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REVOLVING LOAN AGREEMENT
BY AND BETWEEN
XXXXXXXXX INDUSTRIES, INC.
(THE BORROWER)
AND
XXXXXXX BANK, N.A.
(THE BANK)
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TABLE OF CONTENTS
(The Table of Contents for this Revolving Loan Agreement is
for convenience of reference only and is not intended to
define, limit or describe the scope or intent of any
provisions of this Revolving Loan Agreement.)
ARTICLE/SECTION HEADING PAGE
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01 Definitions..................................................1
1.02 Accounting Terms............................................15
ARTICLE II AMOUNTS AND TERMS OF LOAN
2.01 Loan........................................................15
2.02 Borrowing Base for Loan ....................................16
2.03 The Note....................................................17
2.04 Advance of Proceeds of the Loan ............................17
2.05 Interest Rate: Payment of the Note..........................17
2.06 Prepayments.................................................17
2.07 Calculation of Interest.....................................18
2.08 Set-Off.....................................................18
2.09 Late Payment Penalty........................................18
2.10 Use of Proceeds.............................................18
2.11 Right to Debit Account......................................18
2.12 Commitment Fee..............................................19
ARTICLE III CUSTODY, INSPECTION, COLLECTION AND
HANDLING OF COLLATERAL AND RECORDS
3.01 Collection of Accounts......................................19
3.02 Power of Attorney...........................................19
3.03 Liability for Handling Collateral...........................20
3.04 Custodian of Collateral.....................................20
3.05 Cash Collateral Account(s)..................................20
ARTICLE/SECTION HEADING PAGE
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ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.01 Organization, Corporate Powers, etc.........................21
4.02 Authorization of Loan, etc..................................21
4.03 Financial Statements........................................22
4.04 Tax Returns and Payments....................................22
4.05 Agreements..................................................23
4.06 Title to Properties and Assets, Liens, etc..................23
4.07 Litigation, etc.............................................23
4.08 Consents and Approvals......................................23
4.09 Enforceable Obligations.....................................23
4.10 Full Disclosure.............................................24
4.11 Hazardous Materials.........................................24
4.12 Outstanding Debt............................................24
ARTICLE V COVENANTS OF BORROWER
5.01 Affirmative Covenants.......................................25
5.02 Negative Covenants..........................................31
5.03 Financial Covenants.........................................34
ARTICLE VI CONDITIONS OF LENDING
A. The First Advance.
6.01 Evidence of Borrower Action.................................35
6.02 Note........................................................35
6.03 Opinion of Counsel to Borrower..............................35
6.04 Security Agreement and Other Security Documents.............36
6.05 Financing Statements........................................36
6.06 Property and Public Liability Insurance.....................36
6.07 Fees........................................................36
6.08 Concerning the Subordinated Debt............................36
6.09 Other Documents.............................................36
6.10 Asset-Based Lending Audit...................................37
6.11 Stock of Subsidiaries.......................................37
B. All Advances.
6.12 Compliance..................................................37
6.13 Delivery of Documents.......................................38
6.14 Borrowing Request...........................................38
6.15 Supplemental Opinions.......................................38
ARTICLE/SECTION HEADING PAGE
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6.16 Documentation and Proceedings...............................38
6.17 Required Acts and Conditions................................38
6.18 Approval of Bank's Counsel..................................38
6.19 Pledge Agreement from Affiliates Created Posting-Closing....39
6.20 Representations and Warranties..............................39
6.21 No Default of Adverse Change................................39
6.22 Loan Documents..............................................39
6.23 Payment of Commitment Fee...................................39
ARTICLE VII EVENTS OF DEFAULT
7.01 Events of Default...........................................39
ARTICLE VIII RIGHTS UPON DEFAULT
8.01 Acceleration................................................42
8.02 Right of Set-off............................................42
8.03 Other Rights................................................42
8.04 Uniform Commercial Code.....................................42
ARTICLE IX MISCELLANEOUS
9.01 No Waiver, Cumulative Remedies..............................42
9.02 Entire Agreement; Amendments, etc...........................42
9.03 Addresses for Notices, etc..................................43
9.04 Applicable Law..............................................44
9.05 Survival of Representations and Warranties..................44
9.06 Time of the Essence.........................................44
9.07 Headings....................................................44
9.08 Severability................................................44
9.09 Counterparts................................................44
9.10 Conflict....................................................44
9.11 Duration....................................................44
9.12 Expenses....................................................45
9.13 Successors and Assigns......................................45
9.14 Cross Defaults..............................................46
9.15 Non-Waiver..................................................46
9.16 Waiver of Trial by Jury.....................................46
ARTICLE/SECTION HEADING PAGE
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EXHIBIT "A" FORM OF NOTE
EXHIBIT "B" FORM OF SECURITY AGREEMENT
EXHIBIT "C" FORM OF LEGAL OPINION
EXHIBIT "D" BORROWING BASE CERTIFICATE
EXHIBIT "E" BORROWING REQUEST
SCHEDULE 3.07 PENDING LITIGATION
SCHEDULE 5.01(l) OUTSTANDING DEBT
SCHEDULE 5.02(c) PLACES OF BUSINESS
SCHEDULE 5.02(f) PERMITTED LIENS
REVOLVING LOAN AGREEMENT
THIS REVOLVING LOAN AGREEMENT (the "AGREEMENT") made and entered into
as of April ___, 1997, by and between XXXXXXXXX INDUSTRIES, INC., a Delaware
corporation formerly known as Israel Tech Acquisition Corp. (hereinafter
referred to as the "BORROWER") and XXXXXXX BANK, N.A., a national banking
association (hereinafter referred to as the "BANK").
RECITALS
A. Borrower desires to borrow and obtain from Bank a working capital
line of credit loan up to a maximum amount of FIFTY FIVE MILLION
DOLLARS ($55,000,000.00) (the "LOAN").
B. Bank is willing to grant the Loan upon the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the above premises and the
mutual covenants and agreements contained herein, and for consideration,
acknowledged to be adequate, Borrower and Bank, intending to be legally bound,
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01 Definitions. For the purposes of this Agreement, the following
terms shall have the respective meanings specified in this Section 1.01 (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Account" shall mean any right to payment for goods sold or leased or
for services rendered by Borrower which is not evidenced by an instrument or
chattel paper, whether or not it has been earned by performance including, but
not limited to, all contract rights.
"Account Debtor" shall mean any Person who is obligated on an Account.
"Account Collateral Certificate" shall mean a certificate executed and
certified correct by an officer of Borrower and in form acceptable to Bank
setting forth the name and address of each Account Debtor, the amount owed by
each Account Debtor and the period of time said Account has been outstanding.
"Adjusted Base Rate" shall mean a per annum rate of interest that is
equal to the Base Rate (as hereinafter defined) plus the Base Rate Spread (as
hereinafter defined). The rate of interest charged under this Agreement on sums
bearing interest at the Adjusted Base Rate shall change each time the Base Rate
is changed. Any such change in the rate of interest shall become effective as of
the opening of business on the day on which such change in the Base Rate is made
generally effective. A certificate executed by an officer of Bank shall be
conclusive as to the Adjusted Base Rate but no certificate need be issued for
the Adjusted Base Rate to be effective hereunder.
"Adjusted Libor" shall mean a per annum rate of interest that is equal
to Libor (as hereinafter defined) plus the Libor Spread (as hereinafter
defined).
"Adjusted Rate" shall mean as applicable, Adjusted Base Rate or
Adjusted Libor.
"Advance" shall mean the proceeds of the Loan delivered to Borrower by
Bank pursuant to Section 2.04.
"Advance Date" shall mean the date of the Initial Advance or any
Subsequent Advance under this Agreement.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with Borrower,
including a Subsidiary. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, through the ownership of Voting
Stock, by contract, management, understanding, relationship, or otherwise, the
power to direct or cause the direction of the management and policies of such
corporation.
"Airclaims, Inc." shall be as described in Section 2.02.
"Assets" shall mean all property, real or personal, tangible or
intangible in which the Borrower has any legal, beneficial or other interest.
"Authorized Representative" shall mean an officer, member, partner or
other representative of an entity who is authorized to execute agreements,
documents, or certifications on behalf of such entity and authorized to make
decisions, institute litigation, and take all other necessary actions on behalf
of such entity.
"BankAtlantic" shall mean BankAtlantic, a federal savings bank.
"BankAtlantic Loan" shall mean the loan extended to Borrower by
BankAtlantic and evidenced by the loan agreement and related documents dated
as of June 22, 1994, as amended, and secured by a mortgage on the
Borrower's primary place of business.
"Base Rate" shall mean the Prime Rate.
"Base Rate Interest Period" shall mean for each Base Rate Portion, one
month.
"Base Rate Loan" shall mean that portion of the outstanding principal
balance of the Loan for which the interest rate is the Adjusted Base Rate.
"Base Rate Portion" shall mean that portion of the outstanding
principal balance of the Loan which is not included in any Libor Portion (as
hereinafter defined).
"Base Rate Spread" shall mean the Base Rate minus one fourth percent
(1/4%).
"Borrowing Base" shall mean the assets of Borrower against which
Advances may be made, as calculated according to the formulas set forth in
Sections 2.02.
"Borrowing Base Certificate" shall mean a certificate executed with
respect to the Loan and delivered to Bank pursuant to Section 5.01(a)(iii), such
certificate being certified as being true and correct by the chief financial
officer or other Authorized Representative of Borrower, setting forth the
calculations leading to, as well as the amount of, the relevant Borrowing Base
(as further described in Section 2.02) and including a statement that Borrower
is in full compliance with all provisions of the Loan Documents (including
without limitation all financial covenants and conditions), the form of which
certificate shall be substantially similar to Exhibit E hereto.
"Borrowing Request" shall mean a request for a Loan in the form of
Exhibit "E" attached hereto.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in the State of Florida are authorized or required
by law to close.
"Capital Funds" shall mean the sum of paid-in capital plus retained
earnings plus Subordinated Debt, less any intangible assets.
"Capital Funds Ratio" shall mean the ratio of all liabilities of
Borrower less Subordinated Debt divided by Capital Funds as of any particular
date.
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"Capitalized Lease Obligations" shall mean all rental obligations
which, under GAAP, are or will be required to be capitalized on the balance
sheet of Borrower.
"Cash Collateral Account(s)" shall mean Borrower's account(s)
established with Bank, which account(s) shall, unless and until the occurrence
of an Event of Default, constitute the primary depository account(s) for
payments received by Borrower on Accounts under the Loan. Upon the occurrence of
an Event of Default, the Cash Collateral Account(s) may, at Bank's sole
discretion, be replaced with a lockbox/lockboxes established at Bank to receive
payments under the Loan.
"Cash Flow" means, for any fiscal period, the difference between the
gross cash receipts and the total amount of gross cash payments arising from
operating activities as determined in accordance with GAAP.
"Chattel Paper" shall mean a writing or writings which evidence both a
monetary obligation and a security interest in or a lease of specific goods.
"Closing Date" shall mean April 24, 1997.
"Collateral" shall mean and include:
(a) all Accounts, contract rights, Instruments, Chattel Paper,
Documents, Equipment and General Intangibles of Borrower including all bank
accounts in which Borrower has deposited proceeds of any Collateral, all
patents, trademarks and trade names, files, correspondence, advertising
programs, customer lists, all monies becoming due Borrower from any sale of
Collateral on account of rebates, warranty service, or bonuses; all amounts due
under and all rights under any letters of credit for the benefit of Borrower or
in which the Borrower has rights;
(b) any other obligations or indebtedness owed to Borrower
from whatever source arising;
(c) all rights of Borrower to receive any payments in money or
in kind;
(d) all of Borrower's right, title and interest in and to, and
all of Borrower's rights, remedies, security interests and liens under,
guaranties or other contracts of suretyship, security therefor, security
agreements, deposits, leases or other agreements or property securing or
relating to any of the items referred to in
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subparagraph (a) hereof or acquired for the purpose of securing and enforcing
any of such items;
(e) all of Borrower's right, title, and interest in and with
respect to the goods, services, or other property that gave rise to or that
secure any of the foregoing and insurance policies relating thereto (to the
extent such collateral constitutes part of the Borrowing Base), and all of
Borrower's rights as an unpaid seller of goods and services, including, but not
limited to, the rights of stoppage in transit, replevin, reclamation,
repossession, and resale;
(f) all Inventory now owned or hereafter owned or acquired by
Borrower, wherever located, whether in possession of a seller and identified to
a contract of sale between a seller and Borrower, in transit from the seller to
Borrower, in transit from Borrower to a purchaser, or being returned to Borrower
from any purchaser, on Borrower's premises or elsewhere, all contractual rights
to purchase inventory, all shipping invoices, bills of lading, and warehouse
receipts covering such inventory, all Eligible Finished Goods Inventory, all Raw
Materials, work in process and other materials to be used or consumed in
Borrower's business;
(g) all instruments, documents, securities, cash, and property
owned by Borrower or in which Borrower has an interest (except as to which
accounts Borrower is trustee), which now or hereafter are at any time in the
possession or control of Bank or in transit by mail or carrier to or in the
possession of any third party acting on behalf of Bank, without regard to
whether Bank received the same in pledge, for safekeeping, as Bank for
collection or transmission or otherwise or whether Bank had conditionally
released the same, and all of Borrower's deposits, accounts, balances, sums and
credits with, and all of Borrower's claims against, Bank;
(h) all Books and Records including computer records, files,
directories, tapes and programs;
(i) all other property and money of Borrower now or hereafter
in the possession, custody or control of Bank;
(j) all of the foregoing, whether now owned or existing or
hereafter created or acquired by Borrower; and
(k) proceeds and products of all such Collateral.
