Xxxxxxx Xxxxx
WCMA LOAN AND SECURITY AGREEMENT
WCMA LOAN AND SECURITY AGREEMENT NO. 770-02001 ("Loan Agreement')
dated as of September 15, 2003, between THE XXXXXXX CO., a corporation
organized and existing under the laws of the State of Florida having
its principal office at 0000 XxXxx Xxxx, Xx. Xxxxxxxxxx, XX 00000
("Customer'), and XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC., a
corporation organized and existing under the laws of the State of
Delaware having its principal office at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, XX 00000 ("MLBFS").
Pursuant to that certain WORKING CAPITAL MANAGEMENT' ACCOUNT AGREEMENT
NO. 770-02001 and the accompanying Program Description (as the same
may be, or have been, amended, modified or supplemented, the "WCMA
Agreement') between Customer and MLBFS' affiliate, XXXXXXX LYNCH,
PIERCE, XXXXXX & XXXXX INCORPORATED ("MLPF&S"), Customer opened, or
shall prior to the Activation Date open, a Working Capital Management
Account pursuant to the "WCMA Service" and the "WCMA Program"
described in the WCMA Agreement and any documents incorporated
therein. The WCMA Agreement is by this reference incorporated as a
part hereof. In conjunction therewith and as part of the WCMA
Program, Customer has requested that MLBFS provide, and subject to the
terms and conditions herein set forth MLBFS has agreed to provide, a
commercial line of credit for Customer.
Accordingly, and in consideration of the premises and of the mutual
covenants of the parties hereto, Customer and MLBFS hereby agree as
follows:
Article 1. DEFINITIONS
1.1 Specific Terms. In addition to terms defined elsewhere in this
Loan Agreement, when used herein the following terms shall have the
following meanings:
"Activation Date" shall mean the date upon which MLBFS shall cause the
WCMA Line of Credit to be fully activated under MLPF&S' computer
system as part of the WCMA Program.
"Bankruptcy Event" shall mean any of the following: (i) a proceeding
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, liquidation, winding up or receivership law or
statute shall be commenced, filed or consented to by any Credit Party;
or (ii) any such proceeding shall be filed against any Credit Party
and shall not be dismissed or withdrawn within sixty (60) days after
filing; or (iii) any Credit Party shall make a general assignment for
the benefit of creditors; or (iv) any Credit Party shall generally
fail to pay or admit in writing its inability to pay its debts as they
become due; or (v) any Credit Party shall be adjudicated a bankrupt or
insolvent; or (vi) any Credit Party shall take advantage of any other
law or procedure for the relief of debtors or shall take any action
for the purpose of or with a view towards effecting any of the
foregoing; or (vii) a receiver, trustee, custodian, fiscal agent or
similar official for any Credit Party or for any substantial part of
any of their respective property or assets shall be sought by such
Credit Party or appointed.
"Business Day" shall mean any day other than a Saturday, Sunday,
federal holiday or other day on which the New York Stock Exchange is
regularly closed.
"Business GuarantoC' shall mean every Guarantor that is not a natural
person.
"Certificate of Compliance" shall mean, as applicable, that duly
executed certificate, substantially the same form as Exhibit B
attached hereto to the extent such certificate shall be applicable, of
the president, chief financial officer or chief executive officer of
Customer, certifying as to the matters set forth in such certificate.
"Collateral" shall mean the WCMA Account, all Accounts, Chattel Paper,
Contract Rights, Inventory, Equipment, Fixtures, General Intangibles,
Deposit Accounts, Documents, Instruments, Investment Property and
Financial Assets of Customer, howsoever arising, whether now owned or
existing or hereafter acquired or arising, and wherever located;
together with all parts thereof (including spare parts), all
accessories and accessions thereto, all books and records (including
computer records) directly related thereto, all proceeds thereof
(including, without limitation, proceeds in the form of Accounts and
insurance proceeds), and the additional collateral described in
Section 3.6 (b) hereof (excluding real property owned by or in the
name of Customer and any Business Guarantor).
"Commitment Expiration Date" shall mean September 19, 2003.
"Credit Party" and "Credit Parties" shall mean, individually or
collectively, the Customer, all Guarantors and all Pledgors.
"Default' shall mean either an "Event of Default" as defined in
Section 3.5 hereof, or an event which with the giving of notice,
passage of time, or both, would constitute such an Event of Default.
"Default Rate" shall mean an annual interest rate equal to the lesser
of: (i) two percentage points over the Interest Rate; or (ii) the
highest interest rate allowed by applicable law.
"Event of Loss" shall mean the occurrence whereby any tangible
Collateral is damaged beyond repair, lost, totally destroyed or
confiscated.
"Excess Interest' shall mean any amount or rate of interest (including
the Default Rate and, to the extent that they may be deemed to
constitute interest, any prepayment fees, late charges and other fees
and charges) payable, charged or received in connection with any of
the Loan Documents which exceeds the maximum amount or rate of
interest permitted under applicable law.
"GAAP" shall mean the generally accepted accounting principles in
effect in the United States of America from time to time.
"General Funding Conditions" shall mean each of the following
conditions to any WCMA Loan by MLBFS hereunder: (i) Customer shall
have validly subscribed to and continued to maintain the WCMA Account
with MLPF&S, and the WCMA Account shall then be reflected as an active
"commercial" WCMA Account (i.e., one with line of credit capabilities)
on MLPF&S' WCMA computer system; (ii) no Default or Event of Default
shall have occurred and be continuing or would result from the making
of any WCMA Loan hereunder by MLBFS; (iii) there shall not have
occurred and be continuing any material adverse change in the business
or financial condition of any Credit Party; (iv) all representations
and warranties of all of the Credit Parties herein or in any of the
Loan Documents shall then be true and correct in all material
respects; (v) MLBFS shall have received this Loan Agreement and all of
the other Loan Documents duly executed and filed or recorded where
applicable, all of which shall be in form and substance satisfactory
to MLBFS; (vi) MLBFS shall have received evidence satisfactory to it
as to the ownership of the Collateral and the perfection and priority
of MLBFS' liens and security interests thereon, as well as the
ownership of and the perfection and priority of MLBFS' liens and
security interests on any other collateral for the Obligations
furnished pursuant to any of the Loan Documents; (vii) MLBFS shall
have received evidence satisfactory to it of the insurance required
hereby or by any of the Loan Documents; and (viii) any additional
conditions specified in the "WCMA Line of Credit Approval" letter
executed by MLBFS with respect to the transactions contemplated hereby
shall have been met to the satisfaction of MLBFS.
"Guarantor" shall mean each Person obligated under a guaranty,
endorsement or other undertaking by which such Person guarantees or
assumes responsibility in any capacity for the payment or performance
of any of the Obligations.
"Initial Maturity Date" shall mean the first date upon which the WCMA
Line of Credit will expire (subject to renewal in accordance with the
terms hereto@; to wit: August 31, 2004.
"Individual Guarantor' shall mean each Guarantor who is a natural
person.
"Interest Due Date" shall mean the first Business Day of each calendar
month during the term hereof.
"Interest Rate" shall mean a variable per annum rate of interest equal
to the sum of 2.25% plus the One-Month LIBOR. "One-Month LIBOR" shall
mean, as of the date of any determination, the interest rate then most
recently published in the "Money Rates" section of The Wall Street
Journal as the one-month London Interbank Offered Rate. The Interest
Rate will change as of the date of publication in The Wall Street
Journal of a One-Month LIBOR that is different from that published on
the preceding Business Day, if more than one rate is published, then
the highest of such rates. In the event that The Wall Street Journal
shall, for any reason, fail or cease to publish the One-Month LIBOR,
MLBFS will choose a reasonably comparable index or source to use as
the basis for the Interest Rate.
"Line Fee" shall mean a fee of $50,000.00 payable periodically by
Customer to MLBFS in accordance with the provisions of Section 2.2
hereof.
"Loan Documents" shall mean this Loan Agreement, any indenture, any
guaranty of any of the Obligations and all other security and other
instruments, assignments, certificates, certifications and agreements
of any kind relating to any of the Obligations, whether obtained,
authorized, authenticated, executed, sent or received concurrently
with or subsequent to this Loan Agreement, or which evidence the
creation, guaranty or collateralization of any of the Obligations or
the granting or perfection of liens or security interests upon any
Collateral or any other collateral for the Obligations, including any
modifications, amendments or restatements of the foregoing.
"Location of Tangible Collateral" shall mean the address of Customer
set forth at the beginning of this Loan Agreement, together with any
other address or addresses set forth on an exhibit hereto as being a
Location of Tangible Collateral.
"Maturity Date" shall mean the date of expiration of the WCMA Line of
Credit.
