274,246
MAXIMUM REVOLVING CREDIT LOANS: $17,333,334
TERM LOAN A LOAN: $ 2,608,254
TERM LOAN B LOAN: $ 834,167
TERM LOAN C LOAN: $ 6,283,333
TOTAL DOLLAR COMMITMENT: $26,000,000
COMMITMENT PERCENTAGE: 43.33%
TAX I.D. NO. 00-0000000
First Source
Signature Page to Amended and Restated Loan and Security Agreement
First Source Financial LLP
By: First Source Financial, Inc.
Its: Agent/Manager
By /s/ Xxxx X. Xxxxxxx
---------------------
Xxxx X. Xxxxxxx
Senior Vice President
Notice Address: 0000 Xxxx Xxxx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxxxxx, Esq.
Senior Counsel
First Source Financial LLP
0000 X. Xxxx Xxxx, 0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
COMMITMENT
INITIAL REVOLVING CREDIT LOANS: $ 8,763,055
MAXIMUM REVOLVING CREDIT LOANS: $ 9,333,333
TERM LOAN A LOAN: $ 1,404,444
TERM LOAN B LOAN: $ 449,167
TERM LOAN C LOAN: $ 3,383,334
TOTAL DOLLAR COMMITMENT: $ 14,000,000
COMMITMENT PERCENTAGE: 23.33%
TAX I.D. NO. 00-0000000
LaSalle
Signature Page to Amended and Restated Loan and Security Agreement
LaSalle Business Credit, Inc.
By /s/ Xxxxxxxx X. Xxxxxx
----------------------
First Vice President
Notice Address: Xx. Xxxxxxx Xxxxx
LaSalle Business Credit, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
COMMITMENT
INITIAL REVOLVING CREDIT LOANS: $12,518,651
MAXIMUM REVOLVING CREDIT LOANS: $13,333,333
TERM LOAN A LOAN: $ 2,006,349
TERM LOAN B LOAN: $ 641,667
TERM LOAN C LOAN: $ 4,833,333
TOTAL DOLLAR COMMITMENT: $20,000,000
COMMITMENT PERCENTAGE: 33.33%
TAX I.D. NO. ___________
STATE OF New Jersey )
---------- ) SS
COUNTY OF Middlesex )
----------
The foregoing Amended and Restated Loan and Security Agreement was
executed and acknowledged before me this ___ day of February, 1999, by Uri Evan,
personally known to me to be President and Chief Executive Officer of USA
Detergents, Inc., a Delaware corporation, Big Cloud Powder Corporation, a
Delaware corporation, Chicago Management Powder Corp., a Delaware corporation,
and Chicago Contract Powder Corporation, an Illinois corporation, on behalf of
each such corporation.
(SEAL)
Notary Public /s/ Xxxxxxxxx Xxxxxx Beigelbeck
-------------------------------
Xxxxxxxxx Xxxxxx Beigelbeck
Notary Public of New Jersey
MY COMMISSION EXPIRES JUNE 1, 2002
