AMENDED AND RESTATED LOAN AGREEMENT, dated as of
December 3, 1996, between INTEK DIVERSIFIED CORPORATION, a
Delaware corporation having an office at 000 Xxxx 000xx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000 (the "Borrower"), and SECURICOR
COMMUNICATIONS LIMITED, a company incorporated under the laws of
England and Wales having an office at 00 Xxxxxxxxxx Xxxx, Xxxxxx,
Xxxxxx, XX0 0XX, Xxxxxxx ("Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Midland International Corporation, a Delaware
corporation ("Midland"), Borrower and Xxxxxxxx Capital Limited,
an Ontario corporation ("Xxxxxxxx"), entered into an Amended and
Restated Sale of Assets and Trademark License Agreement, dated as
of September 19, 1996 (the "Asset and Trademark Agreement"),
pursuant to which Midland sold to Borrower the Trademark (as
defined herein) and certain other assets, as described therein
(collectively, the "Acquired Assets"), in consideration for up to
2,500,000 shares of common stock, par value $0.01 per share of
Intek, an assumption of certain liabilities of Midland (the
"Assumed Liabilities") and a cash payment, all as set forth in
the Asset and Trademark Agreement (the "Midland Transaction");
and
WHEREAS, Borrower assigned and transferred all of its
right, title and interest in and to the Acquired Assets and the
Asset and Trademark Agreement (and certain other agreements) to
its wholly-owned Subsidiary, Midland USA, Inc. ("MUSA"), and MUSA
has conducted the U.S. LMR Distribution Business since the
consummation of the Midland Transaction;
WHEREAS, Borrower and Lender entered into a Stock
Purchase Agreement, dated as of June 18, 1996, as amended by
agreement of the parties dated as of September 19, 1996 (the
"Stock Agreement"), pursuant to which Lender agreed to sell to
Borrower all of the outstanding securities (other than certain
preferred shares) of Lender's wholly-owned subsidiary, Securicor
Radiocoms Limited ("Radiocoms"), in consideration for 25,000,000
shares of Common Stock (the "Securicor Transaction"); and
WHEREAS, pursuant to the Stock Agreement, Lender has
agreed, among other things, to advance up to $15 million to
Borrower following the consummation of the Securicor Transaction
to finance the combined business of Borrower, the U.S. LMR
Distribution Business and Radiocoms;
WHEREAS, it is currently contemplated that the
Securicor Transaction will be consummated on or about December 3,
1996; and
WHEREAS, in connection with the consummation of the
Midland Transaction on September 20, 1996, Lender and Midland
USA, Inc. ("MUSA"), a wholly owned subsidiary of Borrower,
entered into that certain Loan Agreement, dated as of September
19, 1996 (the "MUSA Loan Agreement"), wherein Lender agreed,
among other things, to loan up to $15 million to MUSA to fund
Borrower's operations until the closing of the Securicor
Transaction; and
WHEREAS, Lender, Borrower and MUSA have agreed that
upon the consummation of the Securicor Transaction, the
"Obligations" (as defined in the MUSA Loan Agreement) of MUSA
outstanding under the MUSA Loan Agreement on the date of such
consummation will be assumed by Borrower and become obligations
under this Amended and Restated Loan Agreement (subject to the
terms hereof), as set forth in that certain letter agreement
between the parties, dated September 19, 1996 (the "Intek Loan
Assumption Agreement"); and
WHEREAS, the aggregate amount outstanding under the
MUSA Loan Agreement, including accrued interest thereon, as of
the date hereof, is $5,912,047.22 and
WHEREAS, the parties wish to amend and restate the MUSA
Loan Agreement as set forth herein to, among other things,
confirm the substitution of Borrower as the obligor with respect
to all Obligations (rather than MUSA) and provide for certain
other changes;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants hereinafter contained, the parties hereto
agree as follows:
1. DEFINITIONS
In addition to the defined terms appearing above,
capitalized terms used in this Agreement shall have (unless
otherwise provided elsewhere in this Agreement) the following
respective meanings when used herein:
"Acquired Assets" shall have the meaning ascribed to it
in the recitals hereof.
"Advance" shall have the meaning ascribed to it in
Section 2.1(a) hereof.
"Affiliate" shall mean, with respect to any Person, any
other Person that controls such Person or is controlled by or
under common control with such Person.
"Agreement" shall mean this Loan Agreement, including
all amendments, modifications and supplements hereto and any
appendices, exhibits or schedules to any of the foregoing, and
shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.
"Ancillary Agreements" shall mean any and all
supplemental agreements, undertakings, instruments, documents or
other writings executed by Borrower.
"Asset and Trademark Agreement" shall have the meaning
ascribed to it in the recitals hereof.
"Business Day" shall mean any day that is not a
Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the State of New York.
"Cash Equivalents" shall mean (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 at the time of their acquisition having the highest rating
obtainable from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc.; and (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 States of America, each having combined capital, surplus
and undivided profits of not less than $200,000,000 and having a
rating of "A" or better by a nationally recognized rating agency.
"Change of Control" shall mean any acquisition,
directly or indirectly, in one transaction or a series of
transactions, by any Person, other than Lender or any Affiliate
thereof, of greater than (i) 50% or more of the issued and
outstanding Common Stock, or (ii) 50% or more of the assets of
Borrower and its Subsidiaries, taken as a whole (including
without limitation the sale by Borrower of the stock of a
Subsidiary or Subsidiaries whose combined assets represent 50% or
more of the assets of Borrower and its Subsidiaries, taken as a
whole).
"Charges" shall mean all federal, state, county, city,
municipal, local, foreign or other governmental taxes at the time
due and payable, levies, assessments, charges, liens, claims or
encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) Borrower's or any of its Subsidiaries'
ownership or use of any of its assets, or (iv) any other aspect
of Borrower's or any of the Subsidiaries' business.
"Closing Date" shall mean the date on which all of the
conditions precedent to the effectiveness of this Agreement have
been satisfied.
"Code" shall mean the Uniform Commercial Code of the
jurisdiction with respect to which such term is used, as in
effect from time to time.
"Commitment Termination Date" shall mean December 31,
1997.
"Common Stock" shall mean common stock, par value
$0.01, of Borrower.
"Composite Prime Rate" shall mean the average of the
rate of interest per annum publicly announced from time to time
by each of The Chase Manhattan Bank, The Bank of New York, N.A.
and Citibank, N.A. as its prime rate in effect at its principal
office in New York City (each change in any such prime rate to be
effective on the date such change is publicly announced).
"Default" shall mean any event which, with the passage
of time or notice or both would, unless cured or waived, become
an Event of Default.
"Event of Default" shall have the meaning ascribed to
it in Section 9.1 hereof.
"Federal Reserve Board" shall have the meaning ascribed
to it in Section 4.8 hereof.
"Fiscal Year" shall mean the calendar year. Subsequent
changes of the fiscal year of Borrower shall not change the term
"Fiscal Year," unless Lender shall consent in writing to such
changes.
"GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect from time
to time.
"Governmental Authority" means any nation or
government, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guaranteed Indebtedness" shall mean, as to any Person,
any obligation of such Person guaranteeing any indebtedness,
lease, dividend, or other obligation ("primary obligations") of
any other Person (the "primary obligor") in any manner including,
without limitation, any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to
advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain
the net worth or solvency or any balance sheet condition of the
primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) to indemnify the owner
of such primary obligation against loss in respect thereof.
"Hitachi Supply Agreement" shall mean the agreement
between Midland and Hitachi Denshi Ltd., a Japanese corporation
("Hitachi"), dated as of May 12, 1994 and pursuant to which
Hitachi agreed, among other things, to manufacture and sell to
Midland certain mobile radios.
"Indebtedness" of any Person shall mean (i) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (including,
without limitation, reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured, but not including oblig
ations to trade creditors incurred in the ordinary course of
business), (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, (iii) all indebtedness created
or arising under any conditional sale or other title retention
agreements with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or
sale of such property), (iv) all Guaranteed Indebtedness, (v) all
Indebtedness referred to in clause (i), (ii), (iii) or (iv) above
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any
Lien upon or in property (including, without limitation, accounts
and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness, and (vi) the Obligations.
"Intek Loan Assumption Agreement" shall have the
meaning ascribed to it in the recitals hereof.
"Letter of Credit Obligations" shall mean all out
standing obligations incurred by Lender at the request of
Borrower, whether direct or indirect, contingent or otherwise,
due or not due, in connection with the issuance or guarantee, by
Lender or another, of letters of credit, bank acceptances in
respect of letters of credit, or the like. The amount of such
Letter of Credit Obligations shall equal the maximum amount which
may be payable by Lender thereupon or pursuant thereto.
"Letters of Credit" shall mean commercial or standby
letters of credit issued at the request and for the account of
Borrower, and bankers' acceptances issued by Borrower, for which
Lender has incurred Letter of Credit Obligations pursuant
thereto.
"Lien" shall mean any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, lien,
charge, claim, security interest, easement or encumbrance, or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any lease or title retention agreement, any financing
lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Loan" shall mean the aggregate amount of Advances
outstanding at any time plus the amount of any interest
capitalized with respect thereto.
"Loan Documents" shall mean this Agreement, the Note,
and any other Ancillary Agreements as to which Lender is a party
or a beneficiary and all other agreements, instruments, documents
and certificates, including, without limitation, pledges, powers
of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter
executed by or on behalf of Borrower or any of its Affiliates, or
any employee of Borrower or any of its Affiliates, and delivered
to Lender in connection with this Agreement or the transactions
contemplated hereby.
