EXHIBIT 10.24
LOAN AND SECURITY AGREEMENT
Dated as of June 2, 2000
among
OMNI PRODUCTS, INC.
and
OMNI RAIL PRODUCTS, INC.
as Borrowers
and
LASALLE BUSINESS CREDIT, INC.,
as Lender
$7,500,000
TABLE OF CONTENTS
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Page
1. DEFINITIONS..........................................................1
(a) General Definitions................................................1
(b) Accounting Terms and Definitions...................................7
2. REVOLVING LOANS......................................................8
3. TERM LOANS...........................................................8
4. ACQUISITION FACILITY................................................10
5. INTEREST, FEES AND CHARGES..........................................10
(a) Rate of Interest..................................................10
(b) Default Rate of Interest..........................................10
(c) Computation of Interest and Fees..................................10
(d) Maximum Interest..................................................10
(e) Facility Fee......................................................10
(f) Unused Facility Fee...............................................10
(g) Collateral Maintenance Fee........................................10
6. LOAN ADMINISTRATION.................................................11
(a) Loan Requests.....................................................11
(b) Disbursement......................................................11
7. GRANT OF SECURITY INTEREST TO LASALLE...............................11
8. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREI1N............................................................12
9. POSSESSION OF COLLATERAL AND RELATED MATTERS........................12
10. COLLECTIONS.........................................................12
11. SCHEDULES AND REPORTS...............................................13
12. TERMINATION.........................................................14
13. REPRESENTATIONS AND WARRANTIES......................................14
14. COVENANTS...........................................................17
15. CONDITIONS PRECEDENT................................................22
16. DEFAULT.............................................................24
17. REMEDIES UPON AN EVENT OF DEFAULT...................................25
18. INDEMNIFICATION.....................................................25
19. NOTICES.............................................................26
20. CHOICE OF GOVERNING LAW AND CONSTRUCTION............................26
21. FORUM SELECTION AND SERVICE OF PROCESS..............................26
22. MODIFICATION AND BENEFIT OF AGREEMENT...............................26
23. HEADINGS OF SUBDIVISIONS............................................26
24. POWER OF ATTORNEY...................................................26
25. WAIVER OF JURY TRIAL; OTHER WAIVERS.................................26
26. ADVERTISING.........................................................27
27. BORROWERS' ACKNOWLEDGMENT...........................................27
28. JOINT AND SEVERAL LIABILITY.........................................27
29. APPOINTMENT OF OMNI AS AGENT........................................27
30. CONFIDENTIALITY.....................................................27
EXHIBITS AND SCHEDULES
EXHIBIT A CONCENTRATION LIMITS
EXHIBIT B BUSINESS AND COLLATERAL LOCATIONS
EXHIBIT C PERMITTED LIENS
EXHIBIT D FORM OF COMPLIANCE CERTIFICATE
EXHIBIT E REPORTING REQUIREMENTS
SCHEDULE 1(a) OMNI'S STANDARD WARRANTY
SCHEDULE 13(i) LITIGATION
SCHEDULE 13(q) INDEBTEDNESS
SCHEDULE 13(s) PARENTS, SUBSIDIARIES AND DIVISIONS
SCHEDULE 13(x) LICENSE AGREEMENTS
SCHEDULE 15(a)(i) CLOSING AGENDA
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is made as of this 2nd day
of June, 2000, by and among LASALLE BUSINESS CREDIT, INC., a Delaware
corporation ("LaSalle"), with its office at Xxx Xxxxxxxxxxxx Xxxxx, Xxxxx 000,
Xxxx Xxxxxx, Xxxxxx 00000, OMNI PRODUCTS, INC., an Oregon corporation with its
principal office at 000 X.X. Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000
("Omni") and OMNI RAIL PRODUCTS, INC., a Delaware corporation with its principal
office at 000 X.X. Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000 ("Rail").
Omni and Rail are referred to in this Agreement collectively as "Borrowers" and
each individually as a "Borrower."
WITNESSETH:
WHEREAS, from time to time Borrowers may request LaSalle to make
loans and advances to and extend certain credit accommodations to Borrowers, and
the parties wish to provide for the terms and conditions upon which such loans,
advances and credit accommodations shall be made.
NOW, THEREFORE, in consideration of any loans, advances and credit
accommodations (including any loans by renewal or extension) hereafter made to
Borrowers by LaSalle, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by Borrowers, the parties agree
as follows:
1. DEFINITIONS.
(a) General Definitions.
-------------------
"A/R Advance Rate" means, at any time, the percentage set forth
below opposite the applicable average Dilution of Borrower's Accounts for the
six months preceding the time of such determination:
Dilution A/R Advance Rate
-------- ----------------
0-5% 85%
5.1-6% 83%
6.1-7% 81%
7.1-8% 79%
8.1-9% 77%
9.1-10% 75%
More than 10% Rate determined by
LaSalle in the
exercise of its
reasonable credit
judgment
"Account," "Account Debtor," "Chattel Paper," "Deposit Accounts,"
"Documents," "Equipment," "General Intangibles," "Goods," "Instruments,"
"Inventory," and "Investment Property" shall have the respective meanings
assigned to such terms, as of the date of this Agreement, in the Oregon Uniform
Commercial Code.
"Affiliate" shall mean any Person directly or indirectly
controlling, controlled by or under common control with another specified
Person.
"Acquisition Facility" shall mean the sum of $2,500,000.
"Bank" shall mean LaSalle Bank National Association.
"Borrowing Base" shall have the meaning specified in paragraph
2(b) hereof.
"Business Day" shall mean (i) any day other than a Saturday,
Sunday, or such other day as banks in Chicago, Illinois or Portland, Oregon are
authorized or required to be closed for business.
"Capital Expenditures" shall mean, with respect to any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including expenditures for capitalized lease obligations) during such period
that are required by GAAP to be included in or reflected by the property, plant
or equipment or similar fixed asset accounts in a balance sheet of a specified
Person.
"Capital Expenditure Facility" shall mean the sum of $300,000.
"Change of Control" shall mean if at any time any Person owns or
controls, of record or beneficially, through one or more Affiliates or other
Persons, an aggregate of more than fifty percent (50%) of the voting securities
of Rail or if Rail shall cease, directly or indirectly, of record or
beneficially, to own or control in the aggregate at least eighty percent (80%)
of the voting shares of Omni free and clear of all liens and security interests.
"Closing Agenda" shall have the meaning specified in paragraph
15(a)(i) hereof.
"Closing Date" shall mean the date first stated above.
"Collateral" shall mean all of the personal property of Borrowers
described in paragraph 7 hereof, and all other real and personal property of any
Obligor or any other Person now or hereafter pledged or granted to LaSalle to
secure, either directly or indirectly, repayment of any of the Liabilities.
"Contract Year" shall mean each one-year period beginning on the
Closing Date and on each anniversary of the Closing Date.
"Debt Service Coverage Ratio" shall mean, with respect to any
period, the ratio of (i) net income after taxes for such period (excluding any
gains on the sale of assets other than the sale of Inventory in the ordinary
course of business and excluding other extraordinary after tax gains), plus
depreciation and amortization deducted in determining net income for such
period, minus Capital Expenditures for such period not financed, to (ii) current
principal maturities of long term debt and capitalized leases paid or scheduled
to be paid during such period, plus any prepayments on indebtedness owed to any
Person (except trade payables, revolving loans, and any prepayments made from
the proceeds of permitted sales of fixed assets) and paid during such period.
"Default" shall mean any event, condition or default which, with
the giving of notice, the lapse of time, or both, would be an Event of Default.
"Dilution" shall mean, with respect to any period, the percentage
obtained by dividing: (a) the sum of non-cash credits against Accounts of a
Borrower for such period, plus pending or probable, but not yet applied,
non-cash credits against Accounts of such Borrower for such period, as
reasonably determined by LaSalle, by (b) gross invoiced sales of such Borrower
for such period.
"Eligible Account" shall mean an Account owing to Omni which is
acceptable to LaSalle in its reasonable judgment for lending purposes. LaSalle
shall consider an Account to be an Eligible Account if it meets, and so long as
it continues to meet, the following requirements:
(i) it is genuine and in all respects is what it purports to
be;
(ii) it is owned by Omni and Omni has the right to subject
it to a security interest in favor of LaSalle;
(iii) it arises from (A) the performance of services by Omni
and such services have been fully performed and have been
acknowledged and accepted by the Account Debtor thereunder; or
(B) the sale of Goods by Omni, and such Goods have been completed
in accordance with the Account Debtor's specifications (if any),
have been shipped to the Account Debtor, such Account Debtor has
not refused to accept and has not rejected, revoked acceptance
of, returned or offered to return any of the Goods, and has not
refused to accept any of the services which are the subject of
such Account, and Omni has possession of, or has delivered to
LaSalle at LaSalle's request, shipping and delivery receipts
evidencing delivery of such Goods;
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(iv) it is evidenced by an invoice rendered to the Account
Debtor thereunder, is due and payable within thirty (30) days
after the stated invoice date thereof and does not remain unpaid
more than ninety (90) days past the invoice date thereof;
provided, however, that if more than twenty-five percent (25%) of
the aggregate dollar amount of invoices owing by a particular
Account Debtor remain unpaid for more than ninety (90) days past
the respective invoice dates thereof, then all Accounts owing to
Omni by that Account Debtor shall be deemed ineligible;
(v) it is not subject to any prior assignment, claim, lien,
security interest or encumbrance whatsoever, other than Permitted
Liens;
(vi) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor thereunder, and is not subject
to setoff, counterclaim, credit, allowance or adjustment by such
Account Debtor, to any claim by such Account Debtor denying
liability thereunder in whole or in part, including but not
limited to any claim of breach of warranty or any rejection or
revocation of acceptance of any Goods;
(vii) it does not arise out of a contract or order which
fails in any material respect to comply with the requirements of
applicable law;
(viii) the Account Debtor thereunder is not a director,
officer, employee or agent of Omni, or a Subsidiary, Parent or
Affiliate of Omni;
(ix) it is not an Account with respect to which the Account
Debtor is the United States of America or any department, agency
or instrumentality thereof, unless Omni assigns its right to
payment of such Account to LaSalle pursuant to, and in full
compliance with, the Assignment of Claims Act of 1940, as
amended;
(x) it is not an Account with respect to which the Account
Debtor is located in a state which requires Omni, as a
precondition to commencing or maintaining an action in the courts
of that state, either to (A) receive a certificate of authority
to do business and be in good standing in such state, or (B) file
a notice of business activities report or similar report with
such state's taxing authority, unless (x) Omni has taken one of
the actions described in clauses (A) or (B), (y) the failure to
take one of the actions described in either clause (A) or (B) may
be cured retroactively by Omni at its election, or (z) Omni has
proven, to LaSalle's reasonable satisfaction, that it is exempt
from any such requirements under any such state's laws;
(xi) it is an Account which arises out of a sale made in the
ordinary course of Omni's business;
(xii) the Account Debtor is a resident or citizen of, and is
located within, the United States of America or Canada or if the
Account Debtor is not a resident of the United States or Canada,
either (A) the Account Debtor has supplied Omni with an
irrevocable commercial letter of credit issued by a financial
institution and in form and substance satisfactory to LaSalle,
and, if so requested by LaSalle, delivered to LaSalle or its
agent in pledge for negotiation and presentment, or (B) the
Account is covered by credit insurance acceptable to LaSalle;
(xiii) it is not an Account with respect to which the
Account Debtor's obligation to pay is conditional upon the
Account Debtor's approval of the Goods or services or is
otherwise subject to any repurchase obligation or return right,
as with sales made on a xxxx-and-hold, guaranteed sale, sale on
approval, sale or return or consignment basis (excepting,
however, repurchase obligations and return rights based upon
Omni's standard written warranty, a copy of which is attached
hereto as Schedule 1(a), and the Account Debtor's right to reject
or revoke its acceptance of Goods in accordance with the Uniform
Commercial Code);
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(xiv) it is not an Account (A) with respect to which any
representation or warranty contained in this Agreement is untrue
or (B) which violates any of the covenants of Borrowers contained
in this Agreement;
(xv) except to the extent otherwise permitted with respect
to Account Debtors listed in Exhibit A attached hereto, it is not
an Account which, when added to a particular Account Debtor's
other indebtedness to Omni, exceeds the lesser of (A) fifteen
percent (15%) of the aggregate of Omni's Accounts or (B) a credit
limit determined by LaSalle in its reasonable credit judgment for
that Account Debtor, provided, however, that Accounts excluded
from Eligible Accounts solely by reason of this paragraph (xv)
shall be Eligible Accounts to the extent of such credit limit.
Exhibit A will be subject to amendment from time to time upon the
request of Borrower, subject to LaSalle's approval of each such
request, on a case by case basis. Any amendment must be in
writing and signed by LaSalle. LaSalle may impose a fee not
exceeding $100 for each such amendment; and
(xvi) it is not an Account with respect to which the
prospect of payment or performance by the Account Debtor is or
will be impaired, as determined by LaSalle in its reasonable
discretion.
"Eligible Inventory" shall mean Inventory of Omni which is
acceptable to LaSalle in its reasonable judgment. Without limiting LaSalle's
discretion, LaSalle shall consider Inventory to be Eligible Inventory if it
meets, and so long as it continues to meet, the following requirements:
(i) it is owned by Omni and Omni has the right to subject it
to a security interest in favor of LaSalle;
(ii) it is not in transit and it is located on the premises
listed in Section A on Exhibit B and if any such premises are
leased, LaSalle has received a landlord's waiver with respect to
such premises satisfactory to LaSalle;
(iii) it is not subject to any prior assignment, claim,
lien, security interest or encumbrance whatsoever, other than
Permitted Liens;
(iv) it is finished goods, and it is not raw materials, work
in process, supplies or inventory consumed in Omni's business;
(v) it is held for sale or furnishing under contracts of
service, and it is (except as LaSalle may otherwise consent in
writing) new and unused and free from defects which would, in
LaSalle's reasonable determination, adversely affect its market
value;
(vi) it is not stored with a bailee, consignee,
warehouseman, processor or similar party unless such party is
listed in Section B on Exhibit B (as such exhibit may be amended
from time to time by a writing signed by LaSalle) and Omni has
caused any such bailee, consignee, warehouseman, processor or
similar party to issue and deliver to LaSalle, in form and
substance acceptable to LaSalle, such UCC financing statements,
warehouse receipts, waivers and other documents as LaSalle shall
require;
(vii) LaSalle has determined in its reasonable judgment that
it is not unacceptable due to age, type, category or quantity;
and
(viii) it is not Inventory (A) with respect to which any of
the representations and warranties contained in this Agreement
are untrue or (B) which violates any of the covenants of
Borrowers contained in this Agreement.
"Environmental Laws" shall mean all applicable Federal, State and
local laws (including common law), legislation, rules, codes, licenses, permits
(including any conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between either Borrower and
any governmental authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, ground water, drinking water, drinking water supply, surface
4
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety (including under the Occupational Health and Safety
Act), (b) relating to the exposure to, or the use, storage, recycling,
treatment, generation, manufacture, processing, distribution, transportation,
handling, labeling, production, release or disposal, or threatened release, of
Hazardous Materials, or (c) relating to all laws with regard to record keeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials. The term "Environmental Laws" includes but is not limited to (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal Act and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (ii) applicable state counterparts to such laws, and (iii) any
common law or equitable doctrine that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.