"Maximum WCMA Line of Credit' shall mean, as of any date of
determination thereof, an amount equal to the lesser of: (A)
$5,000,000.00, or (B) 80% of Customers Accounts and Chattel Paper, as
shown on its regular books and records (excluding Accounts over 90
days old, Accounts arising out of bonded jobs, retainage, directly or
indirectly due from any person or entity not domiciled in the United
States or from any shareholder, officer or employee of Customer or any
affiliated entity) and 35% of Customers Inventory as shown on its
regular books and records (excluding all work-in-process inventory).
"Obligations" shall mean all liabilities, indebtedness and other
obligations of Customer to MLBFS, howsoever created, arising or
evidenced, whether now existing or hereafter arising, whether direct
or indirect, absolute or contingent, due or to become due, primary or
secondary or joint or several, and, without limiting the generality of
the foregoing, shall include principal, accrued interest (including
without limitation interest accruing after the filing of any petition
in bankruptcy), all advances made by or on behalf of MLBFS under the
Loan Documents, collection and other costs and expenses incurred by or
on behalf of MLBFS, whether incurred before or after judgment and all
present and future liabilities, indebtedness and obligations of
Customer under this Loan Agreement.
"Permitted Liens" shall mean with respect to the Collateral: (i) liens
for current taxes not yet due and payable, other non-consensual liens
arising in the ordinary course of business for sums not due, and, if
MLBFS' rights to and interest in the Collateral are not materially and
adversely affected thereby, any such liens for taxes or other
nonconsensual liens arising in the ordinary course of business being
contested in good faith by appropriate proceedings; (ii) liens in
favor of MLBFS; (iii) liens which will be discharged with the proceeds
of the initial WCMA Loan; and (iv) any other liens expressly permitted
in writing by MLBFS.
"Person" shall mean any natural person and any corporation,
partnership (general, limited or otherwise), limited liability
company, trust, association, joint venture, governmental body or
agency or other entity having legal status of any kind.
"Pledgor" shall mean each Person who at any time provides collateral,
or otherwise now or hereinafter agrees to grant MLBFS a security
interest in any assets as security for Customer's Obligations.
"Renewal Year" shall mean and refer to the 12-month period immediately
following the Initial Maturity Date and each 12-month period
thereafter.
"WCMA Account" shall mean and refer to the Working Capital Management
Account of Customer with MLPF&S identified as Account No. 770-02001
and any successor Working Capital Management Account of Customer with
MLPF&S.
"WCMA Line of Credit' shall mean a line of credit funded by MLBFS
through the WCMA Account.
"WCMA Loan" shall mean each advance made by MLBFS pursuant to this
Loan Agreement.
"WCMA Loan Balance" shall mean an amount equal to the aggregate unpaid
principal amount of all WCMA Loans. "UCC" shall mean the Uniform
Commercial Code of Illinois as in effect in Illinois from time to
time.
1.2 Other Terms. Except as otherwise defined herein: (i) all terms
used in this Loan Agreement which are defined in the UCC shall have
the meanings set forth in the UCC, and (ii) capitalized terms used
herein which are defined in the WCMA Agreement (including, without
limitation, "Money Accounts", "Minimum Money Accounts Balance", and
"WCMA Directed Reserve Program") shall have the meanings set forth in
the WCMA Agreement, and (iii) accounting terms not defined herein
shall have the meaning ascribed to them in GAAP.
1.3 UCC Filing. Customer hereby authorizes MLBFS to file a record
or records (as defined or otherwise specified under the UCC),
including, without limitation, financing statements, in all
jurisdictions and with all filing offices as MLBFS may determine, in
its sole discretion, are necessary or advisable to perfect the
security interest granted to MLBFS herein. Such financing statements
may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes
such property in any other manner as MLBFS may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the
perfection of the security interest in the Collateral granted to the
MLBFS herein.
ARTICLE II. THE WCMA LINE OF CREDIT
2.1 WCMA PROMISSORY NOTE. FOR VALUE RECEIVED, Customer hereby
promises to pay to the order of MLBFS, at the times and in the manner
set forth in this Loan Agreement, or in such other manner and at such
place as MLBFS may hereafter designate in writing, the following: (a)
on the Maturity Date, or if earlier, on the date of termination of the
WCMA Line of Credit, the WCMA Loan Balance; (b) interest at the
Interest Rate (or, if applicable, at the Default Rate) on the
outstanding WCMA Loan Balance, from and including the date on which
the initial WCMA Loan is made until the date of payment of all WCMA
Loans in full; and (c) on demand, all other sums payable pursuant to
this Loan Agreement, including, but not limited to, the periodic Line
Fee. Except as otherwise expressly set forth herein, Customer hereby
waives presentment, demand for payment, protest and notice of protest,
notice of dishonor, notice of acceleration, notice of intent to
accelerate and all other notices and formalities in connection with
this WCMA Promissory Note and this Loan Agreement.
2.2 WCMA LOANS
(a) Activation Date. Provided that: (i) the Commitment Expiration
Date shall not then have occurred, and (ii) Customer shall have
subscribed to the WCMA Program and its subscription to the WCMA
Program shall then be in effect, the Activation Date shall occur on or
promptly after the date, following the acceptance of this Loan
Agreement by MLBFS at its office in Chicago, Illinois, upon which each
of the General Funding Conditions shall have been met or satisfied to
the reasonable satisfaction of MLBFS. No activation by MLBFS of the
WCMA Line of Credit for a nominal amount shall be deemed evidence of
the satisfaction of any of the conditions herein set forth, or a
waiver of any of the terms or conditions hereof. Customer hereby
authorizes MLBFS to pay out of and charge to Customer's WCMA Account
on the Activation Date any and all amounts necessary to fully pay off
any bank or other financial institution having a lien upon any of the
Collateral other than a Permitted Lien.
(b) WCMA Loans. Subject to the terms and conditions hereof, during
the period from and after the Activation Date to the first to occur of
the Maturity Date or the date of termination of the WCMA Line of
Credit pursuant to the terms hereof, and in addition to WCMA Loans
automatically made to pay accrued interest, as hereafter provided: (i)
MLBFS will make WCMA Loans to Customer in such amounts as Customer may
from time to time request in accordance with the terms hereof, up to
an aggregate outstanding amount not to exceed the Maximum WCMA Line of
Credit, and (ii) Customer may repay any WCMA Loans in whole or in part
at any time, and request a re-borrowing of amounts repaid on a
revolving basis. Customer may request such WCMA Loans by use of WCMA
Checks, FTS, Visa charges, wire transfers, or such other means of
access to the WCMA Line of Credit as may be permitted by MLBFS from
time to time; it being understood that so long as the WCMA Line of
Credit shall be in effect, any charge or debit to the WCMA Account
which but for the WCMA Line of Credit would under the terms of the
WCMA Agreement result in an overdraft, shall be deemed a request by
Customer for a WCMA Loan.
(c) Conditions of WCMA Loans. Notwithstanding the foregoing, MLBFS
shall not be obligated to make any WCMA Loan, and may without notice
refuse to honor any such request by Customer, if at the time of
receipt by MLBFS of Customer's request: (i) the making of such WCMA
Loan would cause the Maximum WCMA Line of Credit to be exceeded; or
(ii) the Maturity Date shall have occurred, or the WCMA Line of Credit
shall have otherwise been terminated in accordance with the terms
hereof; or (iii) Customer's subscription to the WCMA Program shall
have been terminated; or (iv) an event shall have occurred and be
continuing which shall have caused any of the General Funding
Conditions to not then be met or satisfied to the reasonable
satisfaction of MLBFS. The making by MLBFS of any WCMA Loan at a time
when any one or more of said conditions shall not have been met shall
not in any event be construed as a waiver of said condition or
conditions or of any Default, and shall not prevent MLBFS at any time
thereafter while any condition shall not have been met from refusing
to honor any request by Customer for a WCMA Loan.
(d) Limitation of Liability. MLBFS shall not be responsible, and
shall have no liability to Customer or any other party, for any delay
or failure of MLBFS to honor any request of Customer for a WCMA Loan
or any other act or omission of MLBFS, MLPF&S or any of their
affiliates due to or resulting from any system failure, error or delay
in posting or other clerical error, loss of power, fire, Act of God or
other cause beyond the reasonable control of MLBFS, MLPF&S or any of
their affiliates unless directly arising out of the willful wrongful
act or active gross negligence of MLBFS. In no event shall MLBFS be
liable to Customer or any other party for any incidental or
consequential damages arising from any act or omission by MLBFS,
MLPF&S or any of their affiliates in connection with the WCMA Line of
Credit or this Loan Agreement.
(e) Interest. (i) An amount equal to accrued interest on the daily
WCMA Loan Balance shall be payable by Customer monthly on each
Interest Due Date, commencing with the first Interest Due Date after
the Activation Date. Unless otherwise hereafter directed in writing
by MLBFS on or after the first to occur of the Maturity Date or the
date of termination of the WCMA Line of Credit pursuant to the terms
hereof, such interest will be automatically charged to the WCMA
Account on the applicable Interest Due Date, and, to the extent not
paid with free credit balances or the proceeds of sales of any Money
Accounts then in the WCMA Account, as hereafter provided, paid by a
WCMA Loan and added to the WCMA Loan Balance. All interest shall be
computed for the actual number of days elapsed on the basis of a year
consisting of 360 days.