"Material Adverse Effect" or "Material Adverse Change"
shall mean an event or circumstance which materially adversely
affects the business, properties, financial condition or
operations of Borrower and its Subsidiaries (taken as a whole).
"Maximum Lawful Rate" shall have the meaning ascribed
to it, in Section 2.4(c) hereof.
"Midland" shall have the meaning ascribed to it in the
recitals hereof.
"MUSA" shall have the meaning ascribed to it in the
recitals hereof.
"MUSA Loan Agreement" shall have the meaning ascribed
to it in the recitals hereof.
"Net Worth" shall mean the total assets less the total
liabilities of Borrower and its consolidated Subsidiaries as
determined in accordance with GAAP; provided, however, that in no
event shall the par value of the Radiocoms Preferred Stock be
counted as a liability in making such calculation.
"Note" shall have the meaning ascribed to it in Section
2.1(b).
"Obligations" shall mean all loans, advances, debts,
liabilities, and obligations, for monetary amounts (whether or
not such amounts are liquidated or determinable) owing by
Borrower to Lender (including all Letter of Credit Obligations),
and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any
note, agreement or other instrument, arising under any of the
Loan Documents. This term includes, without limitation, all
interest (whether capitalized or otherwise), charges, expenses,
attorneys' fees and any other sum chargeable to Borrower under
any of the Loan Documents.
"Person" shall mean any individual, sole pro
prietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, public
benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or
department thereof).
"Radiocoms" shall have the meaning ascribed to it in
the recitals hereof.
"Radiocoms Preferred Stock" shall mean the 20,000
shares of Preference Stock of Radiocoms, par value $1,000 per
share, which are issued and outstanding as of the date hereof.
"Repayment Date" means June 30, 2001.
"Securicor Transaction" shall have the meaning ascribed
to it in the recitals hereof.
"Senior Debt" shall mean all Indebtedness of Borrower
(including without limitation all principal of and premium, if
any, and interest on, and all other amounts of any nature
whatsoever owing in respect of such Indebtedness, as the same may
be amended, modified or supplemented and any refinancing thereof
from time to time) other than Indebtedness which, in accordance
with its terms, ranks pari passu or junior to the Loan.
"Senior Indebtedness" shall have the meaning ascribed
to it in Section 10.1 hereof.
"Xxxxxxxx" shall have the meaning ascribed to it in the
recitals hereof.
"Solvent" shall mean, when used with respect to any
Person, that:
(a) the present fair saleable value of such
Person's assets (including, without limitation, the fair
saleable value of the goodwill arising in connection with
the Midland Transaction and other intangible assets) is in
excess of the total amount of such Person's liabilities;
(b) such Person is able to pay its debts as they
become due; and
(c) such Person does not have unreasonably small
capital to carry on such Person's business as theretofore
operated and all businesses in which such Person is about to
engage.
"Stock" shall mean all shares, options, warrants,
general or limited partnership interests, participations or other
equivalents (regardless of how designated) of or in a
corporation, partnership or equivalent entity whether voting or
nonvoting, including, without limitation, common stock, preferred
stock, or any other "equity security" (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by
the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended).
"Subordinated Indebtedness" shall have the meaning
ascribed to it in Section 10.1 hereof.
"Subsidiary" shall mean any Person 50% or more of whose
issued and outstanding voting securities is owned or controlled,
directly or indirectly, by the specified Person.
"Taxes" shall have the meaning ascribed thereto in
Section 2.11 hereof.
"Trademarks" shall mean the Trademarks described on
Schedule 4.12(b) hereto and the trade name "Midland" and similar
variations thereof, and all registrations, applications and
renewals thereof and all logos, whether or not registered, used
in connection therewith.
"US LMR Distribution Business" shall mean the business
consisting of the sale and distribution of land mobile radio
products bearing the Trademarks within the US LMR Distribution
Territory as conducted by MUSA.
"US LMR Distribution Territory" shall mean the United
States of America and the territories and possessions thereof.
Any accounting term used in this Agreement shall have,
unless otherwise specifically provided herein, the meaning
customarily given such term in accordance with GAAP, and all
financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP
consistently applied. That certain terms or computations are
explicitly modified by the phrase "in accordance with GAAP" shall
in no way be construed to limit the foregoing. All other
undefined terms contained in this Agreement shall, unless the
context indicates otherwise, have the meanings provided for by
the Code as in effect in the State of New York to the extent the
same are used or defined therein. The words "herein," "hereof"
and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules
hereto, as the same may from time to time be amended, modified or
supplemented, and not to any particular section, subsection or
clause contained in this Agreement.
Wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the
singular and the plural, and pronouns stated in the masculine,
feminine or neuter gender shall include the masculine, the
feminine and the neuter.
2. AMOUNT AND TERMS OF CREDIT
2.1. ADVANCES. (a) Upon and subject to the terms and
conditions hereof, Lender shall make available, from time to
time, until the Commitment Termination Date, for Borrower's use
and upon the request of Borrower therefor, advances (each, an
"Advance") in an aggregate amount (which amount shall include all
outstanding Letter of Credit Obligations, whether or not then due
and payable) which shall not exceed $15,000,000 (less the amounts
outstanding as of the Closing Date, as set forth in Section
2.1(b)). Each Advance shall be made on notice, given no later
than 1:00 P.M. (New York City time) on the second Business Day
prior to the proposed Advance, by Borrower to Lender and no
Advance shall be requested unless the amount thereof is equal to
the lesser of (i) $500,000 and (ii) a whole number multiple of
$500,000 in excess thereof unless the availability under this
Agreement is less than $500,000 in which case such Advance shall
equal such amount; provided, however, that there shall be no
minimum Advance with respect to any Letter of Credit Obligations
to be incurred pursuant to Section 2.2. Each such notice (a
"Notice of Advance") shall be in writing in substantially the
form of Exhibit A hereto, executed by any duly authorized officer
of Borrower, specifying therein the requested date and amount of
such Advance. Lender shall, before 5:00 P.M. (New York City
time) on the date of the proposed Advance, upon fulfillment of
the applicable conditions set forth in Section 3, wire to a bank
in the United States or the United Kingdom designated by Borrower
and reasonably acceptable to Lender the amount of such Advance.
(b) The Loan made by Lender shall be evidenced by a
promissory note to be executed and delivered by Borrower at or
prior to the Closing Date, the form of which is attached hereto
and made a part hereof as Exhibit B (the "Note"). The Note shall
be payable to the order of Lender and shall represent the
obligation of Borrower to pay the amount of the Loan, with
interest thereon as prescribed in Section 2.4. The date and
amount of each Advance and each payment of principal and interest
or any capitalization of interest with respect thereto shall be
recorded on the books and records of Lender, which books and
records shall constitute PRIMA FACIE evidence of the accuracy of
the information therein recorded. Borrower acknowledges that,
(i) as of the date hereof, the amount outstanding under the MUSA
Loan Agreement is $5,912,047.22, (ii) that such amount
constitutes the amount outstanding under this Agreement as of the
date hereof, and (iii) that the amount of the Loan shall be
increased by the amount of any payments on or pursuant to any
Letter of Credit Obligations that Lender incurred pursuant to the
MUSA Loan Agreement, regardless of the date of such payments.
The entire unpaid balance of the Loan and all other Obligations
shall be due and payable on the Repayment Date.
2.2. LETTERS OF CREDIT. (a) Lender shall, subject to
the terms and conditions hereinafter set forth, (i) incur Letter
of Credit Obligations in respect of the issuance, on the Closing
Date, of such Letters of Credit supporting obligations of
Borrower or its Subsidiaries, as Borrower shall request by
written notice to Lender executed by any duly authorized officer
of Borrower, which is received by Lender not less than 2 Business
Days prior to the Closing Date, and (ii) incur from time to time
on written request of Borrower or its Subsidiaries, additional
Letter of Credit Obligations in respect of Letters of Credit
supporting obligations of Borrower or its Subsidiaries;
PROVIDED, HOWEVER, that no such Letter of Credit shall have an
expiry date which is after March 31, 1998. It is understood that
the determination of the bank or other legally authorized Person
(including Lender) which shall issue or accept, as the case may
be, any letter of credit or bankers acceptance contemplated by
this Section 2.2(a) shall be made by Lender, in its sole
discretion.
(b) In the event that Lender shall make any payment on
or pursuant to any Letter of Credit Obligation, such payment
shall then be deemed to constitute an Advance under Section
2.1(a) hereof (whether or not Borrower is then permitted to
request Advances at such time).
(c) In the event that Lender shall incur any Letter of
Credit Obligations pursuant hereto at the request or on behalf of
Borrower hereunder, Borrower shall pay to Lender, as compensation
to Lender for such Letter of Credit Obligation, all fees and
charges paid by Lender on account of such Letter of Credit
Obligation to the issuer or like party. Fees payable in respect
of Letter of Credit Obligations shall be paid to Lender, in
arrears, on the first day of each month for the preceding month.
2.3. USE OF PROCEEDS. Borrower shall apply the
proceeds of the Advances for the general corporate purposes of
Borrower and its Subsidiaries.
2.4. INTEREST ON LOAN. (a)(i) From the Closing Date
through and including the Commitment Termination Date, interest
accrues on the amount outstanding from time to time under the
Loan at the Composite Prime Rate plus one percent (1%) per annum,
calculated on the basis of a 360 day year for the number of days
elapsed. Interest will be capitalized on the Commitment
Termination Date and shall be added to the principal amount
outstanding at such time under the Loan.