"Event of Default" shall have the meaning specified in paragraph
16 hereof.
"Excess Availability" shall mean, as of any date of determination
by LaSalle, the excess, if any, of (i) the total Borrowing Base of Omni over
(ii) the total outstanding Revolving Loans as of the close of business on such
date. For purposes of calculating Omni's Excess Availability and the amount of
any Borrowing Base relating thereto, all of Omni's trade payables, which remain
unpaid 30 days or more after the due dates thereof shall, on the date of the
determination of Excess Availability, be deemed to have been paid by Omni from
proceeds of Revolving Loans.
"Exhibit B" shall mean the exhibit entitled "Exhibit B - Business
and Collateral Locations" which is attached hereto and made a part hereof.
"Fiscal Year" shall mean with respect to Borrowers, the twelve
(12) month accounting period of Borrowers commencing May 1 of each calendar year
and ending April 30 of the following calendar year.
"GAAP" shall mean generally accepted accounting principles and
policies in the United States as in effect from time to time.
"Hazardous Materials" shall mean any hazardous, toxic or
dangerous substances, materials and wastes, including hydrocarbons (including
naturally occurring or man-made petroleum and hydrocarbons), flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
biological substances, polychlorinated biphenyls, pesticides, herbicides and any
other kind and/or type of pollutants or contaminants (including materials which
include hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any other similar substances, materials, or wastes and including any
other substances, materials or wastes that are or become subject to regulation
under any Environmental Law (including any that are or become classified as
hazardous or toxic under any Environmental Law).
"Indemnified Party" shall have the meaning specified in paragraph
18 hereof.
"Inventory Advance Rate" shall mean fifty percent (50%).
"Liabilities" shall mean any and all obligations, liabilities and
indebtedness of Borrowers, or either of them, to LaSalle or to any Parent,
Affiliate or Subsidiary of LaSalle of any and every kind and nature, howsoever
created, arising or evidenced and howsoever owned, held or acquired, whether now
or hereafter existing, whether now due or to become due, whether primary,
secondary, direct, indirect, absolute, contingent or otherwise (including,
without limitation, obligations of performance), whether several, joint or joint
and several, and whether arising or existing under written or oral agreement or
by operation of law.
"Loan" or "Loans" shall mean any and all Revolving Loans made by
LaSalle to Omni pursuant to paragraph 2 hereof, any and all Term Loans made by
LaSalle to Borrowers, or either of them, pursuant to paragraph 3 hereof and all
other loans, advances and financial accommodations made by LaSalle to or on
behalf of Borrowers, or either of them, hereunder, including but not limited to
loans under the Acquisition Facility.
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"Lock Box" and "Blocked Account" shall have the meanings
specified in paragraph 10 hereof.
"Material Adverse Effect" shall mean with respect to any event,
act, condition or occurrence of whatever nature (including but not limited to
any adverse determination in any litigation, arbitration or governmental
investigation or proceeding), whether singly or in conjunction with any other
event or events, act or acts, condition or conditions, occurrence or
occurrences, whether or not related, a material adverse change in, or a material
adverse effect upon, any of the business, property, assets, operations,
condition (financial or otherwise) or prospects of Borrowers, or either of them.
"Mortgage" shall mean each mortgage or deed of trust executed by
a Borrower in favor of LaSalle to secure the Liabilities.
"Notes" shall mean the Revolving Note and the Term Notes, and
"Note" shall mean each of such Notes.
"Obligor" shall mean each Borrower and each other Person who is
or shall become primarily or secondarily liable for any of the Liabilities;
provided, however, that such term shall not include any Account Debtor.
"Original Term" shall have the meaning specified in paragraph 12
hereof.
"Other Agreements" shall mean all agreements, instruments and
documents including, without limitation, guaranties, mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements and all other writings heretofore, now
or from time to time hereafter executed by or on behalf of Borrowers, or either
of them, or any other Person and delivered to LaSalle or to any Parent,
Affiliate or Subsidiary of LaSalle in connection with the Liabilities or the
transactions contemplated hereby.
"Parent" shall mean any Person now or at any time or times
hereafter owning or controlling (alone or with any other Person) at least a
majority of the issued and outstanding stock or other similar ownership
interests of another specified Person.
"Permitted Liens" shall mean (i) statutory liens of landlords,
carriers, warehousemen, mechanics, materialmen or suppliers incurred in the
ordinary course of business and securing amounts which are not yet due or
declared to be due by the claimant thereunder or which are being contested by a
Borrower in good faith by appropriate proceedings diligently pursued, and with
respect to which adequate reserves have been set aside on such Borrower's books,
(ii) liens or security interests in favor of LaSalle, (iii) zoning restrictions
and easements, rights of way, licenses, covenants and other restrictions
affecting the use of real property that do not individually or in the aggregate
have a Material Adverse Effect on either Borrower's ability to use such real
property for its intended purpose in connection with such Borrower's business,
(iv) liens securing the payment of taxes or other governmental charges not yet
delinquent or being contested in good faith and by appropriate proceedings, (v)
liens incurred or deposits made in the ordinary course of a Borrower's business
in connection with capitalized leases or purchase money security interests for
purchase of, and applying only to, Equipment included in the permitted
borrowings under paragraphs 13(q) or 14(i) or permitted as Capital Expenditures
under paragraph 14(n), such purchase money security interests to apply only to
the specific Equipment which is purchased, the amount secured thereby not to
exceed the purchase price, and the documents relating to such liens to be in
form and substance acceptable to LaSalle, (vi) liens securing indebtedness owing
by any Subsidiary to a Borrower to the extent such indebtedness is permitted
under paragraph 14(i), or to any other Subsidiary of a Borrower, (vii) deposits
to secure performance of bids, trade contracts, leases and statutory obligations
(to the extent not excepted elsewhere herein); (viii) liens specifically
permitted by LaSalle in writing as set forth on Exhibit C attached hereto; (ix)
any lien arising out of the refinancing, extension, renewal or refunding of any
indebtedness secured by any lien permitted by any of the foregoing subparagraphs
(i) through (viii) inclusive, provided, that (a) such indebtedness is not
secured by any additional assets, and (b) the amount of such indebtedness is not
increased; (x) pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation, (xi) securities
and other properties held at banks or financial institutions to secure the
payment or reimbursement under overdraft, acceptance and other facilities, and
(xii) rights of setoff, banker's lien and other similar rights arising solely by
operation of law.
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"Person" shall mean any individual, sole proprietorship,
partnership, limited liability company, venture, trust, unincorporated
organization, association, corporation, institution, entity, party or foreign or
United States government (whether federal, state, county, city, municipal or
otherwise), including, without limitation, any instrumentality, division,
agency, body or department thereof.
"Prime Rate" shall mean the publicly announced prime rate of Bank
in effect from time to time. The Prime Rate is not intended to be the lowest or
most favorable rate of Bank in effect at any time.
"Public Authority" means the government of any country or
sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or any department, agency, public corporation, or other
instrumentality of any of the foregoing.
"Regulatory Development" means any or all of the following: (i)
any change in any law, regulation, or interpretation thereof by any Public
Authority (whether or not having the force of law); (ii) any change in the
application of any existing law, regulation, or the interpretation thereof by
any Public Authority (whether or not having the force of law); and (iii)
compliance by LaSalle with any request or directive (whether or not having the
force of law) of any Public Authority.
"Renewal Term" shall have the meaning specified in paragraph 12
hereof.
"Revolving Loans" shall have the meaning specified in paragraph 2
hereof.
"Revolving Loan Facility" shall mean the sum of $2,500,000.
"Revolving Note" shall mean the revolving promissory note in the
original principal amount of $2,500,000, executed by Omni to the order of
LaSalle, dated as of the Closing Date.
"Subsidiary" shall mean any corporation, limited liability
company, partnership or other entity of which more than fifty percent (50%) of
the outstanding capital stock or other ownership interests are at the time,
directly or indirectly, owned by a specified Person or by any other entity of
which more than fifty percent (50%) of the outstanding equity interests are at
the time, directly or indirectly, owned by a such specified Person.
"Tangible Net Worth" shall mean shareholders' equity (including
retained earnings) less the book value of all intangible assets, determined by
LaSalle on a consistent basis, plus the amount of any debt subordinated to
LaSalle on terms and conditions, and pursuant to documentation, acceptable to
LaSalle in its reasonable judgment, all as determined in accordance with GAAP,
consistently applied.
"Term Loans" shall mean the Omni Real Estate Term Loan, the Rail
Real Estate Term Loan, the M & E Term Loan, the Capital Expenditure Loans, and
the Capital Expenditure Advances, all as described in paragraph 3 hereof.
"Term Notes" shall mean the various notes executed by Borrowers
pursuant to paragraph 3 hereof to evidence the Term Loans.
"Total Facility" shall mean, at any time, the sum of the
Revolving Loan Facility, the Capital Expenditure Facility, the Acquisition
Facility and the aggregate amount then outstanding on all Term Loans other than
Capital Expenditure Loans and advances.
(b) Accounting Terms and Definitions. Unless otherwise defined or
specified herein, all accounting terms used in this Agreement shall be construed
in accordance with GAAP, applied in a basis consistent in all material respects
with the audited financial statements delivered by Borrowers to LaSalle on or
before the Closing Date. All accounting determinations for purposes of
determining compliance with the covenants contained in paragraph 14 shall be
made in accordance with GAAP as in effect on the Closing Date and applied on a
basis consistent in all material respects with the audited financial statements
delivered to LaSalle by Borrowers on or before the Closing Date. The financial
statements required to be delivered hereunder from and after the Closing Date,
and all financial records, shall be maintained in accordance with GAAP. LaSalle
agrees that interim financial statements will not include footnotes.
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2. REVOLVING LOANS. Subject to the terms and conditions of this
Agreement and the Other Agreements, during the Original Term and any Renewal
Term:
(a) LaSalle shall make revolving loans and advances (the
"Revolving Loans") to Omni from time to time based upon Omni's requests, in
accordance with the terms of paragraph 2(b) hereof. The aggregate unpaid
principal amount of all Revolving Loans outstanding at any one time shall not
exceed the lesser of (i) the Borrowing Base for Omni or (ii) the Revolving Loan
Facility. All Revolving Loans shall be repaid in full upon the earlier to occur
of (A) the end of the Original Term or any Renewal Term, if either LaSalle
elects or Borrowers elect to terminate this Agreement as of the end of any such
term, and (B) the acceleration of the Liabilities pursuant to paragraph 17 of
this Agreement. If at any time the outstanding principal balance of the
Revolving Loans made to Omni exceeds Omni's Borrowing Base, or if at any time
the amount of all Revolving Loans exceeds the Revolving Loan Facility, Omni
shall immediately, and without the necessity of a demand by LaSalle, pay to
LaSalle such amounts as may be necessary to eliminate such excess, and LaSalle
shall apply such payments against the outstanding principal balance of the
Revolving Loans. Borrowers hereby authorize LaSalle to charge any of Borrowers'
accounts to make any payments of principal, interest, fees or reimbursable
expenses required by this Agreement. All Revolving Loans shall, in LaSalle's
sole discretion, be evidenced by one or more promissory notes in form and
substance satisfactory to LaSalle. However, if such Revolving Loans are not so
evidenced, such Revolving Loans may be evidenced solely by entries upon the
books and records maintained by LaSalle.
(b) LaSalle shall make Revolving Loans to Omni up to the lesser
of the Revolving Loan Facility or the sum of the following amounts (the
"Borrowing Base" for Omni):
(i) the applicable A/R Advance Rate applied to the face
amount of Omni's Eligible Accounts plus,
(ii) the lesser of $1,250,000 or the Inventory Advance Rate
applied to the value of Omni's Eligible Inventory calculated on
the lower of cost or market value on a first-in, first-out basis;
less
(iii) such reserves as LaSalle in its reasonable judgment
may from time to time establish in determining the Borrowing Base
to reflect events, conditions, contingencies or risks which may
adversely affect the Collateral, the business, business prospects
or financial condition of Borrowers, the security interests of
LaSalle, or the security of the Loans.
3. TERM LOANS
(a) Subject to the terms and conditions of this Agreement and the
other Agreements, on the Closing Date LaSalle will make a Term Loan to Omni in
the original principal amount of Eight Hundred Sixty-Three Thousand and No/100
Dollars ($863,000) (the "Omni Real Estate Term Loan"). Principal payable on
account of the Omni Real Estate Term Loan shall be payable in successive monthly
installments of $7,191.67 payable on the first day of each month, the first of
which installments shall be due and payable on the first day of the month
immediately following the Closing Date; provided, however, that the entire
unpaid principal balance of the Omni Real Estate Term Loan shall be due and
payable in full upon the expiration of the Original Term of this Agreement.
Provided, further, that in the event the Original Term of this Agreement is
initially or subsequently renewed in accordance with paragraph 12 hereof, then
Omni shall continue to make such equal and level monthly payments, and a final
installment equal to the unpaid principal balance and any other amounts
outstanding shall be due and payable upon expiration of the Renewal Term.
(b) Subject to the terms and conditions of this Agreement and the
other Agreements, on the Closing Date LaSalle will make a Term Loan to Rail in
the original principal amount of Seven Hundred Thirty-Seven Thousand and No/100
Dollars ($737,000) (the "Rail Real Estate Term Loan"). Principal payable on
account of the Rail Real Estate Term Loan shall be payable in successive monthly
installments of $6,141.67 payable on the first day of each month, the first of
which installments shall be due and payable on the first day of the month
immediately following the Closing Date; provided, however, that the entire
unpaid principal balance of the Rail Real Estate Term Loan shall be due and
payable in full upon the expiration of the Original Term of this Agreement.
Provided, further, that in the event that the Original Term of this Agreement is
initially or subsequently renewed in accordance with paragraph 12 hereof, then
8
Rail shall continue to make such equal and level monthly payments, and a final
installment equal to the unpaid principal balance and any other amounts
outstanding shall be due and payable upon the expiration of the Renewal Term.
(c) Subject to the terms and conditions of this Agreement and the
other Agreements, on the Closing Date LaSalle will make an additional Term Loan
to Omni in the original principal amount of One Hundred Twenty-Four Thousand and
No/100 Dollars ($124,000), (the "M & E Term Loan"). Principal payable on account
of the M & E Term Loan shall be payable in successive monthly installments of
$2,066.67 payable on the first day of each month, the first of which
installments shall be due and payable on the first day of the month immediately
following the Closing Date; provided, however, that the entire unpaid principal
balance of the M & E Term Loan shall be due and payable in full upon the
expiration of the Original Term of this Agreement. Provided, further, that in
the event that the Original Term of this Agreement is initially or subsequently
renewed in accordance with paragraph 12 hereof, then Omni shall continue to make
such equal and level monthly payments, and a final installment equal to the
unpaid principal balance and any other amounts outstanding shall be due and
payable upon the expiration of the Renewal Term.
