Exhibit (c)(2)
LOAN AGREEMENT
This LOAN AGREEMENT is made as of November 30, 1999 by and between
OPTICAL SECURITY GROUP, INC. (the "BORROWER"), a Colorado corporation having its
principal place of business at 000 00xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx
00000, XXX, and APPLIED HOLOGRAPHICS PLC (Registered No. 1688482), a public
limited company incorporated and existing under the laws of England and Wales
having its registered office at 22 Sedling Road, District 6, Washington, Tyne &
Wear XX00 0XX (the "LENDER").
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Loan
Agreement referred to below:
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
APPLICABLE PENSION LEGISLATION. At any time, any pension or retirement
benefits legislation (be it federal, provincial, territorial or otherwise) then
applicable to the Borrower or any of its Subsidiaries.
BALANCE SHEET DATE. March 31, 1999.
BORROWER. As defined in the preamble hereto.
BRIDGESTONE. Bridgestone Technologies, Inc., a Delaware corporation
with its principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx 00000.
BRIDGESTONE ACQUISITION. See Section 5.17.
BRIDGESTONE ACQUISITION DOCUMENTS. All documents, instruments and
agreements which are to be executed in connection with the Bridgestone
Acquisition, all in form and substance satisfactory to the Lender.
BRIDGESTONE GUARANTY. The Guaranty to be made by Bridgestone in favor
of the Lender pursuant to which Bridgestone guaranties to the Lender the payment
and performance of the Obligations and in form and substance satisfactory to the
Lender.
BUSINESS DAY. Any day on which banks are open for ordinary banking
business in Xxx Xxxx, Xxx Xxxx, Xxxxxx, Xxxxxxxx xxx Xxxxxx, Xxxxxxx.
CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 5.18(a).
CLOSING DATE. The first date on which the conditions set forth in
Section 8 have been satisfied.
CLOSING FEE. See Section 3.1.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of the Borrower
and its Domestic Subsidiaries that are or are intended to be subject to the
security interests created by the Security Documents.
COLLECTED INTEREST. See Section 3.8.
DEFAULT. See Section 10.1.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC SUBSIDIARY. Any Subsidiary of the Borrower which is not a
Foreign Subsidiary.
DRAWDOWN DATE. The date on which the Loan is made or is to be made.
DRAWDOWN TERMINATION DATE. December 10, 1999.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(2) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See Section 5.18(a).
EPA. See Section 5.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
EUROPEAN UNION. The European community established by the Treaty of
Rome of 25 March 1957 as amended by the Single Xxxxxxxx Xxx 0000 and by the
Treaty on European Union which was signed at Maastricht on 7 February 1992 (and
came into being on 1 November 1993) (the Maastricht Treaty) as further amended
from time to time.
EVENT OF DEFAULT. See Section 10.1.
FOREIGN SUBSIDIARY. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time,
and (b) consistently applied with past financial statements of the Borrower
adopting the same principles, PROVIDED that in each case referred to in this
definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTIES. The several Guaranties, each dated as of the date hereof,
made by each Domestic Subsidiary of the Borrower in favor of the Lender pursuant
to which each Domestic Subsidiary of the Borrower guaranties to the Lender the
payment and performance of the Obligations and in form and substance
satisfactory to the Lender.
HAZARDOUS SUBSTANCES. See Section 5.18(b).
HIGHEST LAWFUL RATE. The maximum non-usurious rate of interest
permitted by applicable law.
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized
Lease,
(vi) every obligation of such Person under any lease (a
"SYNTHETIC LEASE") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively "RECEIVABLES"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(viii) every obligation of such Person (an "EQUITY RELATED
PURCHASE OBLIGATION") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices (a
"DERIVATIVE CONTRACT"),
(x) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (i) through (x) (the "PRIMARY OBLIGATION") of another Person
(the "PRIMARY OBLIGOR"), in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person (A) to
purchase or pay (or advance or supply funds for the purchase of) any
security for the payment of such primary obligation, (B) to purchase
property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital,
equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any synthetic lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
derivative contract shall be the maximum amount of any termination or loss
payment required to be paid by such Person if such derivative contract were, at
the time of determination, to be terminated by reason of any event of default or
early termination event thereunder, whether or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
INSOLVENCY EVENT. Any of the following events or circumstances: (i) the
Borrower or any of its Subsidiaries organized in the United Kingdom shall be
deemed unable to pay its debts within the meaning of section 123(1) (a), (b), or
(2) of the Xxxxxxxxxx Xxx 0000 (Xxxxxx Xxxxxxx) or shall otherwise become
insolvent or stop or suspend making payments (whether of principal or interest)
with respect to all or any class of its Indebtedness or announce an intention to
do so, (ii) a meeting shall be convened by the Borrower or any of its
Subsidiaries for the purpose of passing any resolution to purchase, reduce or
redeem any of its capital stock or to comply with section 142 of the Companies
Act 1985 (England), (iii) any petition shall be presented or other step taken
for the purpose of the appointment of an administrator or the winding up of the
Borrower or any of its Subsidiaries (not being, in the case of a winding up, a
petition which such Person can demonstrate to the reasonable satisfaction of the
Lender, by providing an opinion of leading counsel to that effect, is frivolous,
vexatious or an abuse of the process of the court or relates to a claim to which
such Person has a good defense and which is being vigorously contested by such
Person) or an order shall be made or resolution passed for the winding up of any
the Borrower or any of its Subsidiaries or a notice shall be issued by convening
a meeting for the purpose of passing any such resolution (except for the purpose
of a solvent amalgamation or reconstitution which shall have been approved by
the Lender), or (iv) any steps shall be taken, or negotiations commenced by the
Borrower or any of its Subsidiaries or by any of their respective creditors with
a view to proposing any kind of composition, compromise or arrangement involving
such Person and any of its creditors or for the presentation of a petition for
the appointment of an administrator.
INTEREST. See Section 3.8.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LENDER. As defined in the preamble hereto.
LENDER'S COST OF FUNDS. The rate per annum determined by the Lender in
its sole discretion to be that which fairly expresses as a percentage per annum
the cost to the Lender of funding such principal amount from whatever source it
may select in good faith. For reference purposes only, the Lender's Cost of
Funds as at November 29, 1999 was [LIBOR plus 1.4%].
LENDER'S HEAD OFFICE. 22 Sedling Road, District 6, Washington, Tyne &
Xxxx XX00 0XX, Xxxxxxx.
LIEN. Any mortgage, security interest, pledge, hypothecation,
assignment, attachment, deposit arrangement, encumbrance, lien (statutory,
judgment or otherwise), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any similar
such interest arising under the laws of any applicable domestic or foreign
jurisdiction and including any conditional sale or other title retention
agreement, any financing lease involving substantially the same economic effect
as any of the foregoing and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any domestic or foreign
jurisdiction).
LOAN. The loan made or to be made by the Lender to the Borrower on the
Drawdown Date in the aggregate principal amount not to exceed $10,000,000
pursuant to Section 2.1.
LOAN AGREEMENT. This Loan Agreement, including the Schedules and
Exhibits hereto.
LOAN DOCUMENTS. This Loan Agreement, the Note and the Security
Documents.
LOAN REQUEST. See Section 2.4.
MATURITY DATE. The date which is the earliest to occur of (a) December
31, 2000; or (b) any date specified in a demand notice delivered by the Lender
to the Borrower; PROVIDED, that such date shall not be earlier than six (6)
months from the date of such demand notice; PROVIDED FURTHER, that such demand
notice shall not be delivered to the Borrower prior to the date of termination
of the Merger Agreement pursuant to the terms thereof; or (c) any date which may
be mutually agreed upon in writing by the Borrower and the Lender; PROVIDED,
that the Maturity Date may be accelerated by the Lender in accordance with the
provisions of Section 10.1.
MERGER. See Section 3.1.
MERGER AGREEMENT. That certain Agreement and Plan of Merger, dated
November 30, 1999, by and among the Lender, Newco and the Borrower.
MERGER DOCUMENTS. All documents, instruments and agreements (including
without limitation the Merger Agreement) which are to be executed in connection
with the Merger, all in form and substance satisfactory to the Lender.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
NEWCO. NEWCO, a Colorado corporation and a direct wholly-owned
subsidiary of the Lender.
NOTE. See Section 2.3.
NOTE RECORD. A Record with respect to a Note.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to the Lender existing on the date of this
Loan Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Loan Agreement or any of the other Loan Documents
or in respect of the Loan or the Note or other instruments at any time
evidencing any thereof.
OECD. The Organization for Economic Cooperation and Development.
OUTSTANDING. With respect to the Loan, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates as defined in the
Security Agreements.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 7.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
RCRA. See Section 5.18(a).
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to the Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by the
Lender with respect to the Loan referred to in the Note.
XXXX. See Section 5.18(a).
SECURITY AGREEMENTS. The several Security Agreements dated as of the
date hereof between the Borrower and its Domestic Subsidiaries and the Lender
and each in form and substance satisfactory to the Lender.
