EXHIBIT 10.1
LOAN AGREEMENT
Dated as of August 15, 2006
between
BEST CIRCUIT BOARDS, INC.,
INTEGRATED PERFORMANCE SYSTEMS, INC., and
GLOBAL INNOVATION CORP.
and
AMEGY BANK N.A.
TABLE OF CONTENTS
ARTICLE I Definitions 1
Section 1.1 Definitions 1
Section 1.2 Accounting Matters 10
Section 1.3 Other Definitional Provisions 10
ARTICLE II Amounts and Terms of Credit 10
Section 2.1 Revolving Credit Commitment 10
Section 2.2 The Equipment Commitment 11
Section 2.3 Term Loan Commitment 12
Section 2.4 General Provisions Regarding Interest; Etc. 12
Section 2.5 Use of Proceeds 12
Section 2.6 Letters of Credit 12
ARTICLE III Payments 13
Section 3.1 Method of Payment 13
Section 3.2 Prepayments 13
Section 3.3 Additional Costs in Respect of Letters of Credit 13
ARTICLE IV Security 14
Section 4.1 Collateral 14
Section 4.2 Setoff 14
ARTICLE V Conditions Precedent 14
Section 5.1 Initial Extension of Credit 14
Section 5.2 All Extensions of Credit 15
ARTICLE VI Representations and Warranties 16
Section 6.1 Corporate Existence 16
Section 6.2 Financial Statements; Etc 16
Section 6.3 Action; No Breach 16
Section 6.4 Operation of Business 16
Section 6.5 Litigation and Judgments 16
Section 6.6 Rights in Properties; Liens 17
Section 6.7 Enforceability 17
Section 6.8 Approvals 17
Section 6.9 Debt 17
Section 6.10 Taxes 17
Section 6.11 Use of Proceeds; Margin Securities 17
Section 6.12 ERISA 17
Section 6.13 Disclosure 17
Section 6.14 Subsidiaries, Ventures, Etc 18
Section 6.15 Agreements 18
Section 6.16 Compliance with Laws 18
Section 6.17 Inventory 18
Section 6.18 Investment Company Act 18
Section 6.19 Public Utility Holding Company Act 18
Section 6.20 Environmental Matters. 18
Section 6.21 Intellectual Property 19
Section 6.22 Depository Relationship 19
ARTICLE VII Affirmative Covenants 19
Section 7.1 Reporting Requirements 19
Section 7.2 Maintenance of Existence; Conduct of Business 21
Section 7.3 Maintenance of Properties 21
Section 7.4 Taxes and Claims 21
Section 7.5 Insurance 22
Section 7.6 Inspection Rights 22
Section 7.7 Keeping Books and Records 22
Section 7.8 Compliance with Laws 22
Section 7.9 Compliance with Agreements 22
Section 7.10 Further Assurances 22
Section 7.11 ERISA 22
ARTICLE VIII Negative Covenants 22
Section 8.1 Debt 22
Section 8.2 Limitation on Liens 23
Section 8.3 Mergers, Etc 23
Section 8.4 Restricted Payments 23
Section 8.5 Loans and Investments 23
Section 8.6 Intentionally Deleted 23
Section 8.7 Transactions With Affiliates 23
Section 8.8 Disposition of Assets 24
Section 8.9 Sale and Leaseback 24
Section 8.10 Prepayment of Debt 24
Section 8.11 Nature of Business 24
Section 8.12 Environmental Protection 24
Section 8.13 Accounting 24
Section 8.14 No Negative Pledge 24
ARTICLE IX Financial Covenants 24
Section 9.1 Tangible Net Worth 24
Section 9.2 Fixed Charge Coverage Ratio 24
Section 9.3 Cash Flow Coverage Ratio 24
ARTICLE X Default 24
Section 10.1 Events of Default 24
Section 10.2 Remedies Upon Default 26
Section 10.3 Performance by the Lender 27
Section 10.4 Cash Collateral 27
ARTICLE XI Miscellaneous 27
Section 11.1 Expenses 27
Section 11.2 INDEMNIFICATION 27
Section 11.3 Limitation of Liability 28
Section 11.4 No Duty 28
Section 11.5 Lender Not Fiduciary 28
Section 11.6 Equitable Relief 28
Section 11.7 No Waiver; Cumulative Remedies 28
Section 11.8 Successors and Assigns 29
Section 11.9 Survival 29
Section 11.10 ENTIRE AGREEMENT; AMENDMENT 29
Section 11.11 Notices 29
Section 11.12 Governing Law; Venue; Service of Process 29
Section 11.13 Counterparts 30
Section 11.14 Severability 30
Section 11.15 Headings 30
Section 11.16 Participations; Etc 30
Section 11.17 Construction 30
Section 11.18 Independence of Covenants 30
Section 11.19 WAIVER OF JURY TRIAL 30
Section 11.20 Additional Interest Provision 30
Section 11.21 Ceiling Election 31
LOAN AGREEMENT
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THIS LOAN AGREEMENT (the "Agreement"), dated as of August 15, 2006, is
among BEST CIRCUIT BOARDS, INC., a Texas corporation ("Best"), INTEGRATED
PERFORMANCE SYSTEMS, INC., a New York corporation ("Integrated"), and GLOBAL
INNOVATION CORP., a Delaware corporation ("Global"; and together with Best
and Integrated, the "Borrowers"), and AMEGY BANK N.A., a national banking
association (the "Lender").
R E C I T A L S:
- - - - - - - -
The Borrowers have requested that the Lender extend credit to the
Borrowers as described in this Agreement. The Lender is willing to make
such credit available to the Borrowers upon and subject to the provisions,
terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. As used in this Agreement, all exhibits, appendices
and schedules hereto and in any note, certificate, report or other Loan
Documents made or delivered pursuant to this Agreement, the following terms
will have the meanings given such terms in this Section 1 or in the
provision, section or recital referred to below:
"Affiliate" means, as to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that
directly or indirectly beneficially owns or holds five percent (5%) or more
of any class of voting stock of such Person; or (c) five percent (5%) or
more of the voting stock of which is directly or indirectly beneficially
owned or held by the Person in question. The term "control" means the
possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise; provided,
however, in no event shall the Lender be deemed an Affiliate of the Borrower
or any of its Subsidiaries or Affiliates.
"Agreement" has the meaning set forth in the Introductory Paragraph
hereto, as the same may, from time to time, be amended, modified, restated,
renewed, waived, supplemented, or otherwise changed, and includes all
schedules, exhibits and appendices attached or otherwise identified
therewith.
"Borrowing Base" means, at any time, an amount equal to the sum of
(a) eighty percent (80%) of the value of Eligible Accounts, plus (b) the
lesser of the value of (i) fifty percent (50%) of the value of Eligible
Inventory or (ii) $1,000,000.00.
"Borrowing Base Report" means, as of any date of preparation, a
certificate setting forth the Borrowing Base (substantially the form of
Exhibit A attached hereto) prepared by and certified by the chief financial
officer of the Parent.
"Business Day" has the meaning assigned to it in the Notes.
"Capital Expenditure" shall mean any expenditure by a Person for (a) an
asset which will be used in a year or years subsequent to the year in which
the expenditure is made and which asset is properly classified in relevant
financial statements of such Person as equipment, real property, a fixed
asset or a similar type of capitalized asset in accordance with GAAP or
(b) an asset relating to or acquired in connection with an acquired
business, and any and all acquisition costs related to (a) or (b) above.
"Capitalized Lease Obligation" shall mean the amount of Debt under a
lease of Property by a Person that would be shown as a liability on a
balance sheet of such Person prepared for financial reporting purposes in
accordance with GAAP.
"Cash Flow Coverage Ratio" means, in respect of a Person and for any
period of determination, the ratio of (a) Senior Funded Debt as of the date
of determination to (b) EBITDAR calculated on a trailing twelve (12) month
period from the date of determination.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" has the meaning for such term set forth in Section 4.1 of
this Agreement.
"Commitments" means the Revolving Credit Commitment, the Equipment
Commitment and the Term Loan Commitment.
"Commitment Fee" means $13,750.00.
"Compliance Certificate" means a certificate, substantially in the form
of Exhibit B attached hereto, prepared by and executed by the chief
financial officer of the Parent.
"Constituent Documents" means (i) in the case of a corporation, its
articles or certificate of incorporation and bylaws; (ii) in the case of a
general partnership, its partnership agreement; (iii) in the case of a
limited partnership, its certificate of limited partnership and partnership
agreement; (iv) in the case of a trust, its trust agreement; (v) in the case
of a joint venture, its joint venture agreement; (vi) in the case of a
limited liability company, its articles of organization and operating
agreement or regulations; and (vii) in the case of any other entity, its
organizational and governance documents and agreements.
"Current Maturities of Long-Term Indebtedness" shall mean, in respect
of a Person and as of any applicable date of determination thereof, that
portion of Long-Term Indebtedness that should be classified as current in
accordance with GAAP.
"Debt" means as to any Person at any time (without duplication):
(a) all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, notes, debentures, or other similar
instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable of such Person
arising in the ordinary course of business that are not past due by more
than ninety (90) days, (d) all Capital Lease Obligations of such Person,
(e) all Debt or other obligations of others Guaranteed by such Person,
(f) all obligations secured by a Lien existing on property owned by such
Person, whether or not the obligations secured thereby have been assumed by
such Person or are non-recourse to the credit of such Person, (g) any other
obligation for borrowed money or other financial accommodations which in
accordance with GAAP would be shown as a liability on the balance sheet of
such Person, (h) any repurchase obligation or liability of a Person with
respect to accounts, chattel paper or notes receivable sold by such Person,
(i) any liability under a sale and leaseback transaction that is not a
Capital Lease Obligation, (j) any obligation under any so-called "synthetic
leases", (k) any obligation arising with respect to any other transaction
that is the functional equivalent of borrowing but which does not constitute
a liability on the balance sheets of a Person, (l) all reimbursement
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, bankers' acceptances, surety or other bonds and similar
instruments, and (m) all liabilities of such Person in respect of unfunded
vested benefits under any Plan.
"Deed of Trust" means the Deed of Trust, Assignment of Rents, Security
Agreement and Fixture Filing executed by Best in favor of Lender creating a
first and prior Lien in the Real Estate and all Improvements thereon.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event
of Default.
"Default Interest Rate" has the meaning assigned to it in the Notes.
"Dollars" and "$" mean lawful money of the United States of America.
"EBITDAR" means, for any period, Net Income for such period, plus the
following to the extent reflected as an expense in the determination of Net
Income: (a) Interest Expense, (b) Tax Expense, (c) Rental Expense
associated with the Real Estate, and (d) depreciation and amortization of
tangible and intangible assets of Borrower, determined in accordance with
GAAP.