(d) Subject to the terms and conditions of this Agreement and the
other Agreements, LaSalle may make advances to Omni from time to time upon
Omni's request to fund the purchase of new machinery and equipment, provided
that the aggregate amount of such advances will not exceed the Capital
Expenditure Facility. Each advance under the Capital Expenditure Facility (a
"Capital Expenditure Advance") must be requested by Borrower in writing with
supporting documentation acceptable to LaSalle and may not exceed the lesser of
(i) eighty percent (80%) of Omni's actual cost (excluding delivery, tax, service
contracts and extended warranties, installation, engineering and similar costs)
of machinery and equipment acceptable to LaSalle in its reasonable discretion or
(ii) the Capital Expenditure Facility minus the aggregate amount of all prior
Capital Expenditure Advances. LaSalle will have a first priority security
interest in such machinery and equipment, and it will otherwise be free of liens
and encumbrances. No principal payments will be required on any Capital
Expenditure Advance in the Contract Year in which it is made. At the end of each
Contract Year, all Capital Expenditure Advances advanced during the Contract
Year will be aggregated (each such aggregate amount being referred to in this
Agreement as a "Capital Expenditure Loan"). Principal payable on account of each
Capital Expenditure Loan shall be payable in sixty (60) equal successive monthly
installments, the first of which installments shall be due and payable on the
first day of the first month of the Contract Year following the year of advance;
provided, however, that the entire unpaid balance of each Capital Expenditure
Loan, and all Capital Expenditure Advances not yet aggregated into a Capital
Expenditure Loan, shall be due and payable in full upon the expiration of the
Original Term of this Agreement; and, provided, further, that in the event that
the Original Term of this Agreement is initially or subsequently renewed in
accordance with paragraph 12 hereof, then Omni shall continue to make such equal
and level monthly payments, and a final installment equal to the unpaid
principal balance and any other amounts outstanding shall be due and payable
upon the expiration of the Renewal Term.
(e) Notwithstanding anything hereinabove to the contrary, the
entire unpaid principal balance of all the Term Loans, and any accrued and
unpaid interest thereon, shall be immediately due and payable upon the earlier
to occur of (i) the last day of the Original Term or the last day of any Renewal
Term, if either LaSalle or Borrower elects to terminate this Agreement as of the
end of any such Original or Renewal Term as provided in paragraph 12 hereof and
(ii) the acceleration of the Liabilities pursuant to paragraph 16 of this
Agreement. Interest shall accrue on the Term Loans at the rates provided in, and
shall be payable in accordance with, paragraph 5 below. The Term Loans shall, in
LaSalle's reasonable discretion, be evidenced by one or more promissory notes
(the "Term Notes") in form and substance satisfactory to LaSalle. However, if
the Term Loans are not so evidenced, they may be evidenced solely by entries
upon the books and records maintained by LaSalle. The outstanding principal
balance of the Term Loans and all interest accruing thereon will be included in
the Liabilities.
(f) If either Borrower sells any Equipment or any real property
subject to a Mortgage or if any of the Collateral is damaged, destroyed or taken
by condemnation, Borrowers shall pay to LaSalle, unless otherwise specifically
provided herein or otherwise agreed to by LaSalle, as and when received by
Borrowers and as a mandatory prepayment of a Term Loan, to be applied against
the last maturing installments of principal thereof, in the inverse order
thereof (or, at LaSalle's option, such of the other Liabilities of Borrowers as
LaSalle may elect), a sum equal to the proceeds received by Borrowers from (i)
such sale or (ii) such damage, destruction or condemnation.
9
4. ACQUISITION FACILITY. Subject to the terms and conditions of this
Agreement and the other Agreements, LaSalle will make available to Borrowers in
accordance with this paragraph 4 additional revolving and term loans to finance
future business acquisitions by Borrowers, provided that the aggregate amount of
all such revolving loans at any time outstanding, together with the original
principal amounts of all term loans, will not exceed the Acquisition Facility.
Loans under this paragraph 4 will be conditioned upon due diligence and field
examinations satisfactory to LaSalle; LaSalle's satisfaction with the terms and
conditions and documentation of the proposed acquisition; LaSalle's satisfaction
with the proposed collateral and all appraisals and examinations which LaSalle
requires in relation thereto; LaSalle's satisfaction with Borrower's pro forma
debt service coverage after giving effect to the proposed transaction; and the
execution and delivery of all such documents, including amendments to this
Agreement and the Other Documents, and the fulfillment of all such other
conditions, as LaSalle may require. It is anticipated that Loans under this
paragraph 4 will generally be structured and documented in the same manner as
the Revolving Loans and Term Loans provided for in this Agreement, with such
modifications as LaSalle considers appropriate under the circumstances.
5. INTEREST, FEES AND CHARGES.
(a) Rate of Interest. Interest accrued on all Loans shall be due
on the earliest of: (i) the first day of each month (for the immediately
preceding month), computed through the last calendar day of the preceding month;
(ii) acceleration of the maturity and payment of the Liabilities pursuant to
paragraph 17(a) hereof; or (iii) termination of this Agreement pursuant to
paragraph 12 hereof. Except as provided in paragraph 5(b) hereof, interest shall
accrue on the principal amount of all Loans made to Borrowers outstanding at the
end of each day at a fluctuating rate per annum equal to the Prime Rate plus one
percent (1.00%). The rate of interest payable on all Loans shall increase or
decrease by an amount equal to any increase or decrease in the Prime Rate,
effective as of the opening of business on the day that any such change in the
Prime Rate occurs.
(b) Default Rate of Interest. UPON AND AFTER THE OCCURRENCE OF AN
EVENT OF DEFAULT, AND DURING THE CONTINUATION THEREOF, THE PRINCIPAL AMOUNT OF
ALL LOANS SHALL BEAR INTEREST ON DEMAND AT A RATE PER ANNUM EQUAL TO THE RATE OF
INTEREST THEN OTHERWISE IN EFFECT UNDER THIS PARAGRAPH 5 PLUS TWO PERCENT (2%).
(c) Computation of Interest and Fees. Interest and collection
charges hereunder shall be calculated daily and shall be computed on the actual
number of days elapsed over a year consisting of three hundred and sixty (360)
days. For the purpose of computing interest hereunder, all items of payment
received by LaSalle shall be deemed applied by LaSalle on account of the
Liabilities (subject to final payment of such items) on the first Business Day
after receipt by LaSalle of collected funds in LaSalle's account located in
Chicago, Illinois.
(d) Maximum Interest. It is the intent of the parties that the
rate of interest and the other charges to Borrowers under this Agreement shall
be lawful; therefore, if for any reason the interest or other charges payable
under this Agreement are found by a court of competent jurisdiction, in a final
determination, to exceed the limit which LaSalle may lawfully charge Borrowers,
then the obligation to pay interest and other charges shall automatically be
reduced to such limit and, if any amount in excess of such limit shall have been
paid, then such amount shall be refunded to Borrowers.
(e) Facility Fee. Borrowers shall pay to LaSalle a facility fee
of one percent (1.0%) of the Revolving Loan Facility, plus one percent (1.0%) of
the aggregate amount of the initial Term Loans, plus one-half of one percent
(0.5%) of the Acquisition Facility which shall be fully earned, nonrefundable
and due on the Closing Date.
(f) Unused Facility Fee. Borrowers shall pay to LaSalle monthly,
in arrears on the first day of each month, an unused line fee at a rate equal to
one-quarter of one percent (.25%) per annum calculated upon the daily average
amount by which the Revolving Loan Facility plus the Acquisition Facility
exceeds (i) the outstanding principal balance of the Revolving Loans plus (ii)
the outstanding Loans under the Acquisition Facility. The Unused Line Fee shall
accrue from the Closing Date until the last day of the Original Term, and if
applicable, from the first day to the last day of each Renewal Term.
(g) Collateral Maintenance Fee. Borrowers shall pay to LaSalle a
Collateral Maintenance Fee of $7,500 per year. The Collateral Maintenance Fee
for the first year shall be fully earned on the Closing Date and the Collateral
10
Maintenance Fee for each subsequent year shall be fully earned on each
anniversary of the Closing Date. The Collateral Maintenance Fee shall be payable
in monthly installments of $625 each, the first installment to be paid on the
Closing Date and subsequent installments to be made on the first day of each
month; provided, however, that any portion of the Collateral Maintenance Fee
which has been earned but is then unpaid shall be payable immediately upon
termination of this Agreement.
6. LOAN ADMINISTRATION.
(a) Loan Requests. A request for a Revolving Loan shall be made
or shall be deemed to be made, each in the following manner: (i) Omni shall give
LaSalle same day notice, no later than 10:30 A.M. (Portland time) of such day,
of its intention to borrow a Revolving Loan, in which notice Omni shall specify
the amount of the proposed borrowing and the proposed borrowing date; provided,
however, that no such request may be made at a time when there exists a Default
or an Event of Default; (ii) if Omni is using the cash management services of
LaSalle National Bank, Omni will be deemed to have requested Revolving Loans at
such times and in such amounts as are required to cover drafts and other charges
clearing Omni's account each day in accordance with the cash management
procedures approved by Omni; and (iii) the coming due of any amount required to
be paid under this Agreement or any Note, whether on account of interest or for
any other Liability, shall be deemed irrevocably to be a request for a Revolving
Loan on the due date thereof in the amount required to pay such interest or
other Liability. As an accommodation to Borrowers, LaSalle may permit telephone
requests for Revolving Loans and electronic transmittal of instructions,
authorizations, agreements or reports to LaSalle by Borrowers. LaSalle shall
have no liability to Borrowers for any loss or damage suffered by either
Borrower as a result of LaSalle's honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been
sent to LaSalle by Borrowers, or either of them, and LaSalle shall have no duty
to verify the origin of any such communication or the authority of the Person
sending it. Each notice of borrowing shall be irrevocable by and binding on
Borrowers.
(b) Disbursement. Borrowers hereby irrevocably authorize LaSalle
to disburse the proceeds of each Revolving Loan requested by Borrowers, or
deemed to be requested by Borrowers, as follows: (i) the proceeds of each
Revolving Loan requested under paragraph 6(a)(i) shall be disbursed by LaSalle
in lawful money of the United States of America in immediately available funds,
in the case of the initial borrowing, in accordance with the terms of the
written disbursement letter from Borrowers, and in the case of each subsequent
borrowing, by wire transfer or interbank transfer to such bank account or
accounts as may be agreed upon by Borrowers and LaSalle from time to time, or
elsewhere if pursuant to a written direction from a Borrower; (ii) the proceeds
of each Revolving Loan requested under paragraph 6(a)(ii) shall be disbursed by
LaSalle to Borrower's account in accordance with the cash management procedures
referred to above; and (ii) the proceeds of each Revolving Loan requested under
paragraph 6(a)(iii) shall be disbursed by LaSalle by way of direct payment of
the relevant interest or other Liability.
7. GRANT OF SECURITY INTEREST TO LASALLE. As security for the
payment of all Loans now or in the future made by LaSalle to Borrowers hereunder
and for the payment or other satisfaction of all other Liabilities, Borrowers,
and each of them, hereby assigns to LaSalle and grants to LaSalle a continuing
security interest in the following property of each Borrower, whether now or
hereafter owned, existing, acquired or arising and wherever now or hereafter
located: (a) all Accounts (whether or not Eligible Accounts) and all Goods whose
sale, lease or other disposition by such Borrower has given rise to Accounts and
have been returned to or repossessed or stopped in transit by such Borrower; (b)
all Chattel Paper, Instruments, Documents and General Intangibles (including,
without limitation, all patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, tax refund claims, claims against carriers
and shippers, guarantee claims, contracts rights, security interests, security
deposits and any rights to indemnification); (c) all Inventory; (d) all Goods
(other than Inventory) including, without limitation, Equipment, vehicles and
fixtures; (e) all Deposit Accounts; (f) all Investment Property; (g) all
deposits and cash and any other property of the Borrower now or hereafter in the
possession, custody or control of LaSalle or any agent or any Parent, Affiliate
or Subsidiary of LaSalle or any participant with LaSalle in the Loans for any
purpose (whether for safekeeping, deposit, collection, custody, pledge,
transmission or otherwise); and (h) all additions and accessions to,
substitutions for, and replacements, products and proceeds of the foregoing
property, including, without limitation, proceeds of all insurance policies
insuring the foregoing property, and all of Borrowers' books and records
relating to any of the foregoing and to Borrowers' business. In addition,
Borrowers shall grant Mortgages to LaSalle with respect to Borrowers' real
property and fixtures in Ennis, Texas, McHenry, Illinois, and Nevada City,
11
California. Each Borrower agrees that its property as described above shall
secure payment and performance of its Liabilities and the Liabilities of the
other Borrower.
8. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN. Borrowers, and each of them, shall, at LaSalle's request, at any time
and from time to time, execute and deliver to LaSalle such financing statements,
documents and other agreements and instruments (and pay the cost of filing or
recording the same in all public offices deemed reasonably necessary or
reasonably desirable by LaSalle) and do such other acts and things as LaSalle
may deem necessary or desirable in order to establish and maintain a valid,
attached and perfected security interest in the Collateral in favor of LaSalle
(free and clear of all other liens, claims and rights of third parties
whatsoever, whether voluntarily or involuntarily created, except Permitted
Liens) to secure payment of the Liabilities, and in order to facilitate the
collection of the Collateral. Borrowers, and each of them, irrevocably hereby
make, constitute and appoint LaSalle (and all Persons designated by LaSalle for
that purpose) as each Borrower's true and lawful attorney and agent-in-fact to
execute such financing statements, documents and other agreements and
instruments and do such other acts and things as may be necessary to preserve
and perfect LaSalle's security interest in the Collateral. Borrowers further
agree that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement shall be sufficient as a financing
statement.
9. POSSESSION OF COLLATERAL AND RELATED MATTERS. Until an Event of
Default has occurred, Borrowers shall have the right, except as otherwise
provided in this Agreement, in the ordinary course of Borrowers' businesses, to
(a) sell,lease or furnish under contracts of service any of Borrowers' Inventory
normally held by Borrowers for any such purpose, and (b) use and consume any raw
materials, work in process or other materials normally held by Borrowers for
such purpose; provided, however, that a sale in the ordinary course of business
shall not include any transfer or sale in satisfaction, partial or complete, of
a debt owed by either Borrower, but shall include replacement of goods sold by
Omni if such replacement is made pursuant to Omni's standard written warranties.
-------- -------
10. COLLECTIONS.
(a) Borrowers shall, at LaSalle's request, direct all of their
Account Debtors to make all payments on the Accounts directly to one or more
post office boxes (each a "Lock Box") with a financial institution acceptable
to, and in the name and under exclusive control of, LaSalle. Borrowers shall
establish one or more accounts (each a "Blocked Account") in LaSalle's name for
the benefit of Borrowers with a financial institution acceptable to LaSalle,
into which all payments received in the Lock Box shall be deposited, and into
which Borrowers will immediately deposit all payments made for Inventory or
services sold or rendered by Borrowers and received by Borrowers, or either of
them, in the identical form in which such payments were made, whether by cash or
check. If a Borrower, any Affiliate or Subsidiary of a Borrower, or any
shareholder, officer, director, employee or agent of a Borrower or any Affiliate
or Subsidiary, or any other Person acting for or in concert with a Borrower,
shall receive any monies, checks, notes, drafts or other payments relating to or
as proceeds of Accounts or other Collateral, such Borrower and each such Person
shall receive all such items in trust for, and as the sole and exclusive
property of, LaSalle and, immediately upon receipt thereof, shall remit the same
(or cause the same to be remitted) in kind to the appropriate Blocked Account.