SECURITY DOCUMENTS. The Guaranties, the Bridgestone Guaranty, the
Security Agreements, the Stock Pledge Agreement and all other instruments and
documents, including without limitation Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document.
SENIOR LENDER. Mercantile Safe Deposit & Trust Company, a Maryland
banking and trust company.
STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement dated as of the date
hereof between the Borrower and the Lender and in form and substance
satisfactory to the Lender.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
UNITED KINGDOM. The United Kingdom of Great Britain and Northern
Ireland.
UNRESTRICTED INTEREST. See Section 3.8.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or person
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
YEAR 2000 COMPLIANT. See Section 5.20.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall
include such document or agreement as amended, modified or
supplemented from time to time in accordance with its terms
and the terms of this Loan Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein
have the meanings assigned to them by generally accepted
accounting principles applied on a consistent basis by the
accounting entity to which they refer.
(f) The words "include", "includes" and "including"
are not limiting.
(g) All terms not specifically defined herein or by
generally accepted accounting principles, which terms are
defined in the Uniform Commercial Code as in effect in the
State of New York, have the meanings assigned to them therein,
with the term "instrument" being that defined under Article 9
of the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to
that section of this Loan Agreement unless otherwise
indicated.
(i) The words "herein", "hereof", "hereunder" and
words of like import shall refer to this Loan Agreement as a
whole and not to any particular section or subdivision of this
Loan Agreement.
(j) Unless otherwise expressly indicated, in the
computation of periods of time from a specified date to a
later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but
excluding," and the word "through" means "to and including."
(k) This Loan Agreement and the other Loan Documents
may use several different limitations, tests or measurements
to regulate the same or similar matters. All such limitations,
tests and measurements are, however, cumulative and are to be
performed in accordance with the terms thereof.
(l) This Loan Agreement and the other Loan Documents
are the result of negotiation among, and have been reviewed by
counsel to, among others, the Lender and the Borrower and are
the product of discussions and negotiations among all parties.
Accordingly, this Loan Agreement and the other Loan Documents
are not intended to be construed against the Lender merely on
account of the Lender's involvement in the preparation of such
documents.
2. THE TERM LOAN.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions
set forth in this Loan Agreement, the Lender agrees to lend on the
Drawdown Date in a single draw such amount as requested by the Borrower
up to a maximum aggregate principal amount of $10,000,000. The Drawdown
Date shall occur on any single date from the Closing Date up to and
including the Drawdown Termination Date upon notice by the Borrower to
the Lender given in accordance with Section 2.4. The Borrower's request
for the Loan hereunder shall constitute a representation and warranty
by the Borrower that the conditions set forth in Section 8 and Section
9 have been satisfied on the date of such request.
2.2. REPAYMENT OF THE LOAN. The Borrower hereby absolutely and
unconditionally promises to pay the Lender on the Maturity Date the
entire unpaid principal amount of the Loan then outstanding and the
entire unpaid amount of all other Obligations (except as may be
expressly waived in writing by the Lender).
2.3. THE NOTE. The Loan shall be evidenced by a promissory
note of the Borrower in substantially the form of EXHIBIT A hereto (the
"NOTE"), dated the Closing Date and completed with appropriate
insertions. The Note shall be payable to the order of the Lender in a
principal amount equal to the aggregate principal amount of the Loan
and representing the obligation of the Borrower to pay to the Lender
such principal amount or, if less, the outstanding amount of the Loan,
plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes the Lender to make or cause to be made a
notation on the Note Record reflecting the original principal amount of
the Loan and, at or about the time of the Lender's receipt of any
principal payment on the Note, an appropriate notation on the Note
Record reflecting such payment. The aggregate unpaid amount set forth
on the Note Record shall be PRIMA FACIE evidence of the principal
amount thereof owing and unpaid to the Lender, but the failure to
record, or any error in so recording, any such amount on the Note
Record shall not affect the obligations of the Borrower hereunder or
under the Note to make payments of principal of and interest on the
Note when due.
2.4. REQUEST FOR LOAN. The Borrower shall give to the Lender
written notice in the form of EXHIBIT B hereto (or telephonic notice confirmed
in a writing in the form of EXHIBIT B hereto) of the Loan requested hereunder (a
"LOAN REQUEST") no less than two (2) Business Days prior to the proposed
Drawdown Date. Such notice shall specify (a) the principal amount of the Loan
requested, and (b) the proposed Drawdown Date of Loan. Such notice shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Loan requested from the Lender on the proposed Drawdown Date.
2.5. OPTIONAL PREPAYMENT OF LOAN. The Borrower shall have the
right at any time to prepay the Note on or before the Maturity Date, as
a whole, or in part, upon not less than three (3) Business Days prior
written notice to the Lender, without premium or penalty, PROVIDED that
each partial prepayment shall be in the principal amount of $500,000 or
an integral multiple thereof. Any
prepayment of principal of the Loan shall include all fees and interest
accrued to the date of prepayment. No amount repaid with respect to the
Loan may be reborrowed.
2.6. INTEREST ON LOAN. Except as otherwise provided in Section
3.7, the outstanding amount of the Loan shall bear interest at the rate
of two percent (2%) per annum above the Lender's Cost of Funds as in
effect from time to time[; provided, that in the event the Merger
Agreement is terminated solely because (a) the Lender's shareholders
failed to approve the Merger, or (b) the Lender failed to obtain the
financing necessary to complete the Merger, or (c) a material breach by
the Lender of any Merger Document, then commencing as of the Drawdown
Date and continuing thereafter the outstanding amount of the Loan shall
bear interest at the rate of one-half percent (1/2%) per annum above
the Lender's Cost of Funds as in effect from time to time]. Interest
shall be payable monthly in arrears on the first day of each calendar
month for the immediately preceding calendar month, commencing on the
first such date following the Drawdown Date, and on the Maturity Date.
Any change in the interest rate resulting from a change in the Lender's
Cost of Funds is to be effective at the beginning of the day of such
change in the Lender's Cost of Funds. The Lender will give the Borrower
prompt notice in writing of any change in the Lender's Cost of Funds.
The Borrower promises to pay interest on the amount of the Loan
outstanding from time to time from the Drawdown Date until the earlier
of the Maturity Date or payment in full of the Obligations in
accordance with the provisions of this Section 2.6.
3. CERTAIN GENERAL PROVISIONS.
3.1. CLOSING FEE. Unless otherwise expressly waived in writing
by the Lender in accordance with the terms hereof, the Borrower agrees
to pay to the Lender on the Maturity Date a closing fee in the amount
of $1,700,000 (the "CLOSING FEE"). For the avoidance of doubt, each of
the Borrower and the Lender agree that the Closing Fee shall be deemed
fully earned by the Lender on the Closing Date; PROVIDED, that prior to
the Maturity Date the Closing Fee shall not bear interest and
commencing on the Maturity Date and thereafter the Closing Fee shall
bear interest at the rate of six (6%) per annum above the Lender's Cost
of Funds until the Closing Fee is paid in full in cash or otherwise
waived. The Lender agrees to waive the Closing Fee if, as at the
Maturity Date, (a) the Borrower has completed its merger with a
wholly-owned Subsidiary of the Lender pursuant to the terms and
conditions set forth in the Merger Agreement and the other Merger
Documents (the "Merger"), or (b) the Merger Agreement has been
terminated solely because either (i) the Lender's shareholders failed
to approve the Merger, or (ii) the Lender failed to obtain the
financing necessary to complete the Merger, or (c) a material breach by
the Lender of any Merger Document.
3.2. FUNDS FOR PAYMENTS.
3.2.1. PAYMENTS TO LENDER. All payments of principal,
interest, fees and any other amounts due hereunder or under
any of the other Loan Documents shall be made on the due date
thereof to the Lender in Dollars at the Lender's Head Office
or at such other place that the Lender may from time to time
designate, in each case such payment shall be sent by the
Borrower not later than 11:00 a.m. (Denver, Colorado time) and
in immediately available funds; PROVIDED, that in calculating
interest hereunder such payment shall only be credited to the
Borrower's account when it is actually received by the Lender
at the Lender's Head Office or at such other place as the
Lender has designated.
3.2.2. NO OFFSET, ETC. All payments by the Borrower
hereunder and under any of the other Loan Documents shall be
made without recoupment, setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority
therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed
upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan
Documents, the Borrower will pay to the Lender on the date on
which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as
shall be necessary to enable the Lender to receive the same
net amount which the Lender would have received on such due
date had no such obligation been imposed upon the Borrower.
The Borrower will deliver promptly to the Lender certificates
or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
3.3. COMPUTATIONS. All computations of interest on the Loan
and of other fees shall be based on a 360-day year and paid for the
actual number of days elapsed. Whenever a payment hereunder or under
any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the
next succeeding Business Day, and interest shall accrue during such
extension. In the absence of manifest error, the outstanding amount of
the Loan as reflected on the Note Record from time to time shall be
considered correct and binding on the Borrower unless within five (5)
Business Days after receipt of any notice by the Lender of such
outstanding amount, the Lender shall notify the Borrower to the
contrary.