(ii) Upon the occurrence and during the continuance of any Default,
but without limiting the rights and remedies otherwise available to
MLBFS hereunder or waiving such Default, the interest payable by
Customer hereunder shall at the option of MLBFS accrue and be payable
at the Default Rate, The Default Rate, once implemented, shall
continue to apply to the Obligations under this Loan Agreement and be
payable by Customer until the date MLBFS gives written notice that
such Default has been cured to the satisfaction of MLBFS.
(iii) Notwithstanding any provision to the contrary in any of the Loan
Documents, no provision of any of the Loan Documents shall require the
payment or permit the collection of Excess Interest. If any Excess
Interest is provided for, or is adjudicated as being provided for, in
any of the Loan Documents, then: (A) Customer shall not be obligated
to pay any Excess Interest; and (B) any Excess Interest that MLBFS may
have received hereunder or under any of the Loan Documents shall, at
the option of MLBFS, be either applied as a credit against the then
unpaid WCMA Loan Balance or refunded to the payor thereof.
(f)Payments. All payments required or permitted to be made pursuant
to this Loan Agreement shall be made in lawful money of the United
States. Unless otherwise directed by MLBFS, payments on account of
the WCMA Loan Balance may be made by the delivery of checks (other
than WCMA Checks), or by means of FTS or wire transfer of funds (other
than funds from the WCMA Line of Credit) to MLPF&S for credit to
Customer's WCMA Account. Notwithstanding anything in the WCMA
Agreement to the contrary, Customer hereby irrevocably authorizes and
directs MLPF&S to apply available free credit balances in the WCMA
Account to the repayment of the WCMA Loan Balance prior to application
for any other purpose. Payments to MLBFS from funds in the WCMA
Account shall be deemed to be made by Customer upon the same basis and
schedule as funds are made available for investment in the Money
Accounts in accordance with the terms of the WCMA Agreement. All
funds received by MLBFS from MLPF&S pursuant to the aforesaid
authorization shall be applied by MLBFS to repayment of the WCMA Loan
Balance. The acceptance by or on behalf of MLBFS of a check or other
payment for a lesser amount than shall be due from Customer,
regardless of any endorsement or statement thereon or transmitted
therewith, shall not be deemed an accord and satisfaction or anything
other than a payment on account, and MLBFS or anyone acting on behalf
of MLBFS may accept such check or other payment without prejudice to
the rights of MLBFS to recover the balance actually due or to pursue
any other remedy under this Loan Agreement or applicable law for such
balance. All checks accepted by or on behalf of MLBFS in connection
with the WCMA Line of Credit are subject to final collection.
(g) Irrevocable Instructions to MLPF&S. In order to minimize the
WCMA Loan Balance, Customer hereby irrevocably authorizes and directs
MLPF&S, effective on the Activation Date and continuing thereafter so
long as this Loan Agreement shall be in effect: (i) to immediately and
prior to application for any other purpose pay to MLBFS to the extent
of any WCMA Loan Balance or other amounts payable by Customer
hereunder all available free credit balances from time to time in the
WCMA Account; and (ii) if such available free credit balances are
insufficient to pay the WCMA Loan Balance and such other amounts, and
there are in the WCMA Account at any time any investments in Money
Accounts (other than any investments constituting any Minimum Money
Accounts Balance under the WCMA Directed Reserve Program), to
immediately liquidate such investments and pay to MLBFS to the extent
of any WCMA Loan Balance and such other amounts the available proceeds
from the liquidation of any such Money Accounts.
(h) Late Charge. Any payment or deposit required to be made by
Customer pursuant to the Loan Documents not paid or made within ten
(10) days of the applicable due date shall be subject to a late charge
in an amount equal to the lesser of: (a) 5% of the overdue amount, or
(b) the maximum amount permitted by applicable law. Such late charge
shall be payable on demand, or, without demand, may in the sole
discretion of MLBFS be paid by a Subsequent WCMA Loan and added to the
WCMA Loan Balance in the same manner as provided herein for accrued
interest with respect to the WCMA Line of Credit.
(i) Statements. MLPF&S will include in each monthly statement it
issues under the WCMA Program information with respect to WCMA Loans
and the WCMA Loan Balance. Any questions that Customer may have with
respect to such information should be directed to MLBFS; and any
questions with respect to any other matter in such statements or about
or affecting the WCMA Program should be directed to MLPF&S.
(j) Use of WCMA Loan Proceeds. The proceeds of each WCMA Loan
initiated by Customer shall be used by Customer solely for working
capital in the ordinary course of its business, or, with the prior
written consent of MLBFS, for other lawful business purposes of
Customer not prohibited hereby. Customer agrees that under no
circumstances will the proceeds of any WCMA Loan be used: (i) for
personal, family or household purposes of any person whatsoever, or
(ii) to purchase, carry or trade in securities, or repay debt incurred
to purchase, carry or trade in securities, whether in or in connection
with the WCMA Account, another account of Customer with MLPF&S or an
account of Customer at any other broker or dealer in securities except
for the acquisition by, or redemption of, Customer of ownership
interests of Customer, up to the maximum purchase price of
$3,000,000.00, or (iii) unless otherwise consented to in writing by
MLBFS, to pay any amount to Xxxxxxx Xxxxx and Co., Inc. or any of its
subsidiaries, other xxxx Xxxxxxx Xxxxx Bank USA, Xxxxxxx Xxxxx Bank &
Trust Co. or any subsidiary of either of them (including MLBFS and
Xxxxxxx Xxxxx Credit Corporation).
(k) Renewal at Option of MLBFS; Right of Customer to Terminate.
MLBFS may at any time, in its sole discretion and at its sole option,
renew the WCMA Line of Credit for one or more Renewal Years or extend
the Maturity Date; it being understood, however, that no such renewal
or extension shall be effective unless set forth in a writing executed
by a duly authorized representative of MLBFS and delivered to
Customer. Unless any such renewal or extension is accompanied by a
proposed change in the terms of the WCMA Line of Credit (other than
the extension of the Maturity Date), no Customer approval shall be
required. Customer shall, however, have the right to terminate the
WCMA Line of Credit at any time upon written notice to MLBFS.
Concurrently with any such termination, Customer shall pay to MLBFS
the entire WCMA Loan Balance and all other Obligations.
(1) Line Fees. (i) In consideration of the extension of the WCMA
Line of Credit by MLBFS to Customer during the period from the
Activation Date to the Initial Maturity Date, Customer has paid or
shall pay the Line Fee to MLBFS. If the Line Fee has not heretofore
been paid by Customer, Customer hereby authorizes MLBFS, at its
option, to either cause the Line Fee to be paid on the Activation Date
with a WCMA Loan, or invoice Customer for such Line Fee (in which
event Customer shall pay said fee within 5 Business Days after receipt
of such invoice). No delay in the Activation Date, howsoever caused,
shall entitle Customer to any rebate or reduction in the Line Fee or
to any extension of the Initial Maturity Date.
(ii) Customer shall pay to MLBFS an additional Line Fee for each
Renewal Year, or an extension fee for any extension of the Maturity
Date (each extension fee shall be equal to the pro rata amount of the
Line Fee corresponding to the length of the extension period). In
connection therewith, Customer hereby authorizes MLBFS, at its option,
to either cause each such fee to be paid with a WCMA Loan on or at any
time after the first Business Day of such Renewal Year or extension
period, as applicable, or invoiced to Customer at such time (in which
event Customer shall pay such Line Fee within 5 Business Days after
receipt of such invoice). Each Line Fee and extension fee shall be
deemed fully earned by MLBFS on the date payable by Customer, and no
termination of the WCMA Line of Credit, howsoever caused, shall
entitle Customer to any rebate or refund of any portion of such fee;
provided, however, that if Customer shall terminate the WCMA Line of
Credit not later than 5 Business Days after the receipt by Customer of
notice from MLBFS of a renewal of the WCMA Line of Credit, Customer
shall be entitled to a refund of any Line Fee charged by MLBFS for the
ensuing Renewal Year.
Article III. GENERAL PROVISIONS
3.1 REPRESENTATIONS AND WARRANTIES
Customer represents and warrants to MLBFS that:
(a) Organization and Existence. Customer is a corporation, duly
organized and validly existing in good standing under the laws of the
State of Florida and is qualified to do business and in good standing
in each other state where the nature of its business or the property
owned by it make such qualification necessary; and, where applicable,
each Business Guarantor is duly organized, validly existing and in
good standing under the laws of the state of its formation and is
qualified to do business and in good standing in each other state
where the nature of its business or the property owned by it make such
qualification necessary.