(ii) Following the Commitment Termination Date,
interest accrues on the amount outstanding from time to time
under the Loan at the rate of 11% per annum, calculated on the
basis of a 360 day year for the number of days elapsed. Interest
will be capitalized on a monthly basis and shall be added to the
principal amount outstanding from time to time under the Loan.
Interest accrued and uncapitalized on the Repayment Date shall be
payable on such date.
(b) So long as any Event of Default shall be
continuing, the interest rate applicable to the Loan shall be
increased by 3% per annum above the rate otherwise applicable.
(c) Notwithstanding anything to the contrary set forth
in this Section 2.4, if at any time until payment in full of all
of the Obligations, the applicable rate of interest under this
Agreement exceeds the highest rate of interest permissible under
any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto (the "Maximum Lawful
Rate"), then in such event and so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder
shall be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER,
that if at any time thereafter the applicable rate of interest
under this Agreement is less than the Maximum Lawful Rate,
Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by
Lender from the making of advances hereunder is equal to the
total interest which Lender would have received had the
applicable rate of interest under this Agreement been (but for
the operation of this paragraph) the interest rate payable since
the Closing Date. Thereafter, the interest rate payable
hereunder shall be the applicable rate of interest under this
Agreement, unless and until such rate shall again exceed the
Maximum Lawful Rate, in which event this paragraph shall again
apply.
2.5. PREPAYMENTS. (a) Upon the occurrence of a Change
of Control of Borrower, the commitment of Lender to make Advances
under this Agreement shall immediately terminate, and Borrower
shall immediately pay to Lender the full amount of the Loan then
outstanding, together with any accrued but uncapitalized interest
thereon.
(b) Borrower shall have the right, at any time, to
prepay the Loan, in whole or in part, without premium or penalty,
upon at least three Business Days irrevocable notice to Lender
specifying (i) the amount to be repaid and (ii) the date of such
repayment. If any such notice is given, Borrower shall make the
prepayment specified therein, and such prepayment shall be due
and payable as specified therein. Amounts prepaid may not be
reborrowed. Each partial prepayment of the Loan pursuant to this
Section 2.5(b) shall be in an amount equal to the lesser of
$500,000 or a whole number multiple of $500,000 in excess thereof
or such lesser amount outstanding.
2.6. RECEIPT OF PAYMENTS. Borrower shall make each
payment under this Agreement not later than 11:00 A.M. (New York
City time) on the day when due in lawful money of the United
States of America in immediately available funds to Lender's
depositary bank as designated by Lender from time to time for
deposit in Lender's depositary account. For purposes only of
computing interest hereunder, all payments shall be applied by
Lender on the day payment has been credited by Lender's
depository bank to Lender's account in immediately available
funds. For purposes of determining the amount of funds available
for borrowing by Borrower pursuant to Section 2.1(a) hereof, such
payments shall be applied by Lender against the outstanding
amount of the Loan at the time they are credited to its account.
2.7. APPLICATION OF PAYMENTS. Borrower irrevocably
waives the right to direct the application of any and all
payments at any time or times hereafter received by Lender from
or on behalf of Borrower, and Borrower irrevocably agrees that
Lender shall have the continuing exclusive right to apply any and
all such payments against the then due and payable Obligations of
Borrower and in repayment of the Loan as Lender may deem
advisable. Lender is authorized to, and at its option may, make
advances on behalf of Borrower for payment of all fees, expenses,
charges, costs, principal and interest incurred by Borrower
hereunder when and as Borrower fails to promptly pay any such
amounts. At Lender's option and to the extent permitted by law,
any advances so made may be deemed Advances constituting part of
the Loan hereunder.
2.8. ACCOUNTING. Lender will, upon Borrower's
request, provide a monthly accounting of transactions under the
Loan to Borrower within 10 days of the end of the month. Each
and every such accounting shall (absent manifest error) be deemed
final, binding and conclusive upon Borrower in all respects as to
all matters reflected therein, unless Borrower, within 20 days
after the date any such accounting is rendered, shall notify
Lender in writing of any objection which Borrower may have to any
such accounting, describing the basis for such objection with
specificity. In that event, only those items expressly objected
to in such notice shall be deemed to be disputed by Borrower.
Lender's determination, based upon the facts available, of any
item objected to by Borrower in such notice shall (absent mani
fest error) be final, binding and conclusive on Borrower, unless
Borrower shall commence a judicial proceeding to resolve such
objection within 45 days following Lender's notifying Borrower of
such determination.
2.9. INDEMNITY. Borrower shall indemnify and hold
Lender and its officers, directors, employees, agents, Affiliates
and shareholders (collectively, the "Indemnified Persons")
harmless from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable attorneys' fees and
disbursements, including those incurred upon any appeal) which
may be instituted or asserted against or incurred by any
Indemnified Person as the result of the execution of the Loan
Documents or extension of credit hereunder; PROVIDED, HOWEVER,
that Borrower shall not be liable for such indemnification to
such Indemnified Person to the extent that any such suit, action,
proceeding, claim, damage, loss, liability or expense results
from such Indemnified Person's negligence or willful misconduct.
2.10. ACCESS. Lender and any of its officers,
employees and/or agents shall have the right, exercisable as
frequently as Lender determines to be appropriate, during normal
business hours (or at such other times as may reasonably be
requested by Lender), to inspect the properties and facilities of
Borrower and to inspect, audit and make extracts from all of
Borrower's records, files and books of account. Borrower shall
deliver any document or instrument reasonably necessary for
Lender, to obtain records from any service bureau maintaining
records for Borrower, and shall maintain duplicate records or
supporting documentation on media, including, without limitation,
computer tapes and discs owned by Borrower. Borrower shall
instruct its banking and other financial institutions to make
available to Lender such information and records as Lender may
reasonably request.
2.11. TAXES. (a) Any and all payments by Borrower
hereunder or under the Note shall be made, in accordance with
this Section 2.11, free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect
thereto, excluding taxes imposed on or measured by the net income
of Lender by the jurisdiction under the laws of which Lender is
organized or any political subdivision thereof (all such non-
excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as
"Taxes"). If Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under
the Note to Lender, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under
this Section 2.11) Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay
the full amount deducted to the relevant taxing or other
authority in accordance with applicable law.
(b) In addition, Borrower shall pay any present or
future stamp or documentary taxes or any other sales, transfer,
excise, mortgage recording or property taxes, charges or similar
levies that arise from any payment made hereunder or under the
Note or from the execution, sale, transfer, delivery or
registration of, or otherwise with respect to the Loan Documents
and any other agreements and instruments contemplated thereby
(hereinafter referred to as "Other Taxes").
(c) Borrower shall indemnify Lender for the full
amount of Taxes or Other Taxes (including without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.11) paid by Lender and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall
be made within 30 days from the date such Lender makes written
demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, Borrower shall furnish to Lender, at its address referred
to in Section 11.10, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations
of Borrower contained in this Section 2.11 shall survive both (i)
the payment in full of principal and interest hereunder and under
the Note and (ii) the termination of this Agreement.
3. CONDITIONS PRECEDENT
3.1. CONDITIONS TO THE EFFECTIVENESS. Notwithstanding
any other provision of this Agreement and without affecting in
any manner the rights of Lender under the MUSA Loan Agreement,
this Agreement shall not be effective, and Borrower shall have no
rights under this Agreement, and Lender shall not be obligated to
make available any Advance or Letter of Credit hereunder, unless
and until Borrower shall have delivered to Lender, in form and
substance satisfactory to Lender and (unless otherwise indicated)
each dated not later than the Closing Date:
(a) The Note to the order of Lender duly executed by
Borrower.
(b) Resolutions of the board of directors of Borrower
certified by the Secretary or Assistant Secretary of Borrower, as
of the Closing Date, to be duly adopted and in full force and
effect on such date, authorizing (i) the consummation of each of
the transactions contemplated by the Loan Documents and (ii)
specific officers to execute and deliver this Agreement and the
other Loan Documents.
(c) A copy of the organizational charter and all
amendments thereto of Borrower and each of its Subsidiaries,
certified as of a recent date by the Secretary of State of the
jurisdiction of its organization, and copies of Borrower's by-
laws, certified by the Secretary or Assistant Secretary of
Borrower as true and correct as of the Closing Date.
(d) Governmental certificates, dated the most recent
practicable date prior to the Closing Date, with telegram updates
where available, showing that the Borrower and each of its
Subsidiaries is organized and in good standing in the
jurisdiction of its organization and is qualified as a foreign
corporation and in good standing in all other jurisdictions in
which it is qualified to transact business.
(e) (i) Copies of all closing documents and
certificates delivered in connection therewith; and
(ii) a certificate from the chief executive
officer of Borrower certifying that the transactions
contemplated by the Stock Agreement have been
completed.
(f) A certificate of the chief executive officer of
Borrower stating that all of the representations and warranties
of the Borrower contained herein or in any of the Loan Documents
are correct on and as of the Closing Date as though made on and
as of such date, and no event has occurred and is continuing, or
would result from any Advance, if made on the Closing Date, which
constitutes or would constitute a Default or an Event of Default.
(g) Certificates of the Secretary or an Assistant
Secretary of Borrower, dated the Closing Date, as to the
incumbency and signatures of the officers of, respectively,
Borrower executing any of the Loan Documents and any other
certificate or other document to be delivered pursuant hereto or
thereto, together with evidence of the incumbency of such
Secretary or Assistant Secretary.
(h) Such additional information and materials as
Lender may reasonably request, including, without limitation,
copies of any debt agreements, security agreements and other
material contracts.
3.2. FURTHER CONDITIONS TO EACH ADVANCE AND LETTER OF
CREDIT. It shall be a further condition to the funding of each
subsequent Advance and incurrence of Letter of Credit Obligations
that the following statements shall be true on the date of each
such Advance or incurrence:
(a) All of the representations and warranties of
Borrower contained herein or in any of the Loan Documents shall
be correct on and as of the Closing Date and the date of each
such Advance as though made on and as of such date, except to the
extent that any such representation or warranty expressly relates
to an earlier date and for changes therein permitted or contem
plated by this Agreement.
(b) No event shall have occurred and be continuing, or
would result from the funding of any Advance, which constitutes
or would constitute a Default or an Event of Default.
(c) The aggregate principal amount of the Advances
made to Borrower hereunder after giving effect to such Advance,
plus the aggregate amount of all outstanding Letter of Credit
Obligations (whether or not then due or payable), shall not
exceed $15,000,000.
The acceptance by Borrower of the proceeds of any
Advance or the incurrence by Lender of Letter of Credit
Obligations shall be deemed to constitute, as of the date of such
acceptance, a representation and warranty by Borrower that the
conditions in this Section 3.2 have been satisfied.
4. REPRESENTATIONS AND WARRANTIES
To induce Lender to make the Loan, as herein provided
for, Borrower makes the following representations and warranties
to Lender, each and all of which shall be true and correct as of
the date of execution and delivery of this Agreement:
4.1. CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Borrower and each Subsidiary of Borrower (i) is a corporation
duly organized, validly existing and in good standing under the
laws of its state of incorporation; (ii) except as indicated on
Schedule 4.1(ii) hereto, is duly qualified to do business and is
in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business
requires such qualification (except for jurisdictions in which
such failure to so qualify or to be in good standing would not
have a Material Adverse Effect); (iii) has the requisite
corporate power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to
lease the property it operates under lease, and to conduct its
business as now, heretofore and proposed to be conducted; (iv)
except as indicated on Schedule 4.1(iv) hereto, has all material
licenses, permits, consents or approvals from or by, and has made
all material filings with, and has given all material notices to,
all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in
compliance with its certificate of incorporation and by-laws; and
(vi) is in compliance with all applicable provisions of law where
the failure to comply would have a Material Adverse Effect.
4.2. EXECUTIVE OFFICES. The location of Borrower's
executive offices and principal place of business is set forth in
Schedule 4.2 hereto, and, after the Closing Date, as set forth in
a written amendment thereto delivered by Borrower to Lender.
4.3. SUBSIDIARIES. There exist, and upon consummation
of the Securicor Transaction there shall exist, no Subsidiaries
of Borrower other than (a) as set forth on Schedule 4.3 hereto,
which sets forth such Subsidiaries, together with their
respective jurisdictions of organization, and the authorized and
outstanding capital Stock of each such Subsidiary, by class and
number and percentage of each class legally owned by Borrower or
a Subsidiary of Borrower or any other Person, or to be owned by
the Closing Date or (b) after the Closing Date, as set forth in a
written amendment to Schedule 4.3 delivered by Borrower to
Lender. There are no options, warrants, rights to purchase or
similar rights covering capital Stock for any such Subsidiary.
4.4. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE
OBLIGATIONS. The execution, delivery and performance by Borrower
of the Loan Documents, Ancillary Agreements and all instruments
and documents to be delivered by Borrower, to the extent it is a
party thereto, hereunder and thereunder: (i) are within
Borrower's corporate power; (ii) have been duly authorized by all
necessary or proper corporate action; (iii) are not in con
travention of any provision of Borrower's certificates or
articles of incorporation or by-laws; (iv) will not violate any
law or regulation, or any order or decree of any court or
governmental instrumentality in any material respect; (v) will
not conflict with or result in the breach or termination of,
constitute a default under or accelerate any performance required
by, any indenture, mortgage, deed of trust, lease, agreement or
other instrument to which Borrower or any of its Subsidiaries is
a party or by which Borrower or any of its Subsidiaries or any of
their respective properties is bound; (vi) will not result in the
creation or imposition of any Lien upon any of the property of
Borrower or any of its Subsidiaries; and (vii) do not require the
consent or approval of any Governmental Authority or any other
Person. Each of the Loan Documents has been duly executed and
delivered for the benefit of or on behalf of Borrower and each
constitutes a legal, valid and binding obligation of Borrower, to
the extent it is a party thereto, enforceable against it in
accordance with its terms.
4.5. SOLVENCY. After giving effect to the assumption
by Borrower of MUSA's obligation under the MUSA Loan Agreement
and the initial Advance, if made on the Closing Date, and the
payment of all estimated legal, investment banking, accounting
and other fees related hereto or to the Stock Agreement, Borrower
will be Solvent as of and on the Closing Date (it being
understood that in making such representation Borrower has relied
on the projections previously provided to Lender, which are based
on assumptions that Borrower believes are reasonable).
4.6. LABOR MATTERS. There are no strikes or other
labor disputes against Borrower pending or, to Borrower's
knowledge, threatened which would have a Material Adverse Effect.
4.7. INVESTMENT COMPANY ACT. Neither Borrower nor any
of its Subsidiaries is an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended. The making of the Advances by
Lender, the application of the proceeds and repayment thereof by
Borrower and the consummation of the transactions contemplated by
this Agreement and the other Loan Documents will not violate any
provision of such Act or any rule, regulation or order issued by
the Securities and Exchange Commission thereunder.
4.8. MARGIN REGULATIONS. Neither Borrower nor any of
its Subsidiaries owns any "margin security," as that term is
defined in Regulations G and U of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), and the
proceeds of the Advances will be used only for the purposes
contemplated hereunder. The Advances will not be used, directly
or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause
any of the loans under this Agreement to be considered a "purpose
credit" within the meaning of Regulations G, T, U or X of the
Federal Reserve Board. Borrower will not take or permit any
Subsidiary or agent acting on its behalf to take any action which
might cause this Agreement or any document or instrument
delivered pursuant hereto to violate any regulation of the
Federal Reserve Board.
4.9. NO LITIGATION. No action, claim or proceeding is
now pending or, to the knowledge of Borrower, threatened against
Borrower or any of its Subsidiaries at law, in equity or
otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of
any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, which, if determined adversely, could have
a Material Adverse Effect, nor to the knowledge of Borrower does
a state of facts exist which is reasonably likely to give rise to
such proceedings.
4.10. STOCK AGREEMENT. The closing of the Securicor
Transaction and the consummation of the transactions contemplated
thereby will occur immediately prior to the Closing Date.
4.11. HITACHI SUPPLY AGREEMENT. MUSA is a "Midland
Affiliate" under the Hitachi Supply Agreement and entitled to
make purchases thereunder.
4.12. PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES.
Borrower and each of its Subsidiaries owns all material patents,
patent applications, copyrights, trademarks, trademark
applications, and know-how (collectively, "Intangible Property")
necessary to continue to conduct its business as heretofore
conducted by it, now conducted by it and proposed to be conducted
by it, each of which is listed, together with Patent and
Trademark Office application or registration numbers, where
applicable, on Schedule 4.12(a) hereto. Further, (i) Borrower
and each of its Subsidiaries has good and lawful title to the
Intangible Property owned by it (subject to the licenses set
forth on Schedule 4.12(d) hereto); (ii) to Borrower's knowledge,
the Intangible Property is valid and subsisting and is
enforceable; (iii) to Borrower's knowledge, there are no actual
or threatened claims by third parties regarding the Intangible
Property; (iv) to Borrower's knowledge, the Intangible Property
does not infringe or otherwise violate any rights of any third
party, except where any violation or infringement would not have
a Material Adverse Effect.
4.13. NO MATERIAL ADVERSE EFFECT. No event has
occurred and is continuing which has had or could have a Material
Adverse Effect.
5. FINANCIAL STATEMENTS AND INFORMATION
5.1. REPORTS AND NOTICES. Borrower covenants and
agrees that from and after the Closing Date and until the
Commitment Termination Date, it shall deliver to Lender:
(a) Within 45 days after the end of each fiscal
quarter, (i) a copy of the unaudited consolidated balance sheets
of Borrower as of the end of such month and the related state
ments of income and cash flows for that portion of the Fiscal
Year ending as of the end of such month, and (ii) a copy of the
unaudited consolidated statements of income of Borrower for such
month, all prepared in accordance with GAAP (subject to normal
year-end adjustments), accompanied by the certification of the
chief executive officer or chief financial officer of Borrower
that all such financial statements are complete and correct and
present fairly in accordance with GAAP (subject to normal year-
end adjustments), the financial position, the results of
operations and the statements of cash flows of Borrower as at the
end of such month and for the period then ended, and that there
was no Default or Event of Default in existence as of such time.
(b) As soon as practicable, but in any event within
two (2) Business Days after Borrower becomes aware of the
existence of any Default or Event of Default, or any development
or other information which would have a Material Adverse Effect,
telephonic or telegraphic notice specifying the nature of such
Default or Event of Default or development or information,
including the anticipated effect thereof, which notice shall be
promptly confirmed in writing within five (5) days.
(c) If requested by Lender, copies of all federal,
state, local and foreign tax returns and reports in respect of
income, franchise or other taxes on or measured by income
(excluding sales, use or like taxes) filed by Borrower or any of
its Subsidiaries.
(d) Such other information respecting Borrower's or
its Subsidiaries' business (including with respect to orders
received and inventory purchased), financial condition or
prospects as Lender may, from time to time, reasonably request.
5.2. COMMUNICATION WITH ACCOUNTANTS. Borrower
authorizes Lender to communicate directly with its (or any of its
Subsidiaries') independent certified public accountants and tax
advisors and authorizes those accountants to disclose to Lender
any and all financial statements and other supporting financial
documents and schedules including copies of any management letter
with respect to the business, financial condition and other
affairs of Borrower or any of its Subsidiaries. At Lender's
request, Borrower shall deliver a letter addressed to such
accountants and tax advisors instructing them to comply with the
provisions of this Section 5.2.
6. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, unless Lender shall
otherwise consent in writing, from and after the date hereof and
until the Repayment Date:
6.1. MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS.
Borrower shall: (a) do or cause to be done all things necessary
to preserve and keep in full force and effect the corporate
existence, and the rights and franchises of Borrower and each of
its Subsidiaries; (b) transact business on behalf of itself or
any Subsidiary only in such names as Borrower shall specify to
Lender in writing not less than thirty days prior to the first
date such name is used by Borrower and (c) at all times maintain,
preserve and protect all of its Trademarks and any tradenames.
6.2. PAYMENT OF OBLIGATIONS. (a) Borrower shall:
(i) pay and discharge or cause to be paid and discharged all its
and its Subsidiaries' Indebtedness, including, without
limitation, all the Obligations as and when due and payable, and
(ii) pay and discharge or cause to be paid and discharged
promptly all (A) Charges imposed upon it, its income and profits,
or any of its property (real, personal or mixed), and (B) lawful
claims for labor, materials, supplies and services or otherwise
before any thereof shall become in default.
(b) Borrower, on behalf of itself or any Subsidiary,
may in good faith contest, by proper legal actions or proceedings
diligently pursued, the validity or amount of any Charges or
claims arising under Section 6.2(a)(ii), provided that at the
time of commencement of any such action or proceeding, and during
the pendency thereof (i) adequate reserves with respect thereto
are maintained on the books of Borrower, in accordance with GAAP;
(ii) such contest operates to suspend collection of the contested
Charges or claims and is maintained and prosecuted continuously
with diligence; (iii) no Lien shall exist for such Charges or
claims during such action or proceeding; (iv) Borrower shall
promptly pay or discharge such contested Charges and all
additional charges, interest, penalties and expenses, if any, and
shall deliver to Lender evidence acceptable to Lender of such
compliance, payment or discharge, if such contest is terminated
or discontinued adversely to Borrower; and (v) Lender has not
advised Borrower in writing that Lender reasonably believes that
nonpayment or nondischarge thereof would have a Material Adverse
Effect.
(c) Notwithstanding anything to the contrary contained
in Section 6.2(b) above, Borrower shall have the right to pay the
charges or claims arising under Section 6.2(a)(ii) and in good
faith contest, by proper legal actions or proceedings, the
validity or amount of such Charges or claims.
6.3. BOOKS AND RECORDS. Borrower shall keep, and
shall cause its Subsidiaries to keep, all books, accounts and
records in the ordinary course of business.
6.4. LITIGATION. Borrower shall notify Lender in
writing, promptly upon learning thereof, of any litigation
commenced against Borrower or any of its Subsidiaries, and of the
institution against any of them of any suit or administrative
proceeding that may have a Material Adverse Effect.
6.5. INSURANCE. Borrower shall maintain insurance
covering, without limitation, fire, theft, burglary, public
liability, property damage, product liability and insurance on
all property and assets of Borrower and its Subsidiaries, all in
amounts customary for its business and in any event with a
lender's loss payable clause for the benefit of Lender.
6.6. COMPLIANCE WITH LAW. Borrower shall, and shall
cause its Subsidiaries to, comply in all material respects with
all federal, state and local laws and regulations applicable to
it.
6.7. SUPPLEMENTAL DISCLOSURE. From time to time as
may be necessary (in the event that such information is not
otherwise delivered by Borrower to Lender pursuant to this
Agreement), so long as there are Obligations outstanding
hereunder, Borrower will supplement each Schedule (if any) or
representation herein with respect to any matter hereafter
arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described
in such Schedule or as an exception to such representation or
which is necessary to correct any information in such Schedule or
representation which has been rendered inaccurate thereby;
PROVIDED, HOWEVER, that such supplement to such Schedule or
representation shall not be deemed an amendment thereof unless
otherwise consented to by the Lender.
6.8. NET WORTH. Borrower shall maintain at all times,
on a consolidated basis with its Subsidiaries, a Net Worth of not
less than $20 million.
7. NEGATIVE COVENANTS
Borrower covenants and agrees that, without Lender's
prior written consent, from and after the date hereof and until
the Repayment Date:
7.1. MAINTENANCE OF BUSINESS. Borrower shall not and
shall not permit any of its subsidiaries to engage in any
business other than the business currently engaged in by Borrower
or such Subsidiary.
7.2. TRANSACTIONS WITH AFFILIATES. (a) Except as set
forth on Schedule 7.2(b), Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into or be a party to
any transaction with any Affiliate of Borrower, other than with
Securicor, and then only in the ordinary course of and pursuant
to the reasonable requirements of Borrower's or such Subsidiary's
business and upon fair and reasonable terms that are fully
disclosed to Lender and are no less favorable to Borrower or such
Subsidiary than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate of Borrower.
(b) Except as set forth on Schedule 7.2(b) hereto,
Borrower shall not enter into any agreement or transaction to pay
to any Person any management or similar fee based on or related
to Borrower's operating performance or income or any percentage
thereof, nor pay any management or similar fee to an Affiliate.
7.3. EVENTS OF DEFAULT. Borrower shall not, and shall
not permit any of its Subsidiaries to, take or omit to take any
action, which act or omission would constitute (i) a default or
an event of default pursuant to, or noncompliance with any of,
the terms of any of the Loan Documents or (ii) a material default
or an event of default pursuant to, or noncompliance with any
other contract, lease, mortgage, deed of trust or instrument to
which it is a party or by which it or any of its property is
bound, or any document creating a Lien, unless such default,
event of default or non-compliance would not have a Material
Adverse Effect.
8. TERM
8.1. TERMINATION. Subject to the provisions of
Section 2 hereof, the financing arrangement contemplated hereby
in respect of the Loan shall be in effect until the Commitment
Termination Date.
8.2. SURVIVAL OF OBLIGATIONS UPON TERMINATION OF
FINANCING ARRANGEMENT. Except as otherwise expressly provided
for in the Loan Documents, no termination or cancellation
(regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the
powers, obligations, duties, rights and liabilities of Borrower
or the rights of Lender relating to any transaction or event
occurring prior to such termination. Except as otherwise
expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and
representations contained in the Loan Documents shall survive
such termination or cancellation and shall continue in full force
and effect until such time as all of the Obligations have been
paid in full in accordance with the terms of the agreements
creating such Obligations, at which time the same shall
terminate.
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.1. EVENTS OF DEFAULT. The occurrence of any one or
more of the following events (regardless of the reason therefor)
shall constitute an "Event of Default" hereunder:
(a) Borrower shall fail to make any payment of
principal of, or interest on or any other amount owing in respect
of, the Loan or any of the other Obligations when due and such
failure continues for a period of five (5) days.
(b) Borrower shall fail or neglect to perform, keep or
observe any of the provisions of Section 6.8 or Section 7 hereof.
(c) Borrower shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the
other Loan Documents and the same shall remain unremedied for a
period ending on the first to occur of twenty (20) days after
Borrower shall receive written notice of any such failure from
any Lender or forty five (45) days after Borrower shall become
aware thereof.
(d) A default shall occur under any other agreement,
document or instrument to which Borrower or any of its
Subsidiaries is a party or by which Borrower's or any of its
Subsidiaries' property is bound, and such default causes (or
permits any holder of such Indebtedness or a trustee to cause)
such Indebtedness or a portion thereof in an aggregate amount
exceeding $50,000, to become due prior to its stated maturity or
prior to its regularly scheduled dates of payment.
(e) Any representation or warranty herein or in any
Loan Document or in any written statement pursuant thereto or
hereto, report, financial statement or certificate made or
delivered to Lender by Borrower shall be untrue or incorrect in
any material respect, as of the date when made or deemed made
(including those made or deemed made pursuant to Section 3.2).
(f) Any of the assets of Borrower or any of its
Subsidiaries shall be attached, seized, levied upon or subjected
to a writ or distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of
creditors of Borrower or any Subsidiary of Borrower and shall
remain unstayed or undismissed for thirty (30) consecutive days;
or any Person other than Borrower shall apply for the appointment
of a receiver, trustee or custodian for any of the assets of
Borrower or any Subsidiary of Borrower and shall remain unstayed
or undismissed for thirty (30) consecutive days; or Borrower or
any Subsidiary of Borrower shall have concealed, removed or
permitted to be concealed or removed, any part of its property,
with intent to hinder, delay or defraud its creditors or any of
them or made or suffered a transfer of any of its property or the
incurring of an obligation which may be fraudulent under any
bankruptcy, fraudulent conveyance or other similar law.
(g) A case or proceeding shall have been commenced
against Borrower or any Subsidiary of Borrower in a court having
competent jurisdiction seeking a decree or order in respect of
Borrower or any Subsidiary of Borrower (i) under title 11 of the
United States Code, as now constituted or hereafter amended, or
any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar
official) of Borrower or any Subsidiary of Borrower or of any
substantial part of its or their properties, or (iii) ordering
the winding-up or liquidation of the affairs of Borrower or any
Subsidiary of Borrower and such case or proceeding shall remain
undismissed or unstayed for thirty (30) consecutive days or such
court shall enter a decree or order granting the relief sought in
such case or proceeding.