Each financial institution with which a Lock Box and Blocked Account are
established shall acknowledge and agree, in a manner satisfactory to LaSalle,
that the amounts on deposit in such Lock Box and Blocked Account are the sole
and exclusive property of LaSalle, that such financial institution has no right
to setoff against such Lock Box or Blocked Account or against any other account
maintained by such financial institution into which the contents of such Blocked
Account are transferred, and that such financial institution shall wire, or
otherwise transfer in immediately available funds in a manner satisfactory to
LaSalle, funds deposited in the Blocked Account on a daily basis as such funds
are collected. Borrowers agree that all payments made to the Blocked Accounts
established by Borrowers or otherwise received by LaSalle, whether in respect of
the Accounts of Borrowers or as proceeds of other Collateral of Borrowers or
otherwise, will be applied on account of the Liabilities of Borrowers in
accordance with the terms of this Agreement. Borrowers agree to pay all fees,
costs and expenses which Borrowers incur or LaSalle incurs in connection with
opening and maintaining a Lock Box and Blocked Account. All of such fees, costs
and expenses which remain unpaid by Borrowers pursuant to any Lock Box or
Blocked Account Agreement with Borrowers, to the extent same shall have been
paid by LaSalle hereunder, shall constitute Revolving Loans hereunder, shall be
payable to LaSalle by Borrowers upon demand, and, until paid, shall bear
interest at the highest rate then applicable to Revolving Loans hereunder. All
checks, drafts, instruments and other items of payment or proceeds of Collateral
delivered to LaSalle in kind shall be endorsed by Borrowers to LaSalle, and, if
endorsement of any such item shall not be made for any reason, LaSalle is hereby
12
irrevocably authorized to endorse the same on Borrowers behalf. For the purpose
of this paragraph, Borrowers irrevocably hereby make, constitute and appoint
LaSalle (and all Persons designated by LaSalle for that purpose) as each
Borrower's true and lawful attorney and agent-in-fact (i) to endorse each
Borrower's name upon said items of payment and/or proceeds of Collateral of
Borrowers and upon any Chattel Paper, document, instrument, invoice or similar
document or agreement relating to any Account of Borrowers or goods pertaining
thereto; (ii) to take control in any manner of any item of payment or proceeds
thereof; (iii) to have access to any lock box or postal box into which any of
Borrowers' mail is deposited; and (iv) to open and process all mail addressed to
either Borrower and deposited therein; provided, however, that LaSalle shall not
exercise any such powers described in subparagraphs (i), (ii) (except for
routine Lock Box payments/proceeds) and (iv) unless and until an Event of
Default has occurred.
(b) LaSalle may, at any time and from time to time after the
occurrence of an Event of Default, whether before or after notification to any
Account Debtor and whether before or after the maturity of any of the
Liabilities, (i) enforce collection of any of Borrowers' Accounts or contract
rights by suit or otherwise; (ii) exercise all of Borrowers' rights and remedies
with respect to proceedings brought to collect any Accounts; (iii) surrender,
release or exchange all or any part of any Accounts of Borrowers, or compromise
or extend or renew for any period (whether or not longer than the original
period) any indebtedness thereunder; (iv) sell or assign any Account of either
Borrower upon such terms, for such amount and at such time or times as LaSalle
deems advisable; (v) prepare, file and sign each Borrower's name on any proof of
claim in bankruptcy or other similar document against any Account Debtor
indebted on an Account of either Borrower; and (vi) do all other acts and things
which are necessary, in LaSalle's sole discretion, to fulfill Borrowers'
obligations under this Agreement and to allow LaSalle to collect the Accounts.
LaSalle, through its officers, employees or agents, shall have the right, at any
time and from time to time in LaSalle's name, in the name of a nominee of
LaSalle or in each Borrower's name, to verify the validity, amount or any other
matter relating to any of Borrowers' Accounts, by mail, telephone, telegraph or
otherwise. Borrowers shall reimburse LaSalle, on demand, for all reasonable
costs, fees and expenses incurred by LaSalle in this regard after the occurrence
and during the continuation of any Event of Default. In addition to any other
provision hereof, LaSalle may at any time on or after the occurrence of an Event
of Default, at Borrowers' expense, notify any parties obligated on any of the
Accounts of Borrowers to make payment directly to LaSalle of any amounts due or
to become due thereunder.
(c) For the purpose of determining the Borrowing Base of Omni
hereunder, LaSalle shall, upon receipt by LaSalle at its office in Chicago,
Illinois, of cash or other immediately available funds from collections of items
of payment and proceeds of any Collateral, apply the whole or any part of such
collections or proceeds against the Liabilities in such order as LaSalle shall
determine in its sole discretion.
(d) In its reasonable credit judgment, without waiving or
releasing any obligation, liability or duty of Borrowers under this Agreement or
the Other Agreements or any Event of Default, at any time or times hereafter,
LaSalle may (but shall not be obligated to) pay, acquire or accept an assignment
of any security interest, lien, encumbrance or claim asserted by any Person in,
upon or against the Collateral. All sums paid by LaSalle in respect thereof and
all costs, fees and expenses (including, without limitation, reasonable attorney
fees for both inside and outside counsel, all court costs and all other charges
relating thereto) incurred by LaSalle shall constitute Revolving Loans, payable
by Borrowers to LaSalle on demand and, until paid, shall bear interest at the
highest rate then applicable to Revolving Loans hereunder.
(e) Immediately upon either Borrower's receipt of any portion of
the Collateral evidenced by an agreement, Instrument or Document including,
without limitation, any Chattel Paper, such Borrower shall deliver the original
thereof to LaSalle together with an appropriate endorsement or other specific
evidence of assignment thereof to LaSalle (in form and substance acceptable to
LaSalle). If an endorsement or assignment of any such item shall not be made for
any reason, LaSalle is hereby irrevocably authorized, as such Borrower's
attorney and agent-in-fact, to endorse or assign the same on such Borrower's
behalf.
11. SCHEDULES AND REPORTS.
(a) Borrowers shall provide to LaSalle compliance certificates in
the form attached as Exhibit D and the periodic reports and other information
and schedules described on Exhibit E at the times specified on Exhibit E. In
addition, Borrowers shall furnish LaSalle with such other statements and reports
as LaSalle may request from time to time, including, without limitation,
providing the reports, information, and schedules listed on Exhibit E on a more
frequent basis than specified on Exhibit E.
13
(b) Borrowers shall immediately notify LaSalle of any event
causing material loss or depreciation in value of the Collateral (other than
normal depreciation occurring in the ordinary course of business).
(c) All schedules, certificates, reports and assignments and
other items delivered by Borrowers to LaSalle hereunder shall be executed by an
authorized representative of Borrowers and shall be in such form and contain
such information as LaSalle shall reasonably request.
12. TERMINATION.
(a) This Agreement shall be in effect from the date hereof until
the third anniversary of the Closing Date ("Original Term") and shall
automatically renew itself from year to year thereafter (each such one year
renewal being referred to herein as a "Renewal Term") unless (i) the due date of
the Liabilities is accelerated pursuant to paragraph 17 hereof; or (ii)
Borrowers elect or LaSalle elects to terminate this Agreement at the end of the
Original Term or at the end of any Renewal Term by giving the other party
written notice of such election at least ninety (90) days prior to the end of
the Original Term or the then current Renewal Term, in which case Borrowers
shall pay all of the Liabilities in full on the last day of such term. If one or
more of the events specified in subparagraphs (i) or (ii) occurs, this Agreement
shall terminate on the date thereafter that the Liabilities are paid in full;
and the security interests and liens created under this Agreement and the Other
Agreements shall survive such termination until the date upon which payment and
satisfaction in full of the Liabilities shall have occurred. At such time as
Borrowers have repaid all of the Liabilities and this Agreement has terminated,
(A) Borrowers shall deliver to LaSalle a release, in form and substance
reasonably satisfactory to LaSalle, of all obligations and liabilities of
LaSalle and its officers, directors, employees, agents, Parents, Subsidiaries
and Affiliates to Borrowers, and if Borrowers, or either of them, is obtaining
new financing from another lender, Borrowers shall deliver such lender's
indemnification of LaSalle, in form and substance satisfactory to LaSalle, for
checks which LaSalle has credited to Borrowers' accounts, but which subsequently
are dishonored for any reason and (B) upon Borrowers' request, LaSalle shall
deliver to Borrowers a release in form and substance reasonably satisfactory to
Borrowers.
(b) Except as provided below, if, during the term of this
Agreement, (including any Renewal Term) Borrowers prepay all or any portion of
the Liabilities, Borrowers agree to pay to LaSalle, as a prepayment fee, in
addition to the payment of all other Liabilities owing by Borrowers, an amount
equal to one percent (1.00%) of the portion of the Liabilities prepaid (if less
than all the Liabilities) or one percent (1.00%) of the Total Facility if all
Liabilities are prepaid. Provided, however, that Rail may prepay the Rail Real
Estate Term Loan without prepayment fee from the proceeds of the sale of Rail's
real property in Nevada City, California. In light of the extreme difficulty of
accurately calculating actual damages arising out of any prepayment, LaSalle and
Borrower have agreed that the prepayment fee provided for above is a reasonable
estimate of actual damages that would be incurred.
13. REPRESENTATIONS AND WARRANTIES. Borrowers, and each of them,
hereby make the following representations, warranties and covenants:
(a) the financial statements delivered or to be delivered by
Borrowers to LaSalle at or prior to the date of this Agreement and at all times
subsequent thereto accurately reflect the financial condition of Borrowers, and
since the date of the Borrowers' audited financial statements delivered to
LaSalle most recently prior to the date of this Agreement, no event or condition
has occurred which has had, or is reasonably likely to have, a Material Adverse
Effect;
(b) the office where each Borrower keeps its books, records and
accounts (or copies thereof) concerning the Collateral, each Borrower's
principal place of business and all of Borrowers' other places of business,
locations of Collateral and post office boxes are as set forth in Exhibit B;
Borrowers shall promptly (but in no event less than ten (10) days prior thereto)
advise LaSalle in writing of the proposed opening of any new place of business,
the closing of any existing place of business, any change in the location of
either Borrower's books, records and accounts (or copies thereof) or the opening
or closing of any post office box of either Borrower;
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(c) the Collateral, including without limitation, the Equipment
(except any part thereof which prior to the date of this Agreement Borrowers
shall have advised LaSalle in writing consists of Collateral normally used in
more than one state) is and shall be kept, or, in the case of vehicles, based,
only at the addresses set forth on the first page of this Agreement or on
Exhibit B, and at other locations within the continental United States of which
LaSalle has been previously advised by Borrowers in writing;
(d) Borrowers shall immediately give written notice to LaSalle of
any use of any such Goods in any state other than a state in which Borrowers
have previously advised LaSalle such Goods shall be used, and such Goods shall
not, unless LaSalle shall otherwise consent in writing, be used outside of the
continental United States;
(e) no security agreement, financing statement or analogous
instrument exists or shall exist with respect to any of the Collateral other
than any security agreement, financing statement or analogous instrument
evidencing Permitted Liens;
(f) each Account or item of Inventory which Borrowers, or either
of them, shall, expressly or by implication, request LaSalle to classify as an
Eligible Account or as Eligible Inventory, respectively, shall, as of the time
when such request is made, conform in all respects to the requirements of such
classification as set forth in the respective definitions of Eligible Account
and Eligible Inventory and as otherwise established by LaSalle from time to
time, and Borrowers shall promptly notify LaSalle in writing if any such
Eligible Account or Eligible Inventory shall subsequently become ineligible;
(g) each Borrower is and shall at all times during the Original
Term or any Renewal Term be the lawful owner of all Collateral now purportedly
owned or hereafter purportedly acquired by such Borrower, free from all liens,
claims, security interests and encumbrances whatsoever, whether voluntarily or
involuntarily created and whether or not perfected, other than the Permitted
Liens;
(h) each Borrower has the right and power and is duly authorized
and empowered to enter into, execute and deliver this Agreement and the Other
Agreements and perform its obligations hereunder and thereunder; each Borrower's
execution, delivery and performance of this Agreement and the Other Agreements
does not and shall not conflict with the provisions of any statute, regulation,
ordinance or rule of law, or any agreement, contract or other document which may
now or hereafter be binding on such Borrower, and each Borrower's execution,
delivery and performance of this Agreement and the Other Agreements shall not
result in the imposition of any lien or other encumbrance upon any of such
Borrower's property under any existing indenture, mortgage, deed of trust, loan
or credit agreement or other agreement or instrument by which such Borrower or
any of its property may be bound or affected;
(i) except as otherwise disclosed on Schedule 13(i), there are no
actions or proceedings which are pending or, to the best of Borrowers'
knowledge, threatened against either Borrower which are reasonably likely to
have a Material Adverse Effect and Borrowers shall, promptly upon becoming aware
of any such pending or threatened action or proceeding, give written notice
thereof to LaSalle;
(j) Borrowers, to the best of their knowledge and belief, have
obtained all licenses, authorizations, approvals and permits, the lack of which
would have a Material Adverse Effect on the operation of their businesses, and
each Borrower is and shall remain in compliance in all material respects with
all applicable federal, state, local and foreign statutes, orders, regulations,
rules and ordinances (including, without limitation, statutes, orders,
regulations, rules and ordinances relating to taxes, employer and employee
contributions and similar items, securities, employee retirement and welfare
benefits, employee health and safety or environmental matters), the failure to
comply with which would have a Material Adverse Effect on its business,
property, assets, operations or condition, financial or otherwise;
(k) all written information now, heretofore or hereafter
furnished by Borrowers, or either of them, to LaSalle is and shall be true and
correct in all material respects as of the date with respect to which such
information was or is furnished (except for financial projections, which have
been prepared in good faith based upon reasonable assumptions);
(l) neither Borrower is conducting, permitting or suffering to be
conducted, nor shall either Borrower conduct, permit or suffer to be conducted,
any activities pursuant to or in connection with which any of the Collateral is
15
now, or will (while any Liabilities remain outstanding) be owned by any
Affiliate other than the other Borrower;
(m) except as disclosed in Section C on Exhibit B, each
Borrower's name has always been as set forth on the first page of this Agreement
and neither Borrower uses any trade names or division names in the operation of
its business,; each Borrower shall notify LaSalle in writing within ten (10)
days of the change of its name or the use of any trade names or division names
not previously disclosed to LaSalle in writing;
(n) with respect to Borrowers' Equipment: (i) each Borrower has
good and indefeasible and merchantable title to and ownership of all of its
Equipment; (ii) each Borrower shall keep and maintain its Equipment in good
operating condition and repair and shall make all necessary replacements thereof
and renewals thereto so that the value and operating efficiency thereof shall at
all times be preserved and maintained, ordinary wear and tear excepted; (iii)
from time to time Borrowers may sell, exchange or otherwise dispose of obsolete,
unused or worn out Equipment; and (iv) Borrowers, immediately on demand by
LaSalle, shall deliver to LaSalle any and all evidence of ownership of,
including, without limitation, certificates of title and applications for title
to, any of the Equipment, excepting titles to vehicles subject to a Permitted
Lien having priority over the security interest of LaSalle;
(o) this Agreement and the Other Agreements to which Borrowers
are parties are the legal, valid and binding obligations of each Borrower and
are enforceable against each Borrower in accordance with their respective terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the rights of creditors generally;
(p) each Borrower is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business, now owns
property having a value both at fair valuation and at present fair saleable
value greater than the amount required to pay its debts, and will not be
rendered insolvent by the execution and delivery of this Agreement or any of the
Other Agreements or by completion of the transactions contemplated hereunder or
thereunder;
(q) neither Borrower is now obligated, whether directly or
indirectly, for any loans or other indebtedness for borrowed money other than
(i) the Liabilities; (ii) indebtedness disclosed to LaSalle on Schedule 13(q);
(iii) unsecured indebtedness to trade creditors arising in the ordinary course
of such Borrower's business; and (iv) unsecured indebtedness arising from the
endorsement of drafts and other instruments for collection, in the ordinary
course of such Borrower's business;
(r) neither Borrower owns any margin securities, and none of the
proceeds of the Loans hereunder shall be used for the purpose of purchasing or
carrying any margin securities or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase any margin securities or
for any other purpose not permitted by Regulation G or Regulation U of the Board
of Governors of the Federal Reserve System as in effect from time to time;
(s) except as otherwise disclosed on Schedule 13(s), Borrowers
have no Parents, Subsidiaries or divisions, nor is either Borrower engaged in
any joint venture or partnership with any other Person;
(t) each Borrower is duly organized and in good standing in its
state of organization and each Borrower is duly qualified and in good standing
in all states where the nature and extent of the business transacted by it or
the ownership of its assets makes such qualification necessary, except for such
other states in which the failure to so qualify would not have a Material
Adverse Effect;
(u) neither Borrower is in default under any material contract,
lease or commitment to which it is a party or by which it is bound, nor does
either Borrower know of any dispute regarding any contract, lease or commitment
which is material to the continued financial success and well-being of such
Borrower;
(v) there are no controversies pending or threatened between
either Borrower and any of its employees, other than employee grievances arising
in the ordinary course of business which are not, in the aggregate, material to
the continued financial success and well-being of such Borrower, and each
16
Borrower is in compliance in all material respects with all federal and state
laws respecting employment and employment terms, conditions and practices,
except where the failure to so comply would not have a Material Adverse Effect;
(w) each Borrower possesses, and shall continue to possess, as
applicable to its business, adequate licenses, patents, patent applications,
copyrights, service marks, trademarks, trademark applications, trade styles and
trade names to continue to conduct its business as heretofore conducted by it;
(x) neither Borrower is a party to any license agreement except
as disclosed in Schedule 13(x). Complete and accurate copies of all license
agreements listed in Schedule 13(x) have been forwarded to LaSalle.
Each Borrower represents, warrants and covenants to LaSalle that all
representations, warranties and covenants of such Borrower contained in this
Agreement (whether appearing in paragraphs 13 or 14 hereof or elsewhere) shall
be true at the time of such Borrower's execution of 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, shall remain
true until the repayment in full of all of the Liabilities and termination of
this Agreement, and shall be remade by each Borrower at the time each Revolving
Loan is made pursuant to this Agreement.
14. COVENANTS. Until payment or satisfaction in full of all
Liabilities and termination of this Agreement, unless Borrowers obtain LaSalle's
prior written consent waiving or modifying any of Borrowers' covenants hereunder
in any specific instance, which consent will not be unreasonably withheld,
Borrowers, and each of them, agree as follows:
(a) Borrowers shall at all times keep accurate and complete
books, records and accounts with respect to all of Borrowers' business
activities, in accordance with sound accounting practices and using the
accounting terms and definitions specified in paragraph 1(b) and shall keep such
books, records and accounts, and any copies thereof, only at the addresses
indicated for such purpose on Exhibit B;
(b) Borrowers agree to deliver to LaSalle the following financial
information, all of which shall be prepared in accordance with accounting terms
and definitions specified in paragraph 1(b): (i) no later than thirty (30) days
after each calendar month, copies of internally prepared financial statements of
Borrowers and their Subsidiaries, on a consolidated, monthly and year-to-date
basis including, without limitation, balance sheets and statements of income and
cash flows of Borrowers and their Subsidiaries, certified by an officer of Omni
on behalf of Borrowers and accompanied by an officer's certificate in the form
of Exhibit D attached hereto; (ii) no later than ninety (90) days after the end
of each of Borrowers' fiscal years, annual financial statements of Borrowers and
their Subsidiaries on a consolidated basis audited by independent certified
public accountants selected by Borrowers and reasonably satisfactory to LaSalle,
together with such accountants' "management letter," if any; and (iii) no later
than 30 days after the end of each of Omni's fiscal years, projected balance
sheets, income statements and statements of cash flows for each month of the
following year; (iv) promptly as filed all 10KSB's, 10Q's and other reports
filed with the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934; and (v) promptly as transmitted all proxy materials and
other reports and information transmitted to Borrowers' shareholders;
(c) LaSalle, or any Persons designated by it, shall have the
right in the exercise of its commercially reasonable credit judgment, to call at
Borrowers' places of business at any reasonable times, and, without hindrance or
delay, to inspect the Collateral and to inspect, audit, check and make extracts
from Borrowers' books, records, journals, orders, receipts and any
correspondence and other data relating to Borrowers' businesses, the Collateral
or any transactions between the parties hereto, and shall have the right to make
such verification concerning Borrowers' businesses as LaSalle may consider
reasonable under the circumstances. Borrowers shall furnish to LaSalle such
information relevant to LaSalle's rights under this Agreement as LaSalle shall
at any time and from time to time reasonably request. Borrowers authorize
LaSalle to discuss the affairs, finances and business of Borrowers with any
officers or directors of each Borrower or any Affiliate, or with those employees
of each Borrower with whom LaSalle has determined in its commercially reasonable
judgment to be necessary or desirable to converse, and to discuss the financial
condition of Borrowers with Borrowers' independent public accountants. Any such
discussions shall be without liability to LaSalle or to such accountants.
LaSalle, through its officers, employees or agents, shall have the right, at any
time and from time to time in LaSalle's name, in the name of a nominee of
LaSalle or in either Borrower's name, to verify the validity, amount or any
17
other matter relating to any of Borrowers' Accounts, by mail, telephone,
telegraph or otherwise. Borrowers shall pay to or reimburse LaSalle for all
reasonable fees, costs, and out-of-pocket expenses incurred by LaSalle in the
exercise of its rights under the immediately preceding sentence (in addition to
the fees payable by Borrowers pursuant to paragraph 14(o) hereof) and all of
such costs, fees and expenses shall constitute Revolving Loans hereunder, shall
be payable on demand and, until paid, shall bear interest at the highest rate
then applicable to Revolving Loans hereunder;
(d) (i) Borrowers shall keep the Collateral properly housed and
shall keep the Collateral insured against such risks and in such amounts as are
customarily insured against by Persons engaged in businesses similar to that of
Borrowers with such companies, in such amounts and under policies in such form
as shall be reasonably satisfactory to LaSalle. Originals or certified copies of
such policies of insurance have been, or within fifteen (15) days after the
Closing Date, shall be, delivered to LaSalle together with evidence of payment
of all premiums therefor, and shall contain an endorsement, in form and
substance acceptable to LaSalle, showing loss under such insurance policies
payable to LaSalle. Such endorsement, or an independent instrument furnished to
LaSalle, shall provide that the insurance company shall give LaSalle at least
thirty (30) days' written notice before any such policy of insurance is altered
or cancelled and that no act, whether willful or negligent, or default of either
Borrower or any other Person shall affect the right of LaSalle to recover under
such policy of insurance in case of loss or damage. Borrowers shall also obtain
an endorsement designating LaSalle as a loss payee with respect to all policies
of credit insurance maintained by Borrowers, or either of them. Borrowers hereby
direct all insurers under such policies of insurance described above to pay all
proceeds payable thereunder directly to LaSalle (subject, however, to the rights
of holders of Permitted Liens with priority over LaSalle's security interest).
Borrowers irrevocably make, constitute and appoint LaSalle (and all officers,
employees or agents designated by LaSalle) as each Borrower's true and lawful
attorney (and agent-in-fact) for the purpose of making, settling and adjusting
claims under such policies of insurance, endorsing the names of Borrowers on any
check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and making all determinations and decisions with respect
to such policies of insurance; provided, however, that LaSalle shall exercise
such rights only upon the occurrence of an Event of Default;
(ii) Borrowers shall maintain, at their expense, such public
liability and third party property damage insurance as is customary for Persons
engaged in businesses similar to that of Borrowers with such companies and in
such amounts, with such deductibles and under policies in such form as shall be
reasonably satisfactory to LaSalle, and originals or certified copies of such
policies have been, or within fifteen (15) days after the Closing Date shall be,
delivered to LaSalle together with evidence of payment of all premiums therefor;
each such policy shall contain an endorsement showing LaSalle as additional
insured thereunder and providing that the insurance company shall give LaSalle
at least thirty (30) days' written notice before any such policy shall be
altered or cancelled; and
(iii) If Borrowers at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above or to pay
any premium in whole or in part relating thereto, then LaSalle, without waiving
or releasing any obligation or default by Borrowers hereunder, may (but shall be
under no obligation to) obtain and maintain such policies of insurance and pay
such premiums and take such other actions with respect thereto as LaSalle deems
advisable. All sums disbursed by LaSalle in connection with any such actions,
including, without limitation, court costs, expenses, other charges relating
thereto and reasonable attorneys' fees, shall constitute Revolving Loans
hereunder and, until paid, shall bear interest at the highest rate then
applicable to Revolving Loans hereunder.
WARNING
UNLESS BORROWERS PROVIDE LASALLE WITH EVIDENCE OF
THE INSURANCE COVERAGE AS REQUIRED BY THIS
AGREEMENT, LASALLE MAY PURCHASE INSURANCE AT
BORROWERS' EXPENSE TO PROTECT LASALLE'S INTEREST.
THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT
BORROWERS' INTEREST. IF THE COLLATERAL BECOMES
DAMAGED, THE COVERAGE LASALLE PURCHASES MAY NOT
PAY ANY CLAIM BORROWERS MAKE OR ANY CLAIM MADE
AGAINST BORROWERS. BORROWERS MAY LATER CANCEL THIS
COVERAGE BY PROVIDING EVIDENCE THAT BORROWERS HAVE
OBTAINED THE REQUIRED COVERAGE ELSEWHERE.
18
BORROWERS ARE RESPONSIBLE FOR THE COST OF ANY
INSURANCE PURCHASED BY LASALLE. THE COST OF THIS
INSURANCE MAY BE ADDED TO BORROWERS' LIABILITIES.
IF THE COST IS ADDED TO BORROWERS' LIABILITIES,
THE INTEREST RATE APPLICABLE TO THE REVOLVING
LOANS WILL APPLY TO THIS ADDED AMOUNT. THE
EFFECTIVE DATE OF COVERAGE MAY BE THE DATE
BORROWERS' PRIOR COVERAGE LAPSED OR THE DATE
BORROWERS FAILED TO PROVIDE PROOF OF COVERAGE.
THE COVERAGE LASALLE PURCHASES MAY BE CONSIDERABLY
MORE EXPENSIVE THAN INSURANCE BORROWERS CAN OBTAIN
ON THEIR OWN AND MAY NOT SATISFY ANY NEED FOR
PROPERTY DAMAGE COVERAGE OR ANY MANDATORY
LIABILITY INSURANCE REQUIREMENTS IMPOSED BY
APPLICABLE LAW.
(e) Borrowers shall not use the Collateral, or any part thereof,
in any unlawful business or for any unlawful purpose or use or maintain any of
the Collateral in any manner that does or could result in material damage to the
environment or a violation of any applicable environmental laws, rules or
regulations; Borrowers shall keep the Collateral in good condition, repair and
order, ordinary wear and tear excepted; Borrowers shall not permit the
Collateral, or any part thereof, to be levied upon under execution, attachment,
distraint or other legal process; Borrowers shall not sell, lease, grant a
security interest in or otherwise dispose of any of the Collateral except as
expressly permitted by this Agreement; and Borrowers shall not secrete or
abandon any of the Collateral, or remove or permit removal of any of the
Collateral from any of the locations listed on Exhibit B or in any written
notice to LaSalle pursuant to paragraph 13(c) hereof, except for the removal of
Inventory sold in the ordinary course of Borrowers' businesses as permitted
herein;
(f) all monies and other property obtained by Borrowers from
LaSalle pursuant to this Agreement will be used solely for business purposes of
Borrowers and their Subsidiaries;
(g) Borrowers shall, at the request of LaSalle, indicate on their
records concerning the Collateral a notation, in form satisfactory to LaSalle,
of the security interest of LaSalle hereunder, and Borrowers shall not maintain
duplicates or copies of such records at any address other than Borrowers'
principal places of business set forth on the first page of this Agreement;
provided, however, that Borrowers, in the ordinary course of their businesses,
may furnish copies of such records to their accountants, attorneys and other
agents or advisors as they may determine to be necessary or desirable in the
exercise of their commercially reasonable judgment;
(h) Borrowers shall file all required tax returns and pay all of
their taxes when due, including, without limitation, taxes imposed by federal,
state or municipal agencies, and shall cause any liens for taxes to be promptly
released; provided, that Borrowers shall have the right to contest the payment
of such taxes in good faith by appropriate proceedings so long as (i) the amount
so contested is shown on Borrowers' financial statements, (ii) the contesting of
any such payment does not give rise to a lien for taxes, (iii) upon the
occurrence of an Event of Default, Borrowers keep on deposit with LaSalle (such
deposit to be held without interest) an amount of money which, in the reasonable
judgment of LaSalle, is sufficient to pay such taxes and any interest or
penalties that may accrue thereon, and (iv) if Borrowers fail to prosecute such
contest with reasonable diligence, LaSalle may apply the money so deposited in
payment of such taxes. If Borrowers fail to pay any such taxes and in the
absence of any such contest by Borrowers, LaSalle may (but shall be under no
obligation to) advance and pay any sums required to pay any such taxes and/or to
secure the release of any lien therefor, and any sums so advanced by LaSalle
shall constitute Revolving Loans hereunder, shall be payable by Borrowers to
LaSalle on demand, and, until paid, shall bear interest at the highest rate then
applicable to Revolving Loans hereunder;
(i) Borrowers shall not (i) incur, create, assume or suffer to
exist any indebtedness other than (A) indebtedness arising under this Agreement,
(B) unsecured indebtedness owing in the ordinary course of business to trade
suppliers, (C) any other indebtedness described on Schedule 13(q), (D) purchase
money security interests incurred to finance Capital Expenditures after the
Closing Date, and (E) indebtedness to any shareholder of Omni provided such
indebtedness is fully subordinated to the Liabilities on such terms and
conditions and by such documentation as is approved in writing by LaSalle in its
19
sole discretion; or (ii) assume, guarantee or endorse, or otherwise become
liable in connection with, the obligations of any Person, except by endorsement
of instruments for deposit or collection or similar transactions in the ordinary
course of business;
(j) Neither Borrower shall enter into any merger or
consolidation, or sell, lease or otherwise dispose of all or substantially all
of its assets; neither Borrower shall create any new Subsidiary or Affiliate or
issue any shares of, or warrants or other rights to receive or purchase any
shares of, any class of its stock except shares issued upon exercise of stock
options or upon the conversion of, or exchange for, subordinated indebtedness;
neither Borrower shall enter into any transaction outside the ordinary course of
such Borrower's business;
(k) Borrower shall not (i) declare or pay any dividend or other
distribution (whether in cash or in kind) on, purchase, redeem or retire any
shares of any class of its stock (except dividends and distributions by Omni to
Rail), or make any payment on account of, or set apart assets for the
repurchase, redemption, defeasance or retirement of, any class of its stock; or
(ii) make any optional payment or prepayment on or redemption (including without
limitation by making payments to a sinking fund or analogous fund) or repurchase
of any indebtedness for borrowed money other than indebtedness pursuant to this
Agreement;
(l) Neither Borrower shall make any loans to, or investment in,
any Person, whether in cash, securities or other property of any kind, other
than investments that are direct obligations of the United States or other
overnight investment options offered by Bank;
(m) Neither Borrower shall amend its organizational documents or
change its fiscal year without LaSalle's prior written consent, which consent
shall not be unreasonably withheld;
(n) Borrowers shall maintain and keep in full force and effect
each of the financial covenants set forth below. The calculation and
determination of each such financial covenant, and all accounting terms
contained therein, shall be calculated and construed in accordance with GAAP,
applied on a basis consistent with the audited financial statements of Borrowers
delivered on or before the Closing Date:
(i) Consolidated Tangible Net Worth. Borrowers and their
Subsidiaries, on a consolidated basis, shall maintain as of the
end of each month a Tangible Net Worth of not less than the sum
of (1) the "Base Tangible Net Worth" (as defined below), plus (2)
an aggregate amount equal to eighty-five percent (85%) of the net
income after taxes of Borrowers and their Subsidiaries, on a
consolidated basis, for each fiscal quarter ending subsequent to
the Closing Date less any payments made on the Subordinated Debt
during such quarter as authorized under paragraph 14(s)
(provided, however, that such aggregate amount shall not be
reduced by the amount of any net loss after taxes of Borrowers
and their Subsidiaries, on a consolidated basis, for any fiscal
quarter). For purposes of this paragraph 14(n), the "Base
Tangible Net Worth" shall initially be equal to the Tangible Net
Worth of Borrowers and their Subsidiaries as determined by
LaSalle on the basis of Borrower's interim financial statement
for the month ending January 31, 2000, minus $300,000. Upon
receipt of Borrowers' audited financial statement for the fiscal
year ending April 30, 2000, Base Tangible Net Worth will be
adjusted to be equal to the Tangible Net Worth of Borrowers and
their Subsidiaries as determined by LaSalle on the basis of such
audited statement, minus $300,000; and
(ii) Consolidated Debt Service Coverage Ratio. Commencing as
of the end of Borrowers' first fiscal quarter ending after the
Closing Date, Borrowers and their Subsidiaries, on a consolidated
basis, shall maintain as of each fiscal quarter for the twelve
(12) month period ending with such fiscal quarter, a Debt Service
Coverage Ratio of not less than 1.25 to 1.0.