(b) Execution, Delivery and Performance. Each Credit Party has the
requisite power and authority to enter into and perform the Loan
Documents. The Customer holds all necessary permits, licenses,
certificates of occupancy and other governmental authorizations and
approvals required in order to own and operate the Customer's
business. The execution, delivery and performance by Customer of
this Loan Agreement and by each of the other Credit Parties of such of
the other Loan Documents to which it is a party: (i) have been duly
authorized by all requisite action, (ii) do not and will not violate
or conflict with any law, order or other governmental requirement, or
any of the agreements, instruments or documents which formed or govern
any of the Credit Parties, and (iii) do not and will not breach or
violate any of the provisions of, and will not result in a default by
any of the Credit Parties under, any other agreement, instrument or
document to which it is a party or is subject.
(c) Notices and Approvals. Except as may have been given or
obtained, no notice to or consent or approval of any governmental body
or authority or other third party whatsoever (including, without
limitation, any other creditor) is required in connection with the
execution, delivery or performance by any Credit Party of such of this
Loan Agreement and the Loan Documents to which it is a party.
(d) Enforceability. The Loan Documents to which any Credit Party is
a party are the respective legal, valid and binding obligations of
such Credit Party, enforceable against it or them, as the case may be,
in accordance with their respective terms, except as enforceability
may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principles of equity.
(e) Collateral. Except for priorities afforded to any Permitted
Liens: (i) Customer has good and marketable title to the Collateral,
(ii) none of the Collateral is subject to any lien, encumbrance or
security interest, and (iii) upon the filing of all Uniform Commercial
Code financing statements authenticated or otherwise authorized by
Customer with respect to the Collateral in the appropriate
jurisdiction(s) and/or the completion of any other action required by
applicable law to perfect its liens and security interests, MLBFS will
have valid and perfected first liens and security interests upon all
of the Collateral.
(f) Financial Statements. Except as expressly set forth in Customer's
or any Business Guarantor's financial statements, all financial
statements of Customer and each Business Guarantor furnished to MLBFS
have been prepared in conformity with generally accepted accounting
principles, consistently applied, are true and correct in all material
respects, and fairly present the financial condition of it as at such
dates and the results of its operations for the periods then ended
(subject, in the case of interim unaudited financial statements, to
normal year-end adjustments); and since the most recent date covered
by such financial statements, there has been no material adverse
change in any such financial condition or operation. All financial
statements furnished to MLBFS of any Guarantor other than a Business
Guarantor are true and correct in all material respects and fairly
represent such Guarantor's financial condition as of the date of such
financial statements, and since the most recent date of such financial
statements, there has been no material adverse change in such
financial condition.
(g) Litigation; Compliance With All Laws. No litigation,
arbitration, administrative or governmental proceedings are pending
or, to the knowledge of Customer, threatened against any Credit Party,
which would, if adversely determined, materially and adversely affect
(i) such Credit Party's interest in the Collateral or the liens and
security interests of MLBFS hereunder or under any of the Loan
Documents, or (ii) the financial condition of any Credit Party or its
continued operations. Each Credit Party is in compliance in all
material respects with all laws, regulations, requirements and
approvals applicable to such Credit Party.
(h) Tax Returns. All federal, state and local tax returns, reports
and statements required to be filed by any Credit Party have been
filed with the appropriate governmental agencies and all taxes due and
payable by any Credit Party have been timely paid (except to the
extent that any such failure to file or pay will not materially and
adversely affect (i) either the liens and security interests of MLBFS
hereunder or under any of the Loan Documents, (ii) the financial
condition of any Credit Party, or (iii) its continued operations).
(i) Collateral Location. All of the tangible Collateral is located
at a Location of Tangible Collateral.
(j) No Default. No "Default" or "Event of Default" (each as defined
in this Loan Agreement or any of the other Loan Documents) has
occurred and is continuing.
(k) No Outside Broker. Except for employees of MLBFS, MLPF&S or one
of their affiliates, Customer has not in connection with the
transactions contemplated hereby directly or indirectly engaged or
dealt with, and was not introduced or referred to MLBFS by, any broker
or other loan arranger.
Each of the foregoing representations and warranties: (i) has been and
will be relied upon as an inducement to MLBFS to provide the WCMA Line
of Credit, and (ii) is continuing and shall be deemed remade by
Customer concurrently with each request for a WCMA Loan.
3.2 FINANCIAL AND OTHER INFORMATION
(a) Customer shall furnish or cause to be furnished to MLBFS during
the term of this Loan Agreement all of the following:
(i) Certificate of Compliance. Within 45 days after the close of
each calendar quarter, a Certificate of Compliance, duly executed by
the president, chief financial officer or chief executive officer of
the Customer, in the form of Exhibit B attached hereto, or such other
form as reasonably required by MLBFS from time to time.
(ii) Annual Financial Statements. Within 120 days after the close of
each fiscal year of Customer, a copy of the annual audited financial
statements of Customer, including in reasonable detail, a balance
sheet and statement of retained earnings as at the close of such
fiscal year and statements of profit and loss and cash flow for such
fiscal year;
(iii) Interim Financial Statements. Within 45 days after the close of
each fiscal quarter of Customer, a copy of the interim financial
statements of Customer for such fiscal quarter (including in
reasonable detail both a balance sheet as of the close of such fiscal
period, and statement of profit and loss for the applicable fiscal
period);
(iv) A/R Agings. Within 45 days after the close of each fiscal
quarter of Customer, a copy of the Accounts Receivable Aging of
Customer as of the end of such fiscal quarter;
(v) Inventory Reports. Within 45 days after the close of each
fiscal quarter of Customer, a copy of the Inventory Report (as and to
the extent applicable, breaking out Inventory by location, and
separately reporting any work in process) of Customer as of the end of
such fiscal quarter;
(vi) SEC Reports. Customer shall furnish or cause to be furnished to
MLBFS not later than 10 days after the date of filing with the
Securities and Exchange Commission ("SEC"), a copy of each 10-K, 10-Q
and other report required to be filed with the SEC during the term
hereof by Customer; and (vii) Other Information. Such other
information as MLBFS may from time to time reasonably request relating
to Customer, any Credit Party or the Collateral.
(b) General Agreements With Respect to Financial Information.
Customer agrees that except as otherwise specified herein or otherwise
agreed to in writing by MLBFS: (i) all annual financial statements
required to be furnished by Customer to MLBFS hereunder will be
prepared by either the current independent accountants for Customer or
other independent accountants reasonably acceptable to MLBFS, and (ii)
all other financial information required to be furnished by Customer
to MLBFS hereunder will be certified as correct in all material
respects by the party who has prepared such information, and, in the
case of internally prepared information with respect to Customer or
any Business Guarantor, certified as correct by their respective chief
financial officer.
3.3 OTHER COVENANTS
Customer further covenants and agrees during the term of this Loan
Agreement that:
(a) Financial Records; Inspection. Each Credit Party (other than
any Individual Guarantor) will: (i) maintain at its principal place of
business complete and accurate books and records, and maintain all of
its financial records in a manner consistent with the financial
statements heretofore furnished to MLBFS, or prepared on such other
basis as may be approved in writing by MLBFS; and (ii) permit MLBFS or
its duly authorized representatives, upon reasonable notice and at
reasonable times, to inspect its properties (both real and personal),
operations, books and records.
(b) Taxes. Each Credit Party will pay when due all of its
respective taxes, assessments and other governmental charges,
howsoever designated, and all other liabilities and obligations,
except to the extent that any such failure to file or pay will not
materially and adversely affect either the liens and security
interests of MLBFS hereunder or under any of the Loan Documents, the
financial condition of any Credit Party or its continued operations.
(c) Compliance With Laws and Agreements. No Credit Party will
violate (i) any law, regulation or other governmental requirement, any
judgment or order of any court or governmental agency or authority;
(ii) any agreement, instrument or document which is material to its
operations or to the operation or use of any Collateral, in each case
as contemplated by the Loan Documents; or (iii) any agreement,
instrument or document to which it is a party or by which it is bound,
if any such violation will materially and adversely affect either the
liens and security interests of MLBFS hereunder or under any of the
Loan Documents, the financial condition of any Credit Party, or its
continued operations.
(d) No Use of Xxxxxxx Xxxxx Name. No Credit Party will directly or
indirectly publish, disclose or otherwise use in any advertising or
promotional material, or press release or interview, the name, logo or
any trademark of MLBFS, MLPF&S, Xxxxxxx Xxxxx and Co., Incorporated or
any of their affiliates.
(e) Notification By Customer. Customer shall provide MLBFS with
prompt written notification of: (i) any Default; (ii) any material
adverse change in the business, financial condition or operations of
any Credit Party; (iii) any information which indicates that any
financial statements of any Credit Party fail in any material respect
to present fairly the financial condition and results of operations
purported to be presented in such statements; (iv) any threatened or
pending litigation involving any Credit Party; (v) any casualty loss,
attachment, lien, judicial process, encumbrance or claim affecting or
involving $100,000 or more of any Collateral; and (vi) any change in
Customer's outside accountants. Each notification by Customer
pursuant hereto shall specify the event or information causing such
notification, and, to the extent applicable, shall specify the steps
being taken to rectify or remedy such event or information.