(h) Borrower or any Subsidiary of Borrower shall (i)
file a petition seeking relief under title 11 of the United
States Code, as now constituted or hereafter amended, or any
other applicable federal, state or foreign bankruptcy or other
similar law, (ii) consent to the institution of proceedings
thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar
official) of Borrower or any Subsidiary of Borrower or of any
substantial part of its or their properties, (iii) fail generally
to pay its debts as such debts become due, or (iv) take any
corporate action in furtherance of any such action.
9.2. REMEDIES. If any Event of Default specified in
Section 9.1 shall have occurred and be continuing, Lender may, by
written notice to Borrower and the lender with respect to any
Senior Debt (the "Senior Lender") declare all Obligations to be
forthwith due and payable, whereupon all such Obligations,
without presentment, demand, protest or further notice of any
kind, all of which are expressly waived by Borrower, shall become
due and payable (x) if none of the Senior Debt is outstanding,
immediately and (y) if any Senior Debt is outstanding, upon the
first to occur of (1) acceleration of any Senior Debt or (2) the
fifth Business Day after receipt by Borrower and the Senior
Lender of such written notice given hereunder, unless on or prior
to the date such amounts become due and payable Borrower shall
have cured the default, event or condition resulting in such
Event of Default and no other Event of Default is then continuing
and Borrower shall have given notice of such cure to Agent and
Lenders; provided, however, that upon the occurrence of an Event
of Default specified in Section 9.1(f), (g) or (h) hereof, such
Obligations shall become due and payable without declaration,
notice or demand by Lender. Notwithstanding the above, at any
time after such declaration of acceleration has been made and
before payment in full of the Obligations, Lender, by written
notice to Borrower, may rescind and annul such declaration and
its consequences if all Events of Default, other than the non-
payment of principal of the Loan which has become due solely by
such declaration of acceleration, have been cured or waived.
9.3. WAIVERS BY BORROWER. Except as otherwise
provided for in this Agreement and applicable law, Borrower
waives (i) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by
Lender on which Borrower may in any way be liable and hereby
ratifies and confirms whatever Lender may do in this regard, (ii)
all rights to notice and a hearing prior to Lender's taking
possession or control of, or to Lender's replevy, attachment or
levy upon, any bond or security which might be required by any
court prior to allowing Lender to exercise any of its remedies,
and (iii) the benefit of all valuation, appraisal and exemption
laws. Borrower acknowledges that it has been advised by counsel
of its choice with respect to this Agreement, the other Loan
Documents and the transactions evidenced by this Agreement and
the other Loan Documents.
9.4. RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event of Default, Lender is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing
by Lender to or for the credit or the account of Borrower against
any and all of the obligations of Borrower now or hereafter
existing under this Agreement, and the Note held by Lender
irrespective of whether or not Lender shall have made any demand
under this Agreement or such Note and although such obligations
may be unmatured. Lender agrees promptly to notify Borrower
after any such set-off and application made by Lender; provided,
however, that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of
Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off)
which Lender may have.
10. SUBORDINATION
10.1. LOAN SUBORDINATED TO SENIOR INDEBTEDNESS.
Borrower covenants and agrees, and Lender likewise covenants and
agrees, that all payments of the principal of (and premium, if
any), and interest on, the Loan and all other Obligations by
Borrower pursuant to this Agreement (collectively the
"Subordinated Indebtedness") shall be subordinated in accordance
with the provisions of this Section 10 to the prior payment in
full of all Senior Indebtedness of Borrower. For purposes of
this Section 10, the term "Senior Indebtedness" shall mean the
Senior Debt of Borrower and shall include principal of and
premium, if any, and interest (including interest accruing at the
rate provided for in the documents evidencing such Senior
Indebtedness after the commencement of any proceeding of the type
referred to in Section 10.2(a) hereof, whether or not an allowed
claim in such proceeding) on all loans and other extensions of
credit under, and all expenses, fees, reimbursements, indemnities
and other amounts owing pursuant to, all such Senior Debt of the
Borrower.
10.2. PRIORITY AND PAYMENT OVER OF PROCEEDS IN CERTAIN
EVENTS.
(a) Upon payment or distribution of assets or
securities of Borrower of any kind or character, whether in cash,
property or securities, upon any dissolution or winding up or
total or partial liquidation or reorganization of Borrower,
whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings or upon an assignment for the
benefit of creditors or any other marshalling of the assets and
liabilities of Borrower, all Senior Indebtedness shall first be
paid in full in cash, or payment provided for in cash or cash
equivalents in a manner satisfactory to the holders of Senior
Indebtedness, before any direct or indirect payments or
distributions, including, without limitation, by exercise of set-
off, of any cash, property or securities on account of principal
of (or premium, if any) or interest on the Subordinated Notes and
to that end the holders of Senior Indebtedness shall be entitled
to receive (pro rata on the basis of the respective amounts of
Senior Indebtedness held by them) directly, for application to
the payment thereof (to the extent necessary to pay all Senior
Indebtedness in full after giving effect to any substantially
concurrent payment or distribution to or provision for payment to
the holders of such Senior Indebtedness), any payment or
distribution of any kind or character, whether in cash, property
or securities, in respect of the Subordinated Indebtedness. The
holders of Senior Indebtedness are hereby authorized to file an
appropriate claim for and on behalf of Lender if they or any of
them do not file, and there is not otherwise filed on behalf of
the Holders, a proper claim or proof of claim in the form
required in any such proceeding prior to 30 days before the
expiration of the time to file such claim or claims.
(b) No direct or indirect payment by or on behalf of
Borrower of principal of (premium, if any), or interest on, the
Loan, whether pursuant to the terms of this Agreement, upon
acceleration or otherwise, shall be made if at the time of such
payment there exists (i) a default in the payment of all or any
portion of principal of (premium, if any), interest on, fees or
other amounts owing in connection with any Senior Indebtedness,
or (ii) any other default or event of default under any document
or instrument evidencing the Senior Indebtedness as the same may
be amended, modified or otherwise refinanced (and Lender has
received notice thereof from the agent for or representative of
the holders of a majority of the outstanding principal amount of
the Senior Indebtedness (the "Representative") as provided
below), and in either case such default or event of default shall
not have been cured or waived in writing; provided, however, that
if within the period specified in the next sentence with respect
to a default or event of default referred to in clause (ii)
above, the holders of Senior Indebtedness have not declared the
Senior Indebtedness to be immediately due and payable (or have
declared such Senior Indebtedness to be immediately due and
payable and within such period have rescinded such acceleration),
then and in that event, payment of principal of, and interest on,
the Loan shall be resumed. With respect to any default or event
of default under clause (ii) above the period referred to in the
preceding sentence shall commence upon receipt by Lender of a
written notice or notices (which shall specify all defaults and
events of default existing under such documents or instruments on
the date of such notice and of which the Representative,
whichever is giving such notice, had actual knowledge at such
time) of the commencement of such period from the Representative,
and shall end at the completion of the 180th day after the
beginning of such period. Only one such 180 day period may
commence within any 360 consecutive days. Upon termination of
any such period, Borrower shall resume payments on account of the
principal of (premium, if any), and interest on, the Loan, and on
account of all other Subordinated Indebtedness, subject to the
provisions of Sections 10.1 and 10.2 hereof.
(c) (i) In the event that, notwithstanding the
foregoing provision prohibiting such payment or
distribution, Lenders shall have received any payment
on account of the Subordinated Indebtedness at a time
when such payment is prohibited by such provision
before the Senior Indebtedness is paid in full, then
and in such event, such payment or distribution shall
be received and held in trust by Lender apart from its
other assets and paid over or delivered to the holders
of the Senior Indebtedness remaining unpaid to the
extent necessary to pay in full in cash the principal
of (premium, if any), and interest on, such Senior
Indebtedness in accordance with its terms and after
giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness.
(ii) Nothing contained in this Section 10 will
limit the right of the Lender to take any action to
accelerate the maturity of the Subordinated
Indebtedness pursuant to Section 9.2 hereof.
(iii) Upon any payment or distribution of assets or
securities referred to in this Section 10, Lender shall
be entitled to rely upon any order or decree of a court
of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings
are pending, and upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or
other person making any such payment or distribution,
delivered to Lender for the purpose of ascertaining the
persons entitled to participate in such distribution,
the holders of Senior Indebtedness and other
Indebtedness of Borrower, the amount thereof or payable
thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to
this Section 10.
10.3. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS NOT TO
BE IMPAIRED. No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act
or failure to act by any such holder, or by any noncompliance by
Borrower with the terms and provisions and covenants herein
regardless of any knowledge thereof such holder may have or
otherwise be charged with.
The provisions of this Section 10 are intended to be
for the benefit of, and shall be enforceable directly by, the
holders of the Senior Indebtedness. Borrower and Lender
acknowledges that the holders of the Senior Indebtedness are or
will be relying upon the provisions of this Section 10 in
extending such Senior Indebtedness.
10.4. SUBROGATION. Upon the payment in full of all
Senior Indebtedness, Lender shall be subrogated to the extent of
the payments or distributions made to the holders of, or
otherwise applied to payment of, the Senior Indebtedness pursuant
to the provisions of this Section 10 and to the rights of the
holders of Senior Indebtedness to receive payments or
distributions of assets of Borrower made on the Senior
Indebtedness until Loan shall be paid in full; and for the
purposes of such subrogation, no payments or distributions to
holders of Senior Indebtedness of any cash, property or
securities to which Lender would be entitled except for the
provisions of this Section 10, and no payment over pursuant to
the provisions of this Section 10 to holders of Senior
Indebtedness by Lender, shall, as between Borrower, their
creditors other than holders of Senior Indebtedness and Lender,
be deemed to be payment by Borrower to or on account of Senior
Indebtedness, it being understood that the provisions of this
Section 10 are solely for the purpose of defining the relative
rights of the holders of Senior Indebtedness, on the one hand,
and Lender, on the other hand.
If any payment or distribution to which Lender would
otherwise have been entitled but for the provisions of this
Section 10 shall have been applied, pursuant to the provisions of
this Section 10, to the payment of Senior Indebtedness, then and
in such case, Lender shall be entitled to receive from the
holders of Senior Indebtedness at the time outstanding any
payments or distributions received by such holders of Senior
Indebtedness in excess of the amount sufficient to pay all Senior
Indebtedness in full.
10.5. OBLIGATIONS OF BORROWER UNCONDITIONAL. Nothing
contained in this Section 10 or elsewhere in this Agreement or in
the Note is intended to or shall impair, as between Borrower and
Lender, the obligations of Borrower, which are absolute and
unconditional, to pay to Lender the principal of (premium, if
any), and interest on, the Loan as and when the same shall become
due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of Lender and creditors of
Borrower other than the holders of the Senior Indebtedness, nor
shall anything herein or therein prevent any Holder from
exercising all remedies otherwise permitted by applicable law
upon the occurrence of a default or event of default under this
Agreement, subject to the rights, if any, under this Section 10
of the holders of Senior Indebtedness in respect of cash,
property or securities of Borrower received upon the exercise of
any such remedy.
The failure to make a payment on account of principal
of, or interest on, the Loan by reason of any provision of this
Section 10 shall not be construed as preventing the occurrence of
a Default or an Event of Default hereunder.
10.6. NOTICE TO LENDER. Borrower shall give prompt
written notice to Lender of any fact known to Borrower which
would prohibit the making of any payment on or in respect of the
Loan, but failure to give such notice shall not affect the
subordination of the Subordinated Indebtedness to the Senior
Indebtedness provided in this Section 10. Notwithstanding the
provisions of this Section 10 or any other provision of this
Agreement or the Loan, Lender shall not be charged with knowledge
of the existence of any facts which would prohibit the making of
any payment to or in respect of the Loan, unless and until Lender
shall have received written notice thereof from Borrower, the
Representative or other holder of Senior Indebtedness, and, prior
to the receipt of any such written notice, subject to the
provisions of this Section 10, Lender shall be entitled in all
respects to assume no such facts exist. Nothing contained in
this Section 10.6 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by Sections 10.1
and 10.2.
10.7. RIGHT OF LENDER AS HOLDER OF SENIOR
INDEBTEDNESS. Lender in its individual capacity shall be
entitled to all the rights set forth in this Section 10 with
respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Agreement shall deprive Lender
of any of its rights as such holder.
10.8. REINSTATEMENT. The provisions of this Section
10 shall continue to be effective or be reinstated, and the
Senior Indebtedness shall not be deemed to be paid in full, as
the case may be, if at any time any payment of any of the Senior
Indebtedness is rescinded or must otherwise be returned by the
holder thereof upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise, all as though such payment had not
been made.
11. MISCELLANEOUS
11.1. COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT;
SALE OF INTEREST. (a) The Loan Documents constitute the
complete agreement between the parties with respect to the
subject matter hereof and may not be modified, altered or amended
except by an agreement in writing signed by Borrower and Lender.
Borrower may not sell, assign or transfer any of the Loan
Documents or any portion thereof including, without limitation,
Borrower's rights, title, interests, remedies, powers and duties
hereunder or thereunder. Borrower hereby consents to Lender's
sale of participations, assignment, transfer or other
disposition, at any time or times, of any of the Loan Documents
or of any portion thereof or interest therein, including, without
limitation, Lender's rights, title, interests, remedies, powers
or duties thereunder, whether evidenced by a writing or not.
Borrower agrees that it will use its best efforts to assist and
cooperate with Lender in any manner reasonably requested by
Lender to effect the sale of participations in or assignments of
any of the Loan Documents or of any portion thereof or interest
therein.
(b) In the event Lender assigns or otherwise transfers
all or any part of the Note Borrower shall, upon the request of
Lender, issue a new Note to effectuate such assignment or
transfer.
11.2. FEES AND EXPENSES. If, at any time or times,
regardless of the existence of an Event of Default, Lender shall
employ counsel or other advisors for advice or other
representation or shall incur reasonable legal or other costs and
expenses in connection with any litigation, contest, dispute,
suit, proceeding or action (whether instituted by Lender,
Borrower or any other Person) in any way relating to any of the
Loan Documents or any other agreements to be executed or
delivered in connection herewith, then, and in any such event,
the attorneys' and other parties' fees reasonably arising from
such services, including those of any appellate proceedings, and
all expenses, costs, charges and other fees reasonably incurred
by such counsel and others in any way or respect arising in
connection with or relating to any of the events or actions
described in this Section shall be payable, on demand, by
Borrower to Lender and shall be additional Obligations secured
under this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, such expenses, costs,
charges and fees may include: paralegal fees, costs and
expenses; accountants' and investment bankers' fees, costs and
expenses; court costs and expenses; photocopying and duplicating
expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram charges;
secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of
such legal services.
11.3. NO WAIVER BY LENDER. Lender's failure, at any
time or times, to require strict performance by Borrower of any
provision of this Agreement any of the other Loan Documents shall
not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance therewith. Any
suspension or waiver by Lender of an Event of Default by Borrower
under the Loan Documents shall not suspend, waive or affect any
other Event of Default by Borrower under this Agreement and any
of the other Loan Documents whether the same is prior or
subsequent thereto and whether of the same or of a different
type. None of the undertakings, agreements, warranties,
covenants and representations of Borrower contained in this
Agreement or any of the other Loan Documents and no Event of
Default by Borrower under this Agreement and no defaults by
Borrower under any of the other Loan Documents shall be deemed to
have been suspended or waived by Lender, unless such suspension
or waiver is by an instrument in writing signed by an officer of
Lender and directed to Borrower specifying such suspension or
waiver.
11.4. REMEDIES. Lender's rights and remedies under
this Agreement shall be cumulative and nonexclusive of any other
rights and remedies which Lender may have under any other
agreement, including without limitation, the Loan Documents, by
operation of law or otherwise.
11.5. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHTS UNDER THE LOAN DOCUMENTS.
11.6. SEVERABILITY. Wherever possible, each provision
of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
11.7. PARTIES. This Agreement and the other Loan
Documents shall be binding upon, and inure to the benefit of, the
successors of Borrower and Lender and the assigns, transferees
and endorsees of Lender.
11.8. CONFLICT OF TERMS. Except as otherwise provided
in this Agreement or any of the other Loan Documents by specific
reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement is in conflict with, or
inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern
and control.
11.9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. LENDER AND BORROWER AGREE TO SUBMIT TO PERSONAL
JURISDICTION AND TO WAIVE ANY OBJECTION AS TO VENUE IN THE COUNTY
OF NEW YORK, STATE OF NEW YORK. SERVICE OF PROCESS ON BORROWER
OR LENDER IN ANY ACTION ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS SHALL BE EFFECTIVE IF MAILED TO SUCH PARTY AT THE
ADDRESS LISTED IN SECTION 11.10 HEREOF. NOTHING HEREIN SHALL
PRECLUDE LENDER OR BORROWER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION.
11.10. NOTICES. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by another, or
whenever any of the parties desires to give or serve upon another
any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered
in person with receipt acknowledged or by registered or certified
mail, return receipt requested, postage prepaid, or telecopied
and confirmed by telecopy answerback addressed as follows:
(a) If to Lender at:
00 Xxxxxxxxxx Xxxx
Xxxxxx
Xxxxxx XX0 0XX
Xxxxxxx
Attention: Xxxxxx Xxxxx
Telecopy No. (0000) 000 0000
With copies to:
Weil, Gotshal & Xxxxxx LLP
00 Xxxxxxxxxxx
Xxxxxx, XX0X 0XX
Attention: Xxxxx Xxxxxxxxx, Esq.
Telecopy No. 0171 426 0990
(b) If to Borrower, at:
Intek Diversified Corporation
000 Xxxx 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx
Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telecopy No. 310 366 7712
With copies to:
Manatt, Xxxxxx & Xxxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx
Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy No. 000 000 0000
or at such other address as may be substituted by notice given as
herein provided. The giving of any notice required hereunder may
be waived in writing by the party entitled to receive such
notice. Every notice, demand, request, consent, approval,
declaration or other communication hereunder shall be deemed to
have been duly given or served on the date on which personally
delivered, with receipt acknowledged, telecopied and confirmed by
telecopy answerback or seven (7) Business Days after the same
shall have been deposited (i) in the United States mail (in the
case of notice being given by Borrower or any other Person in the
United States) or (ii) in the United Kingdom mail (in the case of
notice being given by Lender or any other Person located in the
United Kingdom). Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies
shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other
communication.
11.11. SURVIVAL. The representations and warranties
of Borrower in this Agreement shall survive the execution,
delivery and acceptance hereof by the parties hereto and the
closing of the transactions described herein or related hereto.
11.12. SECTION TITLES. The Section titles and Table
of Contents contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not
a part of the agreement between the parties hereto.
11.13. COUNTERPARTS. This Agreement may be executed
in any number of separate counterparts, each of which shall,
collectively and separately, constitute one agreement.
IN WITNESS WHEREOF, this Agreement has been duly
executed as of the date first written above.
INTEK DIVERSIFIED CORPORATION
By:_______________________________
Name:
Title:
SECURICOR COMMUNICATIONS LIMITED
By:_______________________________
Name:
Title
The undersigned hereby guarantees to Borrower the performance by
Lender of all of its obligations under this Agreement.