(o) Borrowers shall reimburse LaSalle for all costs and expenses
including, without limitation, legal expenses and reasonable attorneys' fees
(both in-house and outside counsel), incurred by LaSalle in connection with the
documentation and consummation of this transaction, including, without
limitation, Uniform Commercial Code and other public record searches, lien
filings, Federal Express or similar express or messenger delivery, appraisal
20
costs, surveys, title insurance and environmental audit or review costs.
Borrowers shall reimburse LaSalle for all legal expenses and reasonable
attorney's fees (both in-house and outside counsel) incurred by LaSalle in
connection with any amendments or modifications of this Agreement or the Other
Agreements or other transactions among Borrowers, or either of them, and
LaSalle, including without limitation, in seeking to collect, protect or enforce
any rights in or to the Collateral or incurred by LaSalle in seeking to collect
any Liabilities and to administer and enforce any of LaSalle's rights under this
Agreement. Borrowers shall also pay all normal service charges with respect to
accounts maintained by LaSalle for the benefit of Borrowers. Borrowers shall pay
to LaSalle all airfare, travel and other out-of-pocket costs and expenses
incurred by LaSalle for each examination performed at any time by or at
LaSalle's direction of Borrowers' books and records and Collateral and such
other matters as LaSalle shall deem appropriate in its commercially reasonable
judgment. At any time after the occurrence of an Event of Default and so long as
the Event of Default continues, Borrowers shall reimburse LaSalle for all costs
and expenses incurred by LaSalle including without limitation, legal expenses
and reasonable attorneys' fees (both in-house and outside counsel), appraisal
costs, surveys, title insurance, environmental audits or reviews, Uniform
Commercial Code or other public record searches, and lien filings. At any time
after the occurrence of an Event of Default and so long as the Event of Default
continues, Borrowers shall pay to LaSalle an examination fee of $600 per person
per day, plus costs and expenses, for each examination performed by or at
LaSalle's direction of Borrowers' books and records and Collateral and such
other matters as LaSalle shall deem appropriate in its commercially reasonable
judgment. In conjunction with the utilization of the Acquisition Facility,
Borrowers shall reimburse LaSalle for all costs and expenses incurred by LaSalle
including without limitation, legal expenses and reasonable attorneys' fees
(both in-house and outside counsel), appraisal costs, surveys, title insurance,
environmental audits or reviews, Uniform Commercial Code or other public record
searches, and lien filings. All such fees, costs and expenses shall be paid upon
demand by LaSalle. All such costs, expenses and charges shall constitute
Revolving Loans hereunder, shall be payable by Borrowers to LaSalle on demand,
and, until paid, shall bear interest at the highest rate then applicable to
Revolving Loans hereunder;
(p) Neither Borrower shall make loans to the other Borrower or to
any of their respective Subsidiaries or Affiliates. Neither Borrower shall enter
into or be a party to, or permit any Subsidiary to enter into or be a party to,
any transaction with the other Borrower or any of its own or the other
Borrower's Subsidiaries or Affiliates except transactions which are in the
ordinary course of business, are consistent with past practices of such
Borrower, are necessary or desirable for the prudent operation of its business,
are entered into for fair consideration and are on terms no less favorable to
such Borrower or its Subsidiary than are generally available from unaffiliated
third parties;
(q) Borrowers shall promptly advise LaSalle in writing of any
Material Adverse Effect or the occurrence of any Default or Event of Default;
(r) With respect to Environmental Laws and Hazardous Materials:
(i) Borrowers shall establish and maintain, at their
expense, a system to assure and monitor their compliance with all
Environmental Laws in all of their operations. Copies of all
environmental surveys, audits, assessments, feasibility studies
and results of remedial investigations shall be promptly
furnished by Borrowers to LaSalle upon request. Borrowers shall
take prompt and appropriate action to respond to any
non-compliance with any of the Environmental Laws;
(ii) Borrowers shall give written notice to LaSalle
immediately upon either Borrower's receipt of any notice of, or
either Borrower's otherwise obtaining knowledge of, (i) the
occurrence of any event involving the release, spill or
discharge, threatened or actual, of any Hazardous Material
(unless the release, spill or discharge is fully remediated
within 30 days after the Borrower first obtains knowledge of it
and the Borrower has no liability or potential liability
resulting from the release, spill or discharge other than
remediation costs not exceeding $10,000) or (ii) any
investigation, proceeding, complaint, order, directive, claim,
citation or notice with respect to: (A) any non-compliance with
or violation of any Environmental Law by either Borrower; or (B)
the release, spill or discharge, threatened or actual, of any
Hazardous Material except in compliance with applicable
Environmental Laws; or (C) the generation, use, storage,
treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials except in compliance with
applicable Environmental Laws; or (D) any other environmental,
21
health or safety matter which affects either Borrower or its
business, operations or assets or any properties at which either
Borrower transported, stored or disposed of any Hazardous
Materials (unless, in any such case the investigation,
proceeding, complaint, order, directive, claim, citation or
notice is terminated, dismissed or withdrawn within 30 days and
Borrowers have no liability or potential liability resulting
therefrom in excess of $10,000); and
(iii) Borrowers shall indemnify and hold harmless LaSalle,
its Affiliates, Parents and Subsidiaries, and their respective
directors, officers, employees, agents, insurers,
representatives, successors and assigns, from and against any and
all losses, claims, damages, liabilities, costs, and expenses
(including attorneys' fees and legal expenses) directly or
indirectly arising out of or attributable to any violation of any
Environmental Law or the use, generation, manufacture,
reproduction, storage, release, threatened release, spill,
discharge, disposal or presence of a Hazardous Material,
including the costs of any required or necessary repair, cleanup
or other remedial work with respect to any property of either
Borrower, and the preparation and implementation of any closure,
remedial or other required plans. All covenants and
indemnifications in this subsection 14(s) shall survive the
payment of the Liabilities and the termination or nonrenewal of
this Agreement;
(s) So long as this Agreement is in effect or any portion of the
Liabilities remain outstanding, Borrower shall not make any payments on any
indebtedness subordinated in right of payment to the Liabilities ("Subordinated
Debt") except as specifically authorized in this paragraph 14(s). Upon funding
of the initial Loans, Borrower may make principal payments on the Subordinated
Debt provided that the remaining balance of the Subordinated Debt after such
payments is no less than $750,000; Borrower would continue to have a minimum of
$400,000 in Excess Availability as provided in this Agreement after giving
effect to such payments; and such payments would not otherwise cause a Default
or Event of Default. Thereafter, Borrower will be permitted to make regularly
scheduled quarterly principal and interest payments on the Subordinated Debt in
amounts and at rates not exceeding those currently provided in the instruments
evidencing the Subordinated Debt, so long as:
(i) Borrower is in compliance with all covenants in this
Agreement, and Borrower will continue to be in compliance with
all covenants in this Agreement after giving effect to such
payments;
(ii) No Default or Event of Default has occurred and is then
continuing, and no Default or Event of Default would be caused by
such payments; and
(iii) Borrower will, after giving effect to such payments,
have Excess Availability of at least $250,000 as determined by
LaSalle, and Borrower, on a pro forma basis as determined by
LaSalle, would have had Excess Availability averaging at least
$250,000 during the thirty (30) day period immediately preceding
such payments, assuming for such calculation that the payments
had been made at the beginning of such period.
15. CONDITIONS PRECEDENT.
(a) The funding of the initial Revolving Loan is subject to the
satisfaction or waiver on or before the Closing Date of the following conditions
precedent:
(i) LaSalle shall have received each of the agreements,
opinions, reports, approvals, consents, certificates and other
documents which it requests in its discretion, including those
set forth on the closing document list attached hereto as
Schedule 15(a)(i) (the "Closing Agenda");
(ii) Since January 31, 2000, no event shall have occurred
which has had or could reasonably be expected to have a Material
Adverse Effect, as determined by LaSalle in its reasonable
discretion;
(iii) LaSalle shall have received payment in full of all
fees and expenses payable to it by Borrowers on or before the
Closing Date;
22
(iv) LaSalle shall have determined that immediately after
giving effect to (A) the making of the initial Loans, if any,
requested to be made on the Closing Date, (B) the payment or
reimbursement by Borrowers of LaSalle for all closing costs and
expenses incurred in connection with the transactions
contemplated hereby and (c) the payment of any Subdebt on the
Closing Date as permitted by paragraph 14(s) hereof, on a pro
forma basis the Excess Availability of Omni shall not be less
than four hundred thousand dollars ($400,000);
(v) LaSalle shall have received a certificate from Omni's
chief executive officer or chief financial officer, pursuant to
which such officer shall certify on behalf of Omni that in
calculating the Excess Availability described in paragraph (iv)
above, Omni's outstanding trade payables were (and are) not past
due in any material respect;
(vi) The Obligors shall have executed and delivered to
LaSalle all guaranties, security agreements and other documents
which LaSalle determines are reasonably necessary to consummate
the transactions contemplated hereby;
(vii) LaSalle shall continue to be satisfied with the
assets, books, records, financial and business conditions of
Borrowers;
(viii) LaSalle shall have received satisfactory
environmental assessments with respect to each of the properties
to be subject to a Mortgage, such assessments to be performed at
Borrowers' expense by a consultant acceptable to LaSalle;
(ix) LaSalle shall have received appraisals of Omni's
machinery and equipment and Borrowers' real estate in form and
substance satisfactory to LaSalle, each such appraisal to be
performed at Borrowers' expense by an appraisal firm reasonably
acceptable to LaSalle;
(x) LaSalle shall have received reasonably satisfactory
commitments from acceptable title insurance companies for
lender's policies of title insurance insuring LaSalle's
Mortgages;
(xi) LaSalle shall have determined in its reasonable
discretion that Borrowers are adequately capitalized, that the
fair saleable value of Borrowers' assets will exceed its
liabilities as of the Closing Date and that Borrowers will have
sufficient working capital to pay their debts as they become due;
(xii) Any and all indebtedness of Omni to its shareholders
shall have been subordinated to the Liabilities pursuant to
subordination agreements satisfactory to LaSalle; and
(xiii) As of the Closing Date, Omni will have no less than
$750,000 of debt subordinated to the Liabilities on terms and
conditions, and with documentation, acceptable to LaSalle.
(b) After the Closing Date, the making of any requested Revolving
Loan is subject to the satisfaction of the conditions precedent set forth below.
Each such request shall constitute a representation and warranty that such
conditions are satisfied:
(i) All representations and warranties contained in this
Agreement and the Other Agreements shall be true and correct on
and as of the date of such request, as if then made, other than
representations and warranties that relate solely to an earlier
date;
(ii) No Default or Event of Default shall have occurred, or
would result from the making of the requested Revolving Loan,
which has not been waived; and
(iii) Since the Closing Date, no event has occurred which
has had or could reasonably be expected to have a Material
Adverse Effect.
23
16. DEFAULT. The occurrence of any one or more of the following
events shall constitute an "Event of Default" hereunder:
(a) the failure of any Obligor to pay when due or declared due by
LaSalle in accordance with the terms hereof, any of the Liabilities;
(b) the failure of any Obligor to perform, keep or observe any of
the covenants, conditions, promises, agreements or obligations of such Obligor
under this Agreement or any of the Other Agreements; provided, however, that
Borrower's failure to deliver monthly or annual financial statements under
paragraph 14(b), or Borrower's failure to comply with paragraph 14(g), shall not
be an Event of Default unless Borrower does not cure such failure within five
days after written notice of such failure from LaSalle;
(c) the making or furnishing by any Obligor to LaSalle of any
representation, warranty, certificate, schedule, report or other communication
within or in connection with this Agreement or the Other Agreements or in
connection with any other agreement between such Obligor and LaSalle, which is
untrue or misleading in any material respect, or the failure of any Obligor to
perform, keep or observe any of the covenants, conditions, promises, or
agreements of such Obligor under any other agreement with any Person if such
failure has or is reasonably likely to have a Material Adverse Effect;
(d) the creation (whether voluntary or involuntary) of, or any
attempt to create, any lien or other encumbrance upon any of the Collateral,
other than the Permitted Liens, or the making or any attempt to make any levy,
seizure or attachment thereof;
(e) the commencement of any proceedings (i) in bankruptcy by or
against any Obligor, (ii) for the liquidation or reorganization of any Obligor,
(iii) alleging that any Obligor is insolvent or unable to pay its debts as they
mature, or (iv) for the readjustment or arrangement of any Obligor's debts,
whether under the United States Bankruptcy Code or under any other law, whether
state or federal, now or hereafter existing for the relief of debtors, or the
commencement of any analogous statutory or non-statutory proceedings involving
any Obligor; provided, however, that if such commencement of proceedings against
such Obligor is involuntary, such action shall not constitute an Event of
Default unless such proceedings are not dismissed within thirty (30) days after
the commencement of such proceedings;
(f) the appointment of a receiver or trustee for any Obligor, for
any of the Collateral or for any substantial part of any Obligor's assets or the
institution of any proceedings for the dissolution, or the full or partial
liquidation, of any Obligor which is a corporation or a partnership; provided,
however, that if such appointment or commencement of proceedings against such
Obligor is involuntary, such action shall not constitute an Event of Default
unless such appointment is not revoked or such proceedings are not dismissed
within thirty (30) days after the commencement of such proceedings;
(g) the entry of any judgment or order in excess of $10,000
against any Obligor which remains unsatisfied or undischarged and in effect for
thirty (30) days after such entry without a stay of enforcement or execution;
(h) the occurrence of an event of default under, or the
revocation or termination of, any agreement, instrument or document executed and
delivered by any Person to LaSalle pursuant to which such Person has guaranteed
to LaSalle the payment of all or any of the Liabilities or has granted LaSalle a
security interest in or lien upon some or all of such Person's real and/or
personal property to secure the payment of all or any of the Liabilities, or the
death of any such Person;
(i) the occurrence of an event of default under any agreement or
instrument evidencing indebtedness for borrowed money in excess of $10,000
executed or delivered by Borrowers, or either of them, or pursuant to which
agreement or instrument either Borrower or its assets or properties is or may be
bound;
(j) a Change of Control shall have occurred; or
(k) the occurrence of a material adverse change in either
Borrower's business, assets, prospects or financial condition, or the occurrence
of any other event or condition which has or is reasonably likely to have a
Material Adverse Effect.
24
Borrowers agree that any Event of Default with respect to either
Borrower shall constitute an Event of Default with respect to the other
Borrower, too. Notwithstanding anything contained in this paragraph 16 or
contained in any other provision of this Agreement or Other Agreements to the
contrary, in the event of the institution of any proceedings described in
paragraphs 16(e) or 16(f) hereof against either Borrower, LaSalle may cease to
make advances to Borrowers during the thirty (30) day grace periods provided in
paragraphs 16(e) and 16(f).
17. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Upon the occurrence of an Event of Default described in
paragraphs 16(e) or 16(f) hereof, all of the Liabilities shall immediately and
automatically become due and payable, without notice or demand of any kind. Upon
the occurrence of any other Event of Default, all of the Liabilities may, at the
option of LaSalle, and without demand, notice or legal process of any kind, be
declared, and immediately shall become, due and payable.
(b) Upon the occurrence of an Event of Default, LaSalle may
exercise from time to time any rights and remedies available to it under the
Uniform Commercial Code and any other applicable law in addition to, and not in
lieu of, any rights and remedies expressly granted in this Agreement or in any
of the Other Agreements and all of LaSalle's rights and remedies shall be
cumulative and non-exclusive to the extent permitted by law. In particular, but
not by way of limitation of the foregoing, LaSalle may, without notice, demand
or legal process of any kind, take possession of any or all of the Collateral
(in addition to Collateral of which it already has possession), wherever it may
be found, and for that purpose may pursue the same wherever it may be found, and
may enter into any of Borrowers' premises where any of the Collateral may be,
and search for, take possession of, remove, keep and store any of the Collateral
until the same shall be sold or otherwise disposed of, and LaSalle shall have
the right to store the same at any of Borrowers' premises without cost to
LaSalle. At LaSalle's request, Borrowers shall, at Borrowers' expense, assemble
the Collateral and make it available to LaSalle at one or more places to be
designated by LaSalle and reasonably convenient to LaSalle and Borrowers.
Borrowers recognize that if either Borrower fails to perform, observe or
discharge any of its Liabilities under this Agreement or the Other Agreements,
no remedy at law will provide adequate relief to LaSalle, and Borrowers agree
that LaSalle shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages. Any notification
of intended disposition of any of the Collateral required by law will be deemed
reasonably and properly given if given at least ten (10) calendar days before
such disposition. Any proceeds of any disposition by LaSalle of any of the
Collateral may be applied by LaSalle to the payment of expenses in connection
with the Collateral including, without limitation, legal expenses and reasonable
attorneys' fees (both in-house and outside counsel) and any balance of such
proceeds may be applied by LaSalle toward the payment of such of the
Liabilities, and in such order of application, as LaSalle may from time to time
elect.
18. INDEMNIFICATION. Borrowers, jointly and severally, agree to
defend (with counsel reasonably satisfactory to LaSalle), protect, indemnify and
hold harmless LaSalle, each Affiliate, Parent or Subsidiary of LaSalle, and each
of their respective officers, directors, employees, attorneys and agents (each
an "Indemnified Party") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature (including, without limitation, the
disbursements and the reasonable fees of counsel for each Indemnified Party in
connection with any investigative, administrative or judicial proceeding,
whether or not the Indemnified Party shall be designated a party thereto), which
may be imposed on, incurred by, or asserted against, any Indemnified Party
(whether direct, indirect or consequential and whether based on any federal,
state or local laws or regulations including, without limitation, securities,
environmental and commercial laws and regulations, under common law or in
equity, or based on contract or otherwise) in any manner relating to or arising
out of this Agreement or any Other Agreement, or any act, event or transaction
related or attendant thereto, the Collateral, the making and the management of
the Loans or the use or intended use of the proceeds of the Loans; provided,
however, that Borrowers shall not have any obligation hereunder to any
Indemnified Party with respect to matters caused solely by or resulting solely
from the willful misconduct or gross negligence of such Indemnified Party. To
the extent that the undertaking to indemnify set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy,
Borrowers shall satisfy such undertaking to the maximum extent permitted by
applicable law. Any liability, obligation, loss, damage, penalty, cost or
expense covered by this indemnity shall be paid to each Indemnified Party on
demand, and, failing prompt payment, shall, together with interest thereon at
the highest rate then applicable to Revolving Loans hereunder from the date
incurred by each Indemnified Party until paid by Borrowers, be added to the
25
Liabilities of Borrowers and be secured by the Collateral. The provisions of
this paragraph 18 shall survive the satisfaction and payment of the other
Liabilities and the termination of this Agreement.
19. NOTICES. All written notices and other written communications
with respect to this Agreement shall be sent by ordinary, certified or overnight
mail, by telecopy or delivered in person, and in the case of LaSalle shall be
sent to it at Xxx Xxxxxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxx 00000,
Attention: Xxxxx X. Xxxxxx (if by telecopy to (000) 000-0000), and in the case
of Borrowers shall be sent to Borrowers c/o Omni at its principal place of
business as set forth on the first page of this Agreement (if by telecopy to
(000) 000-0000); provided, however, that either party may designate another
address or contact person for itself from time to time by notice given as
provided in this paragraph.
20. CHOICE OF GOVERNING LAW AND CONSTRUCTION. This Agreement and the
Other Agreements are submitted by Borrowers to LaSalle for LaSalle's acceptance
or rejection as an offer by Borrowers to borrow monies from LaSalle now and from
time to time hereafter, and shall not be binding upon LaSalle or become
effective until accepted by LaSalle, in writing. TO THE FULLEST EXTENT POSSIBLE,
THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL BE GOVERNED AND CONTROLLED BY THE
INTERNAL LAWS OF THE STATE OF OREGON AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT
LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES. If any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or remaining provisions of this Agreement.
21. FORUM SELECTION AND SERVICE OF PROCESS. To induce LaSalle to
accept this Agreement, Borrowers irrevocably agree that, subject to LaSalle's
reasonable and absolute election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER
OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER
AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN
CLACKAMAS OR MULTNOMAH COUNTIES, STATE OF OREGON. BORROWERS HEREBY CONSENT AND
SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
SAID COUNTIES AND STATE. Borrowers waive personal service of any process and
consent that all such service of process may be made by certified mail, return
receipt requested, directed to Borrowers at the address indicated in LaSalle's
records; and service so made shall be complete upon receipt by Borrowers.
BORROWERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE VENUE
OF ANY LITIGATION BROUGHT AGAINST BORROWERS, OR EITHER OF THEM, BY LASALLE IN
ACCORDANCE WITH THIS PARAGRAPH.
22. MODIFICATION AND BENEFIT OF AGREEMENT. This Agreement and the
Other Agreements may not be modified, altered or amended except by an agreement
in writing signed by Borrowers and LaSalle. Borrowers may not sell, assign or
transfer this Agreement, or the Other Agreements or any portion thereof
including, without limitation, Borrowers' rights, titles, interest, remedies,
powers or duties thereunder. Borrowers hereby consent to LaSalle's sale,
assignment, transfer or other disposition, at any time and from time to time
hereafter, of this Agreement, or the Other Agreements, or of any portion
thereof, or participations therein including, without limitation, LaSalle's
rights, titles, interests, remedies, powers and/or duties thereunder. Borrowers
agree that they shall execute and deliver such documents as LaSalle may request,
including amendments to this Agreement, in connection with any such sale,
assignment, transfer or other disposition.
23. HEADINGS OF SUBDIVISIONS. The headings of subdivisions in this
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this Agreement.
24. POWER OF ATTORNEY. Each Borrower acknowledges and agrees that its
appointment of LaSalle as its attorney and agent-in-fact for the purposes
specified in this Agreement is an appointment coupled with an interest and shall
be irrevocable until all of the Liabilities are paid in full and this Agreement
is terminated.
25. WAIVER OF JURY TRIAL; OTHER WAIVERS.
(a) LASALLE, BORROWERS, AND EACH OF THEM, HEREBY WAIVE ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, ANY OF THE OTHER AGREEMENTS, THE LIABILITIES, THE
26
COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT OF BORROWERS OR LASALLE OR WHICH, IN
ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP
AMONG BORROWERS AND LASALLE. IN NO EVENT SHALL LASALLE BE LIABLE FOR LOST
PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.
(b) BORROWERS, AND EACH OF THEM, HEREBY WAIVE ALL RIGHTS TO
NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY LASALLE OF ITS RIGHTS TO
REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS.
(c) Borrowers, and each of them, hereby waive demand,
presentment, protest and notice of nonpayment with respect to any promissory
note or other instrument, and further waive the benefit of all valuation,
appraisal and exemption laws.
(d) LaSalle's failure, at any time or times hereafter, to
exercise any of its rights or remedies (including the right to establish
reserves or adjust advance rates) or to require strict performance by Borrowers,
or either of them, of any provision of this Agreement or any of the Other
Agreements shall not waive, affect or diminish any right of LaSalle thereafter
to exercise such rights or remedies or to demand strict compliance and
performance therewith. Any suspension or waiver by LaSalle of an Event of
Default under this Agreement or any default under any of the Other Agreements
shall not suspend, waive or affect any other Event of Default under this
Agreement or any other default under any of the Other Agreements, whether the
same is prior or subsequent thereto and whether of the same or of a different
kind or character. No delay on the part of LaSalle in the exercise of any right
or remedy under this Agreement or any Other Agreement shall preclude other or
further exercise thereof or the exercise of any other right or remedy. None of
the undertakings, agreements, warranties, covenants and representations of
Borrowers contained in this Agreement or any of the Other Agreements and no
Event of Default under this Agreement or default under any of the Other
Agreements shall be deemed to have been suspended or waived by LaSalle unless
such suspension or waiver is in writing, signed by a duly authorized officer of
LaSalle and directed to Borrowers specifying such suspension or waiver.
26. ADVERTISING. Borrowers hereby authorize LaSalle to use Borrowers'
names and trade names, together with variants of such names and related
logotypes in advertising promoting LaSalle and the business transaction among
LaSalle and Borrowers through the use of so-called "tombstones" and similar
publicity.
27. BORROWERS' ACKNOWLEDGMENT. Borrowers hereby acknowledge that they
have read and fully understand and accept this Agreement and each and every
provision hereof. Borrowers further acknowledge that they have had a full and
adequate opportunity to have this Agreement reviewed by attorneys of their
choosing and by all such other professionals of their choosing as Borrowers have
deemed appropriate.
28. JOINT AND SEVERAL LIABILITY. Except as otherwise specifically
provided in this Agreement, all liabilities and obligations of Borrowers under
and in relation to this Agreement and the Loans shall be joint and several.
29. APPOINTMENT OF OMNI AS AGENT. Rail hereby appoints Omni, and each
of its officers, as agents for Rail, and on its behalf to request, receive, and
direct the manner of disbursement of loans; to execute and deliver certificates,
instructions, agreements and other documents; to furnish information; and to
take any and all other actions of every nature in connection with this Agreement
and the Other Agreements, the Loans, and the Liabilities. LaSalle may rely on
any such actions of Omni and its officers as fully as if such actions had been
taken directly by Rail, and LaSalle shall be fully protected in doing so.
30. CONFIDENTIALITY.
(a) LaSalle shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any confidential,
trade secret or other non-public information ("Confidential Information")
supplied to it by Borrower pursuant to this Agreement, provided that nothing
contained herein shall limit the disclosure of any such information: (i) to the
extent required by statute, rule, regulation, subpoena or court order, (ii) to
bank examiners and other regulators, auditors and/or accountants, (iii) in
connection with any litigation to which LaSalle is a party, (iv) to any assignee
or participant (or prospective assignee or participant) so long as such assignee
27
or participant (or prospective assignee or participant) shall have first agreed
in writing to treat such information as confidential in accordance with this
paragraph 30, or (v) to counsel for LaSalle or any participant or assignee (or
prospective participant or assignee). LaSalle agrees to use reasonable efforts
to notify Borrower before disclosing any Confidential Information pursuant to
subsections (i) or (ii) above, so that Borrower may intervene to prevent or
restrict disclosure of its Confidential Information.
(b) In no event shall this paragraph 30 or any other provision of
this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by Borrower or any
third party without breach of this paragraph 30 or otherwise becomes generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to LaSalle on a non-confidential basis from a person other
than Borrower, (iii) to require LaSalle to return any materials furnished by
Borrower to LaSalle or (iv) to prevent LaSalle from responding to routine
informational requests in accordance with the Code of Ethics for the Exchange of
Credit Information promulgated by The Xxxxxx Xxxxxx Associates or other
applicable industry standards relating to the exchange of credit information.
The obligations of LaSalle under this paragraph 30 shall supersede and replace
the obligations of LaSalle under any confidentiality letter signed prior to the
date hereof.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE
BY LASALLE AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS
WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY
THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY LASALLE TO BE ENFORCEABLE.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement.
LASALLE BUSINESS CREDIT, INC.
By:
----------------------------------
Title:
-------------------------------
OMNI PRODUCTS, INC.
By:
----------------------------------
Title:
-------------------------------
OMNI RAIL PRODUCTS, INC.
By:
----------------------------------
Title:
-------------------------------
28
EXHIBIT A - CONCENTRATION LIMITS
Aggregate Percentage or Total Dollar
Amount of Omni's Aggregate Accounts
Owing By This Account Debtor Which
Account Debtor May Be Included in Eligible Accounts
-------------- ------------------------------------
CSX Transportation 50%
Union Pacific 50%
Burlington Northern 50%
Illinois Central Railroad Co. 30%
Long Island Railroad 30%
EXHIBIT B - BUSINESS AND COLLATERAL LOCATIONS
Attached to and made a part of that certain Loan and Security Agreement of even
date herewith among OMNI PRODUCTS, INC., OMNI RAIL PRODUCTS, INC. and LASALLE
BUSINESS CREDIT, INC.
A. (1) Borrowers' and their Subsidiaries' business locations (please indicate
which location is the principal place of business and at which locations
originals and all copies of Borrowers' books, records and accounts are
kept):
000 X.X. Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx 00000 (principal
place of business of both borrowers).
(2) Other locations of Collateral owned or leased by Borrowers and all
post office boxes of Borrowers. Please indicate for each such location
whether it is owned or leased.
0000 Xxxxx Xxxxxxx X-00, Xxxxx, Xxxxx 00000
0000 Xxxxxx Xxxxxx, XxXxxxx, Xxxxxxxx 00000
B. Other locations of Collateral, including warehouses and other storage
locations, processing locations and consignment locations:
Rocla Corp., 000 X. 00xx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 Xxxxx
Rail Corporation, 0000 X.X. Xxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxxxx
Rocla Corp., 000 Xxxxxxxx Xxxxx, Xxxx, Xxxxxxxx 00000
C.
Borrowers do not currently use any trade names or division names.
Omni Rail Products, Inc. was formerly known as Creative Medical
Development, Inc.
Omni Products, Inc. was formerly known as Omni Acquisition, Inc.
Borrowers previously used the name Omni International Rail Products, Inc.
EXHIBIT C - PERMITTED LIENS
File Number Jurisdiction Date Filed Secured Party
445757 Oregon Secretary of State 11/9/98 Xxxxxxx X. Xxxx
465415 Oregon Secretary of State 4/23/99 Xxxxxx X. Xxxxx
465416 Oregon Secretary of State 4/23/99 Xxxxxxx X. Xxxxxxxxxx
98-00129137 Texas Secretary of State 6/24/98 Toyota Motor Credit
Corporation
EXHIBIT D - COMPLIANCE CERTIFICATE
OMNI PRODUCTS, INC. AND OMNI RAIL PRODUCTS, INC.
Omni Products, Inc. and Omni Rail Products, Inc. ("Borrowers"), give
this certificate ("Compliance Certificate") to LaSalle Business Credit, Inc.
("Lender") on and as of the date hereof and in compliance with the Loan and
Security Agreement, dated June 2, 2000 by and among Lender and Borrowers (the
"Loan Agreement"). Capitalized terms used in this Compliance Certificate, unless
otherwise defined herein, shall have the meanings ascribed to them in the Loan
Agreement.
The Borrowers hereby certify that:
1. No Default or Event of Default exists under the Loan Agreement;
2. No Material Adverse Effect or change in the condition, financial or
otherwise, business, property, including, without limitation, with respect to
environmental laws, or the results of operations of Borrowers has occurred since
the date of the last compliance certificate delivered in accordance with
paragraph 11 of the Loan Agreement;
3. All insurance premiums due and payable by Borrowers have been fully
paid;
4. All taxes due and payable by Borrowers have been fully paid;
5. No litigation, investigation or proceeding, or injunction, writ or
restraining order of the type described in paragraph 13(i), 13(v) or any other
section of the Loan Agreement is pending or to Borrowers' knowledge is
threatened as of the date hereof;
6. The financial statements and supporting documents appended hereto
and delivered in accordance with paragraph 11 of the Loan Agreement (The
"Financial Documents") are, to the best of Borrowers' knowledge, complete,
correct and thoroughly present the financial condition of Borrowers;
7. Based upon my review of the financial information provided pursuant
to paragraph 14(b) of the Loan Agreement which are attached hereto for the
period ending _________________, _____:
a. Borrowers' computed Tangible Net Worth ("TNW") was $___________;
the minimum Tangible Net Worth required on that date was $______________.
b. Borrowers' Debt Service Coverage Ratio was _______ (to be
completed quarterly, calculated on a rolling 12-month basis); the minimum ratio
required on that date was 1.25x.
8. Borrowers, as of the date hereof, are, to the best of Borrowers'
knowledge, in full compliance with the representations, warranties, and
covenants set forth in the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate as of ______________ _____,
OMNI PRODUCTS, INC. OMNI RAIL PRODUCTS, INC.
By By
------------------------------- -----------------------------
Its Its
------------------------------ -----------------------------
EXHIBIT E - REPORTING REQUIREMENTS
UNDER STANDARD REPORTING
INSTRUCTIONS TO OMNI PRODUCTS, INC. AND OMNI RAIL PRODUCTS INC. ("BORROWERS")
FOR THE HANDLING OF BORROWERS' ACCOUNT
WITH LASALLE BUSINESS CREDIT, INC. ("LENDER")
A. Submitting Assignments
1. Each Accounts Receivable Daily Loan Report must have attached
a legible copy of an Invoice Register/Sales Journal showing a
breakdown of invoices by account debtor, invoice number,
invoice date, and dollar amounts.
2. Proof of delivery such as bills of lading or signed delivery
receipts must be maintained in your files and be available for
Lender's auditors.
3. All accounts and invoices are to be assigned to Lender.
4. Do not assign part of an account. Each account will be
assigned in full no matter how large or small the amount of
any specific invoice.
5. Each Assignment should be prepared in duplicate, sending the
original to Lender and retaining a copy for your records.
6. All Assignments are to be signed by the President or a
properly designated employee. Be sure to date and number the
Daily Report. To number the reports, use the number of the
month plus the sequence of the report. For example: If it is
the third report for August, the report number would be 8-03.
7. Assignments should be submitted daily.
8. IMPORTANT. Prepare an Assignment covering sales for the last
day of each month end and have it marked FINAL for the month.
DO NOT combine sales of two different months on one
Assignment.
9. All merchandise returned on invoices assigned to Lender is
still under the security interest of Lender. Such merchandise
must be reported as "credits." All credit memos should be
properly reported to Lender as they are issued, and reporting
should comply with the same procedures as for invoices. In
addition, all credits such as write-offs, adjustments, and
journal entries affecting the accounts receivable assigned to
Lender should also be reported on a timely basis.
B. Submitting Collections
1. Any checks received directly by Borrowers (including
non-accounts receivable checks) must be deposited in the
original form with proper endorsement to the special
depository account. No check may be deposited to the general
bank account. All incoming wire transfers should be deposited
to the special depository account.
2. Each Accounts Receivable Daily Loan Report is required to have
attached to it a listing of each check individually to
customer name with totals. This list may be a copy of your
Cash Receipts Journal. This listing must show the individual
invoices the payments are being applied to and all discounts,
allowances, and adjustments must be reflected on this list.
All columns must also be totaled.
3. The Collection Report should be prepared in duplicate, sending
the original to Lender and retaining a copy for your records.
4. Collections must be submitted every day checks are received by
Borrowers, whether in a lockbox or directly by Borrowers.
5. IMPORTANT. On the Collection Report covering remittances for
the last day of each month end, xxxx FINAL for the month.
C. Reporting
For the end of each month the following reports are to be submitted to
Lender per schedule below:
1. Summary and Detailed Accounts Receivable Aging -- due
by the 10th of the following month.
2. Accounts Receivable Reconciliation -- due by the 10th
of the following month. This report will reconcile
the A/R aging to the Final Daily Loan Report for the
month.
3. Summary and Detailed Accounts Payable Aging -- due by
the 10th of the following month including any held
checks.
4. Inventory Report and Aging - An inventory report(s),
by item, in quantity and extended cost at the lower
of cost or market, reconciled to consolidated balance
sheet inventory, due by the 10th of the following
month.
5. Customer Name and Address Listing -- to be submitted
on a quarterly basis.
6. Balance Sheet and Profit and Loss Statement -- due
within 30 days of the month end.
7. CPA - Audited Statement -- at fiscal year-end due
within 90 days of fiscal year end.
8. Compliance Certificate -- to be completed and
submitted with each financial statement and signed by
the chief financial officer. The Compliance
Certificate is to be submitted in a format consistent
with Exhibit D of the Loan and Security Agreement.
The following additional information is to be submitted to
Lender:
9. Promptly as filed all 10KSB's, 10Q's and other
reports filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of
1934.
10. Promptly as transmitted all proxy materials and other
reports and information transmitted to Borrowers'
shareholder;
D. Audits
From time to time, an auditor employed by Lender will call at your
office for the purpose of checking our records against your books, and
reviewing and updating all necessary credit and financial data. Please
cooperate with our auditors by making available to them any information
they may request.
E. Verification of Account Debtors
Periodically, on a random basis, a sampling of your customers' accounts
receivable balances taken from your Aging may be verified by Lender for
collateral control purposes. This procedure is handled on a
"non-notification" basis under the name of "Xxxxxxx and Company" to
protect the integrity of your financing program with Lender.
F. Accounts Receivable Ineligible
On a monthly basis, you will receive from Lender a list of all items on
your A/R Aging that are not eligible for advance purposes. This list
will be updated upon receipt of each Aging.
G. Miscellaneous Fees
The following fees will be charged for these services provided by
Lender:
1. Outgoing Fed wires - $15 per wire.
2. Automated Funds Transfer Fee (ACH) - $50 per month.
3. Interbank Transfers - $7.50 per transfer.
H. Other:
Request for advances must be telephoned to our office by no later than
10:30 a.m. PST to receive the wire that day. The deposit(s) for each
day must be telephoned or faxed to our office by no later than 1:30
p.m. PST to receive credit for the deposit on the following day. Your
primary contact regarding advances and reporting will be Xxxxx Xxxxx,
our Operations Manager. Her telephone number is (000) 000-0000 and her
fax number is (000) 000-0000. Please feel free to call Xxxxx with any
questions you should have.
SCHEDULE 1(a) - OMNI'S STANDARD WARRANTY
Omni warrants that its rubber and concrete railroad grade crossing surfaces will
be free of material manufacturing defects and will serve the intended purpose,
subject to normal road use and permitted highway vehicles, for a period of six
(6) years from the date of initial installation SUBJECT TO THE FOLLOWING TERMS
AND CONDITIONS OF WARRANTY: (a) within the notice period, Purchaser must notify
Omni in writing of all defects; (b) Purchaser must agree to provide or arrange
for reasonable access to the site and provide available information and
Purchaser's on-site representative as may be requested by Omni; and (c) this
warranty is voided and does not apply if the Panels have been improperly
installed or maintained, subjected to misuse or negligence, damaged by any acts
of God (such as hurricane, fire, flood, etc.), or have been repaired by any
party other than Omni or its representatives, or if the railroad subgrade,
ballast or trackwork were improperly prepared. THIS WARRANTY SHALL NOT APPLY IF
ANY OF THE CONDITIONS TO THE WARRANTY SET FORTH ABOVE HAVE NOT BEEN MET.
SCHEDULE 13(i) - LITIGATION
1. Xxxxxx v. Omni Products, Inc., et al., Third Judicial District In and
For Salt Lake County, State of Utah (Civil No. 9809 12368).
2. Usdin v. Omni Products, Inc. (civil action in Lancaster County,
Pennsylvania).
SCHEDULE 13(q) - INDEBTEDNESS
April 30, 2000
Short Long Interest
Account Creditor/Payee Term Term Rate
-------------------------------------------------------------------------------------------------------------------
A.G. Property Note A.G. Properties LLC 10,283.00 12,358.00 10.00%
Xxxxxx Subordinated Debt Xxxxx X. Xxxxxx 0.00 214,500.20 7.00%
Precured Subordinated Debt RDF Liquidating Trust 0.00 289,712.00 7.00%
MMA (Redhawk) Subordinated Debt MMA Partnership 0.00 253,622.00 7.00%
(Dynasty)Xxxx & Xxxxxxxxxx
Subordinated Debt Xxxxxxx X. Xxxx and 0.00 132,125.00 7.00%
Xxxxxxx X. Xxxxxxxxxx
Transcontinental Subordinated Debt Central State Bank 0.00 45,000.00 7.00%
Lease Payable Toyota Motor Credit Co. 0.00 28,200.00 10.00%
Secured Convertible Subordinated Xxxxxxx X. Xxxx 0.00 122,580.00 8.00%
Note-Xxxx
Secured Convertible Subordinated Xxxxxx X. Xxxxx 0.00 30,000.00 8.00%
Note-Xxxxx
Secured Convertible Subordinated
Note-Xxxx Xxxxxxx X. Xxxxxxxxxx 0.00 122,580.00 8.00%
Subordinated Note Payable-Xxxxx Xxxxxx X. Xxxxx 0.00 57,715.12 7.00%
Subordinated Note-(Xxxxxxxxx)
Xxxx & Xxxxxxxxxx Xxxxxxx X. Xxxx and 0.00 73,728.47 7.00%
Xxxxxxx X. Xxxxxxxxxx
--------------------------
Totals 10,283.00 1,382,120.79
==========================
SCHEDULE 13(s) - PARENTS, SUBSIDIARIES AND DIVISIONS
Rail has one wholly-owned Subsidiary, Omni. Neither Rail nor Omni has any other
Subsidiaries.
SCHEDULE 13(x) - LICENSE AGREEMENTS
None.
SCHEDULE 15(a)(i) - CLOSING AGENDA
Loan and Security Agreement
Revolving Promissory Note
Term Notes: M & E Loan
Omni Real Estate Term Loan
Rail Real Estate Term Loan
Capex Note
UCC-1 Financing Statements for:
California
Colorado
Delaware
Illinois
Oregon
Texas
Washington
UCC-1A Fixture Filings - Nevada County, California
XxXxxxx County, Illinois
Xxxxx County, Texas
Continuing Unconditional Guaranties (Omni and Rail)
Deed of Trust (Nevada City, California)
Real Estate Mortgages (McHenry, Illinois)
Deeds of Trust (Ennis, Texas)
Environmental Indemnity Agreement (Nevada City, California)
Environmental Indemnification Agreement (McHenry, Illinois)
Environmental Indemnification Agreement (Ennis, Texas)
Title Insurance Policies
Lockbox and Blocked Account Agreement
Patent, Trademark and Copyright Security Agreement
Subordination Agreements
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxx
MMA Partnership
RDF Liquidating Trust
Transcontinental Capital Partners
Bailee Agreements - Denver, Colorado and Bear, Delaware
Landlord Waiver - Portland
Corporate Resolutions for each Borrower
Secretary's Certificate for each Borrower
Opinion Letter
Disbursement Letter
Accountant's Access Letter
Signatory Authorization Letter
Insurance Certificate(s)