(f) Entity Organization. Each Credit Party which is an entity will
(i) remain (A) validly existing and in good standing in the state of
its organization and (B) qualified to do business and in good standing
in each other state where the nature of its business or the property
owned by it make such qualification necessary, and (ii) maintain all
governmental permits, licenses and authorizations. Customer shall
give MLBFS not less than 30 days prior written notice of any change in
name (including any fictitious name) or chief executive office, place
of business, or as applicable, the principal residence of any Credit
Party.
(g) Merger, Change in Business. Except upon the prior written
consent of MLBFS Customer shall not cause or permit any Credit Party
to: (i) be a party to any merger or consolidation with, or purchase or
otherwise acquire all or substantially all of the assets of, or any
material stock, partnership, joint venture or other equity interest
in, any Person, or sell, transfer or lease all or any substantial part
of its assets--, (ii) engage in any material business substantially
different from its business in effect as of the date of application by
Customer for credit from MLBFS, or cease operating any such material
business; or (iii) cause or permit any other Person to assume or
succeed to any material business or operations of such Credit Party.
(h) Fixed Charge Coverage Ratio. Customers and Business Guarantors'
"Fixed Charge Coverage Ratio" shall at all times exceed 1.25 to 1. For
purposes hereof, "Fixed Charge Coverage Ratio" shall mean the ratio
of: (a) income before interest (including payments in the nature of
interest under capital leases), taxes, depreciation, amortization, and
other non-cash charges, minus any internally financed capital
expenditures, to (b) the sum of the aggregate principal and interest
paid or accrued (excluding such portion of the interest and principal
payments attributable to that certain obligation payable to the
Wachovia National Bank Loan which is specifically secured by a
certificate of deposit), the aggregate rental under capital leases
paid or accrued, any dividends and other distributions paid or payable
to shareholders, and taxes paid in cash; all as determined on a
trailing 12-month basis as set forth in Customer's regular quarterly
financial statements prepared in accordance with GAAP.
(i) Tangible Net Worth. Customers and Business Guarantors Tangible
Net Worth", defined and calculated on Exhibit B attached hereto, shall
at all times exceed $10,000,000.00. For the purposes hereof, the term
"Tangible Net Worth" shall mean Customers and Business Guarantors' net
worth as shown on Customers and Business Guarantors' regular financial
statements prepared in accordance with GAAP, but excluding an amount
equal to: (i) any Intangible Assets, and (ii) any amounts now or
hereafter directly or indirectly owing to Customer and Business
Guarantors' by officers, shareholders or affiliates of Customer and
Business Guarantors'. "Intangible Assets" shall mean the total amount
of goodwill, patents, trade names, trade or service marks, copyrights,
experimental expense, organization expense, unamortized debt discount
and expense, the excess of cost of shares acquired over book value of
related assets, and such other assets as are properly classified as
"intangible assets" of the Customer and Business Guarantors determined
in accordance with GAAP.
(j) Leverage Ratio. Customers and Business Guarantors' "Leverage
Ratio", defined and calculated on Exhibit B attached hereto, shall not
at any time exceed 2.5 to 1. For purposes hereof, "Leverage Ratio"
shall mean the ratio of Customers and Business Guarantors' total
liabilities to Customer's and Business Guarantors' Tangible Net Worth.
The term "Tangible Net Worth" shall mean Customer's and Business
Guarantors' net worth as shown on Customers and Business Guarantors'
regular financial statements prepared in accordance with GAAP, but
excluding an amount equal to: (i) any Intangible Assets, and (ii) any
amounts now or hereafter directly or indirectly owing to Customer and
Business Guarantors' by officers, shareholders or affiliates of
Customer's and Business Guarantors'. "Intangible Assets" shall mean
the total amount of goodwill, patents, trade names, trade or service
xxxx', copyrights, experimental expense, organization expense,
unamortized debt discount and expense, the excess of cost of shares
acquired over book value of related assets, and such other assets as
are properly classified as "intangible assets" of the Customer and
Business Guarantors determined in accordance with GAAP.
(k) No Additional Debt. Except upon the prior written consent of
MLBFS, Customer and Business Guarantors shall not directly or
indirectly incur or permit to exist any debt of Customers and Business
Guarantors for borrowed money or the lease under a capital lease or
deferred purchase price of real or personal property other than: (i)
debt to MLBFS, (ii) debt existing as of the date of and reflected on
the last financial statements of Customer and Business Guarantors
submitted to MLBFS prior to the date hereof and not refinanced by
MLBFS and (iii) debt to a financial institution in connection with
Customer's $2,500,0000 real estate financing.
3.4 COLLATERAL
(a) Pledge of Collateral. To secure payment and performance of the
Obligations, Customer hereby pledges, assigns, transfers and sets over
to MLBFS, and grants to MLBFS first liens and security interests in
and upon all of the Collateral, subject only to priorities afforded to
Permitted Liens.
(b) Liens. Except upon the prior written consent of MLBFS, Customer
shall not create or permit to exist any lien, encumbrance or security
interest upon or with respect to any Collateral now owned or hereafter
acquired other than Permitted Liens.
(c) Performance of Obligations. Customer shall perform all of its
obligations owing on account of or with respect to the Collateral; it
being understood that nothing herein, and no action or inaction by
MLBFS, under this Loan Agreement or otherwise, shall be deemed an
assumption by MLBFS of any of Customer's said obligations.
(d) Sales and Collections. Customer shall not sell, transfer or
otherwise dispose of any Collateral, except that so long as no Event
of Default shall have occurred and be continuing, Customer may in the
ordinary course of its business: (i) sell any Inventory normally held
by Customer for sale, (ii) use or consume any materials and supplies
normally held by Customer for use or consumption, and (iii) collect
all of its Accounts.
(e) Account Schedules. Upon the request of MLBFS, which may be made
from time to time, Customer shall deliver to MLBFS, in addition to the
other information required hereunder, a schedule identifying, for each
Account and all Chattel Paper subject to MLBFS' security interests
hereunder, each account debtor by name and address and amount, invoice
or contract number and date of each invoice or contract. Customer
shall furnish to MLBFS such additional information with respect to the
Collateral, and amounts received by Customer as proceeds of any of the
Collateral, as MLBFS may from time to time reasonably request.
(f) Alterations and Maintenance. Except upon the prior written
consent of MLBFS, Customer shall not make or permit any material
alterations to any tangible Collateral which might materially reduce
or impair its market value or utility. Customer shall at all times
(i) keep the tangible Collateral in good condition and repair,
reasonable wear and tear excepted, (ii) protect the Collateral against
loss, damage or destruction and (iii) pay or cause to be paid all
obligations arising from the repair and maintenance of such
Collateral, as well as all obligations with respect to any Location of
Tangible Collateral (e.g., all obligations under any lease, mortgage
or bailment agreement), except for any such obligations being
contested by Customer in good faith by appropriate proceedings.
(g) Location. Except for movements required in the ordinary course
of Customer's business, Customer shall give MLBFS 30 days' prior
written notice of the placing at or movement of any tangible
Collateral to any location other than a Location of Tangible
Collateral. In no event shall Customer cause or permit any material
tangible Collateral to be removed from the United States without the
express prior written consent of MLBFS. Customer will keep its books
and records at its principal office address specified in the first
paragraph of this Loan Agreement. Customer will not change the
address where books and records are kept, or change its name or
taxpayer identification number. Customer will place a legend
acceptable to MLBFS on all Chattel Paper that is Collateral in the
possession or control of Customer from time to time indicating that
MLBFS has a security interest therein.
(h) Insurance. Customer shall insure all of the tangible Collateral
under a policy or policies of physical damage insurance for the full
replacement value thereof against such perils as MLBFS shall
reasonably require and also providing that losses will be payable to
MLBFS as its interests may appear pursuant to a lender's or
mortgagee's long form loss payable endorsement and containing such
other provisions as- may be reasonably required by MLBFS. Customer
shall further provide and maintain a policy or policies of commercial
general liability insurance naming MLBFS as an additional party
insured. Customer and each Business Guarantor shall maintain such
other insurance as may be required by law or is customarily maintained
by companies in a similar business or otherwise reasonably required by
MLBFS. All such insurance policies shall provide that MLBFS will
receive not less than 10 days prior written notice of any
cancellation, and shall otherwise be in form and amount and with an
insurer or insurers reasonably acceptable to MLBFS. Customer shall
furnish MLBFS with a copy or certificate of each such policy or
policies and, prior to any expiration or cancellation, each renewal or
replacement thereof.