SECURITY SERVICES PLC
By:_______________________________
Name:
Title:
Date: December 3, 1996
SCHEDULE 4.1
CORPORATE MATTERS
4.1(ii) Qualified to Do Business
Midland USA, Inc. is not qualified to do business in the
states of Massachusetts and Texas.
SCHEDULE 4.2
EXECUTIVE OFFICES
The executive offices and principal place of business of Intek
Diversified Corporation are located at 000 Xxxx 000xx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000.
SCHEDULE 4.3
SUBSIDIARIES
Percentage of
Jurisdiction of Classes of Number of Shares Issued Class Owned by
Name of Subsidiary Incorporation Capital Stock and Outstanding Borrower
------------------ --------------- ------------- ----------------------- --------------
Roamer One, Inc. Delaware common stock 100 100%
Midland USA, Inc. Delaware common stock 100 100%
Olympic Plastics
Company, Inc. California common stock 253,164 100%
IMCX Corporation California common stock 100 100%
IDC International
Corporation Florida common stock 1,000 100%
SCHEDULE 4.12
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
4.12(a) Patents
Midland USA, Inc.:
US Patent Number 4,718,586 (Swivel Fastening Device)
4.12(b) Trademarks
Midland USA, Inc.:
The trademark "Midland" Reg. No 927193, serial number
72-277,496, first registered on January 18, 1972 and
renewed on December 13, 1991.
The trademark "Midland" Reg. No 895483, serial number
72-156,089, first registered on July 28, 1970 and
renewed on December 18, 1990.
Roamer One, Inc.:
The trademark "ROAMER R and design" Reg. No. 1,494,062,
first registered June 28, 1988.
The trademark "ROAMER R and design" Reg. No. 1,494,063,
first registered June 28, 1988.
The trademark "ROAMER" Reg. No. 1,494,064, first
registered June 28, 1988.
The trademark "R and design" Reg. No. 1,599,916, first
registered June 5, 1990.
The trademark "RoameR" Reg. No. 1,625,235, first
registered on November 27, 1990.
The trademark "ROAMER" Reg. No. 1,634,393, first
registered on February 5, 1991.
The trademark "RENT-A-ROAMER and . . ." Reg. No.
1,635,737, first registered on February 19, 1991.
The trademark "ROAMER ONE", serial number 74/198,033.
The application for this trademark has been approved
and will be issued shortly.
The trademark "ROAMER", Canadian Reg. No. 594,735.
4.12(c) Copyrights
None
4.12(d) Licenses
Midland USA, Inc.:
1) Midland USA - Midland International Corp.
Trademark License Agreement dated September 19,
1996.
2) Midland International Corp. - Midland Consumer
Int'l. Exclusive License Agreement dated June 30,
1995.
3) Midland International Corp. - LETT Electronics
Private Label Agreement dated March 1, 1995.
4) Midland International Corp. - American Digital
Communications, Inc. Asset Purchase Agreement
dated December 29, 1995.
SCHEDULE 7.2(b)
CERTAIN TRANSACTIONS
Any management or consulting agreement referenced in the
Borrower's Proxy Statement, dated November 8, 1996, under the
caption "Certain Relationships and Related Transactions."
EXHIBIT A
NOTICE OF ADVANCE
_____________, 199_
Securicor Communications Limited
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxx
XX0 4LDAttention:Xxxxxxx Xxxxxxxxx
Gentlemen:
The undersigned, INTEK DIVERSIFIED CORPORATION, refers
to the Amended and Restated Loan Agreement, dated as of December
3, 1996 (the "Loan Agreement", the terms defined therein being
used herein as therein defined), between the undersigned and
SECURICOR COMMUNICATIONS LIMITED, and hereby gives you notice,
irrevocably, pursuant to Section 2.1 of the Loan Agreement, that
the undersigned hereby requests an Advance under the Loan
Agreement, and in that connection sets forth below the
information relating to such Advance as required by Section
2.1(a) of the Loan Agreement:
(i) The date of the requested Advance shall be
_______________, 199_.
(ii) The aggregate amount of the requested Advance
is $___________ (minimum: $500,000).
(iii) The Advance shall be used solely as permitted
by Section 2.3 of the Loan Agreement.
The undersigned hereby certifies that the statements
contained in Section 3.2 of the Loan Agreement are true on the
date hereof, and will be true on the date of the requested
Advance, before and after giving effect thereto and to the
application of the proceeds therefrom.
Very truly yours,
INTEK DIVERSIFIED CORPORATION
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
TABLE OF CONTENTS
SECTION Page
1. DEFINITIONS.......................................................2
2. AMOUNT AND TERMS OF CREDIT........................................9
2.1. ADVANCES.................................................9
2.2. LETTERS OF CREDIT...........................................9
2.3. USE OF PROCEEDS.............................................10
2.4. INTEREST ON LOAN............................................10
2.6. RECEIPT OF PAYMENTS.........................................11
2.7. APPLICATION OF PAYMENTS.....................................12
2.8. ACCOUNTING..................................................12
2.9. INDEMNITY...................................................12
2.10. ACCESS.....................................................13
2.11. TAXES......................................................13
3. CONDITIONS PRECEDENT..............................................14
3.1. CONDITIONS TO THE EFFECTIVENESS.............................14
3.2. FURTHER CONDITIONS TO EACH ADVANCE
AND LETTER OF CREDIT....................................15
4. REPRESENTATIONS AND WARRANTIES....................................16
4.1. CORPORATE EXISTENCE;
COMPLIANCE WITH LAW.....................................16
4.2. EXECUTIVE OFFICES...........................................16
4.3. SUBSIDIARIES................................................16
4.4. CORPORATE POWER; AUTHORIZATION;
ENFORCEABLE OBLIGATIONS.................................16
4.5. SOLVENCY....................................................17
4.6. LABOR MATTERS...............................................17
4.7. INVESTMENT COMPANY ACT......................................17
4.8. MARGIN REGULATIONS..........................................17
4.9. NO LITIGATION...............................................18
4.10. STOCK AGREEMENT............................................18
4.11. HITACHI SUPPLY AGREEMENT...................................18
4.12. PATENTS, TRADEMARKS,
COPYRIGHTS AND LICENSES................................18
4.13. NO MATERIAL ADVERSE EFFECT.................................18
5. FINANCIAL STATEMENTS AND
INFORMATION.......................................................19
5.1. REPORTS AND NOTICES.........................................19
5.2. COMMUNICATION WITH ACCOUNTANTS..............................19
6. AFFIRMATIVE COVENANTS.............................................20
6.2. PAYMENT OF OBLIGATIONS......................................20
6.3. BOOKS AND RECORDS...........................................21
6.4. LITIGATION..................................................21
6.5. INSURANCE...................................................21
6.6. COMPLIANCE WITH LAW.........................................21
6.7. SUPPLEMENTAL DISCLOSURE.....................................21
6.8. NET WORTH...................................................21
7. NEGATIVE COVENANTS................................................21
7.1. MAINTENANCE OF BUSINESS.....................................21
7.2. TRANSACTIONS WITH AFFILIATES................................21
7.3. EVENTS OF DEFAULT...........................................22
8. TERM .............................................................22
8.1. TERMINATION.................................................22
8.2. SURVIVAL OF OBLIGATIONS UPON
TERMINATION
OF FINANCING ARRANGEMENT................................22
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES............................22
9.1. EVENTS OF DEFAULT...........................................23
9.2. REMEDIES....................................................24
9.3. WAIVERS BY BORROWER.........................................25
9.4. RIGHT OF SET-OFF............................................25
10. SUBORDINATION.........................................................25
10.1. LOAN SUBORDINATED TO SENIOR
INDEBTEDNESS...........................................25
10.2. PRIORITY AND PAYMENT OVER OF
PROCEEDS IN CERTAIN EVENTS.............................26
10.3. RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS NOT TO BE IMPAIRED........................28
10.4. SUBROGATION................................................28
10.5. OBLIGATIONS OF BORROWER UNCONDITIONAL......................29
10.6. NOTICE TO LENDER...........................................29
10.7. RIGHT OF LENDER AS HOLDER OF SENIOR
INDEBTEDNESS...........................................29
10.8. REINSTATEMENT..............................................29
11. MISCELLANEOUS.....................................................30
11.1. COMPLETE AGREEMENT; MODIFICATION OF
AGREEMENT; SALE OF INTEREST............................30
11.2. FEES AND EXPENSES..........................................30
11.3. NO WAIVER BY LENDER........................................31
11.4. REMEDIES...................................................31
11.5. WAIVER OF JURY TRIAL.......................................31
11.6. SEVERABILITY...............................................31
11.7. PARTIES....................................................31
11.8. CONFLICT OF TERMS..........................................31
11.9. GOVERNING LAW..............................................32
11.10. NOTICES...................................................32
11.11. SURVIVAL..................................................33
11.12. SECTION TITLES............................................33
11.13. COUNTERPARTS..............................................33
SCHEDULES
Schedule 4.1 Corporate Matters
Schedule 4.2 Executive Office
Schedule 4.3 Subsidiaries
Schedule 4.12 Patents, Trademarks, Copyrights and Licenses
Schedule 7.3 Certain Transactions
EXHIBITS
Exhibit A-Form of Notice of Advance
Exhibit B-Form of Note
$15,000,000
AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of December 3, 1996
between
INTEK DIVERSIFIED CORPORATION
as Borrower
and
SECURICOR COMMUNICATIONS LIMITED
as Lender