"Commitment Fee" shall mean $82,500.00.
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"Current Assets" shall mean those assets which in the regular course of
business of Borrower and its Subsidiaries on a consolidated basis, will be
readily and quickly realized or converted into cash, all in accordance with
GAAP, within the applicable accounting or time period together with such
additional assets as may readily be converted into cash without impairing the
business of Borrower or any of its Subsidiaries, and shall include cash,
temporary investments, receivables, inventories and prepaid expenses, but shall
exclude all inter-company assets between Borrower and such Subsidiaries.
"Current Liabilities" shall mean those liabilities of Borrower and its
Subsidiaries on a consolidated basis, or any portion thereof, the maturity of
which will not extend beyond one year from the date said determination is to be
made, but excluding all inter-company Liabilities between Borrower and such
Subsidiaries.
"Current Ratio" shall mean, for the applicable period, the ratio of (i)
Borrower's Current Assets to (ii) Borrower's Current Liabilities.
"Day" shall mean a calendar day, unless the context indicates
otherwise.
"Debt" means (i) indebtedness for borrowed money or for the deferred
purchase price of property or services, (ii) obligations as lessee under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases, and (iii) obligations under direct or indirect guaranties in respect of
indebtedness or obligations of others of the kinds referred to in clause (i) or
(ii) above.
"Debt Service Coverage Ratio" shall mean for the applicable period, as
to Borrower, the ratio set forth in Section 5.03(c).
"Default" shall mean any event or condition which with the passage of
time or giving of notice, or both, would constitute an Event of Default.
"Default Rate" shall mean the highest rate of interest permitted from
time to time by applicable law.
"Document" shall mean a xxxx of lading, dock warrant, dock receipt,
warehouse receipt or order for the delivery of goods, and also any other
document which, in the regular course of business or financing, is treated as
adequately evidencing that the person in possession of it is entitled to
receive, hold and dispose of the document and goods it covers.
"Dollars" shall mean lawful money of the United States of America.
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"Due Date" shall mean the date any payment of principal, interest or
any other amount is due and payable on the Loan or the Note.
"Eligible Accounts" shall mean the net amount of Accounts outstanding
after eliminating from the aggregate amount of outstanding Accounts, such
Accounts as to which more than 90 days have elapsed since the invoice date, and
eliminating:
(a) all Accounts arising from sales or services to any single
account debtor, more than twenty percent (20%) of whose Accounts owing to the
Borrower remain unpaid more than 90 days after the invoice date,
(b) all Accounts arising from sales or services to any account
debtor affiliated with the Borrower,
(c) the amount by which Accounts existing as of any point in
time during the duration of the Loan arising from sales or services to any one
account debtor exceed 20% of the Borrower's Tangible Net Worth as of such time
(unless such Accounts are otherwise approved by Bank, in its sole discretion),
(d) all U.S. Government account receivables as to which the
Borrower has failed to execute such instruments and take all steps required by
Bank in order that all monies due and to become due thereunder have been
assigned to Bank and notice thereof given to the applicable department, agency
and/or instrumentality of the United States Government under the Federal
Assignment of Claims Act, as same may be amended from time to time,
(e) (as to Domestic Accounts but not as to Foreign Accounts)
all Accounts arising from sales or services to Account Debtors primarily
conducting business in foreign countries, and
(f) those Accounts excluded because of the credit worthiness
of any account debtor and deducting from the aggregate face amount of the
remaining Accounts all payments, adjustments, allowances, deductions, discounts
and credits applicable thereto and all amounts (including any contra accounts
arising out of sale to and purchases from a particular party) due thereon
considered by the Bank difficult to collect or uncollectible by reason of
return, rejection, repossession, loss or damage of or to the merchandise giving
rise thereto, which determination shall be final and binding upon the Borrower.
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This list is non-inclusive. The Advance Formula is at all times subject
to the right of the Bank (together with any Participants) to modify it based on
findings of its Asset-Based Lending audits and the Bank's sole judgment.
"Eligible Domestic Account" shall mean Eligible Accounts arising from
sales within the United States.
"Eligible Foreign Accounts" shall mean Eligible Accounts arising from
sales or services to Account Debtors primarily conducting business in foreign
countries whether or not supported by an irrevocable Letter of Credit issued in
favor of Borrower. All Foreign Accounts shall be subject to preapproval by Bank.
"Equipment" shall mean all goods used or bought for use primarily in
the business of Borrower that are not included in the definition of Inventory.
"Equitable Loan" shall mean that certain subordinated loan in the
original principal amount of Fifteen Million Dollars ($15,000,000.00) extended
by The Equitable Life Assurance Company to Borrower in connection with the
acquisition by IASI of the assets of IASLP.
"Events of Default" shall mean the events of default specified in
Article Eight of this Agreement.
"FAA" shall mean the Federal Aviation Administration or any successor
agency.
"FAA-certified Overhauled Parts Inventory" shall mean those items of
Inventory that have accumulated zero hours and cycles since their refurbishment
and re-certification by an FAA-certified repair station and were purchased by
Borrower less than two years previous to the date of an Advance against such
items.
"Financing Statement" shall mean all financing statements permitted
under the UCC or any other state law for the purpose of perfecting the security
interest in the Collateral granted by Borrower to Bank under the Security
Agreement (the "Security Interest"), and shall include (without limitation)
financing statements to be filed in the States of California and Florida or any
other state against Borrower as debtor.
"GAAP" shall mean those generally accepted accounting principles and
practices which are recognized as such by the American Institute of Certified
Public Accountants acting through its Accounting Principles Board or by the
Financial
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Accounting Standards Board or through other appropriate boards or committees
thereof.
"General Intangibles" shall mean any personal property (including
things in action) other than goods, Accounts, Chattel Paper, Instruments and
money, and shall include, but not be limited to, tax refunds, returns of
insurance premiums and customer lists.
"Hazardous Materials" shall mean materials defined as "hazardous waste"
under the Federal Resource Conservation and Recovery Act and similar state laws,
or as "hazardous substances" under the Federal Comprehensive Environmental
Response, Compensation and Liability Act and similar state laws, and any solid,
semi-solid, liquid or gaseous substances which are toxic, ignitable, corrosive,
carcinogenic or otherwise dangerous to human, plant or animal health and well
being.
"IASI" shall mean IASI Inc, a Delaware corporation and wholly owned
subsidiary of Borrower.
"IASLP" shall mean International Aircraft Support, L.P., a California
limited partnership.
"IASI Merger" shall mean the merger of IASI into and with the Borrower,
which is contemplated to take place after Closing.
"Initial Advance" shall mean the initial delivery of a portion of the
proceeds of the Loan pursuant to the terms hereof on or after the Closing Date.
"Initial Advance Date" shall mean the date on which the first Advance
is made under the Loan.
"Instruments" shall mean a negotiable instrument or a security or any
other writing which evidences a right to the payment of money (whether or not
negotiable) and is not itself a security agreement or a lease and is of a type
which is in the ordinary course of business transferred by delivery with any
necessary indorsement or assignment.
"Intangible Assets" shall mean those assets of Borrower and its
Subsidiaries on a consolidated basis which, in accordance with GAAP, are not
Tangible Assets and shall include, but not be limited to, patents, copyrights,
trademarks, trade names, franchises, good will, covenants not to compete,
experimental expenses,
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prepaid finance charges and other similar assets which would be classified as
"intangible assets" under GAAP.
"Inventory" shall mean all Parts Inventory, Whole Aircraft Engines,
goods, merchandise, and other personal property now owned or hereafter owned or
acquired by Borrower that are held for sale or lease or that are possessed for
sale or lease, or that are furnished or are to be furnished under any contract
of service or are raw materials, work-in process, supplies, finished goods or
materials used or consumed in Borrower's business, and all other tangible
property now owned or hereafter acquired and held for sale or lease or furnished
or to be furnished under contracts of service or used or consumed in Borrower's
business, and all products, substitutions, replacements, additions, or
accessions for or to any of the foregoing.
"Inventory Collateral Certificate" shall mean a certificate executed
and delivered to Bank pursuant to Section 5.01(a)(iii), certified as correct by
an officer of Borrower in form acceptable to Bank setting forth information
concerning descriptions, quantities, costs, fair market value and the location
of all Inventory.
"Inventoried Engines" shall mean Whole Aircraft Engines that are owned
by the Borrower and are held as Inventory for sale or lease.
"Leased Engines" shall mean Whole Aircraft Engines that the Borrower
owns but are, at the time of such classification, subject to leases to third
parties.
"Liabilities" shall mean all liabilities and obligations of Borrower,
or all liabilities and obligations of Borrower and its Subsidiaries on a
consolidated basis, as the case may be, and shall include Long Term and
Contingent Liabilities and/or Current Liabilities, as the case may be, all as
determined in accordance with GAAP.
"Libor" shall mean the offered rate for deposits in United States
dollars in the London Interbank market for the Libor Interest Period which
appears on the Libor Rate Reference Page as of 11:00 a.m. (London time) on the
day that is two London Banking Days preceding the first Business Day of the
Interest Period. If at least two such offered rates appear on the Libor Rate
Reference Page, the rate will be the arithmetic mean of such offered rated.
"Libor Interest Period" shall mean for each Libor Portion, a period
from the date of commencement of the Adjusted Libor on the subject portion of
the outstanding principal balance of the Loan to the day which shall occur 30,
90 or 180 days after the date of such commencement, as selected by Borrower
pursuant to this Agreement. However, if the last day of such Libor Interest
Period would otherwise occur on a day which is not a Business Day, such last day
shall be extended to the next succeeding Business Day unless such extension
would extend
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the maturity date of such Libor Interest Period or cause the last day to occur
in a new calendar month, in which event such last day shall be the immediately
preceding Business Day.
"Libor Portion" shall mean each portion of the outstanding principal
balance of the Loan on which, as a result of Borrower's election hereunder,
Borrower is being charged interest at the corresponding Adjusted Libor for the
corresponding Libor Interest Period. Each Libor Portion must be an integral
multiple of $250,000.00 and be not less than $1,000,000.00.
"Libor Rate Reference Page" shall mean either the Dow Xxxxx Telerate
Page 3750 or such other nationally recognized source, as either may from time to
time be used by Bank in its sole discretion as a reference for determining any
applicable Libor Rate.
"Libor Reserve Percentage" shall mean for any day, that percentage
(expressed as a decimal) that is in effect on such day for determining maximum
reserve requirements, including without limitation: (i) any basic, supplemental,
marginal, or emergency reserve under any regulations of any governmental
authority, domestic or foreign, having jurisdiction with respect thereto; or
(ii) any applicable reserve prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New York City
with deposits exceeding $5,000,000,000.00 in respect of "Euro-currency
liabilities" (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Libor Portions is
determined, or any category of extensions of credit which includes loans by a
non-United States office of a member of the Federal Reserve System to United
States residents). After such calculation, Libor shall be adjusted up to the
next highest 1/16th of one percent.
"Libor Spread" shall be 225 basis points (2.25%).
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, or charge of any kind and shall include, but not be limited to, any
agreement to give any of the foregoing, any conditional sales or other title
retention agreements, or any lease in the nature thereof, the filing of or
agreement to give any financing statement under the UCC of any jurisdiction, the
lien of a lien creditor defined in the UCC, and the lien of a statutory lienor.
