LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made this 8th day of August, 1989,
by and between XXXX CARGO SYSTEMS, INC., a Delaware corporation ("BORROWER"),
and BANK LEUMI LE-ISRAEL B.M. ("BANK").
BACKGROUND
A. BORROWER is engaged in the storage, shipping and common carriage of
goods. BORROWER has requested that BANK extend certain credit facilities to
BORROWER and BANK has agreed to extend a line of credit, a term loan, and a time
loan aggregating $3,500,000 in original principal amount, subject to the terms
and conditions hereinafter more particularly set forth.
B. The purposes of the Loan hereunder are to acquire and/or refinance
certain material handling equipment and to provide working capital.
C. To induce BANK to extend the aforementioned credit facilities, and
to secure the repayment thereof, BORROWER has agreed: (i) to grant to BANK a
first lien and security interest in and to all of BORROWER'S Financed Equipment;
(ii) to cross-collateralize such lien with each credit facility hereunder;
(iii) to cause its affiliates to guaranty the Indebtedness hereunder; and (iv)
to cause its principal stockholder, Xxxxxx X. Xxxx, to guaranty the line of
credit and the time loan.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
DEFINITIONS, CERTAIN RULES OF CONSTRUCTION
1.1 Defined Terms. Each of the terms listed below shall have the
meaning herein ascribed to it for the purposes hereof and for each of the Loan
Documents.
"Agreement" means this Loan and Security Agreement and any
amendments, modifications or extensions to this Loan and Security Agreement.
"BANK Costs" means all reasonable costs and expenses of any kind
paid or incurred by BANK in connection with the preparation, execution,
delivery, amendment, modification, administration or termination of this
Agreement or any other Loan
Document or Interim Loan Document, any transaction contemplated herein and the
preservation, enforcement, defense and protection of BANK'S rights and remedies,
in any manner concerning this Agreement or any other Loan Document or Interim
Loan Document (limited solely to legal fees incurred), or any transaction
contemplated herein, including, but not limited to: (a) expenditures of every
nature and kind of BORROWER paid or incurred by BANK as permitted under this
Agreement, (b) filing, recording publication, appraisal and search costs related
to the Collateral, including, but not limited to, costs paid to perfect,
maintain and preserve the existence and priority of liens on the Collateral; (c)
costs incurred in collecting and gaining possession of, maintaining, handling,
preserving, storing, shipping, selling, preparing for sale and advertising to
sell the Collateral; and (d) reasonable attorneys' fees and other expenses paid
or incurred by BANK in enforcing, obtaining legal advise in preparing,
reviewing, consummating, amending, restructuring, extending, terminating,
defending, or preserving or protecting BANK'S rights and remedies in any manner
concerning, this Agreement or any Loan Document, or any transaction contemplated
herein.
"Business Day" means any day other than a Saturday, a Sunday or any
day designated by BANK as a "holiday." References to time of day shall be the
then prevailing time in Philadelphia, Pennsylvania.
"Capital Lease" means any lease of any property (real, personal or
mixed) which, in conformity with generally accepted accounting principles
consistently applied, is or should be accounted for as a capital lease on the
balance sheet of the lessee.
"Cash Advance" means the cash which BANK advances from time to time
to or for the benefit of BORROWER under the Cash Line subject to and in
accordance with the provisions of Article II hereof.
"Cash Line" means the aggregate amount of Cash Advances evidenced
by the Cash Note which BANK may extend to BORROWER subject to and in accordance
with the provisions of Article II hereof.
"Cash Note" means the promissory note of BORROWER in favor of BANK
to evidence BORROWER'S payment obligations under this Agreement with respect to
the Cash Line.
"Closing" means the day on which this Agreement is executed.
"Collateral" means those assets of BORROWER described in Paragraph
3.1 hereof.
(2)
"Corporate Guarantors" means and refers to Oregon Avenue
Enterprises, Incorporated, Marine Information Technology, Inc., CRT, Inc., The
Riverfront Development Corporation, Xxxx Warehousing Company, T and L Leasing
Corp., Broadway Equipment Leasing Corp., Refrigerated Distribution Center, Inc.,
Xxxx Cargo Systems of California, X.X. Xxxxxxxx & Co., Inc., and Xxxx Hauling &
Warehousing Systems, Inc.
"Debt" means funds necessary to service principal payments due and
owing on all debts of BORROWER (including, but not limited to, payments owing
under any Capital Leases).
"Designated Rate" means that floating annual rate of interest,
calculated on a 365 day basis but charged for the number of days actually
elapsed, in any year or part thereof, established and published by BANK from
time to time as its reference rate in making loans, but which rate may not
reflect the lowest rate of interest charged to any particular borrower or class
of borrowers.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" means each of the events listed in Paragraph 8.1
hereof.
"Financing Statements" means any and all financing statements,
amendments and/or continuation statements required to perfect and keep perfected
in favor of BANK any security interest created hereby or under any Loan Document
pursuant to the Uniform Commercial Code as adopted in any state having
jurisdiction over the Collateral.
"Financial Statements" means the financial statements of BORROWER
prepared on a combined basis by an independent certified public accountant
acceptable to BANK or by BORROWER'S Chief Financial Officer, as more
particularly described in Paragraph 6.1.1 hereof.
"Financed Equipment" means all material handling equipment used or
useful in BORROWER'S business purchased or refinanced with Term Advances.
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies.
"Guarantors" means the Corporate Guarantors and the Individual
Guarantor each of which has executed and delivered to BANK the Guaranty and any
other Person which may in the future guaranty the Indebtedness on behalf of the
BORROWER.
(3)
"Guaranty" means the joint and several unconditional surety and
guaranty by the Corporate Guarantors and the limited surety and guaranty of the
Individual Guarantor of BORROWER'S obligations under this Agreement, the Notes
and the Loan Documents to be executed and delivered by each of GUARANTORS at
Closing.
"Individual Guarantor" means Xxxxxx X. Xxxx.
"Indebtedness" means all amounts due from BORROWER to BANK pursuant
to Article II hereof and otherwise arising out of or in correction with this
Agreement or any other Loan Document.
"Interim Loan Documents" means and refers to the Surety Agreement,
dated July 17, 1989, between BANK and BORROWER and BORROWER'S Note, dated July
17, 1989.
"Loan" means the aggregate amount of the loan described in this
Agreement in the form of the Cash Line, the Term Loan, and the Time Loan.
"Loan Documents" means any and all documents, agreements,
assignments, notes, mortgages, certificates, opinions or other instruments
required to be given by or for BORROWER or any of GUARANTORS pursuant to the
terms hereof or in connection with the Loan, other than this Agreement.
"Materially Adverse Effect" means a materially adverse effect upon
BORROWER'S business, assets, liabilities, financial condition, results of
operations, or its ability to perform its obligations under this Agreement, the
Notes and the Loan Documents to which it is a party, all in accordance with
their respective terms.
"Maximum Cash Line" means the maximum aggregate principal amount
which BANK shall make available to BORROWER at any time from the Closing until
the Termination Date, which amount shall not exceed $1,000,000.
"Maximum Term Loan" means the maximum aggregate amount of Term
Advances, which amount shall not exceed the lesser of $1,000,000 or 80% of the
cost of refinancing of the Financed Equipment to be so purchased or refinanced
with the Term Advances.
"Minimum Cash Flow" means net profit after taxes plus depreciation
and amortization.
"Omnibus Agreement" means the Omnibus Agreement by and among
BORROWER and the Corporate Guarantors.
"Operating Lease" means any lease of any property which is not a
Capital Lease.
(4)
"Notes" means collectively the Cash Note, the Term Note and the
Time Note.
"Person" means an individual, corporation, partnership, trust or
unincorporated organization, or a government or any agency or political
subdivision thereof.
"Proceeds of Sale or Refinance of Assets" means net proceeds
outstanding at any time arising from the sale or refinance of BORROWER'S assets
not used by BORROWER to purchase or acquire capital assets to replace those sold
or to provide other capital assets to BORROWER.
"RICO" means the Racketeer Influenced and Corrupt Organizations
Act, as amended by the Comprehensive Crime Control Act of 1984, 18 U.S.C.
ss.1961-68.
"Rules" means any law, regulation, or rule of practice by which
BANK is bound or to which it adheres.