(i) Event of Loss. Customer shall at its expense promptly repair
all repairable damage to any tangible Collateral. In the event that
there is an Event of Loss and the affected Collateral had a value
prior to such Event of Loss of $25,000.00 or more, then, on or before
the first to occur of (i) 90 days after the occurrence of such Event
of Loss, or (ii) 10 Business Days after the date on which either
Customer or MLBFS shall receive any proceeds of insurance on account
of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer or MLBFS that it disclaims
liability in respect of such Event of Loss, Customer shall, at
Customer's option, either replace the Collateral subject to such Event
of Loss with comparable Collateral free of all liens other than
Permitted Liens (in which event Customer shall be entitled to utilize
the proceeds of insurance on account of such Event of Loss for such
purpose, and may retain any excess proceeds of such insurance), or
permanently prepay the Obligations by an amount equal to the actual
cash value of such Collateral as determined by either the insurance
company's payment (plus any applicable deductible) or, in absence of
insurance company payment, as reasonably determined by MLBFS; it being
further understood that any such permanent prepayment shall cause an
immediate permanent reduction in the Maximum WCMA Line of Credit in
the amount of such prepayment and shall not reduce the amount of any
future reductions in the Maximum WCMA Line of Credit that may be
required hereunder. Notwithstanding the foregoing, if at the time of
occurrence of such Event of Loss or any time thereafter prior to
replacement or line reduction, as aforesaid, an Event of Default shall
have occurred and be continuing hereunder, then MLBFS may at its sole
option, exercisable at any time while such Event of Default shall be
continuing, require Customer to either replace such Collateral or
prepay the Obligations and reduce the Maximum WCMA Line of Credit, as
aforesaid.
(j) Notice of Certain Events. Customer shall give MLBFS immediate
notice of any attachment, lien, judicial process, encumbrance or claim
affecting or involving $25,000.00 or more of the Collateral.
(k) Indemnification. Customer shall indemnify, defend and save
MLBFS harmless from and against any and all claims, liabilities,
losses, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) of any nature whatsoever which may be
asserted against or incurred by MLBFS arising out of or in any manner
occasioned by (i) the ownership, collection, possession, use or
operation of any Collateral, or (ii) any failure by Customer to
perform any of its obligations hereunder; excluding, however, from
said indemnity any such claims, liabilities, etc. arising directly out
of the willful wrongful act or active gross negligence of MLBFS. This
indemnity shall survive the expiration or termination of this Loan
Agreement as to all matters arising or accruing prior to such
expiration or termination.
3.5 EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an
"Event of Default' under this Loan Agreement:
(a) Exceeding the Maximum WCMA Line of Credit. If the WCMA Loan
Balance shall at any time exceed the Maximum WCMA Line of Credit and
Customer shall fail to deposit sufficient funds into the WCMA Account
to reduce the WCMA Loan Balance below the Maximum WCMA Line of Credit
within five (5) Business Days after written notice thereof shall have
been given by MLBFS to Customer.
(b) Other Failure to Pay. Customer shall fail to pay to MLBFS or
deposit into the WCMA Account when due any other amount owing or
required to be paid or deposited by Customer under this Loan Agreement
or any of the Loan Documents, or shall fail to pay when due any other
Obligations, and any such failure shall continue for more than five
(5) Business Days after written notice thereof shall have been given
by MLBFS to Customer.
(c) Failure to Perform. Any Credit Party shall default in the
performance or observance of any covenant or agreement on its part to
be performed or observed under any of the Loan Documents (not
constituting an Event of Default under any other clause of this
Section), and such default shall continue unremedied for ten (10)
Business Days (i) after written notice thereof shall have been given
by MLBFS to Customer, or (ii) from Customer's receipt of any notice or
knowledge of such default from any other source.
(d) Breach of Warranty. Any representation or warranty made by any
Credit Party contained in this Loan Agreement or any of the Loan
Documents shall at any time prove to have been incorrect in any
material respect when made.
(e) Default Under Other ML Agreement. A default or event of default
by any Credit Party shall occur under the terms of any other
agreement, instrument or document with or intended for the benefit of
MLBFS, MLPF&S or any of their affiliates, and any required notice
shall have been given and required passage of time shall have elapsed,
or the WCMA Agreement shall be terminated for any reason.
(f) Bankruptcy Event. Any Bankruptcy Event shall occur.
(g) Material Impairment. Any event shall occur which shall
reasonably cause MLBFS to in good faith believe that the prospect of
full payment or performance by the Credit Parties of any of their
respective liabilities or obligations under any of the Loan Documents
has been materially impaired. The existence of such a material
impairment shall be determined in a manner consistent with the intent
of Section 1-208 of the UCC.
(h) Default Under Other Agreements. Any event shall occur which
results in any default of any material agreement involving any Credit
Party or any agreement evidencing any indebtedness of any Credit Party
of $100,000.00 or more.
(i) Collateral Impairment. The loss, theft or destruction of any
Collateral, the occurrence of any material deterioration or impairment
of any Collateral or any material decline or depreciation in the value
or market price thereof (whether actual or reasonably anticipated),
which causes any Collateral, in the sole opinion of MLBFS, to become
unsatisfactory as to value or character; or any levy, attachment,
seizure or confiscation of the Collateral which is not released within
ten (10) Business Days.
(j) Contested Obligation. (i) Any of the Loan Documents shall for
any reason cease to be, or are asserted by any Credit Party not to be
a legal, valid and binding obligations of any Credit Party,
enforceable in accordance with their terms; or (ii) the validity,
perfection or priority of MLBFS' first lien and security interest on
any of the Collateral is contested by any Person; or (iii) any Credit
Party shall or shall attempt to repudiate, revoke, contest or dispute,
in whole or in part, such Credit Party's obligations under any Loan
Document.
(k) Judgments. A judgment shall be entered against any Credit Party
in excess of $25,000 and the judgment is not paid in full and
discharged, or stayed and bonded to the satisfaction of MLBFS.
(l) Change in Control/Change in Management. (i) Any direct or
indirect sale, conveyance, assignment or other transfer of or grant of
a security interest in any ownership interest of any Credit Party
which results, or if any rights related thereto were exercised would
result, in any change in the identity of the individuals or entities
in control of any Credit Party; or (ii) the owner(s) of the
controlling equity interest of any Credit Party on the date hereof
shall cease to own and control such Credit Party; or (iii) the Person
(or a replacement who is satisfactory to MLBFS in its sole discretion,
not to be unreasonable in the new control of the Credit Party) who is
the chief executive officer or holds such similar position, or any
senior manager of such Credit Party on the date hereof shall for any
reason cease to be the chief executive officer or senior manager of
such Credit Party.
(m) Withdrawal, Death, etc. The incapacity, death, withdrawal,
dissolution, or the filing for dissolution of: (i) any Credit Party;
or (ii) any controlling shareholder, partner, or member of any Credit
Party.
3.6 REMEDIES
(a) Remedies Upon Default. Upon the occurrence and during the
continuance of any Event of Default, MLBFS may at its sole option do
any one or more or all of the following, at such time and in such
order as MLBFS may in its sole discretion choose:
(i) Termination. MLBFS may without notice terminate the WCMA Line
of Credit and all obligations to extend any credit to or for the
benefit of Customer (it being understood, however, that upon the
occurrence of any Bankruptcy Event all such obligations shall
automatically terminate without any action on the part of MLBFS).
(ii) Acceleration. MLBFS may declare the principal of and interest
on the WCMA Loan Balance, and all other Obligations to be forthwith
due and payable, whereupon all such amounts shall be immediately due
and payable, without presentment, demand for payment, protest and
notice of protest, notice of dishonor, notice of acceleration, notice
of intent to accelerate or other notice or formality of any kind, all
of which are hereby expressly waived; provided, however, that upon the
occurrence of any Bankruptcy Event all such principal, interest and
other Obligations shall automatically become due and payable without
any action on the part of MLBFS.
(iii) Exercise Other Rights. MLBFS may exercise any or all of the
remedies of a secured party under applicable law and in equity,
including, but not limited to, the UCC, and any or all of its other
rights and remedies under the Loan Documents.
(iv) Possession. MLBFS may require Customer to make the Collateral
and the records pertaining to the Collateral available to MLBFS at a
place designated by MLBFS which is reasonably convenient to Customer,
or may take possession of the Collateral and the records pertaining to
the Collateral without the use of any judicial process and without any
prior notice to Customer.
(v) Sale. MLBFS may sell any or all of the Collateral at public or
private sale upon such terms and conditions as MLBFS may reasonably
deem proper, whether for cash, on credit, or for future delivery, in
bulk or in lots. MLBFS may purchase any Collateral at any such sale
free of Customer's right of redemption, if any, which Customer
expressly waives to the extent not prohibited by applicable law. The
net proceeds of any such public or private sale and all other amounts
actually collected or received by MLBFS pursuant hereto, after
deducting all costs and expenses incurred at any time in the
collection of the Obligations and in the protection, collection and
sale of the Collateral, will be applied to the payment of the
Obligations, with any remaining proceeds paid to Customer or whoever
else may be entitled thereto, and with Customer and each Guarantor
remaining jointly and severally liable for any amount remaining unpaid
after such application.