"Eligible Accounts" means, at any time, all accounts receivable of Best
created in the ordinary course of business that are acceptable to the Lender
and satisfy the following conditions:
(a) The account complies with all applicable laws, rules, and
regulations, including, without limitation, usury laws, the
Federal Truth in Lending Act, and Regulation Z of the Board of
Governors of the Federal Reserve System;
(b) The account has not been outstanding for more than ninety (90)
days past the original date of invoice;
(c) The account does not represent a commission and the account
was created in connection with (i) the sale of goods by Best in
the ordinary course of business and such sale has been consummated
and such goods have been shipped and delivered and received by the
account debtor, or (ii) the performance of services by Best in the
ordinary course of business and such services have been completed
and accepted by the account debtor;
(d) The account arises from an enforceable contract, the
performance of which has been completed by Best;
(e) The account does not arise from the sale of any good that is
on a xxxx-and-hold, guaranteed sale, sale-or-return, sale on
approval, consignment, or any other repurchase or return basis;
(f) Best has good and indefeasible title to the account and the
account is not subject to any Lien except Liens in favor of the
Lender;
(g) The account does not arise out of a contract with or order
from, an account debtor that, by its terms, prohibits or makes
void or unenforceable the grant of a security interest by the
Borrower to the Lender in and to such account;
(h) The account is not subject to any setoff, counterclaim,
defense, dispute, recoupment, or adjustment other than normal
discounts for prompt payment;
(i) The account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceeding and has not made an assignment
for the benefit of creditors, suspended normal business
operations, dissolved, liquidated, terminated its existence,
ceased to pay its debts as they become due, or suffered a receiver
or trustee to be appointed for any of its assets or affairs;
(j) The account is not evidenced by chattel paper or an
instrument;
(k) No default exists under the account by any party thereto;
(l) The account debtor has not returned or refused to retain, or
otherwise notified Best of any dispute concerning, or claimed
nonconformity of, any of the goods from the sale of which the
account arose;
(m) The account is not owed by an Affiliate, employee, officer,
director or shareholder of either Borrower;
(n) The account is payable in Dollars by the account debtor;
(o) The account is not owed by an account debtor whose accounts
the Lender in its sole discretion has chosen to exclude from
Eligible Accounts;
(p) The account shall be ineligible if the account debtor is
domiciled in any country other than the United States of America
and Canada;
(q) The account shall be ineligible if more than twenty percent
20% of the aggregate balances then outstanding on accounts owed by
such account debtor and its Affiliates to Best are more than
ninety (90) days past the dates of their original invoices;
(r) The account shall be ineligible if the account debtor is the
United States of America or any department, agency, or
instrumentality thereof, and the Federal Assignment of Claims Act
of 1940, as amended, shall not have been complied with;
(s) The account shall be ineligible to the extent the aggregate of
all accounts owed by the account debtor and its Affiliates to
which the account relates exceeds twenty percent 20% of all
accounts owed by all of Best's account debtors; and
(t) The Account is otherwise acceptable in the sole discretion of
the Lender; provided that the Lender shall have the right to
create and adjust eligibility standards and related reserves from
time to time in its good faith credit judgment.
The amount of the Eligible Accounts owed by an account debtor to Best shall
be reduced by the amount of all "contra accounts" and other obligations owed
by Best to such account debtor.
"Eligible Inventory" means, at any time, all inventory of raw materials
and finished goods then owned by (and in the possession or under the control
of) Best and held for sale or disposition in the ordinary course of Best's
business, in which the Lender has a perfected, first priority security
interest, valued at the lower of actual cost or fair market value. Eligible
Inventory shall not include (a) inventory that has been shipped or delivered
to a customer on consignment, a sale-or-return basis, or on the basis of any
similar understanding, (b) inventory with respect to which a claim exists
disputing Best's title to or right to possession of such inventory, (c)
inventory that is not in good condition or does not comply with any
applicable law, rule, or regulation or any standard imposed by any
Governmental Authority with respect to its manufacture, use, or sale,
(d) inventory that is damaged, obsolete or otherwise not readily saleable,
(e) inventory covered by negotiable warehouse or other document of title
(unless the same is in the possession of the Lender); (f) inventory held for
rental or lease, (g) inventory that the Lender, in its sole discretion, has
determined to be unmarketable, (h) inventory subject to third-party
intellectual property agreements and (i) inventory that requires consent of
a third-party for manufacture or sale.
"Environmental Laws" means any and all federal, state, and local laws,
regulations, judicial decisions, orders, decrees, plans, rules, permits,
licenses, and other governmental restrictions and requirements pertaining to
health, safety, or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. S 9601 et seq., the Resource Conservation and Recovery Act
of 1976, 42 U.S.C. S 6901 et seq., the Occupational Safety and Health Act,
29 U.S.C. S 651 et seq., the Clean Air Act, 42 U.S.C. S 7401 et seq., the
Clean Water Act, 33 U.S.C. S 1251 et seq., and the Toxic Substances Control
Act, 15 U.S.C. S 2601 et seq., as the same may be amended or supplemented
from time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses,
(including, without limitation, all reasonable fees, disbursements and
expenses of counsel, expert and consulting fees and costs of investigation
and feasibility studies), fines, penalties, sanctions, and interest incurred
as a result of any claim or demand, by any Person, whether based in
contract, tort, implied or express warranty, strict liability, criminal or
civil statute, including any Environmental Law, permit, order or agreement
with any Governmental Authority or other Person, arising from environmental,
health or safety conditions or the Release or threatened Release of a
Hazardous Material into the environment, resulting from the past, present,
or future operations of such Person or its Affiliates.
"Equipment" means all present and future equipment of Borrowers, as the
term "equipment" is defined in the UCC.
"Equipment Commitment" means the obligation of Lender to make the
Equipment Loan to Borrowers pursuant to Section 2.2 hereof in the principal
amount of $2,000,000.00.
"Equipment Loan" means the loan made by Lender to Borrowers under
Section 2.2(a).
"Equipment Note" means the promissory note of Borrowers payable to the
order of Lender described in Section 2.2(b) and being in form and substance
satisfactory to Lender, together with any and all renewals, extensions
and/or rearrangements thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or is under common control
(within the meaning of Section 414(c) of the Code) with the Borrower.
"Event of Default" has the meaning specified in Section 10.1.
"Fixed Charge Coverage Ratio" means, in respect of a Person and for any
period of determination, the ratio, computed on a trailing twelve (12) month
period, of (a) EBITDAR less cash taxes and non-financed Capital Expenditures
to (b) Current Maturities of Long-Term Indebtedness plus Interest Expense
(excluding capitalized interest) plus Capitalized Lease Obligations and
Subordinated Debt.
"Funded Debt" means Debt described in clauses (a), (b), (d), (g), (i),
(j) and (k) of the definition of "Debt."
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of
the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles applied in a current period are
comparable in all material respects to those accounting principles applied
in a preceding period.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or
pertaining to government.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person as well as any obligation or liability,
direct or indirect, contingent or otherwise, of such Person (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Debt
or other obligation or liability (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to operate Property, to take-or-pay, or to maintain
net worth or working capital or other financial statement conditions or
otherwise) or (b) entered into for the purpose of indemnifying or assuring
in any other manner the obligee of such Debt or other obligation or
liability of the payment thereof or to protect the obligee against loss in
respect thereof (in whole or in part), provided that the term Guarantee
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Hazardous Material" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law,
including, without limitation, asbestos, petroleum, and polychlorinated
biphenyls.
"Interest Expense" means, for any period, the interest expense [(net of
interest income)] for such period of Borrower determined in conformity with
GAAP.
"Letter of Credit" means any letter of credit issued by the Lender for
the account of or at the direction of the Borrowers pursuant to Article II
of this Agreement.
"Letter of Credit Liabilities" means, at any time, the aggregate face
amounts of all outstanding Letters of Credit, plus any amounts drawn under
any Letters of Credit for which the Lender has not been fully reimbursed by
the Borrowers (unless the Lender, in its sole discretion, has cleared the
drawn amount by means of Revolving Credit Loan, in which case the drawn
amount would not constitute a Letter of Credit Liability).
"Letter of Credit Request Form or Application" means a certificate or
agreement, in a form acceptable to the Lender, properly completed and signed
by the Borrowers requesting issuance of a Letter of Credit and containing
provisions for fees for the issuance of Letters of Credit, repayment of
drawn letters of credit, the interest rate applicable to drawn and unpaid
Letters of Credit, and such other matters as the Lender may require.
"Liabilities" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as liabilities on a balance sheet of
a Person.
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other
encumbrance of any kind or nature whatsoever (including, without limitation,
any conditional sale or title retention agreement), whether arising by
contract, operation of law, or otherwise.
"Loan Documents" means this Agreement and all promissory notes,
security agreements, deeds of trust, assignments, letters of credit,
guaranties, and other instruments, documents, and agreements executed and
delivered pursuant to or in connection with this Agreement, as such
instruments, documents, and agreements may be amended, modified, renewed,
restated, extended, supplemented, replaced, consolidated, substituted, or
otherwise changed from time to time.
"Loans" means the Revolving Credit Loans, the Equipment Loan and the
Term Loan.
"Long-Term Indebtedness" shall mean, in respect of a Person and as of
any applicable date of determination thereof, all Debt (other than the
aggregate outstanding principal balance of all Revolving Credit Note due
within one year) which should be classified as "funded indebtedness" or
"long-term indebtedness" on a balance sheet of such Person as of such date
in accordance with GAAP and Long-Term Indebtedness includes Capital Lease
Obligations.
"Maximum Lawful Rate" means, at any time, the maximum rate of interest
which may be charged, contracted for, taken, received or reserved by the
Lender in accordance with applicable Texas law (or applicable United States
federal law to the extent that such law permits Lender to charge, contract
for, receive or reserve a greater amount of interest than under Texas law).
The Maximum Lawful Rate shall be calculated in a manner that takes into
account any and all fees, payments, and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each change in any
interest rate provided for herein based upon the Maximum Lawful Rate
resulting from a change in the Maximum Lawful Rate shall take effect without
notice to the Borrowers at the time of such change in the Maximum Lawful
Rate.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the
Borrowers or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Income" means, for any period, the net income or net loss for such
period of Borrowers determined in conformity with GAAP.
"Notes" means the Revolving Credit Note, the Equipment Note and the
Term Note, together with any and all renewals, extensions and/or
rearrangements thereof.
"Obligations" means all obligations, indebtedness, and liabilities of
the Borrowers to the Lender or Affiliates of the Lender, or both, now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, without limitation, the obligations, indebtedness, and
liabilities under this Agreement, any Swap Contract, the other Loan
Documents (including, without limitation, all Letter of Credit Liabilities),
any cash management or treasury services agreements and all interest
accruing thereon (whether a claim for post-filing or post-petition interest
is allowed in any insolvency, reorganization or similar proceeding) and all
attorneys' fees and other expenses incurred in the enforcement or collection
thereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Person" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture,
Governmental Authority, or other entity, and shall include such Person's
heirs, administrators, personal representatives, executors, successors and
assigns.
"Plan" means any employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and which is covered by
Title IV of ERISA.
"Prime Rate" has the meaning assigned to it in the Notes.
"Principal Office" means the principal office of the Lender, presently
located at 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible or mixed, of such Person, or any other assets
owned, operated or leased by such Person.
"Real Estate" means the real property more specifically described on
Exhibit C attached hereto.
"Regulatory Change" means, with respect to Lender, any change after the
date hereof in Federal, state or foreign law or regulations (including
Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks including
Lender of or under any Federal, state or foreign law or regulations (whether
or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Related Indebtedness" has the meaning set forth in Section 11.20 of
this Agreement.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or
into or out of property owned by such Person, including, without limitation,
the movement of Hazardous Materials through or in the air, soil, surface
water, ground water, or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat, or otherwise address Hazardous Materials in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, or (c) perform pre-remedial studies and investigations
and post-remedial monitoring and care.
"Rental Expense" means, for any period, the aggregate amount of fixed
and contingent rental payable by Borrowers determined in accordance with
GAAP for said period with respect to leases of real and personal property
determined without duplication of any items included in Interest Expense for
such period.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Revolving Credit Commitment" means the obligation of Lender to make
the Revolving Credit Loans to, and/or issue the Letters of Credit for the
account of, Borrowers, pursuant to Section 2.1 up to an aggregate principal
amount at any one time outstanding of $3,000,000.00.
"Revolving Credit Loan" means a loan made by Lender to Borrowers
pursuant to Section 2.1.
"Revolving Credit Note" means the promissory note of Borrowers dated as
of the date of this Agreement in the stated principal amount of
$3,000,000.00 payable to the order of Lender and being in form and substance
acceptable to Lender and any and all renewals, extensions and/or
rearrangements thereof.
"Revolving Loan Request Form" means a certificate in form approved by
Lender, properly completed and signed by Borrowers requesting a Revolving
Credit Loan.
"Security Agreement" means the Pledge and Security Agreement of the
Borrowers in favor of the Lender, in form and substance satisfactory to the
Lender, as the same may be amended, restated, supplemented, modified, or
changed from time to time.
"Security Documents" means the Deed of Trust, the Security Agreement,
and any other collateral security agreement required by or delivered to the
Lender from time to time to secure the Obligations or any portion thereof.
"Senior Funded Debt" means Funded Debt minus Subordinated Debt.
"Subordinated Debt" means the loan or loans up to an aggregate
principal amount of $4,200,000.00 made by Xxxx Xxxxxx to Best and Integrated
pursuant to the Subordinated Debt Documents.
"Subordinated Debt Documents" means all documents and agreements
executed by Best and Integrated and Xxxx Xxxxxx in connection with or as
security for the Subordinated Debt.
"Subsidiary" means (a) any corporation of which at least a majority of
the outstanding shares of stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly
owned or controlled by the Borrower or one or more of the Subsidiaries or by
the Borrower and one or more of the Subsidiaries; and (b) any other entity
(i) of which at least a majority of the ownership, equity or voting interest
is at the time directly or indirectly owned or controlled by one or more of
the Borrower and the Subsidiaries and (ii) which is treated as a subsidiary
in accordance with GAAP.
"Swap Contract" means any agreement (including related confirmations
and schedules) between the Borrower and the Lender or any Affiliate of the
Lender now existing or hereafter entered into which is, or relates to, a
rate swap, basis swap, forward rate transaction, cap transaction, floor
transaction, collar transaction or any other similar transactions (including
any option with respect to any of these transactions) or any combination
thereof.
"Tangible Net Worth" means, at any particular time, all amounts which,
in conformity with GAAP, would be included as stockholders' equity on a
balance sheet of a Person; provided, however, there shall be excluded
therefrom: (a) any amount at which the equity of such Person appears as an
asset on such Person's balance sheet, (b) goodwill, including any amounts,
however designated, that represent the excess of the purchase price paid for
assets or stock over the value assigned thereto, (c) patents, trademarks,
trade names, and copyrights, (d) deferred expenses, (e) loans and advances
to any stockholder, director, officer, or employee of the Person or any
Affiliate of Person, Borrower, and (f) all other assets which are properly
classified as intangible assets.
"Tax Expense" means, for any period, charges for taxes accrued during
such period by Borrowers determined in conformity with GAAP.
"Term Loan Commitment" means the obligation of Lender to make the Term
Loan pursuant to Section 2.3 in the principal amount of $5,500,000.00.
"Term Loan" means the loan made by Lender to Borrowers pursuant to
Section 2.3.
"Term Note" means the promissory note of the Borrowers dated as of the
date of this Agreement in the stated principal amount of $5,500,000.00
payable to the order of Lender and being in form and substance acceptable to
Lender, and any and all renewals, extensions and/or rearrangements thereof.
"Termination Date" means 11:00 A.M. Dallas, Texas time on August 15,
2007, or such earlier date on which the Commitment terminates as provided in
this Agreement with respect to the Deed of Trust.
"Title Company" means Xxxxxxx Title Company.
"Title Policy" means a mortgage title insurance policy issued by the
Title Company in connection with the Deed of Trust.
"UCC" means the Chapters 1 through 11 of the Texas Business and
Commerce Code, as amended from time to time.
Section 1.2 Accounting Matters. Any accounting term used in this Agreement
or the other Loan Documents shall have, unless otherwise specifically
provided therein, the meaning customarily given such term in accordance with
GAAP, and all financial computations thereunder shall be computed, unless
otherwise specifically provided therein, in accordance with GAAP
consistently applied; provided, that all financial covenants and
calculations in the Loan Documents shall be made in accordance with GAAP as
in effect on the date of this Agreement unless the Borrower and the Lender
shall otherwise specifically agree in writing. That certain items or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing.
Section 1.3 Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of
the terms defined. The words "hereof", "herein", and "hereunder" and words
of similar import referring to this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Unless
otherwise specified, all Article and Section references pertain to this
Agreement. Terms used herein that are defined in the UCC, unless otherwise
defined herein, shall have the meanings specified in the UCC.
ARTICLE II
Amounts and Terms of Credit
Section 2.1 Revolving Credit Commitment.
(a) Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, the Lender agrees to make one or more Revolving
Credit Loans to the Borrowers from time to time from the date
hereof to and including the Termination Date in an aggregate
principal amount at any one time outstanding up to but not
exceeding the amount of the Revolving Credit Commitment, provided
that the aggregate amount of all Revolving Credit Loans at any one
time outstanding shall not exceed the lesser of (i) the amount of
the Revolving Credit Commitment minus all outstanding Letter of
Credit Liabilities or (ii) the Borrowing Base minus all
outstanding Letter of Credit Liabilities. Subject to the
foregoing limitations, and the other terms and provisions of this
Agreement, the Borrowers may borrow, repay, and reborrow
hereunder.
(b) The Revolving Credit Note. The obligation of the Borrowers to
repay the Revolving Credit Loans and interest thereon shall be
evidenced by the Revolving Credit Note executed by the Borrowers,
payable to the order of the Lender, in the principal amount of the
Revolving Credit Commitment as originally in effect, and dated the
date hereof.
(c) Repayment of Revolving Credit Loans. The Borrowers shall
repay the unpaid principal amount of all Revolving Credit Loans on
the Termination Date, unless sooner due by reason of acceleration
by the Lender as provided in this Agreement.
(d) Interest. The unpaid principal amount of the Revolving Credit
Loans shall, subject to the following sentence, bear interest as
provided in the Revolving Credit Note. If at any time the rate of
interest specified in the Revolving Credit Note would exceed the
Maximum Lawful Rate but for the provisions thereof limiting
interest to the Maximum Lawful Rate, then any subsequent reduction
shall not reduce the rate of interest on the Revolving Credit
Loans below the Maximum Lawful Rate until the aggregate amount of
interest accrued on the Revolving Credit Loans equals the
aggregate amount of interest which would have accrued on the
Revolving Credit Loans if the interest rate had not been limited
by the Maximum Lawful Rate. Accrued and unpaid interest on the
Revolving Credit Loans shall be payable as provided in the
Revolving Credit Note and on the Termination Date.
(e) Borrowing Procedure. The Borrowers shall give the Lender
notice of each Revolving Credit Loans by means of an Revolving
Loan Request Form containing the information required herein and
delivered (by hand or by mechanically confirmed facsimile) to the
Lender no later than [1:00 p.m.] (Texas time) on the day on which
the Revolving Credit Loan is desired to be funded. The Lender at
its option may accept telephonic requests for such Revolving
Credit Loans, provided that such acceptance shall not constitute a
waiver of the Lender's right to require delivery of a Revolving
Loan Request Form in connection with subsequent Revolving Credit
Loans. Any telephonic request for a Revolving Credit Loans by the
Borrowers shall be promptly confirmed by submission of a properly
completed a Revolving Loan Request Form to the Lender, but failure
to deliver an Revolving Loan Request Form shall not be a defense
to payment of the Revolving Credit Loan. The Lender shall have no
liability to the Borrowers for any loss or damage suffered by the
Borrowers as a result of the Lender's honoring of any requests,
execution of any instructions, authorizations or agreements or
reliance on any reports communicated to it telephonically, by
facsimile or electronically and purporting to have been sent to
the Lender by the Borrowers and the Lender shall have no duty to
verify the origin of any such communication or the identity or
authority of the Person sending it. Subject to the terms and
conditions of this Agreement, each Revolving Credit Loan shall be
made available to the Borrowers by depositing the same, in
immediately available funds, in an account designated by the
Borrowers maintained with the Lender at the Principal Office.
Section 2.2 The Equipment Commitment.
(a) Equipment Loan. Subject to the terms and conditions and
relying on the representations and warranties contained in this
Agreement, Lender agrees to make, on the date of this Agreement,
the Equipment Loan to Borrowers in the principal amount of the
Equipment Commitment.
(b) Equipment Note. To evidence the Equipment Loan, Borrowers
will issue, execute and deliver the Equipment Note dated as of the
date of this Agreement in the principal amount of the Equipment
Commitment.
(c) Repayment of Equipment Loan. The Borrowers shall repay the
unpaid principal amount of the Equipment Loan together with
accrued interest thereon as provided in the Equipment Note.
(d) Interest. The unpaid principal amount of the Equipment Loan
shall, subject to the following sentence, bear interest as
provided in the Equipment Note. If at any time the rate of
interest specified in the Equipment Note would exceed the Maximum
Lawful Rate but for the provisions thereof limiting interest to
the Maximum Lawful Rate, then any subsequent reduction shall not
reduce the rate of interest on the Equipment Loan below the
Maximum Lawful Rate until the aggregate amount of interest accrued
on the Equipment Loan equals the aggregate amount of interest
which would have accrued on the Equipment Loan if the interest
rate had not been limited by the Maximum Lawful Rate. Accrued and
unpaid interest on the Equipment Loan shall be payable as
provided in the Equipment Note.
Section 2.3 Term Loan Commitment.
(a) Term Loan. Subject to the terms and conditions of this
Agreement, the Lender agrees to make, on or about the date of this
Agreement the Term Loan to Borrowers in the principal amount of
the Term Loan Commitment.
(b) The Term Note. The obligation of the Borrowers to repay the
Term Loan and interest thereon shall be evidenced by the Term Note
executed by the Borrowers, payable to the order of the Lender, in
the principal amount of the Term Loan Commitment.
(c) Repayment of Principal and Interest. Subject to prior
acceleration as provided in this Agreement, the unpaid principal
balance of the Term Note shall be repaid as provided therein.
(d) Interest. The unpaid principal amount of the Term Note shall,
subject to the following sentence, bear interest as provided in
the Term Note. If at any time the rate of interest specified in
the Term Note shall exceed the Maximum Lawful Rate but for the
provisions thereof limiting interest to the Maximum Lawful Rate,
then any subsequent reduction shall not reduce the rate of
interest on the Term Loan below the Maximum Lawful Rate until the
aggregate amount of interest accrued on the Term Loan equals the
aggregate amount of interest which would have accrued on the Term
Loan if the interest rate had not been limited by the Maximum
Lawful Rate. Accrued and unpaid interest on the Term Loan shall
be payable as provided in the Term Note.
Section 2.4 General Provisions Regarding Interest; Etc.
(a) Any outstanding principal of any Loan and (to the fullest
extent permitted by law) any other amount payable by the Borrowers
under this Agreement or any other Loan Document that is not paid
in full when due (whether at stated maturity, by acceleration, or
otherwise) shall bear interest at the Default Interest Rate for
the period from and including the due date thereof to but
excluding the date the same is paid in full. Additionally, upon
the occurrence of an Event of Default (and from the date of such
occurrence) all outstanding and unpaid principal amounts of all of
the Obligations shall, to the extent permitted by law, bear
interest at the Default Interest Rate until such time as the
Lender shall waive in writing the application of the Default
Interest Rate to such Event of Default situation. Interest
payable at the Default Interest Rate shall be payable from time to
time on demand.
(b) Computation of Interest. Interest on the Loans and all other
amounts payable by the Borrowers hereunder shall be computed on
the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day)
unless such calculation would result in a usurious rate, in which
case interest shall be calculated on the basis of a year of 365 or
366 days, as the case may be.
Section 2.5 Use of Proceeds. The proceeds of the Revolving Credit Loans
shall be used by the Borrowers for working capital in the ordinary course
of business. The proceeds of the Equipment Loan shall be used by Borrowers
to acquire Equipment used in the Borrowers' business. The proceeds of the
Term Loan will be used to acquire the Real Estate.
Section 2.6 Letters of Credit. Subject to the terms and conditions of this
Agreement, the Lender agrees to issue one or more Letters of Credit for the
account of Best from time to time from the date hereof to and including the
Termination Date; provided, however, that the outstanding Letter of Credit
Liabilities shall not at any time exceed the lesser of (a) Two Million and
No/100 Dollars ($2,000,000.00), (b) an amount equal to the amount of the
Revolving Credit Commitment minus the outstanding Revolving Credit Loans, or
(c) the Borrowing Base minus the outstanding Revolving Credit Loans. Each
Letter of Credit shall have an expiration date not to exceed one hundred
eighty (180) days, shall not have an expiration date beyond the Termination
Date, shall be payable in Dollars, shall have a minimum face amount of
Twenty-Five Thousand Dollars ($25,000.00), must support a transaction that
is entered into in the ordinary course of the Borrowers' business, must be
satisfactory in form and substance to the Lender, will be subject to the
payment of such Letter of Credit fees as the Lender may require, and shall
be issued pursuant to such documents and instruments executed by the
Borrowers (including, without limitation, a Letter of Credit Application as
then in effect) as the Lender may require.
Each payment by the Lender pursuant to a drawing under a Letter of
Credit is due and payable ON DEMAND, and at the sole option of the Lender,
can be charged by the Lender as (and will be deemed to be) a Revolving
Credit Loan by the Lender to the Borrowers under the Revolving Credit Note
and this Agreement as of the day and time such payment is made by the Lender
and in the amount of such payment.
ARTICLE III
Payments
Section 3.1 Method of Payment. All payments of principal, interest, and
other amounts to be made by the Borrowers under this Agreement and the other
Loan Documents shall be made to the Lender at the Principal Office in
Dollars and immediately available funds, without setoff, deduction, or
counterclaim, and free and clear of all taxes at the time and in the manner
provided in the Notes.
Section 3.2 Prepayments.
(a) Voluntary Prepayments. The Borrowers may prepay all or any
portion of the Notes to the extent and in the manner provided for
therein. Prepayments shall be in a minimum of $100,000.00.
(b) Mandatory Prepayment. The Borrower must pay on DEMAND the
amount by which at any time the unpaid principal balance of the
Revolving Credit Note, plus the aggregate Letter of Credit
Liabilities, exceed the Borrowing Base.
Section 3.3 Additional Costs in Respect of Letters of Credit. If as a
result of any Regulatory Change there shall be imposed, modified, or deemed
applicable any tax, reserve, special deposit, or similar requirement against
or with respect to or measured by reference to Letters of Credit issued or
to be issued hereunder or the Lender's commitment to issue Letters of Credit
hereunder, and the result shall be to increase the cost to the Lender of
issuing or maintaining any Letter of Credit or its commitment to issue
Letters of Credit hereunder or reduce any amount receivable by the Lender
hereunder in respect of any Letter of Credit (which increase in cost, or
reduction in amount receivable, shall be the result of the Lender's
reasonable allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by the Lender, the Borrowers
agree to pay the Lender, from time to time as specified by the Lender, such
additional amounts as shall be sufficient to compensate the Lender for such
increased costs or reductions in amount. A statement as to such increased
costs or reductions in amount incurred by the Lender, submitted by the
Lender to the Borrowers, shall be conclusive as to the amount thereof,
provided that the determination thereof is made on a reasonable basis.
ARTICLE IV
Security
Section 4.1 Collateral. To secure full and complete payment and performance
of the Obligations, the Borrowers shall execute and deliver or cause to be
executed and delivered all of the Security Documents required by the Lender
covering the Property and collateral described in such Security Documents
(which, together with any other Property and collateral described in the
Security Agreement, and any other property which may now or hereafter secure
the Obligations or any part thereof, is sometimes herein called the
"Collateral"). The Borrowers shall execute and cause to be executed such
further documents and instruments, including without limitation, Uniform
Commercial Code financing statements, as the Lender, in its sole discretion,
deems necessary or desirable to create, evidence, preserve, and perfect its
liens and security interests in the Collateral.
Section 4.2 Setoff. If an Event of Default shall have occurred and be
continuing, the Lender shall have the right to set off and apply against the
Obligations in such manner as the Lender may determine, at any time and
without notice to the Borrowers, any and all deposits (general or special,
time or demand, provisional or final) or other sums at any time credited by
or owing from the Lender to the Borrowers whether or not the Obligations are
then due. As further security for the Obligations, the Borrowers hereby
grant to the Lender a security interest in all money, instruments, and other
property of the Borrowers now or hereafter held by the Lender, including,
without limitation, property held in safekeeping. In addition to the
Lender's right of setoff and as further security for the Obligations, the
Borrowers hereby grant to the Lender a security interest in all deposits
(general or special, time or demand, provisional or final) and other
accounts of the Borrowers now or hereafter on deposit with or held by the
Lender and all other sums at any time credited by or owing from the Lender
to the Borrowers. The rights and remedies of the Lender hereunder are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which the Lender may have.
ARTICLE V
Conditions Precedent
Section 5.1 Initial Extension of Credit. The obligation of the Lender to
make the initial Revolving Credit Loan or issue the initial Letter of
Credit, to make the initial Equipment Loan, and to make the Term Loan is
subject to the condition precedent that the Lender shall have received on or
before the day of such Loan or Letter of Credit all of the following, each
dated (unless otherwise indicated) the date hereof, in form and substance
satisfactory to the Lender:
(a) Resolutions. Resolutions of the Board of Directors (or other
governing body) of each Borrower certified by the Secretary or an
Assistant Secretary (or other custodian of records) of such
Borrower which authorize the execution, delivery, and performance
by the Borrower of this Agreement and the other Loan Documents to
which such Borrower is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency certified
by an authorized officer or representative certifying the names of
the individuals or other Persons authorized to sign this Agreement
and each of the other Loan Documents to which each Borrower is or
is to be a party (including the certificates contemplated herein)
on behalf of the Borrower together with specimen signatures of
such Persons;
(c) Constituent Documents. The Constituent Documents for the
Borrowers as of a date acceptable to the Lender;
(d) Governmental Certificates. Certificates of the appropriate
government officials of the state of incorporation or organization
of the Borrowers as to the existence and good standing of the
Borrowers, each dated within ten (10) days prior to the date of
the initial Loan or Letter of Credit;
(e) Notes. The Revolving Credit Note, the Equipment Note, and the
Term Note executed by the Borrowers;
(f) Security Documents. The Security Documents executed by the
Borrowers;
(g) Financing Statements. Uniform Commercial Code financing
statements and covering such Collateral as the Lender may request;
(h) Landlord Waivers. Landlord waivers executed by Jacco
Investments.
(i) Insurance Matters. Copies of insurance certificates
describing all insurance policies required by Section 7.5,
together with loss payable and lender endorsements in favor of the
Lender with respect to all insurance policies covering Collateral;
(j) UCC Search. The results of a Uniform Commercial Code search
showing all financing statements and other documents or
instruments on file against each Borrower in the office of the
Secretaries of State of Delaware, New York and Texas, such search
to be as of a date no more than ten (10) days prior to the date of
the initial Advance or the Letter of Credit;
(k) Opinion of Counsel. A favorable opinion of Kane, Russell,
Xxxxxxx & Xxxxx, P.A., legal counsel to the Borrowers, as to such
other matters as the Lender may reasonably request; and
(l) Attorneys' Fees and Expenses. Evidence that the costs and
expenses (including reasonable attorneys' fees) referred to in
Section 11.1, to the extent incurred, shall have been paid in full
by the Borrower.
(m) Additional Items. The additional items set forth on Schedule
5.1(m).
Section 5.2 All Extensions of Credit. The obligation of the Lender to make
each Loan or issue each Letter of Credit (including the initial Loan
and the initial Letter of Credit) is subject to the following additional
conditions precedent:
(a) Request for Loan or Letter of Credit. The Lender shall have
received in accordance with this Agreement, as the case may be, a
Revolving Loan Request Form, or Letter of Credit Request Form,
pursuant to the Lender's requirements dated the date of such
Revolving Loan or Letter of Credit and executed by an authorized
officer of the Borrowers;
(b) No Default, Etc. No Default or material adverse change or
effect shall have occurred and be continuing, or would result from
or after giving effect to such Loan or Letter of Credit;
(c) Representations and Warranties. All of the representations
and warranties contained in Article VI hereof and in the other
Loan Documents shall be true and correct on and as of the date of
such Loan with the same force and effect as if such
representations and warranties had been made on and as of such
date;
(d) Additional Documentation. The Lender shall have received such
additional approvals, opinions, or documents as the Lender or its
legal counsel may reasonably request.
ARTICLE VI
Representations and Warranties
To induce the Lender to enter into this Agreement, each Borrower
represents and warrants to the Lender that:
Section 6.1 Corporate Existence. Each Borrower (a) is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite power and authority
to own its assets and carry on its business as now being or as proposed to
be conducted; and (c) is qualified to do business in all jurisdictions in
which the nature of its business makes such qualification necessary and
where failure to so qualify would have a material adverse effect on its
business, condition (financial or otherwise), operations, prospects, or
properties. Each Borrower has the power and authority to execute, deliver,
and perform its obligations under this Agreement and the other Loan
Documents to which it is or may become a party.
Section 6.2 Financial Statements; Etc. The Borrowers have delivered to the
Lender audited consolidated financial statements of Best and Integrated as
at and for the fiscal year ended July 31, 2005, and unaudited financial
statements of Best and Integrated for the third fiscal quarter of Borrower
ending April 30, 2006. Such financial statements are true and correct, have
been prepared in accordance with GAAP, and fairly and accurately present,
the financial condition of Best and Integrated as of the respective dates
indicated therein and the results of operations for the respective periods
indicated therein. Neither Best nor Integrated has any material contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments, or unrealized or anticipated losses from any unfavorable
commitments except as referred to or reflected in such financial statements.
There has been no material adverse change in the business, condition
(financial or otherwise), operations, prospects, or properties of either
Best nor Integrated since the effective date of the most recent financial
statements referred to in this Section. All projections delivered by the
Borrowers to the Lender have been prepared in good faith, with care and
diligence and use assumptions that are reasonable under the circumstances at
the time such projections were prepared and delivered to the Lender and all
such assumptions are disclosed in the projections.
Section 6.3 Action; No Breach. The execution, delivery, and performance by
the Borrowers of this Agreement and the other Loan Documents to which the
Borrowers are or may become a party and compliance with the terms and
provisions hereof and thereof have been duly authorized by all requisite
action on the part of the Borrowers and do not and will not (a) violate or
conflict with, or result in a breach of, or require any consent under (i)
the Constituent Documents of the Borrowers, (ii) any applicable law, rule,
or regulation or any order, writ, injunction, or decree of any Governmental
Authority or arbitrator, or (iii) any agreement or instrument to which the
Borrowers are a party or by which either of them or any of their Properties
is bound or subject, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of
the revenues or assets of the Borrowers.
Section 6.4 Operation of Business. The Borrowers possess all licenses,
permits, franchises, patents, copyrights, trademarks, and tradenames,
or rights thereto, necessary to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted,
and the Borrowers are not in violation of any valid rights of others with
respect to any of the foregoing.
Section 6.5 Litigation and Judgments. There is no action, suit,
investigation, or proceeding before or by any Governmental Authority or
arbitrator pending, or to the knowledge of the Borrowers, threatened against
or affecting the Borrowers, that would, if adversely determined, have a
material adverse effect on the business, condition (financial or otherwise),
operations, prospects, or properties of either Borrower or the ability
of either Borrowers to pay and perform the Obligations. There are no
outstanding judgments against the Borrowers.
Section 6.6 Rights in Properties; Liens. The Borrowers have good and
indefeasible title to or valid leasehold interests in their respective
Properties, including the Properties reflected in the financial statements
described in Section 6.2, and none of the Properties of the Borrowers is
subject to any Lien, except as permitted by Section 8.2.
Section 6.7 Enforceability. This Agreement constitutes, and the other Loan
Documents to which the Borrowers are parties, when delivered, shall
constitute legal, valid, and binding obligations of the Borrowers,
enforceable against the Borrowers in accordance with their respective terms,
except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors' rights.
Section 6.8 Approvals. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or third party is
or will be necessary for the execution, delivery, or performance by
the Borrowers of this Agreement and the other Loan Documents to which
the Borrowers are or may become a party or the validity or enforceability
thereof.
Section 6.9 Debt. The Borrowers have no Debt, other than (a) Debt to
Lender, and (b) Subordinated Debt.
Section 6.10 Taxes. The Borrowers have filed all tax returns (federal,
state, and local) required to be filed, including all income, franchise,
employment, property, and sales tax returns, and have paid all of their
respective liabilities for taxes, assessments, governmental charges, and
other levies that are due and payable. The Borrowers know of no pending
investigation of the Borrowers by any taxing authority or of any pending but
unassessed tax liability of the Borrowers.
Section 6.11 Use of Proceeds; Margin Securities. No Borrower is 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 meaning of Regulations G, T, U, or X of the Board of Governors
of the Federal Reserve System), and no part of the proceeds of any Loan will
be used to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying margin stock.
Section 6.12 ERISA. The Borrowers are in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event
nor a Prohibited Transaction has occurred and is continuing with respect to
any Plan. No notice of intent to terminate a Plan has been filed, nor has
any Plan been terminated. No circumstances exist which constitute grounds
entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings. Neither the Borrowers nor any ERISA Affiliate has completely
or partially withdrawn from a Multiemployer Plan. The Borrowers and each
ERISA Affiliate have met their minimum funding requirements under ERISA with
respect to all of their Plans, and the present value of all vested benefits
under each Plan do not exceed the fair market value of all Plan assets
allocable to such benefits, as determined on the most recent valuation date
of the Plan and in accordance with ERISA. Neither the Borrowers nor any
ERISA Affiliate has incurred any liability to the PBGC under ERISA.
Section 6.13 Disclosure. No statement, information, report, representation,
or warranty made by the Borrowers in this Agreement or in any other Loan
Document or furnished to the Lender in connection with this Agreement or any
of the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact known to the
Borrowers which has a material adverse effect, or which might in the future
have a material adverse effect, on the business, condition (financial or
otherwise), operations, prospects, or properties of either Borrower that has
not been disclosed in writing to the Lender.
Section 6.14 Subsidiaries, Ventures, Etc. The Borrowers have no
Subsidiaries, Affiliates or joint ventures or partnerships.
Section 6.15 Agreements. No Borrower is a party to any indenture, loan, or
credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate or other organizational restriction
which could have a material adverse effect on the business, condition
(financial or otherwise), operations, prospects, or properties of any
Borrower, or the ability of any Borrower to pay and perform its obligations
under the Loan Documents to which it is a party. No Borrower is in default
in any respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement or
instrument material to its business to which it is a party.
Section 6.16 Compliance with Laws. No Borrower is in violation in any
material respect of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator.
Section 6.17 Inventory. All inventory of the Borrowers has been and will
hereafter be produced in compliance with all applicable laws, rules,
regulations, and governmental standards, including, without limitation, the
minimum wage and overtime provisions of the Fair Labor Standards Act, as
amended (29 U.S.C. SS 201-219), and the regulations promulgated thereunder.
Section 6.18 Investment Company Act. No Borrower is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Section 6.19 Public Utility Holding Company Act. No Borrower is a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate"
of a "holding company" or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
Section 6.20 Environmental Matters.
(a) Each Borrower and all of its properties, assets, and
operations are in full compliance with all Environmental Laws. No
Borrower is aware of, nor has any Borrower received notice of, any
past, present, or future conditions, events, activities,
practices, or incidents which may interfere with or prevent the
compliance or continued compliance of the Borrowers with all
Environmental Laws;
(b) Each Borrower has obtained all permits, licenses, and
authorizations that are required under applicable Environmental
Laws, and all such permits are in good standing and each Borrowers
is in compliance with all of the terms and conditions of such
permits;
(c) No Hazardous Materials exist on, about, or within or have been
used, generated, stored, transported, disposed of on, or Released
from any of the properties or assets of the Borrowers. The use
which the Borrowers make and intend to make of their respective
properties and assets will not result in the use, generation,
storage, transportation, accumulation, disposal, or Release of any
Hazardous Material on, in, or from any of their properties or
assets;
(d) No Borrower nor any of its currently or previously owned or
leased properties or operations is subject to any outstanding or
threatened order from or agreement with any Governmental Authority
or other Person or subject to any judicial or docketed
administrative proceeding with respect to (i) failure to comply
with Environmental Laws, (ii) Remedial Action, or (iii) any
Environmental Liabilities arising from a Release or threatened
Release;
(e) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations
of the Borrowers that could reasonably be expected to give rise to
any Environmental Liabilities;
(f) No Borrower is a treatment, storage, or disposal facility
requiring a permit under the Resource Conservation and Recovery
Act, 42 U.S.C. S 6901 et seq., regulations thereunder or any
comparable provision of state law. The Borrowers are in
compliance with all applicable financial responsibility
requirements of all Environmental Laws;
(g) No Borrower has filed or failed to file any notice required
under applicable Environmental Law reporting a Release; and
(h) No Lien arising under any Environmental Law has attached to
any property or revenues of the Borrowers.
Section 6.21 Intellectual Property. All material Intellectual Property
owned or used by the Borrowers, is listed, together with application or
registration numbers, where applicable, in Schedule 6.21 attached hereto.
Each Person identified Schedule 6.21 owns, or is licensed to use, all
Intellectual Property necessary to conduct its business as currently
conducted except for such Intellectual Property the failure of which to own
or license could not reasonably be expected to have a material adverse
effect. Each Person identified on Schedule 6.21 will maintain the patenting
and registration of all Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office, or other
appropriate Governmental Authority and each Person identified on Schedule
6.21 will promptly patent or register, as the case may be, all new
Intellectual Property and notify the Lender in writing five (5) Business
Days prior to filing any such new patent or registration.
Section 6.22 Depository Relationship. To induce the Lender to establish the
interest rates provided for in the Notes, the Borrowers will use the Lender
as its principal depository bank and the Borrowers covenant and agree to
maintain the Lender as its principal depository bank, including for the
maintenance of business, cash management, operating and administrative
deposit accounts.
ARTICLE VII
Affirmative Covenants
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or the Lender has any Commitment hereunder,
each Borrower will perform and observe the following positive covenants,
unless the Lender shall otherwise consent in writing:
Section 7.1 Reporting Requirements. Borrowers will furnish to the Lender:
(a) Annual Financial Statements. As soon as available, and in any
event within one hundred twenty (120) days after the end of each
fiscal year of the Borrowers, beginning with the fiscal year
ending July 31, 2006, (i) a copy of the annual audit report of the
Borrowers for such fiscal year containing, on a consolidated
basis, balance sheets and statements of income, retained earnings,
and cash flow as at the end of such fiscal year and for the 12-
month period then ended, in each case setting forth in comparative
form the figures for the preceding fiscal year, all in reasonable
detail and audited and certified by certified public accountants
of recognized standing acceptable to the Lender, to the effect
that such report has been prepared in accordance with GAAP and
containing no material qualifications or limitations on scope; and
(ii) a certificate of such independent certified public
accountants to the Lender confirming the calculations set forth in
the officer's certificate delivered simultaneously therewith;
(b) Quarterly Financial Statements. As soon as available, and in
any event within forty-five (45) days after the end of each fiscal
quarter of each fiscal year of the Borrowers, a copy of an
unaudited financial report of the Borrowers as of the end of such
fiscal quarter and for the portion of the fiscal year then ended,
containing, on a consolidated basis, balance sheets and statements
of income, retained earnings, and cash flow, in each case setting
forth in comparative form the figures for the corresponding period
of the preceding fiscal year, all in reasonable detail certified
by the chief financial officer of the Parent to have been prepared
in accordance with GAAP and to fairly and accurately present
(subject to year-end audit adjustments) the financial condition
and results of operations of the Borrowers, on a consolidated
basis, at the date and for the periods indicated therein;
(c) Borrowing Base Report. As soon as available, and in any event
within forty-five (45) days after the end of each calendar
quarter, a Borrowing Base Report, in a form acceptable to the
Lender, certified by the chief financial officer of the Parent;
(d) Compliance Certificate. Concurrently with the delivery of
each of the financial statements referred to in subsections 8.1(a)
and 8.1(b), a certificate of the chief financial officer of
Integrated (i) stating that to the best of such officer's
knowledge, no Default has occurred and is continuing, or if a
Default has occurred and is continuing, a statement as to the
nature thereof and the action which is proposed to be taken with
respect thereto, and (ii) showing in reasonable detail the
calculations demonstrating compliance with Article IX;
(e) Management Letters. Promptly upon receipt thereof, a copy of
any management letter or written report submitted to the Borrowers
by independent certified public accountants with respect to the
business, condition (financial or otherwise), operations,
prospects, or properties of the Borrowers;
(f) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any
Governmental Authority or arbitrator affecting the Borrowers
which, if determined adversely to any Borrower, could have a
material adverse effect on the business, condition (financial or
otherwise), operations, prospects, or properties of any Borrower;
(g) Notice of Default. As soon as possible and in any event
within three (3) days after the occurrence of each Default, a
written notice setting forth the details of such Default and the
action that the Borrowers have taken and propose to take with
respect thereto;
(h) ERISA Reports. Promptly after the filing or receipt thereof,
copies of all reports, including annual reports, and notices which
the Borrowers file with or receive from the PBGC or the U.S.
Department of Labor under ERISA; and as soon as possible and in
any event within five (5) days after the Borrowers know or have
reason to know that any Reportable Event or Prohibited Transaction
has occurred with respect to any Plan or that the PBGC or the
Borrowers have instituted or will institute proceedings under
Title IV of ERISA to terminate any Plan, a certificate of the
chief financial officer of the Parent setting forth the details as
to such Reportable Event or Prohibited Transaction or Plan
termination and the action that the Borrowers propose to take with
respect thereto;
(i) Reports to Other Creditors. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan, or credit or
similar agreement and not otherwise required to be furnished to
the Lender pursuant to any other clause of this Section;
(j) Notice of Material Adverse Change. As soon as possible and in
any event within five (5) days after the occurrence thereof,
written notice of any matter that could have a material adverse
effect on the business, condition (financial or otherwise),
operations, prospects, or properties of any Borrower;
(k) Accounts Receivable and Accounts Payable Aging. As soon as
available, and in any event within forty-five (45) days after the
end of each calendar quarter, an account receivable aging,
classifying each Borrower's domestic and export accounts
receivable in categories of 0-30, 31-60, 61-90 and over 90 days
from date of invoice, and in such form and detail as the Lender
shall require, and account payable aging by categories of 0-30,
31-60 and over 60, from date of invoice, also in such detail as
the Lender shall reasonably require, and in each case certified by
the chief financial officer of Integrated;
(l) Inventory Report. As soon as available, and in any event
within thirty (30) days after the end of each calendar month, an
inventory report, in such form and detail as the Lender shall
reasonably require, certified by the chief financial officer of
Integrated;
(m) Proxy Statements, Etc. As soon as available, one copy of each
financial statement, report, notice or proxy statement sent by the
Borrowers to their stockholders generally and one copy of each
regular, periodic or special report, registration statement, or
prospectus filed by any Borrower with any securities exchange or
the Securities and Exchange Commission or any successor agency;
(n) Equipment Listing - upon request by Lender, a listing of all
Equipment (specifying the location(s) thereof), such report to be
in reasonable detail and prepared on a basis and in a format
acceptable to Lender and certified as complete and correct by the
chief financial officer of Integrated; and
(o) General Information. Promptly, such other information
concerning the Borrowers as the Lender may from time to time
reasonably request.
Section 7.2 Maintenance of Existence; Conduct of Business. Each Borrower
will preserve and maintain its existence and all of its leases, privileges,
licenses, permits, franchises, qualifications, and rights that are necessary
or desirable in the ordinary conduct of its business. Each Borrower will
conduct its business in an orderly and efficient manner in accordance with
good business practices. Without limitation, no Borrower will make any
material change in its credit collection policies if such change would
materially impair the collectibility of any Account, nor will it rescind,
cancel or modify any Account except in the ordinary course of business.
Section 7.3 Maintenance of Properties. Each Borrower will maintain, keep,
and preserve all of its Properties (tangible and intangible) necessary or
useful in the proper conduct of its business in good working order and
condition.
Section 7.4 Taxes and Claims. Each Borrower will pay or discharge at or
before maturity or before becoming delinquent (a) all taxes, levies,
assessments, and governmental charges imposed on it or its income or profits
or any of its Property, and (b) all lawful claims for labor, material, and
supplies, which, if unpaid, might become a Lien upon any of its property;
provided, however, that no Borrower shall be required to pay or discharge
any tax, levy, assessment, or governmental charge which is being contested
in good faith by appropriate proceedings diligently pursued, and for which
adequate reserves have been established.
Section 7.5 Insurance. Each Borrower will maintain insurance with
financially sound and reputable insurance companies in such amounts and
covering such risks as is usually carried by corporations engaged in similar
businesses and owning similar properties in the same general areas in which
the Borrowers operate, provided that in any event each Borrowers will
maintain workmen's compensation insurance, property insurance, comprehensive
general liability insurance, products liability insurance, and business
interruption insurance reasonably satisfactory to the Lender. Each insurance
policy covering Collateral shall name the Lender as loss payee and shall
provide that such policy will not be cancelled or reduced without thirty
(30) days prior written notice to the Lender.
Section 7.6 Inspection Rights. At any reasonable time and from time to
time, each Borrower will permit representatives of the Lender to examine the
Collateral and conduct Collateral audits, to examine, copy, and make
extracts from its books and records, to visit and inspect its properties,
and to discuss its business, operations, and financial condition with its
officers, employees, and independent certified public accountants.
Section 7.7 Keeping Books and Records. Each Borrower will maintain proper
books of record and account in which full, true, and correct entries
in conformity with GAAP shall be made of all dealings and transactions in
relation to its business and activities.
Section 7.8 Compliance with Laws. Each Borrower will comply in all material
respects with all applicable laws, rules, regulations, orders, and decrees
of any Governmental Authority or arbitrator.
Section 7.9 Compliance with Agreements. Each Borrower will comply in all
material respects with all agreements, contracts, and instruments binding on
it or affecting its properties or business.
Section 7.10 Further Assurances. Each Borrower will execute and deliver
such further agreements and instruments and take such further action as may
be requested by the Lender to carry out the provisions and purposes of this
Agreement and the other Loan Documents and to create, preserve, and perfect
the Liens of the Lender in the Collateral.
Section 7.11 ERISA. Each Borrower will comply with all minimum funding
requirements, and all other material requirements, of ERISA, if applicable,
so as not to give rise to any liability thereunder.
ARTICLE VIII
Negative Covenants
Each Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or the Lender has any Commitment hereunder,
each Borrower will perform and observe the following negative covenants,
unless the Lender shall otherwise consent in writing:
Section 8.1 Debt. No Borrower will incur, create, assume, or permit to
exist any Debt, except:
(a) Debt to the Lender;
(b) Debt existing on the date of this Agreement which is disclosed
in the financial statements delivered to Lender prior to the date
of this Agreement;
(c) Subordinated Debt; and
(d) Debt not to exceed $250,000.00 annually during the term of
this Agreement.
Section 8.2 Limitation on Liens. No Borrower will incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except:
(a) Liens in favor of the Lender;
(b) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property
that do not (individually or in the aggregate) materially affect
the value of the assets encumbered thereby or materially impair
the ability of any Borrower to use such assets in its business,
and none of which is violated in any material respect by existing
or proposed structures or land use;
(c) Liens for taxes, assessments, or other governmental charges
which are not delinquent or which are being contested in good
faith and for which adequate reserves have been established;
(d) Liens of mechanics, materialmen, warehousemen, carriers, or
other similar statutory Liens securing obligations that are not
yet due and are incurred in the ordinary course of business; and
(e) Liens resulting from good faith deposits to secure payments of
workmen's compensation or other social security programs or to
secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, or contracts (other than for payment of
Debt), or leases made in the ordinary course of business.
Section 8.3 Mergers, Etc. No Borrower will become a party to a merger or
consolidation, or purchase or otherwise acquire all or any part of the
assets of any Person or any shares or other evidence of beneficial ownership
of any Person, or wind-up, dissolve, or liquidate; provided, however,
Integrated may merge into Global with Global being the surviving entity
provided no Default exists and such merger upon completion will not result
in the occurrence of any Default.
Section 8.4 Restricted Payments. No Borrower will declare or pay any
dividends or make any other payment or distribution (in cash, property, or
obligations) on account of its equity interests, or redeem, purchase,
retire, or otherwise acquire any of its equity interests, or set apart any
money for a sinking or other analogous fund for any dividend or other
distribution on its equity interests or for any redemption, purchase,
retirement, or other acquisition of any of its equity interests.
Section 8.5 Loans and Investments. No Borrower will make any advance, loan,
extension of credit, or capital contribution to or investment in, or
purchase any stock, bonds, notes, debentures, or other securities of, any
Person.
Section 8.6 Intentionally Deleted.
Section 8.7 Transactions With Affiliates. No Borrower will enter into any
transaction, including, without limitation, the purchase, sale, or exchange
of property or the rendering of any service, with any Affiliate of the
Borrowers except in the ordinary course of and pursuant to the reasonable
requirements of the Borrowers' business and upon fair and reasonable terms
no less favorable to the Borrowers than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate of the Borrowers.
Section 8.8 Disposition of Assets. No Borrower will sell, lease, assign,
transfer, or otherwise dispose of any of its assets except (a) dispositions
of inventory in the ordinary course of business or (b) dispositions, for
fair value, of worn-out and obsolete equipment not necessary or useful to
the conduct of business (the net proceeds of which shall be used to prepay
Term Loan).
Section 8.9 Sale and Leaseback. No Borrower will enter into any arrangement
with any Person pursuant to which it leases from such Person real or
personal property that has been or is to be sold or transferred, directly or
indirectly, by it to such Person.
Section 8.10 Prepayment of Debt. No Borrower will prepay any Debt, except
(a) the Obligations and (b) Subordinated Debt owing to Xxxx Xxxxxx to
the extent permitted by the terms of Subordination Agreement executed by
Borrowers, Lender, and Xxxx Xxxxxx.
Section 8.11 Nature of Business. No Borrower will engage in any business
other than the businesses in which it is engaged as of the date hereof.
Section 8.12 Environmental Protection. No Borrower will (a) use (or permit
any tenant to use) any of its properties or assets for the handling,
processing, storage, transportation, or disposal of any Hazardous Material,
(b) generate any Hazardous Material, (c) conduct any activity that is likely
to cause a Release or threatened Release of any Hazardous Material, or (d)
otherwise conduct any activity or use any of its properties or assets in
any manner that is likely to violate any Environmental Law or create any
Environmental Liabilities for which such Borrower would be responsible.
Section 8.13 Accounting. No Borrower will change its fiscal year or make
any change (a) in accounting treatment or reporting practices, except as
required by GAAP and disclosed to the Lender, or (b) in tax reporting
treatment, except as required by law and disclosed to the Lender.
Section 8.14 No Negative Pledge. No Borrower will enter into or permit to
exist any arrangement or agreement, other than pursuant to this Agreement or
any Loan Document, which directly or indirectly prohibits such Borrower from
creating or incurring a Lien on any of its assets.
ARTICLE IX
Financial Covenants
The Borrowers covenant and agree that, as long as the Obligations or
any part thereof are outstanding or the Lender has any Commitment hereunder,
the Borrowers will, at all times, observe and perform the following
financial covenants, unless the Lender shall otherwise consent in writing.
Section 9.1 Tangible Net Worth. The Borrower will at all times maintain on
a consolidated basis Tangible Net Worth plus Subordinated Debt of at least
$14,250,000.00:
Section 9.2 Fixed Charge Coverage Ratio. The Borrower will at all times
maintain a Fixed Charge Coverage Ratio not less than 1.25 to 1.00.
Section 8.3 Cash Flow Coverage Ratio. The Borrower will at all times
maintain a Cash Flow Coverage Ratio not greater than 3.00 to 1.00.
ARTICLE X
Default
Section 10.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) Any Borrower shall fail to pay the Obligations or any part
thereof shall not be paid when due or declared due.
(b) Any Borrower shall fail to provide to the Lender timely any
notice of Default as required by Section 7.1(g) of this Agreement
or any Borrower shall breach any provision of Article VIII or
Article IX of this Agreement.
(c) Any representation or warranty made or deemed made by the
Borrowers (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial
statement furnished at any time in connection with this Agreement
shall be false, misleading, or erroneous in any material respect
when made or deemed to have been made.
(d) Any Borrower shall fail to perform, observe, or comply with
any covenant, agreement, or term contained in this Agreement or
any other Loan Document (other than as covered by Section 10.1(a)
and (b) above), and such failure continues for more than thirty
(30) days following the date such failure first began.
(e) Any Borrower shall commence a voluntary proceeding seeking
liquidation, reorganization, or other relief with respect to
itself or its debts under any bankruptcy, insolvency, or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian, or other similar
official of it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment
for the benefit of creditors or shall generally fail to pay its
debts as they become due or shall take any corporate action to
authorize any of the foregoing.
(f) Any Borrower shall fail to pay when due any principal of or
interest on any Debt (other than the Obligations), or the maturity
of any such Debt shall have been accelerated, or any such Debt
shall have been required to be prepaid prior to the stated
maturity thereof, or any event shall have occurred that permits
(or, with the giving of notice or lapse of time or both, would
permit) any holder or holders of such Debt or any Person acting on
behalf of such holder or holders to accelerate the maturity
thereof or require any such prepayment.
(g) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or
challenged by any Borrower or any of its shareholders, or any
Borrower shall deny that it has any further liability or
obligation under any of the Loan Documents, or any lien or
security interest created by the Loan Documents shall for any
reason cease to be a valid, first priority perfected security
interest in and lien upon any of the Collateral purported to be
covered thereby.
(h) Any of the following events shall occur or exist with respect
to any Borrower or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event with
respect to any Plan; (iii) the filing under Section 4041 of ERISA
of a notice of intent to terminate any Plan or the termination of
any Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section
4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan, or the institution by the PBGC of
any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer
Plan; and in each case above, such event or condition, together
with all other events or conditions, if any, have subjected or
could in the reasonable opinion of the Lender subject either
Borrower to any tax, penalty, or other liability to a Plan, a
Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof).
(i) Intentionally Deleted.
(j) Xxxx Xxxxxx or Xxxxx Xxxxx shall cease to be active in the
management of the Borrowers.
(k) Any Borrower or any of its properties, revenues, or assets,
shall become subject to an order of forfeiture, seizure, or
divestiture (whether under RICO or otherwise) and the same shall
not have been discharged within thirty (30) days from the date of
entry thereof.
(l) More than twenty-five percent (25%) of the record or
beneficial ownership of any Borrower shall have been transferred,
assigned or hypothecated to any Person, when compared to such
ownership as of the date of this Agreement.
(m) An involuntary proceeding shall be commenced against any
Borrower seeking liquidation, reorganization, or other relief with
respect to it or its debts under any bankruptcy, insolvency, or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian, or
other similar official for it or a substantial part of its
property, and such involuntary proceeding shall remain undismissed
and unstayed for a period of thirty (30) days.
(n) Any Borrower shall fail to discharge within a period of thirty
(30) days after the commencement thereof any attachment,
sequestration, or similar proceeding or proceedings involving an
aggregate amount in excess of One Hundred Thousand Dollars
($100,000.00) against any of its assets or properties.
(o) A final judgment or judgments for the payment of money in
excess of One Hundred Thousand Dollars ($100,000.00) in the
aggregate shall be rendered by a court or courts against any
Borrower and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof
shall not be procured, within thirty (30) days from the date of
entry thereof and such Borrower shall not, within said period of
thirty (30) days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal.
(p) Borrowers default in the payment of any of the Subordinated
Debt or any installment thereof, when due.
Section 10.2 Remedies Upon Default. If any Event of Default shall occur and
be continuing, the Lender may without notice terminate the Commitments and
declare the Obligations or any part thereof to be immediately due and
payable, and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by the Borrowers; provided, however, that upon the occurrence of an
Event of Default under Section 10.1(e) or Section 10.1(m), the Commitments
shall automatically terminate, and the Obligations shall become immediately
due and payable without notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, notice of intent to
demand, protest, or other formalities of any kind, all of which are hereby
expressly waived by the Borrowers. If any Event of Default shall occur and
be continuing, the Lender may exercise all rights and remedies available to
it in law or in equity, under the Loan Documents, or otherwise.
Section 10.3 Performance by the Lender. If the Borrowers shall fail to
perform any covenant or agreement contained in any of the Loan Documents,
the Lender may perform or attempt to perform such covenant or agreement on
behalf of the Borrowers. In such event, the Borrowers shall, at the request
of the Lender, promptly pay any amount expended by the Lender in connection
with such performance or attempted performance to the Lender, together
with interest thereon at the Default Rate from and including the date of
such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that the Lender shall
not have any liability or responsibility for the performance of any
obligation of the Borrowers under this Agreement or any other Loan Document.
Section 10.4 Cash Collateral. If any Event of Default shall occur and be
continuing or the Termination Date shall have occurred, the Borrowers shall,
if requested by the Lender, immediately deposit with and pledge to the
Lender cash or cash equivalent investments in an amount equal to the
outstanding Letter of Credit Liabilities as security for the Obligations.
ARTICLE XI
Miscellaneous
Section 11.1 Expenses. The Borrowers hereby agree to pay on demand: (a)
all costs and expenses of the Lender in connection with the preparation,
negotiation, execution, and delivery of this Agreement and the other Loan
Documents and any and all amendments, modifications, renewals, extensions,
and supplements thereof and thereto, including, without limitation, the
reasonable fees and expenses of legal counsel, advisors, consultants, and
auditors for the Lender, (b) all costs and expenses of the Lender in
connection with any Default and the enforcement of this Agreement or any
other Loan Document, including, without limitation, the fees and expenses of
legal counsel, advisors, consultants, and auditors for the Lender, (c) all
transfer, stamp, documentary, or other similar taxes, assessments, or
charges levied by any Governmental Authority in respect of this Agreement or
any of the other Loan Documents, (d) all costs, expenses, assessments, and
other charges incurred in connection with any filing, registration,
recording, or perfection of any security interest or Lien contemplated by
this Agreement or any other Loan Document, and (e) all other costs and
expenses incurred by the Lender in connection with this Agreement or any
other Loan Document, any litigation, dispute, suit, proceeding or action;
the enforcement of its rights and remedies, protection of its interests in
bankruptcy, insolvency or other legal proceedings, including, without
limitation, all costs, expenses, and other charges (including the Lender's
internal charges) incurred in connection with evaluating, observing,
collecting, examining, auditing, appraising, selling, liquidating, or
otherwise disposing of the Collateral or other assets of the Borrowers.
Section 11.2 INDEMNIFICATION. THE BORROWERS SHALL INDEMNIFY THE LENDER AND
EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND
ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES) TO WHICH ANY
OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE
TO (A) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY THE BORROWERS OF ANY
REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF
THE LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR
AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWERS, (E) THE USE OR
PROPOSED USE OF ANY LETTER OF CREDIT, (F) ANY AND ALL TAXES, LEVIES,
DEDUCTIONS, AND CHARGES IMPOSED ON THE LENDER OR ANY OF THE LENDER'S
CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR (G) ANY INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY
THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, RELATING TO ANY
OF THE FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF
ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO
THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED
FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING
ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE CONTRIBUTORY OR
ORDINARY NEGLIGENCE OF SUCH PERSON.
Section 11.3 Limitation of Liability. Neither the Lender nor any Affiliate,
officer, director, employee, attorney, or agent of the Lender shall have any
liability with respect to, and the Borrowers hereby waive, release, and
agree not to xxx any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by the Borrowers
in connection with, arising out of, or in any way related to, this Agreement
or any of the other Loan Documents, or any of the transactions contemplated
by this Agreement or any of the other Loan Documents. The Borrowers hereby
waive, release, and agree not to xxx the Lender or any of the Lender's
Affiliates, officers, directors, employees, attorneys, or agents for
punitive damages in respect of any claim in connection with, arising out of,
or in any way related to, this Agreement or any of the other Loan Documents,
or any of the transactions contemplated by this Agreement or any of the
other Loan Documents.
Section 11.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Lender shall have the
right to act exclusively in the interest of the Lender and shall have no
duty of disclosure, duty of loyalty, duty of care, or other duty or
obligation of any type or nature whatsoever to the Borrowers or any of the
Borrowers' shareholders or any other Person.
Section 11.5 Lender Not Fiduciary. The relationship between the Borrowers
and the Lender is solely that of debtor and creditor, and the Lender has no
fiduciary or other special relationship with the Borrowers, and no term or
condition of any of the Loan Documents shall be construed so as to deem the
relationship between the Borrowers and the Lender to be other than that of
debtor and creditor.
Section 11.6 Equitable Relief. The Borrowers recognize that in the event
the Borrowers fail to pay, perform, observe, or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the
Lender. The Borrowers therefore agree that the Lender, if the Lender so
requests, shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
Section 11.7 No Waiver; Cumulative Remedies. No failure on the part of
the Lender to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement and the
other Loan Documents are cumulative and not exclusive of any rights and
remedies provided by law.
Section 11.8 Successors and Assigns. This Agreement is binding upon and
shall inure to the benefit of the Lender and the Borrowers and their
respective successors and assigns, except that the Borrowers may not assign
or transfer any of their rights or obligations under this Agreement without
the prior written consent of the Lender.
Section 11.9 Survival. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents and no
investigation by the Lender or any closing shall affect the representations
and warranties or the right of the Lender to rely upon them. Without
prejudice to the survival of any other obligation of the Borrowers
hereunder, the obligations of the Borrowers under Sections 11.1, and 11.2
shall survive repayment of the Note and termination of the Commitment and
the Letters of Credit.
Section 11.10 ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT, THE NOTES, AND
THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement and
the other Loan Documents to which the Borrowers are a party may be amended
or waived only by an instrument in writing signed by the parties hereto.
Section 11.11 Notices. Unless otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission) and mailed, faxed or delivered, to the
address, facsimile number or subject to the last sentence hereof electronic
mail address specified for notices below the signatures hereon or to such
other address as shall be designated by such party in a notice to the other
parties. All such other notices and other communications shall be deemed to
have been given or made upon the earliest to occur of (i) actual receipt by
the intended recipient or (ii) (A) if delivered by hand or courier, when
signed for by the designated recipient; (B) if delivered by mail, four
business days after deposit in the mail, postage prepaid; (C) if delivered
by facsimile when sent and receipt has been confirmed by telephone; and
(D) if delivered by electronic mail (which form of delivery is subject to
the provisions of the last sentence below) when delivered; provided,
however, that notices and other communications pursuant to Article II shall
not be effective until actually received by the Lender. Electronic mail and
intranet websites may be used only to distribute only routine
communications, such as financial statements and other information, and to
distribute Loan Documents for execution by the parties thereto, and may not
be used for any other purpose.
Section 11.12 Governing Law; Venue; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State
of Texas and the applicable laws of the United States of America. This
Agreement has been entered into in Dallas County, Texas, and it shall
be performable for all purposes in Dallas County, Texas. Any action or
proceeding against the Borrowers under or in connection with any of the Loan
Documents may be brought in any state or federal court in Dallas County,
Texas. The Borrowers hereby irrevocably (a) submit to the nonexclusive
jurisdiction of such courts, and (b) waive any objection they may now or
hereafter have as to the venue of any such action or proceeding brought in
any such court or that any such court is an inconvenient forum. The
Borrowers agree that service of process upon them may be made by certified
or registered mail, return receipt requested, at its address specified or
determined in accordance with the provisions of Section 11.12. Nothing
herein or in any of the other Loan Documents shall affect the right of the
Lender to serve process in any other manner permitted by law or shall limit
the right of the Lender to bring any action or proceeding against the
Borrowers or with respect to any of their property in courts in other
jurisdictions. Any action or proceeding by the Borrowers against the Lender
shall be brought only in a court located in Dallas County, Texas.
Section 11.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 11.14 Severability. Any provision of this Agreement held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 11.15 Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 11.16 Participations; Etc. The Lender shall have the right at any
time and from time to time to grant participations in, and sell and
transfer, the Obligations and any Loan Documents. Each actual or proposed
participant or assignee, as the case may be, shall be entitled to receive
all information received by the Lender regarding the Borrowers, including,
without limitation, information required to be disclosed to a participant
or assignee pursuant to Banking Circular 181 (Rev., August 2, 1984), issued
by the Comptroller of the Currency (whether the actual or proposed
participant or assignee is subject to the circular or not).
Section 11.17 Construction. The Borrowers and the Lender acknowledge that
each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the Borrowers and the
Lender.
Section 11.18 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default if such action is taken or such
condition exists.
Section 11.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, BORROWERS HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF
LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section 11.20 Additional Interest Provision. It is expressly stipulated
and agreed to be the intent of the Borrowers and the Lender at all times to
comply strictly with the applicable Texas law governing the maximum rate or
amount of interest payable on the indebtedness evidenced by any Note, any
Loan Document, and the Related Indebtedness (or applicable United States
federal law to the extent that it permits the Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under
Texas law). If the applicable law is ever judicially interpreted so as to
render usurious any amount (i) contracted for, charged, taken, reserved or
received pursuant to any Note, any of the other Loan Documents or any other
communication or writing by or between the Borrowers and the Lender related
to the transaction or transactions that are the subject matter of the Loan
Documents, (ii) contracted for, charged, taken, reserved or received by
reason of the Lender's exercise of the option to accelerate the maturity of
any Note and/or any and all indebtedness paid or payable by the Borrowers to
the Lender pursuant to any Loan Document other than any Note (such other
indebtedness being referred to in this Section as the "Related
Indebtedness"), or (iii) the Borrowers will have paid or the Lender will
have received by reason of any voluntary prepayment by the Borrowers of any
Note and/or the Related Indebtedness, then it is the Borrowers' and the
Lender's express intent that all amounts charged in excess of the Maximum
Lawful Rate shall be automatically canceled, ab initio, and all amounts in
excess of the Maximum Lawful Rate theretofore collected by the Lender shall
be credited on the principal balance of any Note and/or the Related
Indebtedness (or, if any Note and all Related Indebtedness have been or
would thereby be paid in full, refunded to the Borrowers), and the
provisions of any Note and the other Loan Documents shall immediately be
deemed reformed and the amounts thereafter collectible hereunder and
thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and
thereunder; provided, however, if any Note has been paid in full before the
end of the stated term of any such Note, then the Borrowers and the Lender
agree that the Lender shall, with reasonable promptness after the Lender
discovers or is advised by the Borrowers that interest was received in an
amount in excess of the Maximum Lawful Rate, either refund such excess
interest to the Borrowers and/or credit such excess interest against such
Note and/or any Related Indebtedness then owing by the Borrowers to the
Lender. The Borrowers hereby agrees that as a condition precedent to any
claim seeking usury penalties against the Lender, the Borrowers will provide
written notice to the Lender, advising the Lender in reasonable detail of
the nature and amount of the violation, and the Lender shall have sixty (60)
days after receipt of such notice in which to correct such usury violation,
if any, by either refunding such excess interest to the Borrowers or
crediting such excess interest against the Note to which the alleged
violation relates and/or the Related Indebtedness then owing by the
Borrowers to the Lender. All sums contracted for, charged, taken, reserved
or received by the Lender for the use, forbearance or detention of any debt
evidenced by any Note and/or the Related Indebtedness shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of such Note and/or the Related
Indebtedness (including any and all renewal and extension periods) until
payment in full so that the rate or amount of interest on account of any
Note and/or the Related Indebtedness does not exceed the Maximum Lawful Rate
from time to time in effect and applicable to such Note and/or the Related
Indebtedness for so long as debt is outstanding. In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates certain
revolving credit loan accounts and revolving triparty accounts) apply to
this Note and/or any of the Related Indebtedness. Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, it
is not the intention of the Lender to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
Section 11.21 Ceiling Election. To the extent that Lender is relying on
Chapter 303 of the Texas Finance Code to determine the Maximum Lawful Rate
payable on any such Note and/or any other portion of the Indebtedness, the
Lender will utilize the weekly ceiling from time to time in effect as
provided in such Chapter 303, as amended. To the extent United States
federal law permits the Lender to contract for, charge, take, receive or
reserve a greater amount of interest than under Texas law, Lender will rely
on United States federal law instead of such Chapter 303 for the purpose of
determining the Maximum Lawful Rate. Additionally, to the extent permitted
by applicable law now or hereafter in effect, the Lender may, at its option
and from time to time, utilize any other method of establishing the Maximum
Lawful Rate under such Chapter 303 or under other applicable law by giving
notice, if required, to the Borrower as provided by applicable law now or
hereafter in effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWERS:
BEST CIRCUIT BOARDS, INC.,
a Texas corporation
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
Address for Notices:
000 Xxxxxxx Xxxx
Xxxxx, Xxxxx 00000
Fax No.:
Telex No.:
Telephone No.:
Attention:
e-mail:
INTEGRATED PERFORMANCE SYSTEMS, INC.,
a New York corporation
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
Address for Notices:
000 Xxxxxxx Xxxx
Xxxxx, Xxxxx 00000
Fax No.:
Telephone No.:
Attention:
e-mail:
GLOBAL INNOVATION CORP.,
a Delaware corporation
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
Address for Notices:
000 Xxxxxxx Xxxx
Xxxxx, Xxxxx 00000
Fax No.:
Telephone No.:
Attention:
e-mail:
LENDER:
AMEGY BANK N.A.
By:
--------------------------------
Xxxx Xxxxxxxxx
Vice President - Commercial Lending
Address for Notices:
0000 Xxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax No.(000) 000-0000
Telephone No.(000) 000-0000
e-mail: xxxx.Xxxxxxxxx@xxxxxxxxx.xxx
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
------- ----------------------
A Borrowing Base Report
B Compliance Certificate
C Real Estate
INDEX TO SCHEDULES
Description of Schedules Article/Section
___________________
___________________
Schedule 5.1(m)
1. The Title Policy.
2. A Survey of the Real Estate acceptable to Lender bearing a date not
earlier than 180 days prior to the Closing Date.
3. An appraisal of the Real Estate by a qualified MAI appraiser
approved by Lender, if form, scope and substance satisfactory to Lender,
showing a value of not less than $_____________.
4. Satisfactory evidence that all zoning ordinances or restrictive
covenants affecting the Real Estate permit the present and intended uses of
the Real Estate and have been and will be complied with.
5. Satisfactory evidence of the Real Estate's compliance with the
requirements of all applicable environmental protection laws, rules and
regulations, whether federal, state or municipal.
6. Subordination Agreement executed by Xxxx Xxxxxx and Borrowers
subordinating the payment of the Subordinated Debt and the liens securing
the Subordinated Debt to the prior payment of the Obligations and the liens
securing the Obligation, in form, scope, and content acceptable to the
Lender.
7. Subordination Agreement from Wylie Economic Development Corporation.
Schedule 6.21
-------------
Intellectual Property
---------------------
Exhibit A
---------
Borrowing Base Certificate
--------------------------
Exhibit B
---------
Compliance Certificate
----------------------
Exhibit C
---------
Real Estate
-----------