"Loan Documents" shall mean this Agreement, the Note, the Financing
Statement, the Security Agreement, the other security documents, any Borrowing
Base Certificate, Account Collateral Certificate, and Inventory Collateral
Certificate
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and Officer's Certificate and all of the other documents, agreements,
certificates, schedules, notes, statements and opinions, however described,
referenced herein or executed or delivered pursuant hereto or in connection with
or arising with the Loans or the transactions contemplated by this Agreement.
"London Banking Day" shall mean each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are closed
for business.
"Long Term and Contingent Liabilities" shall mean and include without
duplication:
(i) any liability or obligation payable more than one year
from the date of creation thereof (including any secured by any Lien on property
owned by Borrower or any Subsidiary), which under GAAP is shown on the balance
sheet as a liability (including Capitalized Lease Obligations, but excluding
reserves for deferred income taxes and other reserves to the extent that such
reserves do not constitute an obligation); and
(ii) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of business), and
other contingent liabilities (whether direct or indirect) in connection with the
obligations, stock, or dividends of any Person; both as determined in accordance
with GAAP.
"Maturity Date" shall mean Three Hundred Sixty Five (365) days from the
date hereof.
"New Parts Inventory" shall mean those items of Inventory that have
accumulated zero hours and cycles since their original manufacture and were
purchased by Borrower less than two years prior to the date on which an Advance
is made against such items.
"Net Profit" shall mean, with respect to any fiscal period, net income
of Borrower and its Subsidiaries on a consolidated basis after taxes for that
fiscal period, exclusive of extraordinary items.
"Note" shall mean Borrower's promissory note or notes evidencing the
Loan in the form of Exhibit "A" attached hereto, and any and all allonges
thereto, and any and all extensions, renewals or modifications thereof.
"Obligations", with respect to Borrower, shall mean, individually and
collectively, the payment and performance duties, obligations and liabilities of
12
Borrower to Bank evidenced by the Note and the other Loan Documents, together
with all accrued but unpaid interest thereon, and all other payment and
performance duties, obligations and liabilities of Borrower to Bank, whether or
not presently contemplated by Borrower or Bank, however and whenever incurred,
acquired or evidenced, whether primary or secondary, direct or indirect,
absolute or contingent, sole or joint and several, or due or to become due,
including, without limitation, all such duties, obligations and liabilities of
Borrower to Bank, under and pursuant to this Agreement, the Note and the
Security Documents and all renewals, modifications or extensions of any thereof.
"Officer's Certificate" shall mean a certificate signed in the name of
Borrower by its President, its Executive Vice President, its Treasurer or its
chief financial officer.
"Opinion" shall mean the legal opinion of counsel to Borrower
substantially in the form of Exhibit "C" attached hereto, which shall be
satisfactory to Bank.
"Participant" shall mean any financial institution that is, during the
term of the Loan, party to a participation agreement with Bank.
"Parts Inventory" shall mean New Parts Inventory, FAA-certified
Overhauled Parts Inventory and Serviceable Parts Inventory.
"Permitted Liens" shall mean those Liens in or upon the Collateral as
further described in Section 5.02(f) hereof and set forth in Schedule 5.02(f)
attached hereto.
"Permitted Loan" shall mean, individually and collectively:
(i) the BankAtlantic Loan,
(ii) the Subordinated Debt.
A loan described in clause (iv) herein shall not be a Permitted Loan
if, immediately after said loan, Borrower is not in compliance with all the
terms and conditions of this Agreement, and if Bank has not received prior
written notice of such loan.
"Person" shall mean any individual, joint venture, partnership, firm,
corporation, trust, unincorporated organization or other organization or entity,
or a governmental body or any department or agency thereof, and shall include
both the singular and the plural.
13
"Place of Business" shall mean any location in which Borrower
undertakes its business, including, but not limited to, the storage of
Inventory, all as set forth in Schedule 4.02(c) attached hereto.
"Plan" shall mean an employee benefit plan or other plan and any trust
created thereunder which has been established or maintained or hereafter is
established or maintained for employees of Borrower and covered by Title IV of
the Employee Retirement Income Security Act of 1974, as amended, including the
rulings and regulations issued thereunder or pursuant thereto ("ERISA"), or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code of 1986, as amended (the "IRS CODE").
"Prime Rate" shall mean the annual rate of interest announced from time
to time by Xxxxxxx Xxxxx, Inc., as the prime rate (which interest rate is only a
reference rate for the information and use of Bank in establishing the actual
rates to be charged to its borrowers and which is purely discretionary and is
not necessarily the best or lowest interest rate charged to borrowing customers
of Xxxxxxx Bank, N.A.)
"Proceeds" shall mean whatever is received upon the sale, exchange,
collection or other disposition of the Collateral or Proceeds, whether cash or
non-cash, including, but not limited to, insurance proceeds.
"Property" shall mean any Place of Business of Borrower owned or leased
by Borrower or a Subsidiary (as further described in Section 4.11 hereof).
"Records" shall mean all books, records, ledger cards or sheets,
customer lists, files, documents and instruments including, but not limited to,
computer programs, files, directories, programs, tapes, software and related
electronic data processing software, and all other property and General
Intangibles evidencing an interest in or relating to Collateral.
"Revolving Period" shall mean the period during which Borrower may
obtain Advances under the Loan. The Revolving Period shall commence on the date
hereof, and shall end on the earlier of an Event of Default and the Maturity
Date.
"Security Agreement" shall mean the security agreement of Borrower
granting a security interest to Bank in the Collateral substantially in the form
of Exhibit "C" attached hereto.
"Security Documents" shall mean the Security Agreement, and all other
documents, agreements, mortgages, assignments, filings, financing statements,
14
certificates of title, notices, returns and other security instruments and
records, however described or denominated, now or hereafter created or existing,
pledging or evidencing any pledge of any property or assets, however described,
to secure any or all of the Obligations.
"Serviceable Parts Inventory" shall mean items of Parts Inventory that
have been deemed airworthy by an FAA-approved entity, that have hours and cycles
remaining in their useful life, and that were purchased less than two (2) years
prior to the date of an Advance against such items.
"Stockholder" shall mean any Person owning stock of Borrower.
"Subordinated Debt" shall mean, individually and collectively (a) the
Equitable Loan, and (b) other indebtedness of Borrower (whether in the form of
loans, guarantees or leases or any other form), which other indebtedness is up
to the amount of $100,000 on an annual basis.
"Subsequent Advances" shall mean individually and collectively all
Advances hereunder after the Initial Advance.
"Subsidiary" shall mean any corporation, limited liability company, or
partnership whether now existing or hereafter created or acquired, fifty percent
(50%) or more of the voting stock, membership or partnership interests of which
is owned, directly or indirectly, by Borrower, and shall include subsidiaries of
a Subsidiary.
"Tangible Assets" shall mean the assets of Borrower and its
Subsidiaries on a consolidated basis, all as determined in accordance with GAAP,
but excluding Intangible Assets.
"UCC" shall mean the Uniform Commercial Code as adopted in any relevant
jurisdiction, as amended.
"Union Bank Loans" shall mean that certain revolving credit loan and
those certain term loans extended by Union Bank of California to IASI, which
loans are being fully satisfied and terminated by the Loan.
"Unused Fee" shall mean fifteen basis points (.15%) on any unused
portion of that part of the Loan which is available within the parameters of the
financial covenants herein. For example, if Borrower may borrow only up to
$48,000,000.00 and still remain in compliance with the financial ratios and
covenants set forth
15
herein, the Unused Fee shall be calculated based on $48,000,000.00 and not on
the whole Loan. The Unused Fee shall be payable quarterly in arrears.
"Whole Aircraft Engines" shall mean aircraft engines that have not been
disassembled into their parts, and shall include both:
(i) aircraft engines that are part of the inventory of Borrower
("INVENTORIED ENGINES"), and
(ii) aircraft engines that are under lease by Borrower to a
lessee ("LEASED ENGINES").
For purposes of the Loan, "Whole Aircraft Engines" shall mean only (a)
those Inventoried Engines which are located in the United States, (b) those
Inventoried Engines which are located outside the United States in jurisdictions
that are signatories to the Convention on the International Recognition of
Rights in Aircraft, signed June 19, 1948, and effective September 17, 1953 (as
ratified by signatories to such Convention) and acquired by Borrower less than
or equal to ninety days before a related Borrowing Request; and (c) all Leased
Engines wherever located. An appraisal acceptable to Bank shall be performed as
to each Whole Aircraft Engine at Borrower's expense within 30 days prior to the
initial Advance against such Whole Aircraft Engine.
"Working Capital" shall mean the excess of Current Assets over Current
Liabilities.
1.02 Accounting Terms. All accounting terms used herein shall be
construed in accordance with GAAP (unless such terms are specifically defined
otherwise herein) consistently applied and all financial data submitted pursuant
to this Agreement shall be prepared in accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF LOAN
16
2.01 Loan. Bank agrees from time to time during the Revolving Period to
lend to Borrower, upon Borrower's request, up to the aggregate principal amount
of the Borrowing Base for the Loan on the terms and conditions set forth herein.
During the Revolving Period, Borrower shall be entitled to receive the entire
proceeds of the Loan in one or more Advances pursuant to Section 2.04 hereof,
except as otherwise specifically set forth in this Agreement. Advances under
this Loan shall be evidenced by the Note. After the expiration of the Revolving
Period, Borrower shall not be entitled to receive any Subsequent Advance. The
Loan shall be a revolving loan and Borrower may borrow up to the maximum
principal amount of the Loan, repay all or any portion of such principal amount
of the Loan, and reborrow up to such maximum principal amount, subject to the
terms and conditions set forth herein.
2.02 Borrowing Base for the Loan. The Borrowing Base for the Loan shall
be as follows:
(a) eighty percent (80%) of Eligible Domestic Accounts;
and
(b) the lesser of:
(i) seventy percent (70%) of Eligible Foreign
Accounts, and
(ii) Ten Million Dollars ($10,000,000.00); and
(c) the lesser of:
(i) sixty five percent (65%) of New Parts
Inventory and FAA-certified Overhauled Parts
Inventory; and
(ii) Twenty Million Dollars ($20,000,000.00); and
(d) the lesser of:
(i) fifty percent (50%) of Serviceable Parts
Inventory; and
(ii) Ten Million Dollars ($10,000,000.00); and
(e) the lesser of:
(i) ninety percent (90%) of the cost of Whole
Aircraft Engines, and
(ii) seventy five percent (75%) of the appraised
fair market value of Whole Aircraft Engines
(calculated by appraisers satisfactory to
Bank, including Airclaims, Inc.), and
(iii) Twenty Million Dollars ($20,000,000.00);
provided, however, that the Borrowing Base
for Whole Aircraft Engines located outside
of the United States shall be as follows,
and only those Whole Aircraft Engines that
17
were acquired by Borrower fewer than or
equal to ninety days before a related
Borrowing Request shall be considered part
of the Borrowing Base:
a) the lesser of:
(i) eighty percent (80%) of the
cost of such Whole Aircraft
Engines, and
(ii) sixty five percent (65%) of
the appraised fair market
value of Whole Aircraft
Engines (calculated by
appraisers satisfactory to
Bank, including Airclaims,
Inc.), and
(iii) Five Million Dollars
($5,000,000.00).
In no event shall the aggregate of all combined Advances outstanding
against New Parts Inventory, FAA-certified Overhauled Parts Inventory, and
Serviceable Parts Inventory at any one time exceed $50,000,000.00. Advances may
be made against New Parts Inventory, FAA-certified Overhauled Parts Inventory
and Serviceable Parts Inventory until two (2) years after the date of purchase.
The value of the Parts Inventory shall be based upon either the cost to
Borrower of said Parts Inventory or the market value thereof, whichever is
lower, after deducting an amount or percentage for slow moving and/or obsolete
Parts Inventory, such amount or percentage to be determined by Bank in its
reasonable discretion.
For Inventoried Engines, a principal curtailment of 5% of the cost of
such Inventoried Engine is required after 90 days in inventory, 5% additional
curtailment after 120 days in inventory, and 10% more for each additional thirty
(30) day period until the earlier of (i) such time as the Advance against such
Inventoried Engine is repaid or (ii) such time as such Inventoried Engine is
sold. Upon receipt by Bank of evidence of such sale, and repayment of Advances
against such Inventoried Engine, Bank will file with the FAA releases of its
security interest in such sold Inventoried Engine.
For Leased Engines, the principal curtailment schedule will be the
greater of (i) 75% of the lease payments received by Borrower to date on such
Leased Engine, and (ii) the curtailments that would be due if it were an
Inventoried Engine. If any Whole Aircraft Engine after being an Inventoried
Engine becomes a Leased Engine and then becomes an Inventoried Engine again
(whether through repossession, expiration of the lease or otherwise) then
notwithstanding any
18
payments made during the term of the lease, the principal curtailment schedule
at the time such Whole Aircraft Engine becomes an Inventoried Engine again shall
resume as if such Whole Aircraft Engine was never a Leased Engine.
If Borrower desires that an Account be considered an Eligible Account,
Borrower shall submit information concerning such Account to Bank three (3)
Business Days prior to submitting any Borrowing Request for purposes of which
such Account is desired to be an Eligible Account. Bank shall inform Borrower as
to Bank's acceptance or rejection of such Account as an Eligible Account before
the date on which Borrower is to submit the related Borrowing Request.
2.03 The Note. The advances made by Bank pursuant to Section 2.01
herein shall be evidenced by the Note in form and substance acceptable to Bank,
and payable to the order of Bank. The Note shall be deemed to reflect the
aggregate unpaid principal amount of all indebtedness to Bank under the Loan,
whether or not the face amount of the Note is in excess of the amount actually
outstanding from time to time, and whether or not the Indebtedness outstanding
thereunder is from time to time repaid and reborrowed.
2.04 Advance of Proceeds of the Loan. On the Initial Advance Date and
on Subsequent Advance Dates, upon initial and continued satisfaction of the
conditions precedent set forth in Article Six hereof, Borrower shall be entitled
to receive Advances. Borrower shall give Bank written notice, signed by an
officer of Borrower authorized by the borrowing resolutions, of any requested
Advance hereunder. Such notice shall specify the proposed date of the Advance
(if not the same Business Day and the amount thereof and shall be received prior
to 12 p.m., Fort Lauderdale time for any same-day Advance. Each request for an
Advance shall constitute, without the necessity of specifically containing a
written statement, a representation and warranty by Borrower that no Default or
Event of Default exists, that Borrower is in compliance with all the conditions
of the Loan Documents, and that all representations and warranties contained in
any Loan Document are true and correct on and as of the date the requested
Subsequent Advance is made. Requests by Borrower for any Subsequent Advance
hereunder on any date shall be in the minimum principal amount of Twenty-five
Thousand and No/100 Dollars ($25,000.00).
2.05 Interest Rate; Payment of the Note. Borrower shall pay interest on
the outstanding principal balance of the Note at the Adjusted Base Rate on the
Base Rate Portion,
19
and at the corresponding Adjusted Libor on each Libor Portion, according to the
terms and provisions of the Note.
2.06 Prepayments. Borrower may at any time prepay all or any part of
the principal amount of the Loan outstanding without penalty. Each prepayment
other than full payment shall be in the minimum amount of Fifty Thousand and
No/100 Dollars ($50,000.00) and shall be made prior to 2:00 P.M. (Fort
Lauderdale time) on a Business Day in immediately available funds.
2.07 Calculation of Interest. Any interest due on the Loan or any other
Obligations shall be calculated on the basis of a year containing 360 days, to
the extent accrued as of midnight on the last day immediately prior to each
interest payment date. Notwithstanding anything herein or in any Loan Document
to the contrary, the sum of all interest and all other amounts reserved,
charged, or taken by Bank as compensation for fees, services, or expenses
incidental to the making, negotiation, or collection of Loan that would be
deemed interest under Florida or other applicable law which may be collected by
Bank hereunder shall not exceed the maximum lawful interest rate permitted by
such law from time to time. Bank and Borrower intend and agree that under no
circumstance shall Borrower be required to pay interest on the Loan or on any
other Obligations at a rate in excess of the maximum interest rate permitted by
applicable law from time to time, and in the event any such interest is received
or charged by Bank in excess of that rate, Borrower shall be entitled to an
immediate refund of any such excess interest by a credit to and payment toward
the unpaid balance of the Loan (such credit to be considered to have been made
at the time of the payment of the excess interest) with any excess interest not
so credited to be immediately paid to Borrower by Bank.
2.08 Set-Off. Borrower hereby grants to Bank a lien on, and a security
interest in, the deposit balances, accounts, items, certificates of deposit
(whether matured or unmatured) and monies of Borrower and each Subsidiary in the
possession of or on deposit with Bank to secure and as collateral for the
payment and performance of the Obligations. Upon an Event of Default, Bank may
at any time and from time to time, without demand or notice, appropriate and
set-off against and apply the same to the Obligations when and as due and
payable.
2.09 Late Payment Penalty. A late payment penalty of the lesser of
$100.00 or five percent (5%), calculated on the interest payment due on the
first day of the month, will be
20
assessed against Borrower on any payment not received by Bank by the tenth day
after such payment was due, and the late payment penalty amount shall accompany
such payment.
2.10 Use of Proceeds. Proceeds of the Loan shall be used for the
general corporate purposes of Borrower, including working capital purposes and
acquisition of core assets, and satisfaction in full on or immediately after the
Closing Date of all IASI's obligations to Union Bank of California ("UBOC"), and
release of all security interests held by UBOC in any of IASI's assets.
2.11 Right to Debit Account. At Bank's option, Bank shall have the
right to automatically debit the Cash Collateral Account with Bank on a daily
basis for the amount of principal payable to Bank, with notice to Borrower
thereof on the date of such debit. Bank shall have the right to debit the Cash
Collateral Account on a monthly basis for all interest and fees payable to Bank,
with notice to Borrower thereof on the date of such debit.
2.12 Commitment Fee. As partial consideration for Bank entering into
this Agreement and establishing the Loan, Borrower has paid to Bank a fully
earned Eighty Two Thousand Five Hundred and 00/100 Dollar ($82,500.00)
commitment fee simultaneously with execution of the Commitment Letter dated as
of March 24, 1997 by Bank and agreed to by Borrower (as amended by the parties
by initialed handwritten changes), irrespective of any funding under the Loan.
In addition to the Commitment Fee, Borrower shall pay to Bank the Unused Fee,
payable quarterly in arrears.
ARTICLE III
CUSTODY, INSPECTION, COLLECTION
AND HANDLING OF COLLATERAL AND RECORDS
3.01 Collection of Accounts. Until Borrower's authority to do so is
curtailed or terminated (which Bank may do at any time after the occurrence of
an Event of Default), Borrower will, at Borrower's cost and expense, collect and
otherwise enforce all remittances and all amounts unpaid on Accounts.
Bank shall at any time after the occurrence of an Event of Default have
the right to send notice of assignment or notice of its Security Interest to any
Account Debtor or any other Person obligated on, holding, or otherwise concerned
with any
21
of the Collateral, and thereafter Bank shall have the sole right to collect the
Accounts and/or take possession of the Collateral and the Records. Any and all
of Bank's reasonable collection expenses including, but not limited to,
attorneys' fees, stationery and postage, telephone and telegraph, secretarial
and clerical expenses and the salaries of any Person utilized to collect the
Accounts, shall be charged to Borrower's account and added to the Obligations.
During the duration of the Loan, Bank will credit collections of
Eligible Accounts immediately to the Loan, and will charge a clearance fee
consisting of an amount equal to two days interest at the Adjusted Base Rate on
each collected item, which fee shall be calculated at the interest rate charged
on the Loan.
3.02 Power of Attorney. Borrower hereby constitutes Bank and any of its
agents or designees as Borrower's attorney-in-fact, at Borrower's cost and
expense, to exercise at any time after an Event of Default (without any further
action being necessary) all or any of the following powers, which, being coupled
with an interest, shall be irrevocable until all Obligations have been paid in
full: to receive, take, endorse, assign, deliver, accept and deposit, in Bank's
or Borrower's name, any and all checks, notes, remittances, drafts and other
documents and instruments relating to the Collateral; to receive, open and
dispose of all mail addressed to Borrower and relating to the Collateral and to
notify postal authorities to change the address for delivery of payments on
Accounts from Borrower's address to such address (including to a lockbox) as
Bank may designate; to transmit to Account Debtors notice of Bank's interest in
the Accounts and to request from Account Debtors at any time, in Bank's or
Borrower's name or that of any of Bank's designees, information concerning the
Accounts; to notify Account Debtors to make payment directly to Bank; to execute
in Borrower's name and on Borrower's behalf any financing statements or
amendments thereto; and to take or bring, in Bank's or Borrower's name, all
steps, actions or proceedings deemed by Bank necessary or desirable to effect
collection of the Collateral or to preserve, protect or enforce Bank's interest
therein. The Bank acting as said attorney (whether through its agents or
designees), and any of its agents or designees shall not be liable for any acts
of omission or commission, nor for any error of judgment or mistake of fact or
law, except for gross negligence or willful misconduct of Bank.
3.03 Liability for Handling Collateral. Nothing herein contained shall
be construed to constitute Borrower as Bank's agent for any purpose whatsoever.
Bank shall not be responsible nor liable for any shortage, discrepancy, damage,
loss or destruction of any Collateral wherever the same may be located and
regardless of the cause thereof, before Bank takes possession of the Collateral.
Bank shall not be responsible nor liable for any such shortage, discrepancy,
22
damage, loss or destruction after Bank takes possession of such Collateral
except for that caused by Bank's gross negligence or willful misconduct.
3.04 Custodian of Collateral. Bank shall have the right, at any time
after an Event of Default and from time to time thereafter, to employ and have
present on any of Borrower's premises one or more custodians selected by Bank
each of whom shall have the right to exercise any and all of Bank's rights
hereunder or under any other Loan Document. Borrower hereby agrees to cooperate
with any such custodian and to do whatever Bank may reasonably request by way of
leasing warehouses or otherwise preserving the Collateral. All expenses incurred
by Bank by reason of the employment of the custodian shall be payable on demand
and, until paid by Borrower, shall be charged to Borrower's account and added to
and deemed part of the Obligations.
3.05 Cash Collateral Account(s). Borrower shall establish one or more
Cash Collateral Accounts at Bank in Borrower's name, into which Borrower will
deposit all payments received on Accounts promptly after receipt thereof under
the Loan. Amounts deposited into the Cash Collateral Account(s) shall be swept
by Bank on a daily basis out of the Cash Collateral Account(s) and applied to
the Loan against the principal outstanding under the Loan as of such day. The
Cash Collateral Account(s), and all proceeds thereof, shall be pledged to Bank,
and shall be a blocked account/blocked accounts (i.e., withdrawals from such
account(s) may only be made by Bank). Upon the occurrence of an Event of Default
under the Loan, or if Bank believes that the prospect of payment or performance
of the obligations of Borrower under the Loan is impaired, Bank shall have the
right, without prior notice to Borrower, to establish a lockbox for the Loan
into which Bank may direct Account Debtors to deposit all payments on Accounts.
Upon exercising its right to establish a lockbox or lockboxes after an Event of
Default, Bank may apply the contents of such lockboxes, which shall be pledged
to Bank, to any of Borrower's Obligations in its sole discretion.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower, and each Subsidiary (as and when applicable as if
specifically set forth and named herein), represents and warrants to Bank that:
4.01 Organization, Corporate Powers, etc. Borrower:
23
(a) is a corporation duly organized, validly existing and
in good standing under the laws of the State of
Delaware,
(b) has all requisite power and authority, corporate and
otherwise, to own its respective properties and
assets and to carry on its respective business as now
conducted and proposed to be conducted,
(c) is duly qualified to do business and is in good
standing in every jurisdiction in which the character
of its properties or assets owned or the nature of
its activities conducted makes such qualification
necessary, and
(d) has the corporate power and authority to execute and
deliver, and to perform its obligations under this
Agreement and the other Loan Documents.
Borrower is in compliance with all laws, rules, regulations, orders and
decrees of any legislative, administrative or judicial body or official which
are applicable to Borrower or to its properties, including the Collateral. As of
the date of this Agreement, Borrower has one Subsidiary, IASI, which is
contemplated to be merged into and with Borrower within ninety days after
Closing.
4.02 Authorization of Loan, etc. The execution, delivery and
performance of the Loan Documents by Borrower:
(a) have been duly authorized by all requisite corporate
action and
(b) will not:
(i) violate
a) any provision of law, any
governmental rule or regulation, any
order of any court or other agency
of government or the Articles of
Incorporation or Bylaws or any
corporate resolution or minutes of
Borrower or
b) any provision of any indenture,
Agreement or other instrument to
which Borrower is a party or by
which Borrower or any of its
properties or assets are bound, or
(ii) result in the creation or imposition of any
Lien, charge or encumbrance of any nature
whatsoever upon any of the properties or
assets of Borrower other than as permitted
by the terms hereof.
4.03 Financial Statements. Borrower has furnished Bank with the
following financial statements,
24
identified by the chief financial officer of Borrower. An audit level balance
sheet of Borrower as of 12/31/96, profit and loss statements, statements of cash
flow, and statements of stockholder's equity of Borrower for the fiscal year
ended on 12/31/96. Such financial statements (including any related schedules
and/or notes) are true and correct in all material respects and have been
prepared in accordance with GAAP and show all liabilities, direct and
contingent, of Borrower required to be shown in accordance with such principles.
The balance sheets fairly present the condition of Borrower as at the dates
thereof, and the profit and loss statements, statements of cash flow and
statements of stockholders' equity fairly present the results of the operations
of Borrower for the periods indicated. From the date of the annual financial
statements to the date of this Agreement, there has been, and to the date of the
Initial Advance and each Subsequent Advance there will be, no change in the
properties, assets, liabilities (whether contingent or otherwise), financial
condition, business, operations, affairs or prospects of Borrower and its
Subsidiaries on a consolidated basis, as the case may be, from that set forth or
reflected in the fiscal year-end balance sheet, which have been, either in any
case or in the aggregate, materially adverse.
4.04 Tax Returns and Payments. All federal, state and local tax returns
and reports of Borrower required to be filed have been filed, and all taxes,
assessments, fees and other governmental charges upon Borrower, or upon any of
its properties, assets, incomes or franchises, which are due and payable have
been paid, other than those presently contested in good faith and by appropriate
and lawful proceedings prosecuted diligently. Borrower has and will establish
all necessary reserves and make all payments required of Borrower to be set
aside or made in regard to all F.I.C.A., withholding, sales or excise, and all
other similar federal, state and local taxes.
4.05 Agreements.
(a) Borrower is not a party to any Agreement, indenture,
lease or instrument or subject to any charter or
other corporate restriction or any judgment, order,
writ, injunction, decree, rule or regulation
materially and adversely affecting its business,
properties, assets, operations or condition
(financial or otherwise). There are no material
unrealized losses with respect to any such Agreement,
indenture, lease or instrument.
(b) Borrower is not in default in the performance,
observance or fulfillment of any of the material
obligations, covenants or
25
conditions contained in any material Agreement or
instrument to which it is a party.
4.06 Title to Properties and Assets, Liens, etc. Borrower has good
title to all of its properties and assets, including the properties and assets
reflected in the balance sheet as of December 31, 1996, hereinabove described
(other than properties and assets disposed of in the ordinary course of
business). Borrower enjoys peaceful and undisturbed possession of all leases.
All such leases are valid and subsisting and are in full force and effect.
Borrower owns or has the right to use all of the patents, trademarks, service
marks, trade names, copyrights, franchises and licenses, and rights with respect
thereto necessary for the conduct of its business as now conducted or proposed
to be conducted, without any known conflict with the rights of others.
4.07 Litigation, etc. There are no actions or proceedings pending or,
to the knowledge of Borrower, threatened, against Borrower or affecting Borrower
which, either in any case or in the aggregate, might result in any material
adverse change in the financial condition, business, prospects, affairs or
operations of Borrower or in any of its properties or assets, or which questions
the validity of this Agreement or the other Loan Documents or with the
transactions contemplated hereby or thereby, except for the pending litigation
of Borrower set forth in Schedule 4.07 attached hereto.
4.08 Consents and Approvals. No authorization, license, consent,
approval, notice, filing (except for UCC financing statements and FAA filings),
or undertaking is required under any applicable law in connection with the
execution, delivery and performance by Borrower of this Agreement or any of the
other Loan Documents.
4.09 Enforceable Obligations. The Loan Documents have been duly
executed and delivered by Borrower and are the legal and binding Obligations of
Borrower enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or similar laws at the time in effect
affecting the rights of creditors generally, and to general equitable
principles, whether applied in a proceeding at law or in equity.
4.10 Full Disclosure. There is no material fact (including, without
limitation, any litigation or outstanding Long Term and Contingent Liabilities
or Current Liabilities) that
26
Borrower has not disclosed to Bank which would have a material adverse effect on
the properties, business, prospects or condition (financial or otherwise) of
Borrower (or of any Subsidiary, as applicable). Neither the financial statements
referenced in Section 4.03 hereof, nor any certificate or statement delivered
herewith or heretofore by Borrower to Bank in connection with this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact necessary to keep the statements contained herein or therein from being
misleading. As to Liabilities, there exists no default and, after giving effect
to the transactions contemplated in this Agreement, there will exist no default
under the provisions of any instrument evidencing such Liabilities or of any
Agreement relating thereto.
4.11 Hazardous Materials. With regard to any real property heretofore,
now, or hereafter owned or leased by Borrower (or by a Subsidiary, as
applicable) (the "PROPERTY"):
(a) To the best of Borrower's knowledge, the Property is
free from Hazardous Materials(except for de minimis
amounts used in compliance with all applicable laws)
and materials that could produce Hazardous Materials
or toxic effects on humans, and does not constitute
an environmental hazard of any type under local,
state or federal law;
(b) There has been an inspection, audit, or other
investigation conducted as to the quality of the air,
surface, or subsurface conditions at or on the
Property by a third party, which report has not been
reviewed and approved by Bank, and Borrower has not
received written, oral, or any other type of notice
that any other third party, including governmental
agencies, proposes to carry out an inspection, audit,
or other investigation of the Property; and
(c) To the best of Borrower's knowledge, there has been
no treatment, storage, disposal, discharge, or other
type of release on land adjacent or near to the
Property which may constitute a risk of contamination
of the Property or surface or ground water flowing to
the Property.
(d) Borrower has put in place internal environmental
policies, copies of which have been provided to Bank
and which are satisfactory to Bank in its sole
discretion. Borrower represents and warrants to Bank
that such policies have been developed
27
with adequate information and do no omit anything
necessary in order to render such policy complete and
thorough, and Borrower further represents and
warrants to Bank that such policies are consistently
enforced by Borrower.
4.12 Outstanding Debt. As of the date hereof, Borrower has no
outstanding debt except for:
(a) the BankAtlantic Loan,
(b) the Equitable Loan,
(c) the Union Bank Loans, and
(d) general trade accounts payables generated by Borrower
in the ordinary course of business.
ARTICLE V
COVENANTS OF BORROWER
5.01 Affirmative Covenants. Borrower covenants, for so long as any of
the principal amount of or interest on the Note is outstanding and unpaid or any
duty or obligation of Borrower hereunder or under any of the other Obligations
remains unpaid or unperformed, as follows:
(a) Accounting: Financial Statements; etc. Borrower will deliver
to Bank copies of each of the following:
(i) as soon as practicable and in any event within
forty-five (45) days after the end of each fiscal
quarter (other than the last quarterly period) in
each fiscal year, a consolidated profit and loss
statement of Borrower and its Subsidiaries for such
fiscal year, and a consolidated balance sheet of
Borrower and its Subsidiaries as at the end of such
quarterly period, setting forth in each case in
comparative form consolidated figures for the
corresponding period in the preceding fiscal year,
all in reasonable detail and certified by an
authorized financial officer of Borrower, subject to
changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within ninety
(90) days after the end of each fiscal year, an
audited consolidating balance sheet, profit and loss
statement, statement of
28
stockholder's equity, and statement of cash flows of
each of Borrower and its Subsidiaries, setting forth
in each case in comparative form corresponding
consolidated figures from the preceding annual audit,
all to be audit level statements in form and scope
acceptable to Bank and certified to Borrower by
independent certified public accountants of
recognized standing whose certificate shall be in
scope and substance reasonably satisfactory to Bank.
(iii) as soon as practicable and in any event within twenty
(20) days after the end of each month during the
duration of this Agreement, an Account Collateral
Certificate, showing Accounts classified as Domestic
and Foreign, a Borrowing Base Certificate (at least
once per month and also as a condition precedent to
an Advance, to establish the required availability
under the Borrowing Base in connection with such
Advance), an Inventory Collateral Certificate showing
Parts Inventory classified by type, cost and age, and
an accounts payable report, and any other ageing
schedules Bank may reasonably request of Borrower in
form satisfactory to Bank;
(iv) as soon as practicable and in any event within twenty
(20) days after the end of each fiscal quarter in
each fiscal year, an Officer's Certificate confirming
full compliance with all financial covenants
contained herein and all other provisions and
conditions of the Loan Documents, which Officer's
Certificate shall be in scope and substance
reasonably satisfactory to Bank;
(v) promptly upon receipt thereof, a copy of each other
report submitted to Borrower by independent
accountants in connection with any annual, interim or
special audit made by them of the books of Borrower;
and
(vi) with reasonable promptness, such other data and
information as from time to time may be reasonably
required by Bank.
Borrower covenants that forthwith upon any officer of Borrower
obtaining knowledge of any Event of Default or Default under this Agreement or
any other obligation of Borrower, it shall deliver to Bank an Officer's
Certificate specifying the nature thereof, the period of existence thereof, and
what action Borrower proposes to take with respect thereto.
29
(b) Inspection of Records and Collateral. At all reasonable times,
Bank (or its designated representative) shall have full access
to, and the right to audit, check, inspect, examine and make
abstracts and copies from, Borrower's Records and all other
books, records, audits, correspondence and papers relating to
the Collateral, the right to confirm and verify all Accounts,
to discuss the Collateral with any Person having a Permitted
Encumbrance, and to do whatever Bank may deem necessary to
preserve or protect its interest in the Obligations and the
Collateral. Bank or its agents may enter upon any of
Borrower's premises at any time and from time to time during
business hours for the purpose of inspecting the Collateral
and any and all Records. Such entry onto Borrower's premises
shall be with prior oral notice to Borrower (unless a Default
or Event of Default exists or Bank deems that the prospect of
payment or performance of all or any part of the Obligations
or the value of any of the Collateral is impaired or
endangered, in which case no prior notice to Borrower is
necessary). At any time after an Event of Default Bank may
take possession of and remove or require Borrower to deliver
to Bank any or all Records. The rights of inspection and
access granted to Bank herein are continuing rights and shall
survive closing and remain in effect until payment in full of
all Obligations regardless of the existence of an Event of
Default or of any action to foreclose Bank's Security Interest
or otherwise protect Bank's rights. Bank shall have the right,
at its discretion, to conduct audits of the books, records and
accounts of Borrower at a time or times reasonably acceptable
to Borrower and Bank. Prior to the occurrence of an Event of
Default, these audits shall be conducted at Bank's expense.
After the occurrence of an Event of Default, they shall be
conducted at Borrower's expense.
(c) Maintenance of Corporate Existence: Compliance with Laws.
Borrower (and each Subsidiary, as applicable), shall each at
all times preserve and maintain in full force and effect its
corporate existence, powers, rights, licenses, permits and
franchises in the jurisdiction of its incorporation; continue
to conduct and operate its business substantially as conducted
and operated during the present and preceding fiscal year;
operate in substantial compliance with all applicable laws,
statutes, regulations, certificates of authority and orders in
respect of the conduct of its business; and qualify and remain
qualified as a foreign corporation in each jurisdiction in
which
30
such qualification is necessary or appropriate in view of its
business and operations.
(d) Creation of Accounts. Upon Bank's request, Borrower will
provide Bank with information as to each Account, including:
(i) confirmatory assignment schedules;
(ii) copies of all documents evidencing the sale and
delivery of goods or the performance of services
which created any Accounts, including, but not
limited to, contracts, orders, invoices, bills of
lading, warehouse receipts, delivery tickets and
shipping receipts; and
(iii) such further schedules and/or information as Bank may
reasonably require.
(e) Maintenance of Properties. Borrower (and each Subsidiary, as
applicable), shall maintain or cause to be maintained in good
repair, working order and condition all properties used in its
business including, but not limited to, any real property and
all improvements located thereon, and from time to time will
make or cause to be made all appropriate repairs, renewals,
improvements and replacements thereof and of leases or
agreements covering such properties (including the Property)
so that the businesses carried on in connection therewith may
be properly conducted at all times.
Borrower shall further keep and maintain, at its cost and
expense, Records pertaining to the Collateral in such detail,
form and scope as Bank shall from time to time require.
Borrower will xxxx its Records with appropriate notations
satisfactory to Bank, disclosing that such Collateral has been
pledged, sold, assigned, mortgaged and transferred to Bank and
that Borrower has granted to Bank a Security Interest therein.
(f) Notice of Suit, Proceedings, Adverse Change; Default. Borrower
(and each Subsidiary, as applicable), shall promptly give Bank
notice in writing:
(i) of all threatened or actual actions or suits (at law
or in equity) and of all threatened or actual
investigations or proceedings affecting Borrower or
any Subsidiary or the rights or other properties of
Borrower or any Subsidiary, (i) which involves
potential liability of Borrower or any Subsidiary in
an amount in
31
excess of One Hundred Thousand and No/100 Dollars
($100,000.00) either in any individual case or in the
aggregate for all such cases;
(ii) of any material adverse change in the condition
(financial or otherwise) of Borrower or any such
Subsidiary;
(iii) of any seizure or levy upon any material part of the
properties of Borrower or any such Subsidiary under
any process or by a receiver; and
(iv) of the happening, occurrence or existence of any
Event of Default or Default and shall provide Bank
with a detailed statement by a responsible officer of
Borrower of all relevant facts and the action being
taken or proposed to be taken by Borrower with
respect thereto.
(g) Checking Accounts. Borrower and each Subsidiary shall maintain
all its checking accounts and business accounts with Bank in a
manner satisfactory to Bank and use Bank as its sole
depository.
(h) Insurance. Borrower shall timely procure and maintain and
comply with such insurance and policies of insurance
(including without limitation public liability, product
liability, business interruption, insurance on foreign
accounts receivable (as currently in force), hazard, fire and
extended coverage, property damage and casualty insurance) as
may be required by law and such other insurance, to such
extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated, and to
furnish to Bank upon its request evidence of said insurance.
In any event, Borrower shall at all times maintain at least
the policies of insurance and the levels of insurance coverage
as are currently maintained by Borrower as of the date hereof.
Bank shall be loss payee as to the business contents portion
of hazard insurance policies, and as to all foreign Accounts
to the extent such Accounts constitute part of the Borrowing
Base. All policies or certificates thereof, including all
endorsements thereof and those required hereunder, shall be
deposited with Bank.
(i) Debts and Taxes and Liabilities. Borrower and each Subsidiary
shall pay and discharge:
(i) all of its indebtedness and obligations in accordance
with their terms and before they shall become in
default,
(ii) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income and profits
or against its
32
properties, prior to the date on which penalties
attach thereto, and
(iii) all lawful claims which, if unpaid, might become a
Lien or charge upon any of its properties; provided,
however, that Borrower shall not be required to pay
the items listed in subsections (i) through (iii)
that are being contested in good faith by appropriate
and lawful proceedings diligently pursued and for
which adequate reserves (with respect to any material
claims) have been set aside on its books.
(j) Further Assurances; Additional Collateral Documents. Borrower
will, at its expense, execute, acknowledge and deliver and
cause to be executed, acknowledged and delivered, to Bank all
such instruments, including, without limitation, financing
statements, security agreements, assumptions and continuation
statements, deliver to Bank all such legal opinions, and take
all such other action as Bank may from time to time request
for the purpose of further assuring to Bank the security for
the Obligations provided for, or intended to be provided for,
in this Agreement and the other Loan Documents, and to confirm
the Obligations to carry out and fulfill the intent and
purpose of this Agreement and the Loan Documents. Further, to
the extent Borrower acquires from time to time any additional
property within the definition of the term Collateral,
Borrower shall immediately execute and deliver to Bank such
documents as are necessary to grant Bank a valid and first
priority perfected lien or security interest in such property.
Borrower shall notify Bank of all new patents and trademarks
acquired or originated by Borrower. To the extent that Bank
considers any patent or trademark owned by Borrower to be
materially economically significant to Borrower, Borrower
shall promptly take all actions requested by Bank to perfect
Bank's security interest in such patent or trademark.
(k) Consent of Lessor. In the event that any of the Collateral is
at any time located on any leased premises, Borrower will
promptly furnish to Bank a consent of lessor subordinating any
landlord's lien to the lien of the Bank, which consent shall
be satisfactory to Bank. If such consent is not obtained
within a reasonable time not to exceed fifteen (15) Business
Days, such collateral as in the nature of inventory will (at
Bank's sole discretion) be designated as not eligible as
Inventory until such consent is obtained.
33
(l) Subordination of Non-Bank Debt; Permitted Loans. All non-Bank
debt (with the exception of the existing mortgage loan from
BankAtlantic in the current outstanding principal amount of
approximately One Million One Hundred Thousand Dollars
($1,100,000.00)) must be subordinated to the Loan. Borrower
currently has subordinated debt from The Equitable Life
Assurance Company in the current outstanding principal amount
of Fifteen Million Dollars ($15,000,000.00). No principal
repayment of any non-Bank debt will be permitted without
Bank's prior consent, except for the regularly scheduled
payments of principal and interest relating to the current
mortgage loan to Borrower from BankAtlantic and a previously
agreed upon repayment of Subordinated Debt in the amount of
$3,750,000.00. No prepayments of either principal or interest
will be allowed in connection with the current mortgage loan
to Borrower from BankAtlantic without prior approval of Bank.
No payments in any form on subordinated non-Bank debt will be
allowed if the Loan is in default.
Prior to the occurrence of an Event of Default,
scheduled payments of interest on and principal of the
BankAtlantic Loan may be made by Borrower. No prepayments or
acceleration of such loans may be made by Borrower. After the
occurrence of an Event of Default, such prepayments may only
be made with prior written consent of Bank.
(m) Hazardous Materials. Borrower shall immediately notify Bank
orally and in writing of any notice of:
(i) the happening of any event involving the spill,
release, leak, seepage, discharge or cleanup of any
Hazardous Materials on the Property or in connection
with Borrower's operations thereon or
(ii) any complaint, order, citation or notice with regard
to air omissions, water discharges, or any other
environmental, health or safety matter affecting
Borrower or any of the Property.
(n) The IASI Merger shall be consummated within ninety days after
the Closing Date. In connection with the IASI Merger, Borrower
shall provide to Xxxxxxx copies of all merger documents for
Bank's review and approval prior to such merger, and shall
take all actions and execute all documents reasonably
requested by Bank in order to
34
further clarify Borrower's obligations pursuant to the IASI
Merger and the Loan Documents and protect Bank's security
interest and other rights under the Loan Documents, including
the filing of any financing statements, terminations, or FAA
filings.
In addition, Borrower, in connection with the IASI
Merger, shall assume all IASI's obligations to third parties,
and provide Bank with evidence satisfactory to Bank that all
liens and security interests in assets of IASI (except for the
security interest of the Bank) have been released.
5.02 Negative Covenants. Borrower covenants, for so long as any of the
principal amount of or interest on the Note is outstanding and unpaid or any
duty or obligation of Borrower hereunder or under any of the other Obligations
remains unpaid or unperformed, as follows:
(a) Other Agreements. Borrower will not enter into any
arrangements, contractual or otherwise, which would materially
and adversely affect its duties or the rights of Bank under
the Loan Documents or which is inconsistent with or limits or
abrogates the Loan Documents.
(b) Sale of Assets. Neither Borrower nor any Subsidiary will sell,
lease, assign, transfer or otherwise dispose of all or a
substantial (being defined as equal to or greater than
$200,000 worth of fixed assets which are not Current Assets)
part of its assets or properties, tangible or intangible, to
any Person without the prior written consent of Bank, except
for the sale or lease of Inventory in the ordinary course of
business.
(c) Merger, Consolidation, Dissolution, Change of Name, Location
or Business, etc. Without prior written consent of Bank,
neither Borrower nor any Subsidiary will consolidate with or
merge into any other corporation, or permit another
corporation to merge into it (unless, in the case of a merger
or consolidation involving Borrower, Borrower is the surviving
corporation), or permit any other type of reorganization or
recapitalization, or dissolve or take or omit to take any
action which would result in its dissolution, or acquire all
or substantially all the properties or assets of any other
Person (except pursuant to the IASI Merger) or change the name
or use of any trade names of Borrower or any Subsidiary
(including the fictitious name "Westco International", which
Borrower represents and warrants is the
35
only name other than Borrower's legal name under which
Borrower conducts its business; Borrower holds no trademarks)
or the location of the chief executive office (as that term is
used in the UCC) of Borrower or such Subsidiary, the location
of any records pertaining to any Accounts or other Collateral,
or the address where any Inventory is or may be stored (except
that Borrower has disclosed to Bank that Inventory is sent to
repair facilities in various states in the ordinary course of
business, which repair facilities change from time to time;
the initial repair facilities as of the date hereof are set
forth in Schedule 5.02(c)), or maintain a Place of Business at
any time outside the State of Florida other than those set
forth in Schedule 5.02(c) attached hereto (unless Bank shall
first have consented thereto and Borrower shall have executed
such documents which, in the reasonable opinion of Bank, are
required in order to perfect, under the laws of the state
where said Place of Business is located, the Security Interest
granted Bank in the Collateral under the Security Agreement),
or engage in any business other than the business presently
conducted by it on the date of this Agreement and business of
substantially the same type or reasonably related thereto.
(d) Sale of Collateral; Liens on Collateral. Borrower will not
sell, assign or discount any of the Collateral with or without
recourse, except for the collection or disposition of Accounts
or the sale or lease of Inventory in the ordinary course of
business; or borrow from anyone on the security of or create,
incur or suffer to exist any Lien (other than Bank's, which
Borrower warrants is a first priority security interest) on
any of the Collateral or permit any financing statement (other
than Bank's Financing Statement) to be on file with respect
thereto.
(e) Fiscal Year. Borrower will not change its fiscal year from a
year ending 12/31 without prior reasonable notice to Bank.
(f) Liens. Neither Borrower nor any Subsidiary, as applicable,
will create, assume, or suffer to exist any Lien, (including
Capitalized Lease Obligations) upon any of its property or
assets, whether now owned or hereafter acquired except:
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate
proceedings;
36
(ii) Permitted Liens as described in Schedule 5.02(f)
attached hereto, including Liens incurred in
connection with the BankAtlantic Loan; and existing
Liens on Borrower's Equipment;
(iii) Purchase money Liens and Capitalized Lease
Obligations on machinery and Equipment hereafter
acquired, and extensions or renewals of any of the
same; or
(iv) Liens not placed by Borrower on the Collateral, as to
which Liens an Event of Default will not be deemed by
Bank to exist for 60 days after its placement if
within such time it is removed or bonded off.
(g) Additional Indebtedness. Except for Permitted Loans and the
Obligations, Borrower will not incur, create, assume or
otherwise permit the existence, at any time during any fiscal
year of Borrower, of any indebtedness or liability for
borrowed money, any indebtedness evidenced by notes, bonds,
debentures, or similar obligations or any conditional sales or
title retention Agreement or capitalized leases without the
prior written consent of Bank. Prior to obtaining any
Permitted Loan, Borrower must first notify Bank and furnish to
Bank any information which Bank may request regarding the
proposed Permitted Loan. Further, any payment (of interest or
principal) on a Permitted Loan may only be made pursuant to
Section 6.01(l) hereof.
(h) Transactions with Affiliates. Neither Borrower nor any
Subsidiary will directly or indirectly, purchase, acquire, or
lease any property from, or sell, transfer, or lease any
property to, or otherwise deal with, in the ordinary course of
business or otherwise, or make or permit to remain outstanding
any loan or advance to or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or
make any capital contribution to, any Affiliate except to the
extent that such acts and transactions are on terms not less
favorable to Borrower or to any Subsidiary than if no such
relationship described above existed.
(i) Amendment to Existing Agreements; Adoption of Plan. Borrower
shall not enter into any amendment, change or modification to
any existing agreements, which change or amendment would have
a material effect on the business or condition of Borrower, or
suffer or permit to occur any Event of Default or Default
thereunder, or adopt a Plan, without the prior written consent
of Bank.
37
(j) Establishment of Subsidiaries. Neither Borrower nor its
Subsidiaries, as applicable, will establish or acquire any new
subsidiaries without Bank's prior written consent thereto,
which consent shall not be unreasonably withheld or denied.
Upon the establishment of any such new Subsidiary, Borrower
will obtain:
(i) a pledge of such Subsidiary's Stock, and
(ii) in addition, its joinder upon such Loan Documents as
Bank shall require in connection with the Loan if in
Bank's sole judgment such new Subsidiary directly or
indirectly benefits from the proceeds of the Loan.
(k) Policies; Returns and Credits. Borrower shall not materially
amend or deviate from any of its policies and procedures with
regard to returns of or rejection of Inventory, or with regard
to any deduction, discount, credit, or allowance of any kind
relating to the sale or lease of Inventory as set forth on
Schedule 5.02(p) hereof.
5.03 Financial Covenants. Borrower covenants, for so long as any of the
principal amount of or interest on the Note is outstanding and unpaid or any
duty or Obligation of Borrower hereunder or under any of the other Loan
Documents remains unpaid or unperformed, as follows:
(a) Maximum Capital Funds Ratio. The ratio of Total Liabilities to
Capital Funds of Borrower (both on an individual and on a
consolidated basis) shall never exceed 1.75 to 1 at any time
during the duration of the Loan. The Maximum Capital Funds
Ratio shall be computed on a quarterly basis beginning with
figures from the December 31, 1996 financial statement of the
Borrower.
(b) Minimum Consolidated Capital Funds Position. At all times
during the duration of the Loan, the Consolidated Capital
Funds Position of the Borrower and its wholly-owned
subsidiaries shall not be less than Thirty Million Dollars
($30,000,000.00) plus fifty percent (50%) of all net profits
in each such fiscal quarter, beginning with the fiscal quarter
beginning January 1, 1997. The Minimum Consolidated Capital
Funds Position shall be computed quarterly beginning with
figures from the March 31, 1997 financial statement of the
Borrower.
(c) Minimum Debt Service Coverage Ratio. Tested quarterly, both on
an individual operating basis and consolidated basis,
beginning with the
38
fiscal first quarter of 1997, the Borrower's minimum debt
service coverage ratio must exceed 1.25x.
The Minimum Debt Service Coverage Ratio shall be calculated as
follows:
New Profit + Interest Expense + Depreciation Expense +
Amortization Expense
--------------------------------------------------------------
Interest Expense + Current Maturities of Long Term Debt
(d) Loan. At no time will the outstanding principal balance of the
Loan exceed the Borrowing Base.
ARTICLE VI
CONDITIONS OF LENDING
A. The First Advance. The obligation of the Bank to fund the Loan
hereunder on the Initial Advance Date shall be subject to the fulfillment of the
following condi tions precedent (and, in addition, to the conditions to any
Advance set forth in subsection B of this Article VI):
6.01 Evidence of Borrower Action. The Bank shall have received a
certificate, dated as of the Closing Date, of an Authorized Representative of
the Borrower:
(a) attaching true and complete copies of the resolutions of its
Board of Directors, written action of general partner, or
written action of members, as applicable, and of all
documents(in form and substance satisfactory to the Bank)
evidencing other necessary corporate, partnership, or company
action taken by the Borrower to authorize this Agreement, the
Note and the other Loan Documents,
(b) attaching a true and complete copy of its certificate of
incorporation and bylaws, partnership Agreement, or articles
of organization and regulations, as applicable;
(c) setting forth the incumbency of its officers who sign this
Agreement, the Note, and the other Loan Documents, including
therein signature specimens of such officers, and
(d) attaching a certificate of good standing of the Secretary of
State of the state of incorporation or organization of
Borrower and of all states in which Borrower is qualified to
do business, together with such other documents as the Bank
shall reasonably require.
39
6.02 Note. The Bank shall have received the Note, executed by an
Authorized Representative of Borrower.
6.03 Opinion of Counsel to Borrower. The Bank shall have received
the opinion of Xxxxxxx, Weaver, Miller, et al, P.A., counsel to the Borrower,
addressed to the Bank and dated the Closing Date, substantially in the form of
Exhibit "C" attached hereto.
6.04 Security Agreement and Other Security Documents. The Bank
shall have received and be in possession of:
(a) the Security Agreement, duly executed by an Authorized
Representative of the Borrower; and
(b) such other supporting documentation as shall be reasonably
requested by Bank, in form and substance satisfactory to Bank.
6.05 Financing Statements. The Borrower shall have executed such
financing statements and other documents as may be required or advisable under
the Security Agreement, or the other Loan Documents, as Bank may request, for
the purpose of perfecting the security interests granted therein and herein.
6.06 Property and Public Liability Insurance. The Bank shall have
received the policy or policies of property, public and products liability and
other insurance required by this Agreement with such endorsements and
certificates as may be required thereby.
6.07 Fees. Bank shall have received the Commitment Fee and the fees
and disbursements of Bank's counsel shall have been paid.
6.08 Concerning the Subordinated Debt. Borrower's indebtedness
evidenced by the Subordinated Debt shall not be in default.
6.09 Other Documents. Review and approval by Bank and/or Bank
counsel shall have been obtained of:
(a) the IASI Merger (if such merger has been consummated prior to
the Closing Date);
(b) proforma financial statements showing the post-acquisition
consolidated financial condition of IASI and Borrower (if the
IASI Merger has been consummated prior to the Closing Date);
40
(c) any other document requested by Bank or its counsel;
(d) a landlord subordination agreement and waiver and a
conditional assignment of any real property lease to which the
Borrower is a party, and any real property lease to which IASI
is a party, the terms of which documents shall be satisfactory
to Bank in its sole discretion, as well as such other
documents as Bank shall require;
(e) Borrower will merge its subsidiary IASI into Borrower, and
assume all obligations of IASI to third parties. Further, if
the merger of IASI into Borrower is accomplished prior to the
Closing Date, Borrower will provide evidence satisfactory to
Bank that all security interests and liens in assets of IASI
have been released prior to the Closing Date;.
6.10 Asset-Based Lending Audit. Prior to the Initial Advance, Bank
shall have conducted a comprehensive asset-based lending audit, the results of
which shall be satisfactory to Bank, in Bank's sole judgment.
A comprehensive Inventory evaluation and collateral audit shall be
conducted at Borrower's expense by Collateral Evaluation Associates pre-closing,
and the results of such audit shall be satisfactory to Bank, in Bank's sole
judgment.
6.11 Stock of Subsidiaries. Borrower will pledge the stock of all
subsidiaries, whether currently existing or formed or acquired post-closing, to
Bank as further security for the line of credit, All Borrower's subsidiaries
shall join in the covenants and other provisions of the Loan Documents, and
shall guarantee the Loan and pledge their assets to Bank as further security for
the Loan.
B. All Advances. The obligation of Bank to make any Advance on any
Borrowing Date (including the Closing Date) is subject to the satisfaction of
the following conditions precedent as of such Borrowing Date:
6.12 Compliance. On each Borrowing Date, and after giving effect to
the Advances to be made thereon:
(a) Borrower shall be in compliance with all of the terms,
covenants and conditions of this Agreement, the Note and the
other Loan Documents;
(b) there shall exist no Default or Event of Default hereunder or
thereunder;
41
(c) the representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct, with
the same effect as though such representations and warranties
had been made on such Borrowing Date (after giving effect to
any updating by Borrower of the Exhibits referred to in such
representations and warranties), except such matters relating
thereto as are indicated in each Borrowing Request, which
shall be satisfactory to the Bank in its reasonable
discretion; and
(d) there shall have occurred no material adverse change in the
financial condition, operations, status, business, prospects,
Assets or property of Borrower and any Affiliate since the
Closing Date. The acceptance of each Advance shall constitute
a certification by Borrower as of such Borrowing Date that
each of the foregoing matters is true and correct in all
respects.
6.13 Delivery of Documents. All documents required by the
provisions of this Agreement to be executed or delivered to the Bank on or
before such Borrowing Date shall have been executed and shall have been
delivered at the office of the Bank set forth in Section 7.8 on or before such
Borrowing Date.
6.14 Borrowing Request. By 12 p.m. Fort Lauderdale time on such
Borrowing Date the Bank shall have received a Borrowing Request duly executed by
an Authorized Representative of Borrower, together with a Borrowing Base
Certificate if required pursuant to Section 5.01(a)(iii).
6.15 Supplemental Opinions. If requested by the Bank with respect
to such Borrowing Date, there shall have been delivered to the Bank favorable
supplementary opinions of counsel to Borrower, addressed to Bank and dated such
Borrowing Date, covering such matters incident to such transactions contemplated
herein as the Bank shall reasonably request.
6.16 Documentation and Proceedings. All corporate and legal
proceedings and all documents and papers in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to Bank (including without limitation those documents listed in
Section 3.4, 3.5 and 3.6), and Bank shall have received all information and
copies of all documents, which may reasonably have requested in connection
therewith, such documents where appropriate to be certified by an Authorized
Representative of Borrower or proper Governmental Authorities.
6.17 Required Acts and Conditions. All acts, conditions and things
(including, without limitation, the obtaining of any necessary regulatory
approvals
42
and the making of any required filings, recordings or registrations) required to
be done and performed and to have happened prior to such Borrowing Date and the
continued performance and effectiveness of this Agreement, the Note and the
other Loan Documents, shall have been done and performed and shall have happened
in due compliance with all applicable laws, including the payment of all
Commitment Fees and Unused Fees due and payable on or prior to such Borrowing
Date.
6.18 Approval of Bank's Counsel. All legal matters in connection
with the making of each Advance shall be satisfactory to Bank's counsel.
6.19 Pledge Agreement from Affiliates Created Post-Closing. Bank
shall have received pledge agreements duly executed by Borrower assigning to
Bank as security for the Loan all Borrower's right, title and interest in and to
any Affiliate of Borrower created after the Closing Date, including any such
Affiliate created for the purpose of acquiring Assets, and in the case of any
such Affiliate that is a corporation, Borrower shall have delivered to Bank the
stock of such Affiliate, together with all necessary endorsements. Borrower
shall cause any such Affiliates that are Subsidiaries to be added as guarantors
of the Loan immediately upon organization of any such Affiliates.
6.20 Representations and Warranties. The representations and
warranties set forth in the Loan Documents are true and correct on and as of the
date hereof, and on the date of each Advance hereunder, and no material omission
shall have been made by Borrower to Bank concerning its business operations,
financial condition or any aspect of the Loan.
6.21 No Default or Adverse Change. On the date hereof and on the
date of each Advance, Borrower shall be in compliance with all the terms and
provisions set forth in the Loan Documents on its part to be observed or
performed, and no Event of Default or Default or adverse change in the condition
or operations of Borrower shall have occurred and be continuing at such time.
6.22 Loan Documents. Borrower shall have delivered or caused to be
delivered to Bank all the Loan Documents (including, without limitation, the
Opinion, the Security Agreement and all applicable Consents of Lessor, in form
and substance satisfactory to Bank, as Bank may request), and all of the Loan
Documents are in full force and effect. Borrower shall have filed all Financing
Statements necessary for perfection of Bank's security interest in the
Collateral and taken all other steps necessary to perfect Bank's security
interest in the Collateral. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby, and all documents
incident thereto shall be satisfactory in substance and form to Bank, and Bank
shall have received all such
43
counterpart originals or certified or other copies of such documents as Bank may
reasonably request.
6.23 Payment of Commitment Fee. Borrower shall have paid to Bank
any Commitment Fee and Unused Fee then due and owing.
ARTICLE VII
EVENTS OF DEFAULT
7.01 Events of Default. The following each and all are Events of
Default hereunder:
(a) Monetary Default. If Borrower shall default in any payment of
principal, interest or other charges in respect of any
Obligations including, but not limited to, the Loan, within 10
days of the date due and payable, whether on demand, at
maturity, by acceleration or otherwise; or
(b) Certain Non-Monetary Defaults. If Borrower shall default in
the performance of or compliance with Subsection 5.01(c) as to
corporate existence or Section 5.01(n) as to the IASI Merger,
any term or covenant contained in Section 5.02 of this
Agreement as to negative covenants or in subsections (d)
through (j) of this Article Seven; or
(c) Other Non-Monetary Defaults. If Borrower shall default in the
performance of or compliance with Section 5.03, or with any
other term or covenant contained in the Loan Documents, which
default or non-compliance shall continue and not be cured
within ninety (90) days of notice thereof to Borrower by Bank;
or
(d) Misrepresentation. If any representation, warranty,
certificate, schedule, or other information made or furnished
in writing by or on behalf of Borrower herein or in any other
Loan Document shall prove to have been false or incorrect in
any material respect on the date as of which made or
reaffirmed; or
(e) Bankruptcy, Insolvency, Dissolution or Liquidation. If
Borrower or any Subsidiary shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, petition
or apply to any tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of its
assets, or shall commence any proceeding under any
44
bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect, or if there shall have
been filed any such petition or application against Borrower
or any Subsidiary, or any such proceeding shall have been
commenced against any thereof (provided that proceedings filed
against Borrower shall not constitute Events of Default if:
(i) Bank shall have been notified promptly of such
proceedings,
(ii) such proceedings have been released within 60 days
after being instituted, and
(iii) no other default or Event of Default exists under any
Loan Document at the time of such proceeding or
thereafter);
or if Borrower, or any Subsidiary shall admit in writing its
inability, or be generally unable, to pay its debts as they
become due or shall make an assignment for the benefit of
creditors, petition or apply to any tribunal for the
appointment of a custodian, receiver or trustee for Borrower,
or any such Subsidiary or a substantial part of its assets, or
Borrower, or any Subsidiary by any act or omission shall
indicate its consent to, approval of or acquiescence in any
such petition, application, or proceeding or order for relief
or the appointment of a custodian, receiver or any trustee for
Borrower, or any such Subsidiary or any substantial part of
any of its properties; or if any order, judgment, or decree is
entered in any proceedings against Borrower, or any Subsidiary
decreeing the dissolution or liquidation of Borrower, or any
such Subsidiary; or
(f) Final Judgment. If a final judgment for the payment of money
in excess of an aggregate of One Hundred Thousand and No/100
Dollars ($100,000.00) shall be rendered against Borrower, or
any Subsidiary, and the same shall remain undischarged for a
period of thirty (30) consecutive days during which execution
shall not be effectively stayed; or
(g) Revocation of Consent or License. If any consent, approval,
franchise, license or permit of any governmental agency or
body necessary for the ownership of Borrower's assets or the
operation of Borrower's business is cancelled, revoked or
modified in a manner which materially adversely affects
Borrower or its properties; or
45
(h) Enforceability of Loan Documents. If any of the Loan Documents
shall cease to be legal, valid and binding agreements
enforceable against the Person executing the same in
accordance with the respective terms thereof or shall in any
way be terminated or become or be declared ineffective or
inoperative or shall in any way whatsoever cease to give or
provide the respective liens, security interest, rights,
titles, interest, remedies, powers or privileges intended to
be created thereby; or
(i) Impairment of Payment. If Bank in good faith believes that the
prospect of payment or performance of all or any part of the
Obligations or the value of any of the Collateral is impaired.
ARTICLE VIII
RIGHTS UPON DEFAULT
Upon the occurrence of any Event of Default, Bank shall have and may
exercise any or all of the rights set forth herein provided, however, Bank shall
be under no duty or obligation to do so:
8.01 Acceleration. To declare the indebtedness evidenced by the
Note and all other Obligations to be forthwith due and payable, whereupon the
Note and all other Obligations shall become forthwith due and payable, both as
to principal and interest, without presentment, demand, protest or any other
notice or grace period of any kind, all of which are hereby expressly waived,
anything contained herein or in the Note or in such other Obligations to the
contrary notwithstanding and, upon such acceleration, the unpaid principal
balance and accrued interest upon the Note shall from and after such date of
acceleration bear interest at the Default Rate.
8.02 Right of Setoff. To exercise its right of setoff as permitted
under Section 2.06.
8.03 Other Rights. To exercise such other rights as may be
permitted under any of the Loan Documents.
8.04 Uniform Commercial Code. To exercise from time to time any and
all rights and remedies of a secured creditor under the UCC as in effect from
time to time in the State of Florida and any and all rights and remedies
available to it under any other applicable law.
46
ARTICLE IX
MISCELLANEOUS
9.01 No Waiver, Cumulative Remedies. No failure or delay on the
part of Bank in exercising any right, power or remedy hereunder, or under the
Note or the other Loan Documents shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy hereunder or thereunder. The remedies herein and therein provided are
cumulative and not exclusive of any remedies provided by law or in equity.
9.02 Entire Agreement; Amendments, etc. Except as otherwise
expressly provided, this Agreement and the other Loan Documents embody the
entire Agreement and understanding between the parties hereto and supersede all
prior agreements and understandings relating to the subject matter hereof. No
amendment, modification, termination or waiver of any provision of this
Agreement, the Note or the other Loan Documents, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by Bank and Borrower, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
9.03 Addresses for Notices, etc. All notices, requests, demands and
other communications provided for hereunder shall be in writing (including
telex, telecopier or telegraphic communications) and shall be sufficient if
mailed, sent by overnight courier, telexed, telecopied, telegraphed or delivered
to the applicable party at the address indicated below:
If to Borrower: Xxxx X. Xxxxxxx
Chief Financial Officer
Xxxxxxxxx Industries, Inc.
00000 X.X. 0xx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: 000-000-0000
With a copy to: Xxxxx Xxxxx, Esq.
Xxxxxxx Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx &
Xxxxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
47
If to Bank: Xxxxxx Xxxxxx
Xxxxxxx Bank, N.A., Broward County
000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
English, XxXxxxxxx & O'Bryan, P.A.
000 X.X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
and to: Xxxxxxx Xxxxx, Inc.
0000 Xxxxxxx Xxxx
Xxxxx X, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn: Asset-Based Lending Department
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to the delivery with the
terms of this Section. Except as otherwise expressly provided in this Agreement,
all such notices, requests, demands and other communications shall, when mailed,
telexed, telecopied or telegraphed, be effective 4 days after being deposited in
the mails (postage paid), sent over a telex or telecopier owned or operated by a
party hereto (with an answer back response set forth on the sender's copy of the
document in the case of a telex) or delivered to Borrower addressed as aforesaid
or delivered to the other party at the address set forth above.
9.04 Applicable Law. This Agreement, and each of the Loan Documents
and transactions contemplated herein shall be governed by and interpreted in
accordance with the laws of the State of Florida without regard to its
principles of conflict of laws.
9.05 Survival of Representations and Warranties. All
representations, warranties, covenants and agreements contained herein or made
in writing by Borrower in connection herewith shall survive the execution and
delivery of this Agreement, the Note and the other Loan Documents and be true
and correct during the duration of the Loan.
9.06 Time of the Essence. Time is of the essence of this Agreement,
the Note and the other Loan Documents.
48
9.07 Headings. The headings in this Agreement are intended to be
for convenience of reference only, and shall not define or limit the scope,
extent or intent or otherwise affect the meaning of any portion hereof.
9.08 Severability. In case any one or more of the provisions
contained in this Agreement, the Note or the other Loan Documents shall for any
reason be held to be invalid, illegal or unenforceable in any respect, the same
shall not affect any other provision of this Agreement, the Note or the other
Loan Documents, but this Agreement, the Note and the other Loan Documents shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained therein.
9.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
9.10 Conflict. In the event any conflict arises between the terms
of this Agreement and the terms of any other Loan Document, Bank shall have the
option of selecting which conditions shall govern the loan relationship evidence
by this Agreement and, if Bank does not so indicate, the terms of this Agreement
shall govern in all instances of such conflict.
9.11 Duration. The duration of this Agreement shall be for such
period of time until the Loan and the Note have been repaid in full, and all of
the other Obligations have been paid to Bank in full.
9.12 Expenses. Borrower agrees, whether or not the transactions
hereby contemplated shall be consummated, to pay, and save Bank harmless against
liability for the payment of, all out-of-pocket expenses arising in connection
with this transaction (including attorneys' fees (whether incurred at trial, in
any bankruptcy or appellate proceeding or otherwise) and the fees and
commissions of collection agencies or other costs and penalties incurred by Bank
in enforcing its rights under the Loan Documents or pursuant to law), all taxes,
together in each case with interest and penalties, if any, which may be payable
in respect of the execution, delivery and performance of this Agreement or the
execution, delivery, and performance of the Note issued under or pursuant to
this Agreement (excepting only any tax on or measured by net income of Bank
determined substantially in the same manner, other than the rate of tax, as net
income is presently determined under the IRS Code), all costs incurred by Bank
in connection with Hazardous Materials found on or affecting the Property or
Borrower's operations; the reasonable legal fees and expenses (whether incurred
at trial, in any bankruptcy or appellate proceeding or otherwise) of counsel to
Bank in connection with the negotiation, preparation and enforcement of this
Agreement, the Note, the Security Agreement, or any of the
49
other Loan Documents, or incurred by Bank in its efforts to enforce payment of
Accounts, whether incurred through judicial proceedings or otherwise, and
whether incurred at trial, in any bankruptcy or appellate proceeding or
otherwise. Borrower either
(a) agrees to pay all documentary stamp taxes due as a result of
the closing of this transaction within the State of Florida,
or
(b) acknowledges that at its request the Loan is being closed and
the Note are being held by Bank outside of the State of
Florida and that no Florida documentary stamp taxes are being
paid by Bank on the Note.
Borrower agrees to indemnify and hold Bank harmless from the payment of
all documentary stamp taxes, together with any penalties and interest thereon,
if Bank, at any time or for any reason, is required to pay such taxes under the
laws of the State of Florida. The obligations of Borrower under this Section
9.12 shall survive payment of the Note. The obligations of Borrower hereunder do
not affect Borrower's right to contest any tax after payment of the disputed
amounts or establishment of adequate reserves, as applicable.
9.13 Successors and Assigns. All covenants and agreements in this
Agreement contained by or on behalf of either of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns (including
Participants) of the parties hereto whether so expressed or not provided,
however, this clause shall not by itself authorize any delegation of duties by
Borrower or any other assignment which may be prohibited by the terms and
conditions of this Agreement, and provided further that the parties (including
any such successors and assigns and Participants) intend that this Agreement is
solely for their benefit and no person not a party hereto shall have any rights
or privileges under this Agreement whatsoever either as the third party
beneficiary or otherwise.
9.14 Cross Defaults. A Default under any Loan Document, including a
default under this Agreement, shall be and constitute a Default under each and
every Loan Document, including this Agreement.
9.15 Non-Waiver. No delay, forbearance, or non-exercise by Bank in
exercising any of its rights under this Agreement and no course of dealing
between Bank and Borrower shall operate as a waiver of any rights of Bank unless
Bank has expressly so waived said rights in a writing signed by it. Any such
action shall not preclude Bank from thereafter exercising its rights as set
forth in this Agreement.
50
9.16 WAIVER OF TRIAL BY JURY. EACH OF BORROWER AND BANK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT TO ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER BANK OR
BORROWER OR ANY OTHER PERSON. THIS WAIVER OF TRIAL BY JURY BY BORROWER IS A
MATERIAL INDUCEMENT FOR BANK TO ENTER INTO THIS AGREEMENT.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed, sealed and delivered, as applicable, by their duly
Authorized Representatives on the day and year first above written.
BORROWER:
XXXXXXXXX INDUSTRIES, INC.
(CORPORATE SEAL)
By:
_________________________________________
Xxxx X. Xxxxxxx, Executive Vice
President/Chief Financial Officer
ATTEST:
Secretary
BANK:
XXXXXXX BANK, N.A.
By:
_________________________________________
Xxxx Xxxxxxx
Vice President
51
EXHIBIT "A"
FORM OF NOTE
Attached
52
EXHIBIT "B"
FORM OF SECURITY AGREEMENT
Attached
53
EXHIBIT "C"
FORM OF LEGAL OPINION
Attached
54
EXHIBIT "D"
BORROWING BASE CERTIFICATE
Attached
55
EXHIBIT "E"
BORROWING REQUEST
Attached
56
SCHEDULE 3.07
PENDING LITIGATION
None
57
SCHEDULE 5.01(L)
OUTSTANDING DEBT
BankAtlantic Loan
Existing Subordinated Debt
58
SCHEDULE 5.02(C)
PLACES OF BUSINESS
Street Address Leased or Owned
Xxxxxxxxx Industries, Inc. Owned
00000 X.X. 0xx Xxxxxx
Xxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
LOCATION OF REPAIR FACILITIES AT WHICH
COLLATERAL IS CURRENTLY LOCATED
California
Connecticut
Georgia
Missouri
New York
Texas
59
SCHEDULE 5.02(F)
PERMITTED LIENS
Liens pursuant to:
BankAtlantic Loan
Mitsubishi (Forklift) (to be terminated post-closing)
Consignment Agreement (to be terminated post-closing)
60