(vi) Delivery of Cash, Checks, Etc. MLBFS may require Customer to
forthwith upon receipt, transmit and deliver to MLBFS in the form
received, all cash, checks, drafts and other instruments for the
payment of money (properly endorsed, where required, so that such
items may be collected by MLBFS) which may be received by Customer at
any time in full or partial payment of any Collateral, and require
that Customer not commingle any such items which may be so received by
Customer with any other of its funds or property but instead hold them
separate and apart and in trust for MLBFS until delivery is made to
MLBFS.
(vii) Notification of Account Debtors. MLBFS may notify any
account debtor that its Account or Chattel Paper has been assigned to
MLBFS and direct such account debtor to make payment directly to MLBFS
of all amounts due or becoming due with respect to such Account or
Chattel Paper; and MLBFS may enforce payment and collect, by legal
proceedings or otherwise, such Account or Chattel Paper.
(viii) Control of Collateral. MLBFS may otherwise take control in
any lawful manner of any cash or non-cash items of payment or proceeds
of Collateral and of any rejected, returned, stopped in transit or
repossessed goods included in the Collateral and endorse Customer's
name on any item of payment on or proceeds of the Collateral.
(b) Set-Off. MLBFS shall have the further right upon the occurrence
and during the continuance of an Event of Default to set-off,
appropriate and apply toward payment of any of the Obligations, in
such order of application as MLBFS may from time to time and at any
time elect, any cash, credit, deposits, accounts, financial assets,
investment property, securities and any other property of Customer
which is in transit to or in the possession, custody or control of
MLBFS, MLPF&S or any agent, bailee, or affiliate of MLBFS or MLPF&S.
Customer hereby collaterally assigns and grants to MLBFS a continuing
security interest in all such property as Collateral and as additional
security for the Obligations. Upon the occurrence and during the
continuance of an Event of Default, MLBFS shall have all rights in
such property available to collateral assignees and secured parties
under all applicable laws, including, without limitation, the UCC.
(c) Power of Attorney. Effective upon the occurrence and during the
continuance of an Event of Default, Customer hereby irrevocably
appoints MLBFS as its attorney-in-fact, with full power of
substitution, in its place and stead and in its name or in the name of
MLBFS, to from time to time in MLBFS' sole discretion take any action
and to execute any instrument which MLBFS may deem necessary or
advisable to accomplish the purposes of this Loan Agreement and the
other Loan Documents, including, but not limited to, to receive,
endorse and collect all checks, drafts and other instruments for the
payment of money made payable to Customer included in the Collateral.
The powers of attorney granted to MLBFS in this Loan Agreement are
coupled with an interest and are irrevocable until the Obligations
have been indefeasibly paid in full and fully satisfied and all
obligations of MLBFS under this Loan Agreement have been terminated.
(d) Remedies are Severable and Cumulative. All rights and remedies
of MLBFS herein are severable and cumulative and in addition to all
other rights and remedies available in the Loan Documents, at law or
in equity, and any one or more of such rights and remedies may be
exercised simultaneously or successively.
(e) No Marshalling. MLBFS shall be under no duty or obligation to
(i) preserve, protect or xxxxxxxx the Collateral; (ii) preserve or
protect the rights of any Credit Party or any other Person claiming an
interest in the Collateral; (iii) realize upon the Collateral in any
particular order or manner, (iv) seek repayment of any Obligations
from any particular source; (v) proceed or not proceed against any
Credit Party pursuant to any guaranty or security agreement or against
any Credit Party under the Loan Documents, with or without also
realizing on the Collateral; (vi) permit any substitution or exchange
of all or any part of the Collateral; or (vii) release any part of the
Collateral from the Loan Agreement or any of the other Loan Documents,
whether or not such substitution or release would leave MLBFS
adequately secured.
(f) Notices. To the fullest extent permitted by applicable law,
Customer hereby irrevocably waives and releases MLBFS of and from any
and all liabilities and penalties for failure of MLBFS to comply with
any statutory or other requirement imposed upon MLBFS relating to
notices of sale, holding of sale or reporting of any sale, and
Customer waives all rights of redemption or reinstatement from any
such sale. Any notices required under applicable law shall be
reasonably and properly given to Customer if given by any of the
methods provided herein at least 5 Business Days prior to taking
action. MLBFS shall have the right to postpone or adjourn any sale or
other disposition of Collateral at any time without giving notice of
any such postponed or adjourned date. In the event MLBFS seeks to
take possession of any or all of the Collateral by court process,
Customer further irrevocably waives to the fullest extent permitted by
law any bonds and any surety or security relating thereto required by
any statute, court rule or otherwise as an incident to such
possession, and any demand for possession prior to the commencement of
any suit or action.
3.7 MISCELLANEOUS
(a) Non-Waiver. No failure or delay on the part of MLBFS in
exercising any right, power or remedy pursuant to this Loan Agreement
or any of the other Loan Documents shall operate as a waiver thereof,
and no single or partial exercise of any such right, power or remedy
shall preclude any other or further exercise thereof, or the exercise
of any other right, power or remedy. Neither any waiver of any
provision of any of the Loan Documents, nor any consent to any
departure by Customer therefrom, shall be effective unless the same
shall be in writing and signed by MLBFS. Any waiver of any provision
of this Loan Agreement or any of the other Loan Documents and any
consent to any departure by Customer from the terms of this Loan
Agreement or any of the other Loan Documents shall be effective only
in the specific instance and for the specific purpose for which given.
Except as otherwise expressly provided herein, no notice to or demand
on Customer shall in any case entitle Customer to any other or further
notice or demand in similar or other circumstances.
(b) Disclosure. Customer hereby irrevocably authorizes MLBFS and
each of its affiliates, including without limitation MLPF&S, to at any
time (whether or not an Event of Default shall have occurred) obtain
from and disclose to each other, and to any third party in connection
with Section 3.7 (g) herein, any and all financial and other
information about Customer. In connection with said authorization,
the parties recognize that in order to provide a WCMA Line of Credit
certain information about Customer is required to be made available on
a computer network accessible by certain affiliates of MLBFS,
including MLPF&S. Customer further irrevocably authorizes MLBFS to
contact, investigate, inquire and obtain consumer reports, references
and other information on Customer from consumer reporting agencies and
other credit reporting services, former or current creditors, and
other persons and sources (including, without limitation, any
Affiliate of MLBFS) and to provide to any references, consumer
reporting agencies, credit reporting services, creditors and other
persons and sources (including, without limitation, affiliates of
MLBFS) all financial, credit and other information obtained by MLBFS
relating to the Customer.
(c) Communications. Delivery of an agreement, instrument or other
document may, at the discretion of MLBFS, be by electronic
transmission. Except as required by law or otherwise provided herein
or in a writing executed by the party to be bound, all notices
demands, requests, accountings, listings, statements, advices or other
communications to be given under the Loan Documents shall be in
writing and shall be served either personally, by deposit with a
reputable overnight courier with charges prepaid, or by deposit in the
United States mail by certified mail, return receipt required.
Notices may be addressed to Customer as set forth at its address shown
in the preamble hereto, or to any office to which billing or account
statements are sent; to MLBFS at its address shown in the preamble
hereto, or at such other address designated in writing by MLBFS. Any
such communication shall be deemed to have been given upon, in the
case of personal delivery the date of delivery, one Business Day after
deposit with an overnight courier, two (2) Business Days after deposit
in the United States by certified mail (return receipt required), or
receipt of electronic transmission (which shall be presumed to be
three hours after the time of transmission unless an error message is
received by the sender), except that any notice of change of address
shall not be effective until actually received.
(d) Fees, Expenses and Taxes. Customer shall pay or reimburse MLBFS
for: (i) all UCC, real property or other filing, recording, and search
fees and expenses incurred by MLBFS in connection with the
verification, perfection or preservation of MLBFS' rights hereunder or
in any Collateral or any other collateral for the Obligations; (ii)
any and all stamp, transfer, mortgage, intangible, document, filing,
recording and other taxes and fees payable or determined to be payable
in connection with the borrowings hereunder or the execution,
delivery, filing and/or recording of the Loan Documents and any other
instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith; and (iii) all fees and
out-of-pocket expenses (including, attorneys' fees and legal expenses)
incurred by MLBFS in connection with the preparation, execution,
administration, collection, enforcement, protection, waiver or
amendment of this Loan Agreement, the other Loan Documents and such
other instruments or documents, and the rights and remedies of MLBFS
thereunder and all other matters in connection therewith. Customer
hereby authorizes MLBFS, at its option, to either cause any and all
such fees, expenses and taxes to be paid with a WCMA Loan, or invoice
Customer therefore (in which event Customer shall pay all such fees,
expenses and taxes within 5 Business Days after receipt of such
invoice). The obligations of Customer under this paragraph shall
survive the expiration or termination of this Loan Agreement and the
discharge of the other Obligations.