3.4. ADDITIONAL COSTS, ETC. If any present or future
applicable law, which expression, as used herein, includes statutes,
rules and regulations thereunder and interpretations thereof by any
competent court or by any governmental or other regulatory body or
official charged with the administration or the interpretation thereof
and requests, directives, instructions and notices at any time or from
time to time hereafter made upon or otherwise issued to the Lender by
any regulatory authority (whether or not having the force of law),
shall:
(a) subject the Lender to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with
respect to this Loan Agreement, the other Loan Documents, or
the Note (other than taxes based upon or measured by the
income or profits of the Lender), or
(b) materially change the basis of taxation (except
for changes in taxes on income or profits) of payments to the
Lender of the principal of or the interest on the Loan or any
other amounts payable to the Lender under this Loan Agreement
or the other Loan Documents, or
(c) impose or increase or render applicable (other
than to the extent specifically provided for elsewhere in this
Loan Agreement) any special deposit, reserve, assessment,
liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or
commitments of an office of the Lender, or
(d) impose on the Lender any other conditions or
requirements with respect to this Loan Agreement, the other
Loan Documents, or the Note, and the result of any of the
foregoing is
(i) to increase the cost to the Lender of
making, funding, issuing, renewing, extending or
maintaining the Loan, or
(ii) to reduce the amount of principal,
interest, or other amount payable to the Lender
hereunder on account of the Loan, or
(iii) to require the Lender to make any
payment or to forego any interest or other sum
payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable
or deemed received by the Lender from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by the
Lender at any time and from time to time and as often as the occasion
therefor may arise, pay to the Lender such additional amounts as will
be sufficient to compensate the Lender for such additional cost,
reduction, payment or foregone interest or other sum.
3.5. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to Section 3.4 and a brief explanation of such
amounts which are due, submitted by the Lender to the Borrower, shall
be conclusive, absent manifest error, that such amounts are due and
owing.
3.6. INDEMNITY. The Borrower agrees to indemnify the Lender
and to hold the Lender harmless from and against any loss, cost or
expense that the Lender may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any
interest on the Loan as and when due and payable, including any such
loss or expense arising from interest or fees payable by the Lender to
lenders of funds obtained by it in order to maintain the Loan, (b)
default by the Borrower in making a borrowing after the Borrower has
given (or is deemed to have given) a Loan Request, or (c) the making of
any payment on the Loan on a day that is not the Maturity Date,
including interest or fees payable by the Lender to lenders of funds
obtained by it in order to maintain the Loan.
3.7. INTEREST AFTER DEFAULT.
3.7.1. OVERDUE AMOUNTS. Overdue principal and (to the
extent permitted by applicable law) interest on the Loan and
all other overdue amounts payable hereunder or under any of
the other Loan Documents shall bear interest compounded
monthly and payable on demand at a rate per annum equal to
four percent (4%) above the otherwise applicable rate until
such amount shall be paid in full (after as well as before
judgment).
3.7.2. AMOUNTS NOT OVERDUE. During the continuance of
a Default or an Event of Default the principal of the Loan not
overdue shall, until such Default or Event of Default has been
cured or remedied or such Default or Event of Default has been
waived in writing by the Lender, bear interest at a rate per
annum equal to four percent (4%) above the otherwise
applicable rate.
3.8. USURY PROVISION. It is not the intention of any parties
to this Loan Agreement to make an agreement in violation of the laws of
any applicable jurisdiction relating to usury. Regardless of any
provision of this Loan Agreement or of any other Loan Document, the
Lender shall not be entitled to receive, collect or apply, as interest,
charges, fees, penalties or additional amounts (collectively, referred
to herein as "INTEREST") on any of the Loans or any other Obligation,
any amount in excess of the Highest Lawful Rate. If under the laws of
any applicable jurisdiction there is no legal limitation on the rate of
Interest that may be charged with respect to an obligation owing to the
Lender (including, without limitation, the outstanding principal amount
of the Loan, unpaid interest with respect to the Loan or any other
Obligations due and payable under any Loan Document), there shall be no
maximum amount applicable to such obligation, notwithstanding any
reference thereto herein or in any other Loan Document. If at any time
the rate at which interest is payable to the Lender on the Loan or any
other Obligation exceeds the Highest Lawful Rate, the Loan or other
Obligation shall bear interest at the Highest Lawful Rate only but
shall continue to bear interest at the Highest Lawful Rate until such
time as the total amount of interest accrued on the Loan or other
Obligation equals (but does not exceed) the total amount of interest
which would have accrued thereon had there been no Highest Lawful Rate
applicable thereto. If at the maturity or final payment of the Loan or
other Obligation (whether at stated maturity, by acceleration or
prepayment or otherwise) the total amount of interest which has then
accrued or been paid thereon as provided above (the "COLLECTED
INTEREST") is less than the total amount of interest which would have
accrued thereon had there been no Highest Lawful Rate applicable
thereto (the "UNRESTRICTED INTEREST"), then the Borrower shall, in
addition to the Collected Interest, pay to the Lender an amount equal
to (a) the lesser of the Unrestricted Interest owed or accrued for the
benefit of
the Lender and the total amount of interest which would have accrued
thereon for the benefit of the Lender had the Loan or other Obligation
at all times borne Interest at the Highest Lawful Rate, MINUS (b) the
Collected Interest paid for the account of the Lender. This Section 3.8
shall control every provision of every agreement pertaining to the
transactions contemplated by or contained in this Loan Agreement or any
of the other Loan Documents and shall equally apply to any guaranty or
other obligation of any Subsidiary of the Borrower or of any other
Person under the Loan Documents as if such obligations were
"Obligations" as defined herein.
4. SECURITY AND GUARANTIES.
4.1. SECURITY OF BORROWER. The Obligations shall be secured by
a perfected security interest (subject only to the Permitted Liens
entitled to priority under applicable law) in all of the assets of the
Borrower and its Domestic Subsidiaries, whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which the
Borrower or its Domestic Subsidiaries are a party.
4.2. GUARANTIES OF DOMESTIC SUBSIDIARIES. The Obligations
shall also be guaranteed pursuant to the terms of the Guaranties and
the Bridgestone Guaranty.
5. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Lender as of the date
hereof, as of the date the Loan is made and immediately following the
consummation of the Bridgestone Acquisition as follows:
5.1. CORPORATE AUTHORITY.
5.1.1. INCORPORATION; GOOD STANDING. Each of the
Borrower and its Subsidiaries (a) is a corporation duly
organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization, (b)
has all requisite corporate power to own its property and
conduct its business as now conducted and as presently
contemplated, and (c) is in good standing as a foreign
corporation (or similar business entity) and is duly
authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so
qualified would not have a materially adverse effect on the
business, assets or financial condition of the Borrower or its
Subsidiaries.
5.1.2. AUTHORIZATION. The execution, delivery and
performance of this Loan Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is
or is to become a party and the transactions contemplated
hereby and thereby (a) are within the corporate (or similar)
authority of such Person, (b) have been duly authorized by all
necessary corporate (or similar organizational) proceedings,
(c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or
regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment, order, writ, injunction, license or
permit applicable to such Person, (d) do not conflict with any
provision of the corporate charter or bylaws or other
organizational or constitutive documents of, or any agreement
or other instrument binding upon, the Borrower or any of its
Subsidiaries, and (e) except for the Liens granted in favor of
the Lender under this Loan Agreement and the other Loan
Documents, do not result in the creation or imposition of any
Lien on any undertaking, assets, rights or revenues of the
Borrower or its Subsidiaries.
5.1.3. ENFORCEABILITY. The execution and delivery of
this Loan Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party
will result in valid and legally binding obligations of such
Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor
may be brought.
5.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrower and any of its Subsidiaries of this Loan
Agreement and the other Loan Documents to which the Borrower or any of
its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent
of, or filing with, any governmental agency or authority other than
those already obtained.
5.3. TITLE TO PROPERTIES; LEASES. Except as indicated on
SCHEDULE 5.3 hereto, the Borrower and its Subsidiaries own all of the
assets reflected in the consolidated balance sheet of the Borrower and
its Subsidiaries as at the Balance Sheet Date or acquired since that
date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases, conditional sales agreements,
title retention agreements, liens or other encumbrances except
Permitted Liens.
5.4. FISCAL YEAR; FINANCIAL STATEMENTS.
5.4.1. FISCAL AND FINANCIAL YEAR. The Borrower and
each of its Subsidiaries has a fiscal year (or financial year,
as applicable) which is the twelve months ending on March 31
of each calendar year.
5.4.2. FINANCIAL STATEMENTS. There has been furnished
to the Lender a consolidated balance sheet of the Borrower and
its Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income for the fiscal year then
ended, certified by the Borrower's independent certified
public accountants. Such balance sheet and statement of income
have been prepared in accordance with generally accepted
accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the
date thereof and the results of operations for the fiscal year
then ended. There are no contingent liabilities of the
Borrower or any of its Subsidiaries as of such date involving
material amounts, known to the officers of the Borrower not
disclosed in said balance sheet and the related notes thereto.
5.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date
there has occurred no materially adverse change in the financial
condition or business of the Borrower and its Subsidiaries as shown on
or reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, or the consolidated
statement of income for the fiscal year then ended, other than changes
in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business
or financial condition of the Borrower or its Subsidiaries. Except as
set forth on SCHEDULE 5.5, since the Balance Sheet Date the Borrower
has not made any Distribution.
5.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the
Borrower and its Subsidiaries possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights
in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights
of others.
5.7. LITIGATION. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Borrower
or any of its Subsidiaries before any court, tribunal or administrative
agency or board that, if adversely determined, might, either in any
case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Borrower and its
Subsidiaries or materially impair the right of the Borrower and its
Subsidiaries, considered as a whole, to carry on business substantially
as now conducted by them, or result in any substantial liability not
adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated
balance sheet of the Borrower, or which question the validity of this
Loan Agreement or any of the other Loan Documents, or any action taken
or to be taken pursuant hereto or thereto.
5.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the
Borrower nor any of its Subsidiaries is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order,
rule or regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial
condition of the Borrower or any of its Subsidiaries. Neither the
Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's
officers, to have any materially adverse effect on the business of the
Borrower or any of its Subsidiaries.
5.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the
Borrower nor any of its Subsidiaries is in violation of any provision
of its charter documents, bylaws, or any agreement or instrument to
which it may be subject or by which it or any of its properties may be
bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely
affect the financial condition, properties or business of the Borrower
or any of its Subsidiaries.
5.10. TAX STATUS. The Borrower and its Subsidiaries (a) have
made or filed all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which
any of them is subject, (b) have paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Borrower know of no basis for any such claim.
5.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
5.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Borrower nor any of its Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a
"holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935; nor is it an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment
company", as such terms are defined in the Investment Company Act of
1940.
5.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with
respect to Permitted Liens, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry, or other public
office, that purports to cover, affect or give notice of any present or
possible future lien on, or security interest in, any assets or
property of the Borrower or any of its Subsidiaries or rights
thereunder.
5.14. PERFECTION OF SECURITY INTEREST. All filings,
assignments, pledges and deposits of documents or instruments have been
made and all other actions have been taken that are necessary or
advisable, under applicable law, to establish and perfect the Lender's
security interest in the Collateral. The Collateral and the Lender's
rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower is the owner of
the Collateral free from any Lien, except for Permitted Liens.
5.15. CERTAIN TRANSACTIONS. Except for arm's length
transactions pursuant to which the Borrower or any of its Subsidiaries
makes payments in the ordinary course of business upon terms no less
favorable than the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of the Borrower
or any of its Subsidiaries is presently a party to any transaction with
the Borrower or any of its Subsidiaries (other than for services as
employees, officers and
directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
5.16. EMPLOYEE BENEFIT PLANS.
5.16.1. IN GENERAL. Each Employee Benefit Plan and
each Guaranteed Pension Plan has been maintained and operated
in compliance in all material respects with the provisions of
ERISA and/or all Applicable Pension Legislation and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and
the bonding of fiduciaries and other persons handling plan
funds as required by Section 412 of ERISA. The Borrower has
heretofore delivered to the Lender the most recently completed
annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under Section
103(d) of ERISA, with respect to each Guaranteed Pension Plan.
5.16.2. TERMINABILITY OF WELFARE PLANS. No Employee
Benefit Plan, which is an employee welfare benefit plan within
the meaning of Section 3(1) or Section 3(2)(B) of ERISA,
provides benefit coverage subsequent to termination of
employment, except as required by Title I, Part 6 of ERISA or
the applicable state insurance laws. The Borrower may
terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower without liability
to any Person other than for claims arising prior to
termination.
5.16.3. GUARANTEED PENSION PLANS. Each contribution
required to be made to a Guaranteed Pension Plan, whether
required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of Section
302(f) of ERISA, or otherwise, has been timely made. No waiver
of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any
Guaranteed Pension Plan, and neither the Borrower nor any
ERISA Affiliate is obligated to or has posted security in
connection with an amendment to a Guaranteed Pension Plan
pursuant to Section 307 of ERISA or Section 401(a)(29) of the
Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by
the Borrower or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA
Reportable Event (other than an ERISA Reportable Event as to
which the requirement of 30 days notice has been waived), or
any other event or condition which presents a material risk of
termination of any Guaranteed Pension Plan by the PBGC. Based
on the latest valuation of each Guaranteed Pension Plan (which
in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities
of all such Guaranteed Pension Plans within the meaning of
Section 4001 of ERISA did not exceed the aggregate value of
the assets of all such Guaranteed Pension Plans, disregarding
for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit
liabilities.
5.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor
any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a
result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result
of a sale of assets described in Section 4204 of ERISA.
Neither the Borrower nor any ERISA Affiliate has been notified
that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245
of ERISA or is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to terminate
or has been terminated under Section 4041A of ERISA.
5.17. USE OF PROCEEDS. The proceeds of the Loan shall be used
solely to finance the acquisition by the Borrower of 100% of the issued and
outstanding common stock of Bridgestone and other transactions in connection
therewith (the "BRIDGESTONE ACQUISITION"), all in accordance with the terms of
and pursuant to the Bridgestone Acquisition Documents.
5.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all
necessary steps to investigate the past and present condition and usage
of the Real Estate and the operations conducted thereon and, based upon
such diligent investigation, has determined that:
(a) none of the Borrower, its Subsidiaries or any
operator of the Real Estate or any operations thereon is in
violation, or alleged violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those
arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"),
the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local
statute, regulation, ordinance, order or decree relating to
health, safety or the environment in the United Kingdom,
France, Germany, the European Union or other applicable
jurisdiction (hereinafter "ENVIRONMENTAL LAWS"), which
violation would have a material adverse effect on the
environment or the business, assets or financial condition of
the Borrower or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries
has received notice from any third party including, without
limitation, any federal, state or local governmental
authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a
site listed on the National Priorities List, 40 C.F.R. Part
000 Xxxxxxxx X; (ii) that any hazardous waste, as defined by
42 U.S.C. Section 6903(5), any hazardous substances as defined
by 42 U.S.C. Section 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. Section 9601(33), any waste substance or
other material as defined in the Environmental Protection Act
1990 (United Kingdom), and any toxic substances, oil or
hazardous materials or other chemicals or substances regulated
by any Environmental Laws ("HAZARDOUS SUBSTANCES") which any
one of them has generated, transported or disposed of has been
found at any site at which a federal, state or local agency or
authority in any other applicable jurisdiction, or other third
party has conducted or has ordered that the Borrower or any of
its Subsidiaries conduct a remedial investigation, removal or
other response action pursuant to any Environmental Law; or
(iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out
of any third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release
of Hazardous Substances;
(c) except as set forth on SCHEDULE 5.18 attached
hereto: (i) no portion of the Real Estate has been used for
the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental
Laws; and no underground tank or other underground storage
receptacle for Hazardous Substances is located on any portion
of the Real Estate; (ii) in the course of any activities
conducted by the Borrower, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or
are being used on the Real Estate except in accordance with
applicable Environmental Laws; (iii) there have been no
releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened
releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases
would have a material adverse effect on the value of any of
the Real Estate or adjacent properties or the environment;
(iv) to the best of the Borrower's knowledge, there have
been no releases on, upon, from or into any real property in
the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of,
the Real Estate; and (v) in addition, any Hazardous Substances
that have been generated on any of the Real Estate have been
transported offsite only by carriers having an identification
number issued by the EPA (or by a similar agency in other
jurisdictions, as applicable), treated or disposed of only by
treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of
the Borrower's knowledge, operating in compliance with such
permits and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any
of the other Real Estate is subject to any applicable
environmental law requiring the performance of Hazardous
Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement
by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the recording of any
Mortgage or to the effectiveness of any other transactions
contemplated hereby.
5.19. SUBSIDIARIES, ETC. SCHEDULE 5.19 sets forth all the
Subsidiaries of the Borrower, their respective jurisdictions of
organization and principal places of business. Except as set forth on
SCHEDULE 5.19, neither the Borrower nor any Subsidiary of the Borrower
is engaged in any joint venture or partnership with any other Person.
5.20. YEAR 2000 PROBLEM. The Borrower and its Subsidiaries
have (a) reviewed the areas within their businesses and operations
which could be adversely affected by failure to become "YEAR 2000
COMPLIANT" (i.e. that computer applications, imbedded microchips and
other systems used by the Borrower or any of its Subsidiaries, will be
able properly to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December
31, 1999), (b) developed a detailed plan and timetable to become Year
2000 Compliant in a timely manner, and (c) committed adequate resources
to support the Year 2000 plan of the Borrower and its Subsidiaries.
Based upon such review, the Borrower reasonably believes that the
Borrower and its Subsidiaries will become "Year 2000 Compliant" in a
timely manner except to the extent that failure to do so will not have
any materially adverse effect on the business or financial condition of
the Borrower or any of its Subsidiaries.
5.21. DISCLOSURE. None of this Loan Agreement or any of the
other Loan Documents contains any untrue statement of a material fact
or omits to state a material fact (known to the Borrower or any of its
Subsidiaries in the case of any document or information not furnished
by it or any of its Subsidiaries) necessary in order to make the
statements herein or therein not misleading. There is no fact known to
the Borrower or any of its Subsidiaries which materially adversely
affects, or which is reasonably likely in the future to materially
adversely affect, the business, assets, financial condition or
prospects of the Borrower or any of its Subsidiaries, exclusive of
effects resulting from changes in general economic conditions, legal
standards or regulatory conditions.
5.22. NO WITHHOLDING. Neither the Borrower nor any of its
Subsidiaries is required by the laws of any jurisdiction to make any
deduction or withholding of any nature whatsoever from any payment to
be made by the Borrower or its Subsidiaries hereunder or under any Loan
Document unless disclosed to the Lender in writing prior to the Closing
Date (which may be in the form of legal opinions) and unless the amount
and likelihood such deductions or withholdings are not, in the Lender's
reasonable discretion, material. Neither this Loan Agreement nor any of
the other Loan Documents is subject to any registration or stamp tax or
any other similar or like taxes payable in any jurisdiction.
5.23. CHIEF EXECUTIVE OFFICE. The location of the Borrower's
and each of its Subsidiaries chief executive office or registered
office, as applicable, is set forth in SCHEDULE 5.23.
5.24. INSURANCE. The Borrower and each of its Subsidiaries
maintain with financially sound and reputable insurers insurance with
respect to its properties and businesses against such casualties and
contingencies as are in accordance with sound business practices and
with the details of such coverage being more fully described on
SCHEDULE 5.24 hereto.
5.25. DELIVERY OF CERTAIN DOCUMENTS. The Borrower has
delivered to the Lender true and complete copies of all of the
Bridgestone Acquisition Documents (including all amendments thereto).
Each of the representations and warranties made by the Borrower and any
of its Subsidiaries in any of the Bridgestone Acquisition Documents was
true and correct in all material respects when made and continues to be
true and correct in all material respects on the Closing Date, except
to the extent that any of such representations and warranties relate,
by the express terms thereof, solely to a date falling prior to the
Closing Date.
6. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as the Loan or Note is
outstanding:
6.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loan and the
fees provided for in this Loan Agreement, all in accordance with the
terms of this Loan Agreement and the Note.
6.2. MAINTENANCE OF OFFICE.
(a) The Borrower and each of its Subsidiaries
incorporated or organized in the United States of America will
maintain its chief executive office at the location set forth
in SCHEDULE 5.23, or at such other place in the United States
of America as such Person shall designate upon written notice
to the Lender where notices, presentations and demands to or
upon such Person in respect of the Loan Agreement and the
other Loan Documents to which such Person is a party may be
given or made.
(b) Each Subsidiary of the Borrower incorporated or
organized in a jurisdiction other than the United States of
America will maintain its registered office at the location
set forth in SCHEDULE 5.23, or at such other place in such
jurisdiction of incorporation or organization as such Person
shall designate upon written notice to the Lender where
notices, presentations and demands to or upon such Person in
respect of the Loan Agreement and the other Loan Documents to
which such Person is a party may be given or made.
6.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and
books of account in which full, true and correct entries will be made
in accordance with generally accepted accounting principles (or
equivalent thereof in any jurisdiction other than the United States of
America), and (b) maintain, and cause each of its Subsidiaries to
maintain, adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization
of its properties and the properties of its Subsidiaries,
contingencies, and other reserves.
6.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to the Lender contemporaneously with the filing or mailing
thereof, copies of all material of a financial nature filed with the Securities
and Exchange Commission (or equivalent thereof in any other jurisdiction) or
sent to the stockholders of the Borrower and from time to time such other
financial data and information as the Lender may reasonably request.
6.5. NOTICES.
6.5.1. DEFAULTS. The Borrower will promptly notify
the Lender in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take
any other action in respect of a claimed default (whether or
not constituting an Event of Default) under this Loan
Agreement or any other note, evidence of indebtedness,
indenture or other obligation to which or with respect to
which the Borrower or any of its Subsidiaries is a party or
obligor, whether as principal or surety, the Borrower shall
forthwith give written notice thereof to the Lender,
describing the notice or action and the nature of the claimed
default.
6.5.2. ENVIRONMENTAL EVENTS. The Borrower will
promptly give notice to the Lender (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries
reports in writing or is reportable by such Person in writing
(or for which any written report supplemental to any oral
report is made) to any federal, state or local environmental
agency or any similar environmental agency or board in any
other jurisdiction and (b) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including
a notice from any agency of potential environmental liability,
of any federal, state or local environmental agency or board,
that has the potential to materially affect the assets,
liabilities, financial conditions or operations of the
Borrower or any of its Subsidiaries, or the Lender's security
interests pursuant to the Security Documents.
6.5.3. NOTIFICATION OF CLAIMS AGAINST COLLATERAL. The
Borrower will, immediately upon becoming aware thereof, notify
the Lender in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims),
withholdings or other defenses to which any of the Collateral,
or the Lender's rights with respect to the Collateral, are
subject.
6.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The
Borrower will, and will cause each of its Subsidiaries to,
give notice to the Lender in writing within fifteen (15) days
of becoming aware of any litigation or proceedings threatened
in writing or any pending litigation and proceedings affecting
the Borrower or any of its Subsidiaries or to which the
Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of
its Subsidiaries that could reasonably be expected to have a
materially adverse effect on the Borrower or any of its
Subsidiaries and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause
each of its Subsidiaries to, give notice to the Lender, in
writing, in form and detail satisfactory to the Lender, within
ten (10) days of any judgment not covered by insurance, final
or otherwise, against the Borrower or any of its Subsidiaries
in an amount in excess of $100,000.
6.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The
Borrower will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights and
franchises and those of its Subsidiaries and will not, and will not
cause or permit any of its Subsidiaries to, convert to a limited
liability company (or the equivalent thereof in any foreign
jurisdiction). It (a) will cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary
equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted
at all times, and (c) will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by them
and in related businesses; PROVIDED that nothing in this Section 6.6
shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or those of its Subsidiaries if
such discontinuance is, in the judgment of the Borrower, desirable in
the conduct of its or their business and that do not in the aggregate
materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.
6.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements.
6.8. TAXES. The Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor,
materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower or such Subsidiary shall
have set aside on its books adequate reserves with respect thereto; and
PROVIDED FURTHER that the Borrower and each Subsidiary of the Borrower
will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor.
6.9. INSPECTION OF PROPERTIES AND BOOKS, ETC. The Borrower
shall permit the Lender to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries, to examine the books of account of the
Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of the Borrower
and its Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Lender may
reasonably request.
6.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.
The Borrower will, and will cause each of its Subsidiaries to, be in
material compliance with (a) the applicable laws and regulations
wherever its business is conducted, including all Environmental Laws,
(b) the provisions of its charter documents and by-laws and all other
organizational and constitutive documents, (c) all agreements and
instruments by which it or any of its properties may be bound and (d)
all applicable decrees, orders, and judgments. If at any time while the
Loan or Note is outstanding, any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the
Borrower may fulfill any of its obligations hereunder, the Borrower
will immediately take or cause to be taken all reasonable steps within
the power of the Borrower to obtain such authorization, consent,
approval, permit or license and furnish the Lender with evidence
thereof.
6.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly
upon filing the same with the Department of Labor or Internal Revenue
Service, furnish to the Lender a copy of the most recent actuarial
statement required to be submitted under Section 103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of
each Guaranteed Pension Plan, (b) promptly upon receipt or dispatch,
furnish to the Lender any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under Sections 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under Sections 4041A, 4202, 4219, 4242, or 4245 of
ERISA, and (c) furnish to the Lender (at such time as such reports are
prepared in order to comply with Applicable Pension Legislation) copies
of all actuaries reports in relation to the Employee Benefit Plans
operated by them from time to time.
6.12. USE OF PROCEEDS. The Borrower will use the proceeds of
the Loan solely to finance the Bridgestone Acquisition.
6.13. FURTHER ASSURANCES. The Borrower will, and will cause
each of its Subsidiaries to, cooperate with the Lender and execute such
further instruments and documents as the Lender shall
reasonably request to carry out to its satisfaction the transactions
contemplated by this Loan Agreement, the other Loan Documents, the
Bridgestone Acquisition Documents and the Merger Documents.
6.14. ADDITIONAL GUARANTORS. The Borrower will cause each
Domestic Subsidiary created, acquired or existing on or after the
Closing Date (including Bridgestone) to become a Guarantor immediately
and shall cause such Subsidiary to execute and deliver to the Lender
(a) a Guaranty (or in the case of Bridgestone, the Bridgestone
Guaranty) in form and substance satisfactory to the Lender, and (b)
further Security Documents or other instruments and documents as the
Lender may reasonably require in order to grant to the Lender a first
priority perfected security interest in such Subsidiary's assets,
together with legal opinions in form and substance reasonably
satisfactory to the Lender to be delivered to the Lender opining as to
the authorization, validity and enforceability of such Guaranty and
Security Documents and (as to the applicable Security Documents) the
perfection of such security interests.
6.15. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the
Borrower or any of its Subsidiaries creates or acquires, either
directly or indirectly, any Subsidiary, it will immediately notify the
Lender of such creation or acquisition, as the case may be, and provide
the Lender with an updated SCHEDULE 5.19 hereof and take all other
actions required by Section 6.14 hereof.
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as the Loan or Note is
outstanding:
7.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(a) Indebtedness to the Lender arising under any of
the Loan Documents;
(b) endorsements for collection, deposit or
negotiation and warranties of products or services, in each
case incurred in the ordinary course of business;
(c) Indebtedness incurred in connection with the
acquisition after the date hereof of any real or personal
property by the Borrower or any Subsidiary of the Borrower or
under any Capitalized Lease, PROVIDED that the aggregate
principal amount of such Indebtedness of the Borrower and its
Subsidiaries shall not exceed the aggregate amount of
$1,000,000 at any one time;
(d) Indebtedness existing on the date of this Loan
Agreement (including all commitments to make loans or credit
extensions available to the Borrower by any Person but which
remain undrawn by the Borrower on the date hereof) and any
refinancings thereof (so long as the aggregate amount of such
Indebtedness is not increased) and listed and described on
SCHEDULE 7.1 hereto;
(e) Existing Indebtedness of Bridgestone assumed by
the Borrower in connection with the Bridgestone Acquisition
pursuant to the Bridgestone Acquisition Documents;
(f) Indebtedness of a Subsidiary of the Borrower to
the Borrower; and
(g) deposits or pledges made in connection with, or
to secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security
obligations.
7.2. RESTRICTIONS ON LIENS. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) create or incur or suffer to
be created or incurred or to exist any Lien upon any of its property or
assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (b) transfer any of such property
or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of
any other obligation in priority to payment of its general creditors;
(c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money
security agreement, device or arrangement; (d) suffer to exist for a
period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given
any priority whatsoever over its general creditors; or (e) sell,
assign, pledge or otherwise transfer any "receivables" as defined in
clause (vii) of the definition of the term "Indebtedness," with or
without recourse; PROVIDED that the Borrower or any of its Subsidiaries
may create or incur or suffer to be created or incurred or to exist:
(i) Liens in favor of the Borrower on all or part of
the assets of Subsidiaries of the Borrower securing
Indebtedness owing by Subsidiaries of the Borrower to the
Borrower;
(ii) Liens to secure taxes, assessments and other
government charges in respect of obligations not overdue or
Liens on properties to secure claims for labor, material or
supplies in respect of obligations not overdue;
(iii) deposits or pledges made in connection with, or
to secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security
obligations;
(iv) Liens on properties in respect of judgments or
awards that have been in force for less than the applicable
period for taking an appeal so long as execution is not levied
thereunder or in respect of which the Borrower or such
Subsidiary shall at the time in good faith be prosecuting an
appeal or proceedings for review and in respect of which a
stay of execution shall have been obtained pending such appeal
or review;
(v) Liens of carriers, warehousemen, mechanics and
materialmen, and other like Liens on properties, in existence
less than 120 days from the date of creation thereof in
respect of obligations not overdue;
(vi) encumbrances consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's Liens under leases to which the
Borrower or a Subsidiary of the Borrower is a party, and other
minor Liens or encumbrances none of which in the opinion of
the Borrower interferes materially with the use of the
property affected in the ordinary conduct of the business of
the Borrower and its Subsidiaries, which defects do not
individually or in the aggregate have a materially adverse
effect on the business of the Borrower individually or of the
Borrower and its Subsidiaries on a consolidated basis;
(vii) presently outstanding Liens listed on SCHEDULE
7.2 hereto;
(viii) purchase money security interests in or
purchase money mortgages on real or personal property acquired
after the date hereof to secure purchase money Indebtedness of
the type and amount permitted by Section 7.1(c), incurred in
connection with the acquisition of such property, which
security interests or mortgages cover only the real or
personal property so acquired;
(ix) Liens in favor of the Lender under the Loan
Documents; and
(x) Liens to secure the Indebtedness permitted by
Section 7.1(e).
7.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and
will not permit any of its Subsidiaries to, make or permit to exist or
to remain outstanding any Investment except Investments in:
(a) Bridgestone in connection with the Bridgestone
Acquisition;
(b) marketable direct or guaranteed obligations of
the United States of America that mature within one (1) year
from the date of purchase by the Borrower;
(c) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having
total assets in excess of $1,000,000,000 or banks of any other
jurisdiction which are members of the OECD;
(d) securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws
of the United States of America or any state thereof that at
the time of purchase have been rated and the ratings for which
are not less than "P 1" if rated by Xxxxx'x Investors Service,
Inc., and not less than "A 1" if rated by Standard and Poor's
Rating Group;
(e) Investments existing on the date hereof and
listed on SCHEDULE 7.3 hereto;
(f) Investments with respect to Indebtedness
permitted by Section 7.1(e);
(g) Investments consisting of the Guaranty or
Investments by the Borrower in Subsidiaries of the Borrower
existing on the Closing Date;
(h) Investments in OpSec France not to exceed
$150,000 in the aggregate;
(i) Investments consisting of promissory notes
received as proceeds of asset dispositions permitted by
Section 7.5.2; and
(j) Investments consisting of loans and advances to
employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to exceed
$50,000 in the aggregate at any time outstanding;
PROVIDED, HOWEVER, that, such Investments will be considered
Investments permitted by this Section 7.3 only if all actions have been
taken to the satisfaction of the Lender a first priority perfected
security interest in all of such Investments free of all encumbrances
other than Permitted Liens.
7.4. DISTRIBUTIONS. Except as set forth on SCHEDULE 7.4, the
Borrower will not make any Distributions.
7.5. MERGER, CONSOLIDATION.
7.5.1. MERGERS AND ACQUISITIONS. The Borrower will
not, and will not permit any of its Subsidiaries to, become a
party to any merger or consolidation, or agree to or effect
any asset acquisition or stock acquisition (other than the
acquisition of assets in the ordinary course of business
consistent with past practices) except the merger or
consolidation of one or more of its Subsidiaries of the
Borrower with and into the Borrower, or the Bridgestone
Acquisition, or the Merger, or the merger or consolidation of
two or more Subsidiaries of the Borrower so long as such
merger does not have an adverse effect on the Liens held by
the Lender as security for the Obligations.
7.5.2. DISPOSITION OF ASSETS. The Borrower will not,
and will not permit any of its Subsidiaries to, become a party
to or agree to or effect any disposition of assets, other than
the sale of inventory, the licensing of intellectual property
and the disposition of obsolete assets, in each case in the
ordinary course of business consistent with past practices.
7.6. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby the Borrower or any Subsidiary of the Borrower
shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the
Borrower or any Subsidiary of the Borrower intends to use for
substantially the same purpose as the property being sold or
transferred.
7.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will
not, and will not permit any of its Subsidiaries to, (a) use any of the
Real Estate or any portion thereof for the handling, processing,
storage or disposal of Hazardous Substances, (b) cause or permit to be
located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate
any Hazardous Substances on any of the Real Estate, (d) conduct any
activity at any Real Estate or use any Real Estate in any manner so as
to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous
Substances on, upon or into the Real Estate or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner
that would violate any Environmental Law or bring such Real Estate in
violation of any Environmental Law.
7.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any
ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code
which could result in a material liability for the Borrower or
any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in
302 of ERISA, whether or not such deficiency is or may be
waived; or
(c) fail to contribute to any Guaranteed Pension Plan
to an extent which, or terminate any Guaranteed Pension Plan
in a manner which, could result in the imposition of a Lien or
encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to Section 302(f) or Section 4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in
circumstances requiring the posting of security pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code;
(e) permit or take any action which would result in
the aggregate benefit liabilities (with the meaning of Section
4001 of ERISA) of all Guaranteed Pension Plans exceeding the
value of the aggregate assets of such Plans, disregarding for
this purpose the benefit liabilities and assets of any such
Plan with assets in excess of benefit liabilities; or
(f) take any action referred to in paragraphs (a)
through (e) above that would violate any provisions of
Applicable Pension Legislation.
7.9. CHANGES TO BRIDGESTONE ACQUISITION DOCUMENTS. The
Borrower will not, and will not permit its Subsidiaries to, (a) amend
the economic terms of the Bridgestone Acquisition Documents or (b)
amend, supplement or waive any of the other terms or conditions set
forth in the Bridgestone Acquisition Documents, without the prior
written consent of the Lender.
7.10. ASSIGNMENT BY BORROWER. The Borrower shall not, and will
not permit its Subsidiaries to, assign or transfer any of its rights or
obligations under any of the Loan Documents, the Bridgestone
Acquisition Documents or the Merger Documents without the prior written
consent of the Lender.
7.11. MODIFICATION OF CHARTER. The Borrower will not, nor
permit any of its Subsidiaries to amend or permit to be amended its
certificate of incorporation or bylaws, memorandum and articles of
association, or similar organizational documents without the prior
written consent of the Lender unless such amendment, supplement or
modification would not have any material adverse effect on the Lender's
rights under the Loan Documents or the Borrower's or any of its
Subsidiaries' obligations under the Loan Documents or any of such
Persons' abilities to perform such obligations.
7.12. UPSTREAM LIMITATIONS. The Borrower will not enter into,
nor permit any of its Subsidiaries to enter into, any agreement,
contract or arrangement (other than the Loan Agreement and the other
Loan Documents) restricting the ability of any Subsidiary to pay or
make dividends or distributions in cash or kind, to make loans,
advances or other payments of whatsoever nature or to make transfers or
distributions of all or any part of its assets to the Borrower or any
Subsidiary.
7.13. INCONSISTENT AGREEMENTS. The Borrower will not, nor will
it permit its Subsidiaries to, enter into any agreement containing any
provision which would be violated or breached by the performance by the
Borrower or such Subsidiary of its obligations hereunder or under any
of the Loan Documents.
7.14. NEGATIVE PLEDGES. Except as set forth on SCHEDULE 7.14,
the Borrower will not, nor will it permit its Subsidiaries to, enter
into or permit to exist any arrangement or agreement, enforceable under
applicable law, which directly or indirectly prohibits the Borrower or
its Subsidiaries from creating or incurring any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest in
favor of the Lender under the Loan Documents other than customary
anti-assignment provisions in leases and licensing agreements entered
into by such Person in the ordinary course of its business.
8. CLOSING CONDITIONS.
The obligation of the Lender to make the Loan shall be subject to the
satisfaction of the following conditions precedent:
8.1. LOAN DOCUMENTS; MERGER DOCUMENTS; BRIDGESTONE ACQUISITION
DOCUMENTS. Each of the Loan Documents, the Merger Agreement and the Bridgestone
Acquisition Documents shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and shall be in
form and substance satisfactory to the Lender. The Lender shall have received a
fully executed copy of each Loan Document and Bridgestone Acquisition Document.
8.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Lender shall
have received from the Borrower and each of its Subsidiaries, a copy,
certified by a duly authorized officer of such Person to be true and
complete on the Closing Date, of each of (a) its charter or other
incorporation documents as in effect on such date of certification, and
(b) its by-laws (or other similar document) as in effect on such date.
8.3. CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by the Borrower and each of
its Subsidiaries of this Loan Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Lender
shall have been provided to the Lender.
8.4. INCUMBENCY CERTIFICATE. The Lender shall have received
from the Borrower and each of the Domestic Subsidiaries an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Borrower or such Domestic Subsidiary, and giving the
name and bearing a
specimen signature of each individual who shall be authorized: (a) to
sign, in the name and on behalf of each of the Borrower or such
Domestic Subsidiary, each of the Loan Documents to which the Borrower
or such Domestic Subsidiary is or is to become a party; (b) in the case
of the Borrower to make the Loan Request; and (c) to give notices and
to take other action on its behalf under the Loan Documents.
8.5. VALIDITY OF LIENS. The Security Documents shall be
effective to create in favor of the Lender a legal, valid and
enforceable security interest in the Collateral (subject only to
Permitted Liens entitled to priority under applicable law). All
filings, recordings, deliveries of instruments and other actions
necessary or desirable in the opinion of the Lender to protect and
preserve such security interests shall have been duly effected. The
Lender shall have received evidence thereof in form and substance
satisfactory to the Lender.
8.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The
Lender shall have received from each of the Borrower and its
Subsidiaries a completed and fully executed Perfection Certificate and
the results of UCC searches and all other applicable Lien searches,
indicating no Liens other than Permitted Liens and otherwise in form
and substance satisfactory to the Lender.
8.7. SENIOR LENDER CONSENTS. The Borrower and its Subsidiaries
shall have delivered to the Lender evidence satisfactory to the Lender
that all necessary or otherwise advisable consents by the Senior Lender
permitting the Borrower and its Subsidiaries to enter into and fully
perform their obligations under this Loan Agreement and the other Loan
Documents have been obtained by the Borrower and its Subsidiaries.
8.8. CERTIFICATES OF INSURANCE. The Lender shall have received
(a) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the Security
Agreements and (b) certified copies of all policies evidencing such
insurance (or certificates therefore signed by the insurer or an agent
authorized to bind the insurer).
8.9. OPINION OF COUNSEL. The Lender shall have received a
favorable opinion addressed to the Lender, dated as of the Closing Date, in form
and substance satisfactory to the Lender, from Xxxx, Shaiman & Xxxxxx, P.C.,
counsel to the Borrower and its Subsidiaries.
9. CONDITIONS TO BORROWING.
The obligation of the Lender to make the Loan, whether on or after the
Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
9.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its
Subsidiaries contained in this Loan Agreement, the other Loan Documents
or in any document or instrument delivered pursuant to or in connection
with this Loan Agreement shall be true as of the date as of which they
were made and shall also be true at and as of the time of the making of
the Loan, with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions
contemplated or permitted by this Loan Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an
earlier date) and no Default or Event of Default shall have occurred
and be continuing.
9.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the
reasonable opinion of the Lender would make it illegal for the Lender
to make the Loan.
9.3. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Loan Agreement, the other
Loan Documents, the Bridgestone Acquisition Documents and all other
documents incident thereto shall be satisfactory in substance and in
form to the Lender and the Lender shall have received all information
and such counterpart originals or certified or other copies of such
documents as the Lender may reasonably request.
9.4. BRIDGESTONE ACQUISITION. The Lender shall have received
evidence satisfactory to the Lender, including a legal opinion from
Borrower's counsel, that all of the closing conditions (other than full
payment of the purchase price for which the funds provided by the
Lender to the Borrower under this Loan Agreement are to be used) to the
purchase of 100% of Voting Stock of Bridgestone pursuant to the
Bridgestone Acquisition Documents shall have been satisfied and none of
the conditions shall have been amended, supplemented or waived except
in accordance with Section 7.9 hereof.
10. EVENTS OF DEFAULT; ACCELERATION; ETC.
10.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the
following events ("EVENTS OF DEFAULT" or, if the giving of notice or
the lapse of time or both is required, then, prior to such notice or
lapse of time, "DEFAULTS") shall occur:
(a) the Borrower shall fail to pay any principal of
the Loan when the same shall become due and payable, whether
at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on
the Loan, the Closing Fee, or other sums due hereunder or
under any of the other Loan Documents, when the same shall
become due and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other date fixed
for payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in Sections 6 or 7;
(d) the Borrower or any of its Subsidiaries shall
fail to perform any term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those
specified elsewhere in this Section 10.1) for fifteen (15)
days after written notice of such failure has been given to
the Borrower by the Lender;
(e) any representation or warranty of the Borrower or
any of its Subsidiaries in this Loan Agreement or any of the
other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Loan
Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or
repeated;
(f) the Borrower or any of its Subsidiaries shall
fail to pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit received or
in respect of any Capitalized Leases, or fail to observe or
perform any material term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing
borrowed money or credit received or in respect of any
Capitalized Leases for such period of time as would permit
(assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof, or any such
holder or holders shall rescind or shall have a right to
rescind the purchase of any such obligations;
(g) the Borrower or any of its Subsidiaries shall
make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply
for the appointment of a trustee or other
custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or of any substantial part of the assets of
the Borrower or any of its Subsidiaries or shall commence any
case or other proceeding relating to the Borrower or any of
its Subsidiaries under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or
hereafter in effect, or any Insolvency Event shall occur, or
shall take any action to authorize or in furtherance of any of
the foregoing, or if any such petition or application shall be
filed or any such case or other proceeding shall be commenced
against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein or
such petition or application shall not have been dismissed
within fourteen (14) days following the filing thereof;
(h) the Borrower or any of its Subsidiaries organized
in Germany shall become obligated to file for bankruptcy
proceedings pursuant to Section 64 of the GmbH Act;
(i) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the
Borrower or any of its Subsidiaries bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or
a decree or order for relief is entered in respect of the
Borrower or any Subsidiary of the Borrower in an involuntary
case under federal bankruptcy laws as now or hereafter
constituted;
(j) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than fourteen (14) days,
whether or not consecutive, any final judgment against the
Borrower or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate
$200,000;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Lender's security
interests or liens in a substantial portion of the Collateral
shall cease to be perfected, or shall cease to have the
priority contemplated by the Security Documents, in each case
otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of
the Lender, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of the Borrower
or any of its Subsidiaries party thereto or any of their
respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one
or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any
liability to the PBGC or a Guaranteed Pension Plan pursuant to
Title IV of ERISA in an aggregate amount exceeding $50,000, or
the Borrower or any ERISA Affiliate is assessed withdrawal
liability pursuant to Title IV of ERISA by a Multiemployer
Plan requiring aggregate annual payments exceeding $50,000, or
any of the following occurs with respect to a Guaranteed
Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the
meaning of Section 302(f)(1) of ERISA), PROVIDED that the
Lender determines in its reasonable discretion that such event
(A) could be expected to result in liability of the Borrower
or any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $50,000 and (B)
could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by
the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan or for the imposition
of a lien in favor of such Guaranteed Pension Plan; or (ii)
the appointment by a United States District Court of a trustee
to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;
(m) the Borrower or any of its Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of
any court or any administrative or regulatory agency from
conducting any material part of its business and such order
shall continue in effect for more than fourteen (14) days;
(n) there shall occur any material damage to, or
loss, theft or destruction of, any Collateral, whether or not
insured, or any strike, lockout, labor dispute, embargo,
condemnation, act of God or public enemy, or other casualty,
which in any such case causes the cessation or substantial
curtailment of revenue producing activities at any facility of
the Borrower or any of its Subsidiaries if such event or
circumstance is not covered by business interruption insurance
and would have in the opinion of the Lender a material adverse
effect on the business or financial condition of the Borrower
or such Subsidiary;
(o) there shall occur the loss, suspension or
revocation of, or failure to renew, any license or permit now
held or hereafter acquired by the Borrower or any of its
Subsidiaries if such loss, suspension, revocation or failure
to renew would have in the opinion of the Lender a material
adverse effect on the business or financial condition of the
Borrower or such Subsidiary; and
(p) the Borrower or any of its Subsidiaries shall
fail to observe or perform, in any material respect, any
covenant, agreement or obligation contained in any of the
Merger Documents or the Bridgestone Acquisition Documents;
then, and in any such event, so long as the same may be continuing, the
Lender may by notice in writing to the Borrower declare all amounts
owing with respect to this Loan Agreement, the Note and the other Loan
Documents to be, and they shall thereupon forthwith become, immediately
due and payable without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived by the Borrower;
PROVIDED that in the event of any Event of Default specified in
Sections 10.1(g), 10.1(h), 10.1(i), all such amounts shall become
immediately due and payable automatically and without any requirement
of notice from the Lender.
10.2. REMEDIES. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the
Lender shall have accelerated the maturity of the Loan pursuant to
Section 10.1, the Lender, if owed any amount with respect to the Loan,
may proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Loan
Agreement and the other Loan Documents or any instrument pursuant to
which the Obligations to the Lender are evidenced, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of the
Lender. No remedy herein conferred upon the Lender or the holder of the
Note is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity
or by statute or any other provision of law.
10.3. DISTRIBUTION OF COLLATERAL PROCEEDS. If following the
occurrence or during the continuance of any Default or Event of
Default, the Lender receives any monies in connection with the
enforcement of any the Security Documents, or otherwise with respect to
the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be)
the reimbursement of the Lender for or in respect of all
reasonable costs, expenses, disbursements and losses which
shall have been incurred or sustained by the Lender in
connection with the collection of such monies by the Lender,
for the exercise, protection or enforcement by the Lender of
all or any of the rights, remedies, powers and privileges of
the Lender under this Loan Agreement or any of the
other Loan Documents or in respect of the Collateral or in
support of any provision of adequate indemnity to the Lender
against any taxes or liens which by law shall have, or may
have, priority over the rights of the Lender to such monies;
(b) Second, to all other Obligations in such order or
preference as the Lender may determine;
(c) Third, the excess, if any, shall be returned to
the Borrower or to such other Persons as are entitled thereto.
11. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from the
Lender to the Borrower and any securities or other property of the Borrower in
the possession of the Lender may be applied to or set off by the Lender against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to the Lender.
12. EXPENSES AND INDEMNIFICATION.
12.1. EXPENSES. The Borrower agrees to pay (a) any taxes
(including any interest and penalties in respect thereto) payable by
the Lender (other than taxes based upon the Lender's net income) on or
with respect to the transactions contemplated by this Loan Agreement
(the Borrower hereby agreeing to indemnify the Lender with respect
thereto), (b) the fees, expenses and disbursements of the Lender or any
of its affiliates incurred by the Lender or such affiliate in
connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned
herein, including all title insurance premiums and surveyor,
engineering and appraisal charges, (c) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and
costs, which attorneys may be employees of the Lender, and reasonable
consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by the Lender in connection
with (i) the enforcement of or preservation of rights under any of the
Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of
Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Lender's relationship
with the Borrower or any of its Subsidiaries and (d) all reasonable
fees, expenses and disbursements of he Lender incurred in connection
with UCC searches, UCC filings or mortgage recordings.
12.2. INDEMNIFICATION. The Borrower agrees to indemnify and
hold harmless the Lender and its affiliates from and against any and
all claims, actions and suits whether groundless or otherwise, and from
and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Loan Agreement or any of
the other Loan Documents or the transactions contemplated hereby
including, without limitation, (a) any actual or proposed use by the
Borrower or any of its Subsidiaries of the proceeds of any of the Loan,
(b) the Borrower or any of its Subsidiaries entering into or performing
this Loan Agreement or any of the other Loan Documents or (c) with
respect to the Borrower and its Subsidiaries and their respective
properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or
any action, suit, proceeding or investigation brought or threatened
with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable
fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation
or other proceeding. In litigation, or the preparation therefor, the
Lender and its affiliates shall be entitled to select their own counsel
and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable
fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 12.2 are unenforceable
for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which
is permissible under applicable law.
12.3. SURVIVAL. The covenants contained in this Section 12
shall survive payment or satisfaction in full of all other Obligations.
12.4. CONSEQUENTIAL DAMAGES. Notwithstanding any provision to
the contrary contained herein, in no event shall the Borrower be liable
to the Lender or any third party for any consequential damages;
PROVIDED, that the foregoing shall not impair the payment and
satisfaction in full of the Obligations hereunder.
13. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
13.1. CONFIDENTIALITY. The Lender agrees, on behalf of itself
and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential
information of the same nature and in accordance with safe and sound
banking practices, any non-public information supplied to it by the
Borrower or any of its Subsidiaries pursuant to this Loan Agreement
that is identified by such Person as being confidential at the time the
same is delivered to the Lender, PROVIDED that nothing herein shall
limit the disclosure of any such information (a) after such information
shall have become public other than through a violation of this Section
13, (b) to the extent required by statute, rule, regulation or judicial
process, (c) to counsel for any of the Lender, (d) to any regulatory
authority having jurisdiction over the Lender, or to auditors or
accountants, (e) in connection with any litigation to which the Lender
is a party, or in connection with the enforcement of rights or remedies
hereunder or under any other Loan Document, or (f) to a Subsidiary or
affiliate of the Lender.
13.2. PRIOR NOTIFICATION. Unless specifically prohibited by
applicable law or court order, the Lender shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative
thereof or pursuant to legal process.
13.3. OTHER. In no event shall the Lender be obligated or
required to return any materials furnished to it by the Borrower or any
of its Subsidiaries. The obligations of the Lender under this Section
13 shall supersede and replace the obligations of the Lender under any
confidentiality letter in respect of this financing signed and
delivered by the Lender to the Borrower prior to the date hereof.
14. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Note, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Lender,
notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by the Lender of the Loan, as herein contemplated,
and shall continue in full force and effect so long as any amount due under this
Loan Agreement or the Note or any of the other Loan Documents remains
outstanding or the Lender has any obligation to make the Loan, and for such
further time as may be otherwise expressly specified in this Loan Agreement. All
statements contained in any certificate or other paper delivered to the Lender
at any time by or on behalf of the Borrower or any of its Subsidiaries pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary
hereunder.
15. NOTICES, ETC.
Except as otherwise expressly provided in this Loan Agreement, all
notices and other communications made or required to be given pursuant to this
Loan Agreement or the Note shall be in writing and shall be delivered in hand,
mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, facsimile or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at 000 00xx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000, XXX, Attention: Xxxxxxx X. Xxxx and Xxxx X. Xxxxxxx, or
at such other address for notice as the Borrower shall last have
furnished in writing to the Person giving the notice; and
(b) if to the Lender, at the Lender's Head Office Attention:
Xxxxxxx Xxxxx, Finance Director, or such other address for notice as
the Lender shall last have furnished in writing to the Person giving
the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, at
the time of the receipt thereof.
16. GOVERNING LAW.
THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF
THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT
FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY CERTIFIED OR REGULAR MAIL AT THE ADDRESS SPECIFIED IN SECTION 15.
THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT.
17. HEADINGS.
The captions in this Loan Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
18. COUNTERPARTS.
This Loan Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Loan Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
19. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Loan Agreement nor
any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 21.
20. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Loan
Agreement, the Note or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of such rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of the Lender has
represented, expressly or otherwise, that the Lender would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that the
Lender has been induced to enter into this Loan Agreement, the other Loan
Documents to which it is a party by, among other things, the waivers and
certifications contained herein.
21. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Loan Agreement, any
consent or approval required or permitted by this Loan Agreement to be given by
the Lender may be given, and any term of this Loan Agreement or of any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Loan Agreement or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon. No course of dealing or delay or omission on the
part of the Lender in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Borrower shall
entitle the Borrower to other or further notice or demand in similar or other
circumstances.
22. SEVERABILITY.
The provisions of this Loan Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Loan Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Loan
Agreement as a sealed instrument as of the date first set forth above.
APPLIED HOLOGRAPHICS PLC
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Finance Director
OPTICAL SECURITY GROUP, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