"Tangible Net Worth" means the combined sum of BORROWER'S: (i)
capital stock, (ii) capital in excess of par or stated value of shares of
capital stock, (iii) retained earnings, (iv) any debt of BORROWER to the owners
of its capital stock which is subordinated to the Indebtedness on terms and
conditions satisfactory to BANK, and (v) any other account which, in accordance
with generally accepted accounting principles consistently applied, constitutes
shareholders' equity; less the sum of: (a) any capital write-up resulting from
re-appraisal of assets or investments previously set forth on the combined
balance sheet of BORROWER at a lower amount, (b) treasury stock, and (c) any
intangible assets carried on the books of BORROWER.
"Term Advance" means the cash which BANK advances to or for the
benefit of BORROWER under the Term Loan subject to and in accordance with the
provisions of Article II hereof.
"Termination Date" means May 31, 1990.
"Term Loan" means the term facility granted hereby by BANK to
BORROWER, evidenced by the Term Note, subject to and in accordance with the
provisions of Article II hereof.
"Term Note" means the promissory note of BORROWER in favor of BANK
to evidence BORROWER'S payment obligations under this Agreement with respect to
the Term Loan.
"Time Loan" means the $1,500,000 which BANK advanced to BORROWER on
July 17, 1989, pursuant to the Interim Loan Documents.
(5)
"Time Note" means the promissory note of BORROWER in favor of BANK
to evidence BORROWER'S payment obligations under this Agreement with respect to
the Time Loan.
"Unmatured Event of Default" means and refers to any event, act or
occurrence which with the passage of time or giving of notice or both becomes an
Event of Default.
1.2 Construction of Definitions. All terms defined herein shall be
construed to include the plural or the singular, and references to persons in
the masculine or neuter gender shall refer to all persons or entities, as the
context requires.
1.3 Accounting Reports and Principles. The character or amount of any
asset, liability, account or reserve and of any item of income or expense to be
determined, and any combination or other accounting computation to be made, and
the construction of any definition containing a financial term, pursuant to this
Agreement or any Loan Document, shall be construed, determined or made, as the
case may be, in accordance with generally accepted accounting principles,
consistently applied and in effect as of the date of such determination,
computation or construction, unless such principles are inconsistent with any
express provision of this Agreement. All financial statements required to be
provided hereunder shall be made in combination and on a combined basis.
1.4 Business Days. etc. Whenever any payment or other obligation
hereunder or under any of the Notes or Loan Documents is due on a day other than
a Business Day, such shall be paid or performed on the Business Day next
following the prescribed due date, and such extension of time shall be included
in the computation of interest and charges.
ARTICLE II
THE LOAN
2.1 The Cash Line. Provided that no Event of Default or Unmatured Event
of Default shall have occurred and be continuing, and subject to the terms and
conditions set forth herein, commencing with the date hereof and expiring on the
Termination Date, BANK will extend to BORROWER the Cash Line pursuant to which
the BANK will make aggregate Cash Advances to or for the benefit of BORROWER up
to the Maximum Cash Line, which BORROWER may from time to time borrow, repay and
reborrow.
2.1.1 Mandatory Payments. In the event that the principal amount
outstanding under the Cash Line shall at any time exceed the Maximum Cash Line,
BORROWER shall immediately pay such
(6)
excess to BANK within five (5) days of BANK'S written demand upon BORROWER.
2.1.2 Interest Rate. All Cash Advances shall bear interest from the
date the Cash Advance is made until repaid in full, at an interest rate equal to
the sum of the Designated Rate plus one-half percent (1/2%) per annum.
2.1.3 Maturity/Repayment Schedule. All Cash Advances shall be
repaid as follows:
2.1.3.1 Interest shall be paid on the outstanding principal
balance of all Cash Advances, at the interest rate provided in Paragraph 2.1.2
hereof, on the first day of each month, commencing the first day of the month
after the month in which the first Cash Advance is made; and
2.1.3.2 Principal and any accrued and unpaid interest shall be
due and payable on demand on or after the Termination Date.
2.1.4 Cash Note. To evidence BORROWER'S obligations under this
Agreement with respect to the Cash Line, BORROWER shall execute and deliver to
BANK the Cash Note.
2.2 The Time Loan. BANK has fully funded the Time Loan for BORROWER'S
working capital needs.
2.2.1 Interest Rate. The Time Loan shall bear interest at the fixed
rate of eleven (11%) percent per annum.
2.2.2 Maturity/Repayment Schedule. The Time Loan shall be repaid as
follows:
2.2.2.1 Interest shall be payable at the interest rate
provided in Paragraph 2.2.1 hereof, on the first day of each month, commencing
August 1, 1989 through and including July 1, 1990.
2.2.2.2 Principal and any accrued and unpaid interest shall be
due and payable on demand on or after July 17, 1990.
2.2.3 Prepayment Penalty. Any prepayment of the principal of the
Time Loan shall be accompanied by a payment of a prepayment premium equal to 5%
of the principal amount outstanding for any prepayments made during the first
six months after the date hereof, and a prepayment premium equal to 2% of the
principal amount outstanding for any prepayments made after the six month
period following the date hereof.
(7)
2.2.4 Time Note. To evidence BORROWER'S obligations under this
Agreement with respect to the Time Loan and to replace BORROWER'S Note dated
July 17, 1989 in original principal amount of $1,000,000, BORROWER shall execute
and deliver to BANK The Time Note.
2.3 The Term Loan. Provided that no Event of Default shall have
occurred and be continuing, and subject to the terms and conditions set forth
herein, commencing with the date hereof and expiring on the ninetieth day
following the date hereof, BANK will extend to BORROWER the Term Loan, pursuant
to which BANK will make Term Advances to or for the benefit of BORROWER up to
the lesser of the aggregate sum of One Million ($1,000,000) or 80% of the cost
or refinancing of the Financed Equipment to be purchased or refinanced with the
Term Advances. $-0- shall be drawn at Closing, and provided that no Event of
Default or Unmatured Event of Default shall have occurred and be continuing, not
less than $100,000 may be drawn by BORROWER upon three (3) days prior written
notice to BANK at any time within ninety days from the date hereof, and all such
requests for Term Advances, including Closing, shall be accompanied by a list of
Financed Equipment in the form attached hereto as Schedule 2.3, together with
Uniform Commercial Code termination statements with respect thereto to release
previous liens on Financed Equipment and Financing Statements with respect
thereto, and together with certificates of insurance pursuant to paragraph 6.1.7
hereof covering the Financed Equipment and the Landlord's Waiver pursuant to
paragraph 4.1.6 hereof. Unless BANK consents thereto, BORROWER shall have no
right to reborrow under the Term Loan and no amounts will be advanced after the
90th day following Closing. Notwithstanding Paragraph 2.3.2.2, in the event that
the principal amount outstanding under the Term Loan shall at any time exceed
the Maximum Term Loan, BORROWER shall immediately pay such excess to BANK within
five (5) days of BANK'S written demand upon BORROWER.
2.3.1 Interest Rate. All Term Advances shall bear interest from the
date the Term Advance is made at an interest rate equal to the sum of the
Designated Rate plus three-fourths (3/4%) percent per annum.
2.3.2 Maturity/Payment Schedule. The Term Loan shall be repaid as
follows:
2.3.2.1 Interest shall be paid at the interest rate provided
in Paragraph 2.3.1 hereof on the outstanding principal balance of the Term Loan,
in arrears on and to the first day of each month, commencing the first month
following Closing; and
2.3.2.2 Principal shall be paid in sixty equal monthly
installments of $16, 666.66 commencing on the first day of the fourth month
following Closing with all remaining unpaid principal and accrued interest being
due and payable on the first day of the month which is five years and four
months following Closing.
(8)
2.3.3.1 BORROWER may pre-pay the principal balance of the Term
Loan in whole or in part at any time, without premium or penalty.
2.3.3.2 All Proceeds of Sales or Refinance of Assets shall be
applied dollar-for-dollar to the repayment of the Term Loan, unless BORROWER
purchases or acquires capital assets of equal or greater value to replace those
sold and grants to BANK a first priority security interest in and lien on such
Financed Equipment. All such mandatory repayments shall be credited to principal
in inverse order of maturity.
2.3.3.3 Voluntary prepayments under Paragraph 2.3.3.1 shall be
credited in the following order of priority: (i) to reimburse BANK for any fees,
costs or expenses as provided hereunder or under any of the Notes or Loan
Documents (as are customarily charged by the BANK to its customers under similar
circumstances); (ii) to all accrued and unpaid interest in connection with the
Term Loan; and (iii) in inverse order of maturity of installments of principal
under the Term Loan. So long as any principal in connection with the Term Loan
remains unpaid, no Prepayment shall relieve BORROWER from its obligation to make
scheduled payments of principal under the Term Note.
2.3.4 Term Note. To evidence BORROWER'S obligations under this
Agreement with respect to the Term Loan, BORROWER shall execute and deliver to
Bank the Term Note.
2.4 General Provisions
2.4.1 Application of Funds. Except as provided in Paragraph 2.3.3.3
hereof, and provided that no Event of Default or Unmatured Event of Default had
occurred hereunder or under any of the Notes of the Loan Documents, all payments
shall be credited at the direction of BORROWER to the Cash Note, the Term Note
or the Demand Note, and payments shall be applied by BANK in the following order
of priority: (i) to reimburse BANK for any fees, costs, disbursements or
expenses as provided hereunder or under any of the Notes or the Loan Documents
(as are customarily charged by the BANK to its customers under similar
circumstances); (ii) to interest; and (iii) to principal. Upon the occurrence of
any Event of Default or Unmatured Event of Default, BANK may, at BANK's
election, credit so much of any payment received from BORROWER to the Cash Note,
Term Note or the Demand Note or any other portion of the Indebtedness as BANK
shall see fit.
2.4.2 Bank Costs. BORROWER shall, upon written request of BANK, pay
BANK the amount of all unpaid BANK costs within
(9)
ten (10) days after such notice. Until paid, all past due and owing BANK Costs
shall be deemed to be part of the principal balance of the Loan, bear interest
as provided in Paragraph 2.3.1 hereof and be secured by the Collateral.
2.4.3 Use of Proceeds. The proceeds of the Cash Line and Time Loan
shall be used for BORROWER'S working capital purposes. The proceeds of the Term
Loan shall be used to purchase or refinance a maximum of eighty percent of the
purchase price or refinancing cost of Financed Equipment purchased or
refinanced.
2.4.4 Interest; Late Payments. Interest under each of the Notes
shall be calculated on a 365-day basis but charged for the number of days
actually elapsed during any year or part thereof. The Designated Rate shall be
adjusted daily to reflect changes in the Designated Rate and each adjustment
shall be effective on the day the change occurs. If during any period of time
the interest rate under any Note would exceed the maximum rate of interest
allowed by applicable law, the interest rate under such Note during such period
of time shall equal the maximum rate of interest allowed by applicable law. If
any amounts of principal and interest due and owing hereunder are not paid when
due, BORROWER shall pay to BANK a late payment fee equal to 2% of the amount of
such past due principal and interest if paid on or before the 10th day after the
same becomes due, and a late payment fee equal to 4% of the amount of any past
due principal and interest paid after the 10th day after the same becomes due.
2.4.5 Cash Advance and Term Advance Procedure. BANK shall make a
good faith effort to make all Cash Advances and Term Advances to BORROWER on the
same Business Day as BANK receives a request from BORROWER for the Cash Advance
or the Term Advance, provided that such request is received by BANK no later
than 1 P.M. of that Business Day, but in any event within two (2) Business Days
thereafter. BANK shall have or incur no liability to BORROWER in acting upon any
telephonic notice requesting a Cash Advance or a Term Advance which BANK
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of BORROWER or for otherwise acting in
good faith under this Paragraph.
ARTICLE III
SECURITY
3.1 Collateral Generally.
3.1.1 Security Interest in Financed Equipment. As security for the
payment of the Term Note and as conditional security for the payment of the Cash
Note, the Demand Note, and performance and discharge of all of the Indebtedness,
BORROWER hereby grants to
(10)
BANK a first lien security interest in and to all of BORROWER'S Financed
Equipment.
3.1.2 Cross Default upon Event of Default. An Event of Default
under the Cash Line, Time Loan or Term Loan shall be deemed an Event of Default
under the Loan and entitle BANK to the remedies set forth in Article VIII
hereof.
3.2 Security Agreement. The parties hereto hereby acknowledge and agree
that the provisions of this Agreement are intended to constitute a security
agreement under the Pennsylvania Uniform Commercial Code.
3.3 Titles to Financed Equipment. BORROWER agrees to deliver when
acquired by BORROWER all certificates of title to any of the Financed Equipment
for which a certificate of title is issued, duly endorsed and with all
additional documents required to record valid liens thereon.
3.4 Financing Statements. BORROWER agrees to execute and deliver to
BANK any and all financing statements requested by BANK to perfect and keep
perfected any security interest created under this Agreement or under any Loan
Document and under the Uniform Commercial Code of any state having jurisdiction
over the Collateral.
3.5 Guaranty. To secure the performance of BORROWER hereunder, BANK has
requested, and made a condition of Closing, the guaranties of the Guarantors.
3.6 Interim Loan Documents Replaced. This Agreement, the Notes, and the
other Loan Documents supplant in their entirety the Interim Loan Documents.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Documents to be Produced. As conditions precedent to the
performance by BANK of any of BANK'S obligations hereunder, BORROWER and each of
Guarantors, where applicable, shall deliver to BANK, in form and substance
satisfactory to BANK and BANK'S counsel, in addition to this Agreement, the
following documents and instruments:
4.1.1 The Cash Note;
4.1.2 The Time Note;
4.1.3 The Term Note;
(11)
4.1.4 The Guaranties of the Corporate Guarantors and the Individual
Guarantor;
4.1.5 Omnibus Agreement;
4.1.6 Landlords' Waivers in the form attached hereto as Schedule
4.1.6 for all of BORROWER'S places of business as listed on Schedule 4.1.6
hereto;
4.1.7 On behalf of BORROWER: (i) a copy of its Articles of
Incorporation, By-laws, and Resolutions adopted by its Board of Directors
authorizing the execution, delivery and performance of this Agreement, the
Notes, the Omnibus Agreement, the Loan Documents to which BORROWER is a party
and all other documents and instruments required by BANK for the implementation
of this Agreement, each certified by BORROWER'S Secretary to be true and correct
copies of the originals and to be in full force and effect as of the date of
Closing; and (ii) an Incumbency and Signature Certificate with respect to its
officers authorized to execute and deliver this Agreement, the Notes, the Loan
Documents to which BORROWER is a party and all other documents and instruments
required by BANK for the implementation of this Agreement;
4.1.8 On behalf of each Corporate Guarantor: (i) a copy of its
Articles of Incorporation, By-laws, and Resolutions adopted by its Board of
Directors authorizing the execution, delivery and performance of the Guaranty,
the Omnibus Agreement, the Loan Documents to which it is a party and all other
documents and instruments required by BANK for the implementation of this
Agreement, each certified by its Secretary to be true and correct copies of the
originals and to be in full force and effect as of the date of Closing; and (ii)
an Incumbency and Signature Certificate with respect to its Officers authorized
to execute and deliver the Guaranty and other Loan Documents to which it is a
party and all other documents and instruments required by BANK for the
implementation of this Agreement;
4.1.9 A Certificate of Good Standing, or a telegram to that effect,
with respect to BORROWER and each Corporate Guarantor, issued by the Secretary
of State BORROWER'S and each Corporate Guarantor's respective state of
incorporation, dated within twenty-one (21) days of Closing and a certificate or
telegram from the appropriate governmental agency indicating that BORROWER and
each of the Corporate Guarantors is duly qualified as a foreign corporation in
each state in which its activities require such qualification;
4.1.10 All Loan Documents, and all other documents and instruments
required by BANK for the implementation of this Agreement, to which BORROWER or
any of the Guarantors, as the case may be, is a party;
(12)
4.1.11 Such Financing Statements as may be requested by BANK;
4.1.12 Certificates of Title to Financed Equipment refinanced at
Closing;
4.1.13 Such security interest, lien and judgment searches
pertaining to BORROWER, any of Guarantors or the Collateral as BANK may request;
4.1.14 Opinions of BORROWER'S and Guarantors' counsel pertaining
to Paragraphs 5.1.1, 5.1.2, 5.1.5, 5.1.6, 5.1.7, 5.1.8 (to counsel's knowledge)
and 5.1.11, dated the date of Closing;
4.1.15 The combined Financial Statement of BORROWER and the
Corporate Guarantors dated as of March 31, 1989, all as more particularly
described in Paragraph 6.1.1 hereof, prepared on a combined basis in accordance
with generally accepted accounting principles consistently applied and certified
to BANK by the Chief Financial Officers of BORROWER and each Corporate
Guarantor;
4.1.16 Certificates of insurance regarding all policies of
insurance insuring all of the Financed Equipment of BORROWER, all in conformance
with the requirements set forth in Section 6.1.7 hereof; and
4.1.17 Such additional documents or instruments as BANK may
reasonably require.
4.2 Pre-Closing Legal Expenses. As a condition precedent to the
execution of this Agreement by BANK and BANK'S performance hereunder, BORROWER
shall pay BANK an amount equal to the legal fees and expenses incurred by BANK
arising out of the pre-Closing preparation of this Agreement, the Notes and the
other Loan Documents and the attendance at Closing of BANK'S counsel.
4.3 Other Conditions Precedent. As additional conditions precedent to
the performance by BANK of any of its present or future obligations hereunder:
(i) all representations and warranties made by BORROWER or any of Guarantors
hereunder or under any Loan Document shall be true, complete and correct in all
material respects as of the date made; and (ii) BORROWER and each Guarantor
shall be in compliance with all of the terms and conditions of this Agreement,
the Notes, the Guaranty and each of the other Loan Documents.
(13)
ARTICLE V
REPRESENTATIONS AND WARRANTIES.
5.1 BORROWER represents and warrants to BANK as follows:
5.1.1 Good Standing. BORROWER is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation; has the corporate power and authority to own and operate its
properties and to carry on its businesses where and as contemplated; is duly
qualified as a foreign corporation to do business in, and is in good standing
in, every jurisdiction where the nature of its business requires such
qualification; and BORROWER does not employ or has not employed during the last
five (5) years any fictitious or trade names except as listed on Schedule 5.1.1
hereof.
5.1.2 Power and Authority. The making, execution, issuance and
performance by BORROWER of this Agreement, the Notes and each of the Loan
Documents to which it is a party, has been duly authorized by all necessary
corporate action of BORROWER and will not violate any provision of law or
regulation, or charter or by-laws of BORROWER, and will not violate any
agreement, trust or other indenture or instrument to which BORROWER is a party
or by which BORROWER or any of its property is bound, so that this Agreement,
the Notes and each of the Loan Documents, when executed, issued and delivered,
will be valid and binding obligations of BORROWER, enforceable in accordance
with their respective terms, except to the extent that enforceability is limited
or affected by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally;
5.1.3 Priority of Liens: Location and Condition of Collateral. The
Collateral will be owned absolutely by BORROWER, free and clear of all liens,
encumbrances, security interests or other rights of third parties, subject only
to the rights and interests granted BANK herein and in the Loan Documents;
5.1.4 Financial Condition. The combined financial statements of
BORROWER dated as of December 31, 1988, together with the interim financial
statements of BORROWER as of March 31, 1989 heretofore furnished to BANK, are
each complete and correct in all material respects, have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the financial condition and results of operations of BORROWER
as of said dates. Except as set forth on Schedule 5.1.4 attached hereto,
BORROWER has no fixed, accrued or contingent obligation or liability for taxes
or otherwise that is not disclosed or reserved against on BORROWER'S balance
sheets. BORROWER has filed all tax returns required to be filed by BORROWER with
any taxing authority. Since December 31, 1988, there has been no change in the
(14)
condition of BORROWER financial or otherwise, from that set forth in the
respective balance sheets as of said dates set forth therein that would have a
Materially Adverse Effect upon BORROWER, other than changes previously disclosed
to BANK in writing. BORROWER has no actual knowledge of facts or circumstances,
after due inquiry, which would give BORROWER reason to believe, that there has
been or will be a change relating to the business of BORROWER that would cause a
Materially Adverse Effect;
5.1.5 No Litigation. Claims or Tax Liens. Except as set forth on
Exhibit 5.1.5 attached hereto, there are no suits, proceedings or tax liens
pending or in existence, or, to the knowledge of BORROWER after due inquiry,
threatened against or affecting BORROWER which have not already been disclosed
to BANK, and BORROWER is not in default in the performance of any agreement to
which it is a party or by which it is bound or with respect to any order, writ,
injunction or decree of any court, or any federal, state, municipal or other
government agency or instrumentality, domestic or foreign that would have a
Material Adverse Effect on BORROWER;
5.1.6 Compliance. Except as set forth on Exhibit 5.1.6 hereof,
BORROWER has all Governmental Approvals necessary for the conduct of its
business and the conduct of such business is not and has not been in violation
of any such Governmental Approvals or any applicable federal or state law, rule
or regulation. BORROWER does not require any Governmental Approvals to enter
into, or perform under, this Agreement, the Notes or any of the Loan Documents;
5.1.7 Compliance with Regulations U and X. BORROWER is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meanings of Regulations U and X of the Board of Governors of the Federal Reserve
System);
(15)
Individual Guarantor to furnish to BANK, within one hundred twenty (120) days
after the end of each fiscal year, the Individual Guarantor's balance sheet as
of the last day of such year;
6.1.2 Maintain and cause the Corporate Guarantors to maintain their
respective corporate existence and all necessary foreign qualifications in good
standing; continue to comply with all applicable statutes, rules and regulations
with respect to the conduct of BORROWER'S and the Corporate Guarantors'
businesses and maintain all necessary licenses and permits required for the
conduct of BORROWER'S and the Corporate Guarantors' businesses; and immediately
notify BANK of: (i) any proposed merger, consolidation or acquisition with, by,
or of any other entity (which notice shall not, in and of itself be deemed an
Event of Default); (ii) any borrowing or debt from a source other than BANK in
excess of $500,000 per transaction and not otherwise included in financial
projections delivered to BANK prior to Closing; (iii) any Capital Lease or
Operating Lease expense in excess of $500,000 per transaction; and (iv) any
change in BORROWER'S or any Corporate Guarantor's name (including trade names)
or principal places of business or the location of any records, offices,
registered agents or Collateral;
6.1.3 Establish and maintain with BANK a money market or other
interest-bearing account in original principal amount of not less than
$200,000.
6.1.4 Promptly pay and discharge all taxes, governmental charges
and assessments levied and assessed or imposed upon the Collateral or any
portion thereof, or upon the purchase, ownership, delivery, leasing, possession,
use, operation, return or other disposition thereof, or upon or with respect to
this Agreement, the Notes or any of the Loan Documents, and pay all other claims
which, if unpaid, might become liens or charges upon the Collateral, provided,
however, that nothing in this Paragraph shall require BORROWER to pay any such
taxes, assessments or claims so long as BORROWER shall in good faith contest the
amount or validity thereof and shall establish reserves against such taxes,
assessments or claims in kind and amount reasonably satisfactory to BANK;
6.1.5 Provide BANK at any time or from time to time on request with
such Financing Statements and such additional instruments or documents as BANK
may deem necessary or appropriate in order to perfect, protect and maintain the
security interests and liens granted to BANK pursuant to the terms of this
Agreement or any of the Loan Documents;
6.1.6 With reasonable promptness, furnish to BANK such additional
information and data concerning the business and financial condition of BORROWER
or any Corporate Guarantor as may be reasonably requested by BANK and afford
BANK or BANK'S agents access to the financial books and records (including
computer tapes, discs
(16)
or other computer prepared information) and properties of BORROWER at all
reasonable times upon reasonable prior notice and permit BANK or BANK'S agents
to make copies and abstracts of same and to remove such copies and abstracts
from the premises of BORROWER;
6.1.7 Maintain general public liability, casualty and workers'
compensation insurance with respect to each of BORROWER'S businesses and assets
in such amounts and against such hazards and liabilities as is customarily
maintained by similarly situated companies operating similar businesses
(including but not limited to, fire and casualty with extended coverage,
vandalism and malicious mischief), with respect to each and every location where
BORROWER operates Financed Equipment, and with such insurance companies as are
rated B+ or better by A.M. Best. All policies of insurance covering the
Collateral shall be in such amounts sufficient to satisfy any applicable
co-insurance requirements, insure BANK as BANK'S interest may appear. All
policies of insurance shall provide no less than thirty (30) days notice of
cancellation or material change endorsements in favor of BANK and if available
shall contain a waiver of the right of the insurer to assert against BANK any
defenses which the insurer could assert against BORROWER;
6.1.8 Promptly defend all actions, proceedings or claims affecting
BORROWER or any of its business property and promptly notify BANK of the
institution of, or any change in, any uninsured action, proceeding or claim if
the same is in excess of $100,000 and would have a Materially Adverse Effect on
the financial condition of BORROWER;
6.1.9 Maintain, preserve, protect and keep in good order and
condition all Collateral and all other property used in the conduct of
BORROWER'S business and, from time to time, make all necessary or appropriate
repairs, replacements and improvements thereto;
6.1.10 Promptly give written notice to BANK of the occurrence or
imminent occurrence of any event which in the reasonable opinion of BORROWER
causes or would imminently cause a Materially Adverse Effect or any
representation or warranty made in Article V hereof to be untrue at any time, or
which would cause BORROWER to be in default hereunder or under any of the Notes
or Loan Documents for any reason, or of any material casualty to any of the
Collateral or other property of BORROWER;
6.1.11 Maintain the character and nature of BORROWER'S businesses
as they exist as of Closing;
6.1.12 On a combined basis and as determined in accordance with
generally accepted accounting principles consistently applied:
(17)
6.1.12.1 Calculated annually as of the end of the last day of
the fiscal year, maintain a Debt to Tangible Net Worth ratio of not more than
4.0 to 1.0 from Closing until December 31, 1989; from January 1, 1990 to
December 31, 1990, a ratio of no less than 3.75 to 1.0; and from January 1, 1991
to December 31, 1991, a ratio of not less than 3.50 to 1.0;
6.1.12.2 Have a Tangible Net Worth of no less than the
following amounts for the periods set beside each amount:
as of December 31, 1989 - $26,500,000
as of December 31, 1990 - $29,500,000
as of December 31, 1991 - $33,500,000
6.1.12.3 Maintain a Minimum Cash Flow of $8,000,000 at
December 31, 1989; $9,000,000 at December 31, 1990; and $10,000,000 at December
31, 1991; and
6.1.12.4 Not make any capital expenditure, or any commitment
therefor, or purchase or enter into a Capital Lease for any real or personal
property in any one fiscal year which, when aggregated with all such
expenditures, commitments, purchases and Capital Leases of BORROWER are in
excess of the following amounts: (i) $22,500,000 during the period from the date
hereof until December 31, 1989; (ii) $10,000,000 during the next succeeding
twelve months; and (iii) $8,000,000 during the next succeeding twelve months;
6.1.13 Comply in all material respects with ERISA and furnish to
BANK, as soon as possible and in any event within thirty (30) days after
BORROWER knows that any reportable event, as defined in Title IV of ERISA, has
occurred with respect to any plan subject to Title IV of ERISA and maintained
for the employees of BORROWER or any corporation, trade, business or affiliated
service group (whether or not incorporated) which is under common control with
BORROWER or any affiliate of any of them, and is treated as a single employer
with BORROWER under section 414(b), (c) or (m) of the Internal Revenue Code of
1954, as amended (a "Plan"), or that the Pension Benefit Guaranty Corporation or
BORROWER instituted or, to BORROWER'S knowledge, intends to institute
proceedings under Title IV of ERISA to terminate any Plan, a certificate of the
Chief Financial Officers of BORROWER setting forth details as to such reportable
event and the action which BORROWER propose to take with respect thereto,
together with a copy of any notice of such reportable event that may be required
to be filed with the Pension Benefit Guaranty Corporation, or any notice
delivered by the Pension Benefit Guaranty Corporation evidencing its intent to
institute such proceedings or any notice to the Pension Benefit Guaranty
Corporation that such Plan is to be terminated, as the case may be; and
(18)
6.1.14 Maintain the management of BORROWER among the persons listed
on Schedule 6.1.14 hereto; and
6.1.15 Maintain or keep all of the Financed Equipment at the
BORROWER'S principal place of business at 000 X. Xxxxxxxx, Xxxxxxxxxx Xxxx, Xxx
Xxxxxx.
ARTICLE VII
NEGATIVE COVENANTS
7.1 BORROWERS' Covenants.
7.1.1 So long as any portion of the Indebtedness shall remain
outstanding and unpaid, BORROWER covenants and agrees that, in the absence of
prior written consent of BANK, BORROWER will not:
7.1.1.1 Create, incur, assume or permit to exist any mortgage,
lien, pledge, charge, security interest or other encumbrance upon any of its
accounts receivable, whether now owned or hereafter acquired, except: (i)
security interests which may be given with respect to money borrowed from BANK;
(ii) liens for taxes or governmental claims not yet due or which are being duly
contested and reserved in accordance with Paragraph 6.1.4 hereof, and will not
permit any of the Collateral to be levied upon under any legal process; and
(iii) as permitted pursuant to Paragraph 5.1.3 hereof;
7.1.2 So long as any portion of the Indebtedness shall remain
outstanding and unpaid, BORROWER covenants and agrees that without notice to
BANK (which notice shall not itself constitute an Event of Default), BORROWER
will not:
7.1.2.1 Create, assume, incur or otherwise become liable to
any Person, including Capital Lease and Operating Lease expense in the ordinary
course of business, for amounts in excess of $500,000 per transaction and not
otherwise included in financial projections delivered to BANK prior to Closing;
7.1.2.2 Change the general character of BORROWER'S business
from that in which it is currently engaged; enter into proceedings in total or
partial dissolution;
7.1.2.3 Declare any dividends, whether in cash or stock, or
make any other distributions to Shareholders except as permitted under the
Internal Revenue Code of 1986, as amended, to Shareholders of "S" Corporations.
7.1.2.4 Use any part of the proceeds of the Loan to purchase
or carry, or to reduce, retire or refinance any
(19)
credit incurred to purchase or carry, any margin stock (within the meaning of
Regulations U and X of the Board of Governors of the Federal Reserve System) or
to extend credit to others for the purpose of purchasing or carrying any margin
stock. If requested by BANK, BORROWER will furnish to BANK statements in
conformity with the requirements of Federal Reserve Form U-1 referred to in said
Regulation;
7.1.2.5 Engage in any conduct or take or fail to take any
actions which will, or could, if the facts and circumstances relative thereto
were discovered, give rise to any criminal indictment or civil action against
BORROWER under RICO.
ARTICLE VIII
DEFAULT
8.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default" hereunder, under the
Notes and under each of the Loan Documents:
8.1.1 Failure by BORROWER to pay any Indebtedness or any portion
thereof within ten (10) days after the same becomes due;
8.1.2 Failure by BORROWER, any Corporate Guarantor or the
Individual Guarantor to observe or perform any agreement, condition,
undertaking, term, provision or covenant (other than the covenants set forth in
Paragraph 6.1.12 hereof) in this Agreement, the Notes or any Loan Document, by,
between or among BORROWER or any Corporate Guarantor and BANK;
8.1.3 The default by Borrower or any of the Guarantors in the
payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Outstanding Indebtedness (as hereinafter
defined) of Borrower or any of the Guarantors in excess of $1,000,000 in the
aggregate (except any Outstanding Indebtedness from Borrower or any Guarantor to
any other Guarantor) or any interest or premium thereon, or in the performance
or observance of any obligation or condition with respect to any Outstanding
Indebtedness if the effect of such default is to accelerate the maturity of any
such Outstanding Indebtedness or to permit the holder or holder thereof, or any
trustee or agent for such holders, to cause such Outstanding Indebtedness to
become due and payable prior to its expressed maturity, and such Outstanding
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled prepayment) prior to stated maturity
whether or not any such default shall subsequently be cured. For purposes of
this paragraph 8.1.3, the term "Outstanding Indebtedness" shall mean all
indebtedness of Borrower
(20)
or any Guarantors to any person as reflected on Borrower's Financial Statements
as of March 31, 1989 or otherwise incurred thereafter.
8.1.4 Failure of BORROWER to timely and completely perform and
comply with each of the covenants set forth in Paragraph 6.1.12 hereof;
8.1.5 Failure of any Corporate Guarantor or the Individual
Guarantor to observe or perform any agreement, condition, undertaking, term,
provision or covenant in the Guaranty;
8.1.6 A determination by BANK in its reasonable opinion that any
material representation or warranty made in this Agreement, the Notes, the
Guaranty or any other Loan Document furnished by BORROWER any Corporate
Guarantor, or the Individual Guarantor in connection with this Agreement, the
Notes, any of the Loan Documents or otherwise in connection with the making of
the Loan hereunder is untrue in any material respect or fails to contain a
material fact necessary in order to make the representation or warranty true and
correct in all material respects.
8.1.7 BORROWER, any Corporate Guarantor, or the Individual
Guarantor shall become insolvent or unable to pay its debts as they mature, or
files a voluntary petition or suffers any involuntary petition to be filed
against it under any provision of any state or Federal bankruptcy or insolvency
statute (which involuntary petition has not been dismissed or discharged within
sixty (60) days of filing), or makes an assignment or any other transfer of
assets for the benefit of its or his creditors, or applies for, or consents to
the appointment of, a receiver for its or his assets, or suffers the filing
against its property of any attachment or garnishment and the same shall not be
released or stayed within sixty (60) days;
8.1.8 Entry of a final judgment or judgments against BORROWER, or
any Guarantor in an aggregate amount exceeding $1,000,000 in any twelve (12)
month period, which is not covered by insurance, enforcement of which judgment
or judgments has not been stayed or satisfied within thirty (30) days after
entry; or
8.1.9 BORROWER shall fail to give BANK prompt written notice of the
imposition of any lien or series of liens, other than consensual liens as may be
permitted hereunder, against BORROWER or any Guarantor or any of their
respective property arising by operation of law in an amount in excess of an
aggregate collective amount of $1,000,000 which lien or liens are not discharged
or stayed pending appeal within thirty (30) days of entry.
8.2 Cross Default. Any Event of Default hereunder, whether under the
Cash Line, Time Loan or Term Loan shall entitle BANK to the remedies provided in
this Article VIII.
(21)
8.3 Cure Period For Non-monetary Default. Notwithstanding anything
contained herein to the contrary, no Event of Default shall be deemed to have
occurred or to exist to the extent any event, condition or state of affairs
exists, other than the failure to pay any monetary obligations for interest and
principal on the Loan when due, under Paragraphs 8.1.2 through 8.1.9 hereof,
unless BORROWER shall have had the right to eliminate, resolve, remove or "cure"
same within thirty (30) days after written notice with respect thereto has been
given to BORROWER by BANK; provided however, that nothing contained herein shall
be deemed to enlarge any grace period provided for in the Cash Note, the Term
Note, the Time Note or any other Loan Document.
8.4 Remedies on Default. Upon the occurrence of any Event of Default,
BANK may at its election, forthwith declare all Indebtedness to be immediately
due and payable, without protest, demand or other notice (which are hereby
expressly waived by BORROWER) and, in addition to the rights specifically
granted hereunder or now or hereafter existing in equity or at law by virtue of
statute or otherwise (each of which rights may be exercised at any time and from
time to time), may exercise its rights and remedies available to it at law or in
equity or under this Agreement, the Notes, the Guaranty or any other Loan
Document, or any other agreement between BORROWER and BANK or any Guarantor and
BANK, in accordance with the respective provisions thereof.
8.5 Assembly of Collateral, etc. BANK may require BORROWER, at
BORROWER'S expense, to assemble the Collateral and make it available to BANK at
the place or places to be reasonably designated by BANK. BANK shall have the
right to sell such Collateral at public or private sale(s) in one or more lots
or parcels. BORROWER will pay, as part of the Indebtedness, all reasonable
amounts (including but not limited to BANK'S reasonable attorneys' fees, where
permitted by applicable law) paid or incurred by BANK: (i) for taxes, levies and
insurance on, or maintenance of, such Collateral; and (ii) in taking possession
of, disposing of or preserving such Collateral. The requirement of reasonable
notice of the time and place of disposition of such Collateral by BANK shall be
conclusively met if such notice is personally delivered or mailed, postage
prepaid, to BORROWER'S address as specified in this Agreement at least fifteen
(15) days before the time of the sale or disposition. BANK may bid upon and
purchase any or all of such Collateral at any public sale thereof. BANK may
dispose of all or any part of such Collateral in one or more lots or parcels and
at one or more times and from time to time, and upon such terms and conditions,
including a credit sale, as it determines in its sole discretion. BANK shall
apply the net proceeds of any such disposition of such Collateral or any part
thereof, after deducting all costs of BANK incurred in connection therewith, or
incidental to the holding, preparing for sale, in whole or part, of the
Collateral,
(22)
including reasonable attorneys' fees, in such order as BANK may elect, to the
Indebtedness, subject to the provisions of this Agreement, whereupon the
remaining proceeds shall be paid to BORROWER.
8.6 Set-Off Rights Upon Default. Upon and during the continuance of
any Event of Default, BANK in addition to any remedies set forth above, shall
have the right at any time and from time to time without notice to BORROWER (any
such notice being expressly waived by BORROWER), and to the fullest extent
permitted by applicable Rules, to set off, to exercise any banker's lien or any
right of attachment or garnishment and apply any and all balances, credits,
deposits (general or special, time or demand, provisional or final), accounts or
monies at any time held by BANK to or for the account of BORROWER, against any
and all of the Indebtedness and other obligations of BORROWER now or hereafter
existing under this Agreement, the Notes or any Loan Document, whether or not
BANK shall have made any demand hereunder or thereunder.
8.7 Singular or Multiple Exercise; Non-Waiver. The remedies provided
herein, in the Notes, in the Loan Documents or otherwise available to BANK at
law or in equity, and any warrants of attorney therein contained, shall be
cumulative and concurrent, and may be pursued singly, successively or together
at the sole discretion of BANK, and may be exercised as often as occasion
therefor shall occur; and the failure to exercise any such right or remedy shall
in no event be construed as a waiver or release of the same.
ARTICLE IX
MISCELLANEOUS
9.1 Integration. This Agreement, the Notes and the Loan Documents shall
be construed as one agreement, and in the event of any inconsistency, the
provisions of the Notes shall control over the provisions of this Agreement or
any Loan Document, and the provisions of this Agreement shall control over the
provisions of any Loan Document. This Agreement, the Notes and the Loan
Documents contain all the agreements of the parties hereto with respect to the
subject matter of each thereof and supersede all prior agreements with respect
to such subject matter.
9.2 Modification. Modifications, waivers, amendments or extensions of
or to the provisions of this Agreement, the Notes or any Loan Document shall be
effective only if set forth in a written instrument signed by BANK and BORROWER.
9.3 Notices. Any notice of other communication by one party hereto to
the other shall be in writing and shall be deemed to have been validly given if
personally delivered, three (3) days after
(23)
mailing certified mail return receipt requested, or delivered by a recognized
delivery service addressed as follows:
If to BORROWER:
Xxxx Cargo Systems, Inc.
000 X. Xxxxxxxx
Xxxxxxxxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Vice President
With a copy to:
Xxxx Xxxxx, Esquire
If to BANK:
Bank Leumi Le-Israel B.M.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX x0000
Attn: Xxxxxx X. Xxxxxx, Xx., Vice President
With a copy to:
Mesirov, Gelman, Jaffe, Xxxxxx & Xxxxxxxx
0000 Xxx Xxxxxxxx Xxxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxx, Esquire
BANK and BORROWER may from time to time specify to the other a different address
to which all notices and communications are to be given to such party by giving
the other party notice of such different address in accordance with this
Paragraph.
9.4 Survival. The terms of this Agreement and all agreements,
representations, warranties and covenants made by BORROWER or any Guarantor
herein or in any of the Notes or Loan Documents shall survive the issuance and
payment of the Notes and shall continue as long as any portion of the
Indebtedness shall remain outstanding and unpaid; provided, however, that the
covenants set forth in Paragraph 2.4.2 shall survive the payment of the
Indebtedness. BORROWER hereby acknowledge that BANK has relied upon the
foregoing in making the Loan.
9.5 Successors and Assigns; Governing Law. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto; provided, however, that BORROWER shall not assign this
Agreement or any rights or duties arising hereunder without the express prior
written consent of BANK. This Agreement shall be construed and enforced in
accordance with the internal laws of the Commonwealth of Pennsylvania for
contracts made and to be performed in Pennsylvania.
(24)
9.6 Jurisdiction; Waiver of Jury Trial. Any and all actions, at law or
in equity, directly or indirectly arising out of or relating to this Agreement
or the Indebtedness, shall be brought, and jurisdiction and venue shall be had
exclusively, in the courts of Philadelphia County, Pennsylvania and the United
States District Court for the Eastern District of Pennsylvania, AND BANK AND
BORROWER HEREBY SUBMIT AND CONSENT IN ADVANCE TO THE JURISDICTION AND VENUE OF
SUCH COURTS. The exclusive choice of forum set forth in this Paragraph shall not
be deemed to preclude the enforcement by BANK of any judgment obtained in such
forum or the commencement of any action by BANK in any appropriate jurisdiction.
9.7 Participation. BANK may, upon giving 10 days' prior written notice
to BORROWER, in its sole discretion enter into a participation arrangement with
respect to any loan made under this Agreement and may, with BORROWER'S prior
consent, provide all information in its possession relating to BORROWER or any
Guarantor to any prospective or current participating lender.
9.8 Excess Payments. If BORROWER shall pay any interest under the terms
of the Notes at a rate higher than the maximum rate allowed by applicable law,
then such excess payment shall be credited as a payment of principal unless
BORROWER notifies BANK in writing to return the excess payment to BORROWER.
9.9 Partial Invalidity. If any provision of this Agreement shall for
any reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof, but this Agreement
shall be construed as if such invalid or unenforceable provision had never been
contained herein.
9.10 Compliance with Rules. Neither BANK nor BORROWER shall be required
by operation or effect of any provision of this Agreement to violate any statute
or regulation under state or federal law, including all Rules.
(25)
9.11 Headings. The heading of any Article, Section or Paragraph
contained in this Agreement is for convenience of reference only and shall not
be deemed to amplify, limit, modify or give full notice of the provisions
thereof.
IN WITNESS WHEREOF, intending to be legally bound hereby, BANK and
BORROWER have each executed this Agreement under seal, as of the day and year
first above written.
BANK:
BANK LEUMI LE-ISRAEL B.M.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Xxxxxx X. Xxxxxx, Xx., Vice
President
BORROWER:
Attest: XXXX CARGO SYSTEMS, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
------------------------------ ------------------------------
Xxxx Xxxxx, Secretary Xxxx Xxxxx, Assistant Vice
[Corporate Seal] President
(26)
CASH NOTE
$1,000,000 Philadelphia, Pennsylvania
August 8, 1989
FOR VALUE RECEIVED, the undersigned, (herein "BORROWER"), promises to
pay to the order of BANK LEUMI LE-ISRAEL B.M., with offices at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000 (herein the "BANK") the principal sum of One
Million ($1,000,000) Dollars or so much thereof as shall have been advanced to,
or on behalf of, BORROWER as Cash Advances and then be outstanding, together
with interest thereon at an interest rate equal to the BANK'S Designated Rate
plus one-half (1/2%) percent per annum, calculated on a 365-day basis but
charged for the number of days actually elapsed during any year or any part
thereof. The interest rate shall be adjusted daily to reflect changes in the
BANK'S Designated Rate, and each adjustment shall be effective on the day the
change occurs. If during any period of time the interest rate that would result
from the foregoing calculation would exceed the maximum rate of interest allowed
by applicable law, the interest rate during such period of time shall equal the
maximum rate of interest allowed by applicable law. Principal and interest
hereunder shall be payable as follows:
(a) Interest shall be paid on the outstanding principal
balance of all Cash Advances, on the first day of each
month, commencing the first day of the month after the
month in which the first Cash Advance is made and on
the first day of each month thereafter; and
(b) Principal and any accrued and unpaid interest shall be
due and payable in full on demand on or after the
Termination Date (as defined in the Loan Agreement
hereinafter described).
This Cash Note is made and issued pursuant to a Loan and Security
Agreement bearing even date herewith, by and between the BANK and the
undersigned as BORROWER, (the "Loan Agreement"), to evidence BORROWER'S
obligations in connection with the Cash Line thereunder. All capitalized terms
used herein shall have the meanings ascribed to them in the Loan Agreement
unless the context clearly requires to the contrary.
BORROWER may prepay any amount of the principal hereunder without
premium or penalty at any time. All payments hereunder shall be made at BANK'S
offices, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000, or at such other location
as the holder hereof shall, from time to time, designate upon thirty (30) days
prior written notice to BORROWER. In the event that the principal amount
outstanding under the Cash Line shall at any time exceed the Maximum Cash Line,
BORROWER shall immediately pay such excess to BANK within five (5) days of
BANK's written demand upon BORROWER.
In the event the due date of any payment hereunder is not a Business
Day, such payment shall be due on the next succeeding Business Day, provided
that any such payment bearing interest shall continue to accrue interest until
paid.
If any amounts of principal and interest due and owing hereunder are
not paid when due, BORROWER shall pay to BANK a late payment fee equal to 2% of
the amount of such past due principal and interest if paid on or before the 10th
day after the same becomes due, and a late fee equal to 4% of the amount of any
past due principal and interest if paid after the 10th day after the same
becomes due.
In addition to other remedies of BANK as set forth in this Cash Note,
the Loan Agreement, or the Loan Documents, upon the occurrence of an Event of
Default, without demand or notice to BORROWER, BANK may cause this Cash Note to
become immediately due and payable in full.
Except as otherwise provided in the Loan Agreement, BORROWER hereby
waives presentment, demand for payment, notice of dishonor or acceleration,
protest or notice of protest and any and all notices or demands in connection
with the delivery, acceptance, performance, default or enforcement of this Cash
Note.
The liabilities and obligations of BORROWER hereunder shall be
unconditional without regard to the liability or obligations of any other party
and shall not be in any manner affected by any allowance whatsoever granted or
consented to by BANK, including, but without being limited to, any release of
any party or of any Collateral, extension of time, renewal, waiver or other
modification. Any failure of BANK to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any time and from time to time thereafter.
This Cash Note shall be governed as to its validity, interpretation and
effect by the internal laws of the Commonwealth of Pennsylvania for contracts
made and to be performed in Pennsylvania. BANK and BORROWER hereby submit and
consent in advance to the exclusive jurisdiction and venue of the courts of
Philadelphia County, Pennsylvania and the United States District Court for the
Eastern District of Pennsylvania in any and all actions and proceedings between
BANK and BORROWER. BANK and BORROWER hereby irrevocably agree to service of
process by certified mail, return receipt requested, postage prepaid to BANK at
the address above and
(2)
to BORROWER at BORROWER'S address appearing on BANK'S records. BORROWER and BANK
do not have any oral agreements.
This Cash Note may not be changed orally but only by an agreement in
writing and signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
If any provision of this Cash Note shall for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, but this Cash Note shall be construed as if such
invalid or unenforceable provision had never been contained herein.
IN WITNESS WHEREOF, and intending to be legally bound hereby, BORROWER
has executed this Cash Note as an instrument uncle seal as of the day and year
first above written.
Attest: XXXX CARGO SYSTEMS, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
----------------------------- ------------------------------
Xxxx Xxxxx, Secretary Xxxx Xxxxx, Assistant
Vice President
[Corporate Seal]
(3)
TIME NOTE
$1,500,000 Philadelphia, Pennsylvania
August 1, 1991
FOR VALUE RECEIVED, the undersigned, (herein "BORROWER"), promises to
pay to the order of BANK LEUMI LE-ISRAEL B.M., with offices at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000 (herein the "BANK") the principal sum of One
Million Five Hundred Thousand ($1,500,000) Dollars, together with interest equal
to the sum of the rate of interest designated by the Bank, and in effect from
time to time at its designated rate, plus (1/2%), calculated on a 365-day basis
but charged for the number of days actually elapsed during any year or any part
thereof. If during any period of time the interest rate hereunder would exceed
the maximum rate of interest allowed by applicable law, the interest rate during
such period of time shall equal the maximum rate of interest allowed by
applicable law. Principal and interest hereunder shall be payable as follows:
(a) Interest shall be paid on the first day of each month
commencing September 1, 1991 through and including
August 1, 1992; and
(b) Principal and any accrued and unpaid interest shall be
payable on demand on or after August 1, 1992.
This Time Note is made and issued pursuant to a Loan and Security
Agreement bearing even date herewith, by and between BANK and the undersigned as
BURROWER, (the "Loan Agreement"), to evidence BOPROWER'S obligations in
connection with the Time Loan thereunder. All capitalized terms used herein
shall have the meanings ascribed to them in the Loan Agreement unless the
context clearly requires to the contrary.
All payments hereunder shall be made at BANK'S offices, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX. 00000, or at such other location as the holder hereof
shall, from time to time, designate upon thirty (30) days prior written notice
to BORROWER.
Any prepayment of principal hereunder shall be accompanied by the
payment of a prepayment premium equal to 5% of the principal outstanding if
prepayment occurs within six months after Closing and 2% of the principal
outstanding if prepayment occurs after six months after Closing.
In the event the due date of any payment hereunder is not a Business
Day, such payment shall be due on the next succeeding Business Day, provided
that any such payment bearing interest shall continue to accrue interest until
paid.
If any amounts of principal and interest due and owing hereunder are
not paid when due, BORROWER shall pay to BANK a late payment fee equal to 2% of
the amount of such past due principal and interest if paid on or before the 10th
day after the same becomes due, and a late fee equal to 4% of the amount of any
past due principal and interest if paid after the 10th day after the same
becomes due.
In addition to other remedies of BANK as set forth in this Time Note,
the Loan Agreement, or the Loan Documents, upon the occurrence of an Event of
Default, without demand or notice to BORROWER, BANK may cause this Time Note to
become immediately due and payable in full.
Except as otherwise provided in the Loan Agreement, BORROWER hereby
waives presentment, demand for payment, notice of dishonor or acceleration,
protest or notice of protest and any and all notices or demands in connection
with the delivery, acceptance, performance, default or enforcement of this Time
Note.
The liabilities and obligations of BORROWER hereunder shall be
unconditional without regard to the liability or obligations of any other party
and shall not be in any manner affected by any allowance whatsoever granted or
consented to by BANK, including, but without being limited to, any release of
any party or of any Collateral, extension of time, renewal, waiver or other
modification. Any failure of BANK to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any time and from time to time thereafter.
This Time Note shall be governed as to its validity, interpretation and
effect by the internal laws of the Commonwealth of Pennsylvania for contracts
made and to be performed in Pennsylvania. BANK and BORROWER hereby submit and
consent in advance to the exclusive jurisdiction and venue of the courts of
Philadelphia County, Pennsylvania and the United States District Court for the
Eastern District of Pennsylvania in any and all actions and proceedings between
BANK and BORROWER. BANK and BORROWER hereby irrevocably agree to service of
process by certified mail, return receipt requested, postage prepaid to BANK at
the address above and to BORROWER at BORROWER'S address appearing on BANK'S
records. BORROWER and BANK do not have any oral agreements.
This Time Note may not be changed orally but only by an agreement in
writing and signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
If any provision of this Time Note shall for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, but this Time Note shall be construed as if such
invalid or unenforceable provision had never been contained herein.
(2)
IN WITNESS WHEREOF, and intending to be legally bound hereby, BORROWER
has executed this Time Note as an instrument under seal as of the day and year
first above written.
Attest: XXXX CARGO SYSTEMS, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
----------------------------- -------------------------------
Xxxx Xxxxx, Secretary Xxxx Xxxxx, Assistant
Vice President
[Corporate Seal]
(3)
TERM NOTE
$1,000,000 Philadelphia, Pennsylvania
August 8, 1989
FOR VALUE RECEIVED, the undersigned, (herein "BORROWER"), promises to
pay to the order of BANK LEUMI LE-ISRAEL B.M., with offices at 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000 (herein the "BANK") the principal sum of One
Million ($1,000,000) Dollars or so much thereof as shall have been advanced to
or on behalf of Borrower as Term Advances hereunder and pursuant to the Loan and
Security Agreement between BORROWER and BANK of even date herewith ("Loan
Agreement") together with interest thereon at an interest rate equal to the
BANK'S Designated Rate plus three-fourths (3/4%) percent per annum until all
sums due and payable hereunder shall have been paid in full. All capitalized
terms not defined herein shall have the meanings ascribed to them in the Loan
Agreement unless the context clearly requires to the contrary. All interest
shall be calculated on a 365-day basis, but charged for the number of days
actually elapsed during any year or any part thereof. The interest rate shall be
adjusted daily to reflect changes in the BANK'S Designated Rate, and each
adjustment shall be effective on the day the change occurs. If during any period
of time the interest rate that would result from the foregoing calculations
would exceed the maximum rate of interest allowed by applicable law, the
interest rate during such period of time shall equal the maximum rate of
interest allowed by applicable law. Principal and interest hereunder shall be
payable as follows:
(a) Interest shall be paid on the outstanding principal
balance in arrears on and to the first day of each
month, commencing the first month following Closing.
(b) Principal shall be paid in sixty equal monthly
installments of $16,666.66 commencing on the first day
of the fourth month following Closing with all
remaining unpaid principal and accrued and unpaid
interest being due and payable on the first day of the
month which is five years and four months following
Closing.
BORROWER may prepay the principal hereunder in whole or in part at any
time without penalty or premium; provided however that any such prepayment shall
be credited as provided in the Loan Agreement and shall not delay or defer the
next scheduled principal or interest payments hereunder. All Proceeds of Sales
or Refinance of Assets shall be applied dollar-for-dollar to the repayment of
the Term Loan, unless BORROWER purchases or acquires capital assets of equal or
greater value to replace those sold. Such mandatory
prepayments shall be credited to principal in inverse order of maturity.
All payments hereunder shall be made at BANK'S offices, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxxxx, XX 00000, or at such other location as the holder hereof
shall, from time to time, designate upon thirty (30) days prior written notice
to BORROWER.
In the event the due date of any payment hereunder is not a Business
Day, such payment shall be due on the next succeeding Business Day, provided
that any such payment bearing interest shall continue to accrue interest until
paid.
In addition to other remedies of BANK as set forth in this Term Note,
the Loan Agreement, or the Loan Documents, upon the occurrence of an Event of
Default, without demand or notice to BORROWER, BANK may cause this Term Note to
become immediately due and payable in full.
If any amounts of principal and interest due and owing hereunder are
not paid when due, BORROWER shall pay to BANK a late payment fee equal to 2% of
the amount of such past due principal and interest if paid on or before the 10th
day after the same becomes due, and a late fee equal to 4% of the amount of any
past due principal and interest if paid after the 10th day after the same
becomes due.
Except as otherwise provided in the Loan Agreement, BORROWER hereby
waives presentment, demand for payment, notice of dishonor or acceleration,
protest or notice of protest and any and all notices or demands in connection
with the delivery, acceptance, performance, default or enforcement of this Term
Note.
The liabilities and obligations of BORROWER hereunder shall be
unconditional without regard to the liability or obligations of any other party
and shall not be in any manner affected by any allowance whatsoever granted or
consented to by BORROWER, including, but without being limited to, any release
of any party or of any Collateral, extension of time, renewal, waiver or other
modification. Any failure of BANK to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any time and from time to time thereafter.
This Term Note shall be governed as to its validity, interpretation and
effect by the internal laws of the Commonwealth of Pennsylvania for contracts
made and to be performed in Pennsylvania. BANK and BORROWER hereby submit and
consent in advance to the exclusive jurisdiction and venue of the courts of
Philadelphia County, Pennsylvania and the United States District Court for the
Eastern District of Pennsylvania any and all actions and
(2)
proceedings between BANK and BORROWER. BANK and BORROWER hereby irrevocably
agree to service of process by certified mail, return receipt requested, postage
prepaid to BANK at the address above and to BORROWER at BORROWER'S address
appearing on BANK'S records. BORROWER and BANK do not have any oral agreements.
This Term Note may not be changed orally but only by an agreement in
writing and signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
If any provision of this Term Note shall for any reason be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof, but this Term Note shall be construed as if such
invalid or unenforceable provision had never been contained herein.
IN WITNESS WHEREOF, and intending to be legally bound hereby, BORROWER
has executed this Term Note as an instrument under seal as of the day and year
first above written.
Attest: XXXX CARGO SYSTEMS, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxx Xxxxx
----------------------------- ------------------------------
Xxxx Xxxxx, Secretary Xxxx Xxxxx, Assistant
Vice President
[Corporate Seal]
(3)