(e) Right to Perform Obligations. If Customer shall fail to do any
act or thing which it has covenanted to do under any of the Loan
Documents or any representation or warranty on the part of Customer
contained in the Loan Documents shall be breached, MLBFS may, in its
sole discretion, after 5 Business Days written notice is sent to
Customer (or such lesser notice, including no notice, as is reasonable
under the circumstances), do the same or cause it to be done or remedy
any such breach, and may expend its funds for such purpose. Any and
all reasonable amounts so expended by MLBFS shall be repayable to
MLBFS by Customer upon demand, with interest at the Interest Rate
during the period from and including the date funds are so expended by
MLBFS to the date of repayment, and all such amounts shall be
additional Obligations. The payment or performance by MLBFS of any of
Customer's obligations hereunder shall not relieve Customer of said
obligations or of the consequences of having failed to pay or perform
the same, and shall not waive or be deemed a cure of any Default.
(f) Further Assurances. Customer agrees to do such further acts and
things and to execute and deliver to MLBFS such reasonable additional
agreements, instruments and documents as MLBFS may reasonably require
or deem advisable to effectuate the purposes of the Loan Documents, to
confirm the WCMA Loan Balance, or to establish, perfect and maintain
MLBFS' security interests and liens upon the Collateral, including,
but not limited to: (i) executing financing statements or amendments
thereto when and as reasonably requested by MLBFS; and (ii) if in the
reasonable judgment of MLBFS it is required by local law, causing the
owners and/or mortgagees of the real property on which any Collateral
may be located to execute and deliver to MLBFS waivers or
subordinations reasonably satisfactory to MLBFS with respect to any
rights in such Collateral.
(g) Binding Effect. This Loan Agreement and the Loan Documents
shall be binding upon, and shall inure to the benefit of MLBFS,
Customer and their respective successors and assigns. MLBFS reserves
the right, at any time while the Obligations remain outstanding, to
sell, assign, syndicate or otherwise transfer or dispose of any or all
of MLBFS' rights and interests under the Loan Documents. MLBFS also
reserves the right at any time to pool the WCMA Loan with one or more
other loans originated by MLBFS or any other Person, and to securitize
or offer interests in such pool on whatever terms and conditions MLBFS
shall determine. Customer consents to MLBFS releasing financial and
other information regarding Credit Parties, the Collateral and the
WCMA Loan in connection with any such sale, pooling, securitization or
other offering. Customer shall not assign any of its rights or
delegate any of its obligations under this Loan Agreement or any of
the Loan Documents without the prior written consent of MLBFS. Unless
otherwise expressly agreed to in a writing signed by MLBFS, no such
consent shall in any event relieve Customer of any of its obligations
under this Loan Agreement or the Loan Documents.
(h) Interpretation; Construction. (i) Captions and section and
paragraph headings in this Loan Agreement are inserted only as a
matter of convenience, and shall not affect the interpretation hereof;
(ii) no provision of this Loan Agreement shall be construed against a
particular Person or in favor of another Person merely because of
which Person (or its representative) drafted or supplied the wording
for such provision; and (iii) where the context requires: (a) use of
the singular or plural incorporates the other, and (b) pronouns and
modifiers in the masculine, feminine or neuter gender shall be deemed
to refer to or include the other genders.
(i) Governing Law. This Loan Agreement, and, unless otherwise
expressly provided therein, each of the Loan Documents, shall be
governed in all respects by the laws of the State of Illinois, not
including its conflict of law provisions.
(j) Severability of Provisions. Whenever possible, each provision
of this Loan Agreement and the other Loan Documents shall be
interpreted in such manner as to be effective and valid under
applicable law. Any provision of this Loan Agreement or any of the
Loan Documents which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to
the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Loan Agreement and the
Loan Documents or affecting the validity or enforceability of such
provision in any other jurisdiction.
(k) Term. This Loan Agreement shall become effective on the date
accepted by MLBFS at its office in Chicago, Illinois, and, subject to
the terms hereof, shall continue in effect so long thereafter as the
WCMA Line of Credit shall be in effect or there shall be any
Obligations outstanding. Customer hereby waives notice of acceptance
of this Loan Agreement by MLBFS.
(l) Exhibits. The exhibits to this Loan Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Loan Agreement
(m) Counterparts. This Loan Agreement may be executed in one or
more counterparts which, when taken together, constitute one and the
same agreement.
(n) Jurisdiction; Waiver. Customer acknowledges that this Loan
Agreement is being accepted by MLBFS in partial consideration of
MLBFS' right and option, in its sole discretion, to enforce this Loan
Agreement and all of the Loan Documents in either the State of
Illinois or in any other jurisdiction where Customer or any Collateral
may be located. Customer irrevocably submits itself to jurisdiction
in the State of Illinois and venue in any state or federal court in
the County of Xxxx for such purposes, and Customer waives any and all
rights to contest said jurisdiction and venue and the convenience of
any such forum, and any and all rights to remove such action from
state to federal court. Customer further waives any rights to
commence any action against MLBFS in any jurisdiction except in the
County of Xxxx and State of Illinois. Customer agrees that all such
service of process shall be made by mail or messenger directed to it
in the same manner as provided for notices to Customer in this Loan
Agreement and that service so made shall be deemed to be completed
upon the earlier of actual receipt or three (3) days after the same
shall have been posted to Customer or Customer's agent. Nothing
contained herein shall affect the right of MLBFS to serve legal
process in any other manner permitted by law or affect the right of
MLBFS to bring any action or proceeding against Customer or its
property in the courts of any other jurisdiction. Customer waives, to
the extent permitted by law, any bond or surety or security upon such
bond which might, but for this waiver, be required of MLBFS. Customer
further waives the right to bring any non-compulsory counterclaims.
(o) Jury Waiver. MLBFS and Customer hereby each expressly waive any
and all rights to a trial by jury in any action, proceeding or
counterclaim brought by either of the parties against the other party
with respect to any matter relating to, arising out of or in any way
connected with the WCMA Line of Credit, the Obligations, this Loan
Agreement, any of the Loan Documents and/or any of the transactions
which are the subject matter of this Loan Agreement.
(p) Integration. This Loan Agreement, together with the other Loan
Documents, constitutes the entire understanding and represents the
full and final agreement between the parties with respect to the
subject matter hereof, and may not be contradicted by evidence of
prior written agreements or prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements of
the parties. Without limiting the foregoing, Customer acknowledges
that: (I) no promise or commitment has been made to it by MLBFS,
MLPF&S or any of their respective employees, agents or representatives
to extend the availability of the WCMA Line of Credit or the Maturity
Date, or to increase the Maximum WCMA Line of Credit, or to make any
WCMA Loan on any terms other than as expressly set forth herein or to
otherwise extend any other credit to Customer or any other party; (ii)
no purported extension of the Maturity Date, increase in the Maximum
WCMA Line of Credit or other extension or agreement to extend credit
shall be valid or binding unless expressly set forth in a written
instrument signed by MLBFS; and (iii) this Loan Agreement supersedes
and replaces any and all proposals, letters of intent and approval and
commitment letters from MLBFS to Customer, none of which shall be
considered a Loan Document. No amendment or modification of any of
the Loan Documents to which Customer is a party shall be effective
unless in a writing signed by both MLBFS and Customer.
(q) Survival. All representations, warranties, agreements and
covenants contained in the Loan Documents shall survive the signing
and delivery of the Loan Documents, and all of the waivers made and
indemnification obligations undertaken by Customer shall survive the
termination, discharge or cancellation of the Loan Documents.
(r) Customer's Acknowledgments. The Customer acknowledges that the
Customer: (i) has had ample opportunity to consult with counsel and
such other parties as deemed advisable prior to signing and delivering
this Loan Agreement and the other Loan Documents; (ii) understands the
provisions of this Loan Agreement and the other Loan Documents,
including all waivers contained therein; and (iii) signs and delivers
this Loan Agreement and the other Loan Documents freely and
voluntarily, without duress or coercion.
This Loan Agreement and the other Loan Documents are executed under
seal and are intended to take effect as sealed instruments.
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the
day and year first above written.
THE XXXXXXX CO.
By: /s/ Xxxxx Xxxxxxx
____________________________
Signature (1)
Printed Name
Title
STATE OF Colorado }
} ss.
COUNTY OF Denver }
The foregoing instrument was acknowledged before me this day of
Sept. 19 AD, 2003 by Xxxxx Xxxxxxx of THE XXXXXXX CO., a Florida
corporation, on behalf of the corporation. Said person is personally
known to me or has produced a drivers license as identification.
NOTARY PUBLIC
PRINTED NAME OF NOTARY PUBLIC
My Commission Expires:
[S E A L]
Accepted at Chicago, Illinois:
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC.
By:
