EXHIBIT 4.3
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement")made as of the 28th day of
June, 1996, by and between LASALLE NATIONAL BANK, a national banking
association ("Bank") and BANDO XxXXXXXXXX SMALL BUSINESS INVESTMENT
CORPORATION, a Wisconsin corporation ("Borrower").
WITNESSETH:
WHEREAS, Borrower has requested from Bank a revolving credit facility
(the "Credit Facility") of up to $7,500,000.00; and
WHEREAS, Bank is willing to make the revolving credit facility
available to Borrower, but only on the terms and conditions hereinafter
set forth and in reliance on the
representations and warranties of Borrower herein contained;
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENTS
1. DEFINITIONS. As used in this Agreement, the listed terms are
defined as follows:
Adjusted Tangible Assets shall means all assets except: (a)
trademarks, tradenames, franchises, goodwill, and other similar
intangibles; (b) assets located and notes and receivables due from
obligors domiciled outside the United States of America, Puerto Rico, or
Canada; and (c) accounts, notes, and other receivables due from Affiliates
or employees.
Adjusted Tangible Net Worth shall mean the remainder of (a) net book
value (after deducting related depreciation, obsolescence, amortization
and other proper reserves) at which the Adjusted Tangible Assets of
Borrower would be shown on a balance sheet at such date, but excluding any
amounts arising from write-ups of assets, minus (b) the amount at which
its liabilities (other than preferred stock, capital stock, surplus, and
retained earnings) would be shown on such balance sheet, and including as
liabilities all reserves for contingencies and other potential
liabilities.
Advance shall mean the proceeds of the Loan advanced from time to
time by Bank to Borrower in accordance with the terms of this Agreement.
Affiliate shall mean any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with any other
Person. A Person shall be deemed to control another Person if the
controlling Person owns ten percent (10%) or more of any class of voting
securities of the controlled Person or possesses, directly or indirectly,
the power to direct or cause the direction of the management or policies
of the controlled Person, whether through ownership of stock, by contract
or otherwise.
Bank's Expenses shall mean and shall include:
(i) all expenses incurred by Bank in the negotiation,
documentation, administration of this Agreement, the other
Loan Documents and the Loan, including, but not limited to,
accounting and attorney's fees and expenses of any kind and
mailing costs;
(ii) all expenses incurred by Bank in connection with any
verification and inspection of the Collateral and/or any
audit and inspection of any Borrower's books, accounts,
records, correspondence and other papers;
(iii) all taxes levied against or paid by Bank (other than
taxes on, or measured by, the income of Bank) and all
filing and recording fees, costs and expenses which
may be incurred by Bank in respect to the filing
and/or recording of any document or instrument
relating to the transactions described in this
Agreement;
(iv) all costs and expenses (including all allocated costs of
staff counsel which are employees of Bank) incurred by Bank
to collect the collateral (with or without suit), correct
any Default or Event of Default, or enforce any provision
of this Agreement; and
(v) all costs, outlays, attorney's fees and expenses of any
kind (including all allocated costs of staff counsel)
incurred in the enforcement of this Agreement or the other
Loan Documents or the defense of legal proceedings
involving any claim made against Bank arising out of this
Agreement, the other Loan Documents or the protection of
the Collateral.
Business Day shall means a day, other than a Saturday, Sunday or
holiday, on which banks are open for business in Chicago, Illinois and
London, England.
Collateral Agent shall mean Firstar Trust Company or any successor
Collateral Agent appointed pursuant to the terms of the Intercreditor
Agreement.
Default shall mean an event or condition the occurrence of which
would, with a lapse of time or the giving of notice or both, become an
Event of Default.
Default Rate shall mean, with respect to any Advance, the greater of
(i) the Prime Rate applicable to such Advance plus 2.0% per annum, and
(ii) the LIBOR Rate plus 2.0% per annum.
Event of Default shall have the meaning set forth in section 9
herein.
Funding Date shall mean the date of each Advance made hereunder.
Intercreditor Agreement shall have the meaning ascribed to such term
in the Security Agreement.
LIBOR Base Rate shall be determined based on the LIBOR Interest
Period(s) selected by Borrower from time to time and shall mean, with
respect to each such LIBOR Interest Period selected, the rate of interest
per annum determined as follows (such determination to be conclusive,
absent manifest error): on the second Business Day prior to the first day
of such LIBOR Interest Period (the "LIBOR Determination Date"), Bank shall
obtain the quoted offered rate for United States dollar deposits with
leading banks in the London interbank market that appears at 11:00 a.m.
London time on the display page designated as page 3750 on the Telerate
monitor (or such other page or service as industry practice generally
regards as an acceptable replacement for it for the purpose of displaying
London interbank offered rates for U.S. dollar deposits).
LIBOR Interest Period shall mean a period of one, two or three months
commencing on a Business Day selected by the Borrower. Such LIBOR
Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two or three months thereafter, provided,
however, that if there is no such numerically corresponding day in such
month, such LIBOR Interest Period shall end on the last Business Day of
such month. If a LIBOR Interest Period would otherwise end on a day which
is not a Business Day, such LIBOR Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such LIBOR Interest Period
shall end on the immediately preceding Business Day.
LIBOR Rate shall mean, for the relevant LIBOR Interest Period, the
sum of (i) the LIBOR Base Rate applicable to such LIBOR Interest Period,
plus (ii) 1.375% per annum. The LIBOR Rate shall be rounded to the next
higher multiple of 1/100 of 1% if the rate is not such a multiple.
LIBOR Rate Advance shall mean an Advance which bears interest at the
LIBOR Rate.
Loan shall mean all indebtedness owed by Borrower to Bank arising
under this Agreement or the Note.
Loan Documents shall mean this Agreement, the Note and all other
agreements and documents now or hereafter delivered to the Bank pursuant
to or in connection with the transactions contemplated hereby, and any
amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions and extensions of any of the foregoing.
Maturity Date shall have the meaning set forth in section 2.J.
herein.
Note shall mean the Secured Promissory Note executed and delivered by
Borrower to Bank pursuant to the terms of this Agreement.
Obligations shall have the meaning ascribed to such term in the
Security Agreement.
Person means an individual, corporation, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or
political subdivision thereof.
Prime Rate shall mean at any time, and from time to time, the rate of
interest then most recently announced by Bank as its "prime rate", which
is not necessarily Bank's lowest or most favorable rate of interest at any
time.
Prime Rate Advance shall mean an Advance which bears interest at the
Prime Rate.
Rate Options shall mean the Prime Rate or the LIBOR Rate. The Rate
Option in effect on any date shall always be the LIBOR Rate (based on a
LIBOR Interest Period of one month) unless Borrower has properly selected
the Prime Rate or the LIBOR Rate (based on a LIBOR Interest Period of two
months or three months) pursuant to section 2.C. hereof.
Security Agreement shall have the meaning set forth in section 8.A.
hereof.
SWIB Documents shall mean (i) the Second Amended and Restated
Agreement dated November 11, 1991, by and between the State of Wisconsin
Investment Board ("SWIB"), as lender, and Borrower, as amended, (ii) the
Master Purchase Agreement dated March 3, 1995, as amended on April 14,
1995, by and between SWIB and Borrower, and (iii) all documents and
instruments executed and/or delivered by Borrower and/or SWIB which
evidences, services, modifies or amends the transactions contemplated by
the documents described in clauses (i) and (ii) above.
2. REVOLVING CREDIT FACILITY. Subject to the terms and conditions
hereinafter set forth in this Agreement, Bank agrees to make available to
the Borrower the Credit Facility pursuant to which the Borrower may
obtain Advances from the Bank, repay such Advances and reborrow, provided,
however, that the aggregate principal balance of the Credit Facility
outstanding at any time shall not exceed $7,500,000. In no event shall
Borrower be entitled to receive any Advance if the making of such Advance
would cause the aggregate amount of all loans made to Borrower by the Bank
and the Additional Lenders to exceed 80% of the value of the collateral
then held by the Collateral Agent.
Each Advance request shall be conclusively presumed to be made by a
person authorized by Borrower to do so and the crediting of the Loan to
Borrower's deposit account, or transmittal to such person as Borrower
shall direct, and shall conclusively establish the obligation of Borrower
to repay such Advance as provided herein. All of Bank's Expenses, fees,
commissions, costs, expenses, and other charges under or pursuant to the
Loan Documents, and all payments made and out-of-pocket charges under or
pursuant to the Loan Documents will be charged as Advances to the Loan as
of the date due from Borrower or the date paid or incurred by Bank, as the
case may be. Unless otherwise advised in writing by Borrower, all
Advances shall be wire transferred in connection with the wire transfer
instructions attached hereto as Exhibit A.
A. Advances under the Credit Facility shall be evidenced by
the Note in the maximum amount of the Credit Facility. The Note
shall be dated as of the date of this Agreement and shall be payable
in full on or before the Maturity Date.
B. (1) The outstanding principal balance under the Note shall
bear interest from time to time at a rate per annum equal to:
(i) the LIBOR Rate (based on a LIBOR Interest Period of
one month); or
(ii) at the election of Borrower with respect to all or
portions of the Obligations, the Prime Rate or the
LIBOR Rate (based on a LIBOR Interest Period of two
months or three months).
(2) All interest shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest accrued on
each Advance shall be payable in arrears on (i) the first day of
each calendar month, commencing with the first such date to
occur after the date hereof, (ii) on any date on which the
Advance is prepaid, whether due to acceleration or otherwise,
and (iii) on the Maturity Date. Interest shall not be payable
for the day of any payment on the amount paid if payment is
received by Bank prior to noon (Chicago time). If any payment
of principal or interest under the Note shall become due on a
day that is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a payment
of principal, such extension of time shall be included in
computing interest due in connection with such payment; provided
that for purposes of section 9 hereof, any payments of principal
described in this sentence shall be considered to be "due" on
such next succeeding Business Day.
C. (1) Borrower, from time to time, may select the Rate
Option and, in the case of each LIBOR Rate Advance, the
commencement date (which shall be a Business Day) and the length
of the LIBOR Interest Period applicable to each LIBOR Rate
Advance. Borrower shall give Bank a written draw request
specifying the type, date and amount of the Advance requested
and containing a certification (i) remaking and reaffirming all
of the representations and warranties of Borrower contained in
the Loan Documents, and (ii) stating that Borrower is in
compliance with all of the covenants, terms and conditions set
forth in the Loan Documents, not later than 11:00 a.m. (Chicago
time) (i) at least one Business Day prior to a Prime Rate
Advance, and (ii) at least three (3) Business Days prior to a
LIBOR Advance.
(2) Bank shall, as soon as practicable after receipt of a
draw request, determine the LIBOR Rate applicable to the
requested LIBOR Rate Advance and inform Borrower of the same.
Each determination of the LIBOR Rate by Bank shall be conclusive
and binding upon Borrower in the absence of manifest error.
(3) If Borrower shall fail to draw a LIBOR Rate Advance on
the date requested or shall prepay a LIBOR Rate Advance other
than on the last day of the LIBOR Interest Period applicable
thereto, Borrower shall be responsible to pay all amounts due to
Bank as required by section 2.H. hereof.
(4) As of the end of each LIBOR Interest Period selected
for a LIBOR Rate Advance, the interest rate on the LIBOR Rate
Advance will become the LIBOR Rate (based upon a LIBOR Interest
Period of one month), unless Borrower has once again selected a
different LIBOR Interest Period in accordance with the time and
procedures set forth in section 2.C.(7).
(5) The right of Borrower to select the LIBOR Rate for an
Advance pursuant to this Agreement is subject to the
availability to Bank to a similar option. If Bank determines
that (i) deposits of U.S. Dollars in an amount approximately
equal to the LIBOR Rate Advance for which the Borrower wishes to
select the LIBOR Rate are not generally available at such time
in the London interbank eurodollar market, or (ii) the rate of
which the deposits described in subsection (i) herein are being
offered will not adequately and fairly reflect the costs to Bank
of maintaining a LIBOR Rate on an Advance or of funding the same
in such market for such LIBOR Interest Period, or (iii)
reasonable means do not exist for determining a LIBOR Rate, or
(iv) the LIBOR Rate would be in excess of the maximum interest
rate which Borrower may by law pay, then in any of such events,
Bank shall so notify Borrower and such Advance shall bear
interest at the Prime Rate.
(6) In no event may Borrower elect a LIBOR Interest Period
which would extend beyond the Maturity Date. Unless Bank agrees
thereto, in no event may Borrower have more than three different
LIBOR Interest Periods for LIBOR Rate Advances outstanding at
any one time.
(7) Conversion and Continuation.
(i) Borrower may elect from time to time, subject to
the other provisions of this section 2.C., to convert all
or any part of an Advance into any other type of Advance;
provided that any conversion of any LIBOR Rate Advance
shall be made on, and only on, the last day of the LIBOR
Interest Period applicable thereto.
(ii) Prime Rate Advances shall continue as Prime Rate
Advances unless and until such Prime Rate Advances are
converted into LIBOR Rate Advances pursuant to a
Conversion/Continuation Notice (as defined below) from
Borrower in accordance with section 2.C.(7)(iv). LIBOR
Rate Advances shall continue until the end of the then
applicable LIBOR Interest Period therefor, at which time
each such Advance shall be automatically converted into a
LIBOR Rate Advance (based on a LIBOR Interest Period of one
month) unless Borrower shall have given Bank a
Conversion/Continuation Notice in accordance with section
2.C.(7)(iv) requesting that, at the end of such LIBOR
Interest Period, such Advance be converted to a Prime Rate
Advance or either continue as an Advance of such type for
the same or another LIBOR Interest Period.
(iii) Notwithstanding anything to the contrary
contained in sections 2.C.(7)(ii) or (7) (iv), no Advance
may be converted into a Prime Rate Advance or LIBOR Rate
Advance or continued as a LIBOR Rate Advance when any Event
of Default has occurred and is continuing.
(iv) Borrower shall give Bank irrevocable notice (a
"Conversion/Continuation Note") of each conversion of an
Advance or continuation of a LIBOR Rate Advance not later
than 11:00 a.m. (Chicago time) on the Business Day
immediately preceding the date of the requested conversion,
in the case of a conversion into a Prime Rate Advance, or
11:00 a.m. (Chicago time) at least three (3) Business Days
prior to the date of the requested conversion or
continuation, in the case of a conversion into or
continuation of a LIBOR Rate Advance, specifying: (1) the
requested date (which shall be a Business Day) of such
conversion or continuation; (2) the amount and type of the
Advance to be converted or continued; and (3) the amounts
and type(s) of Advance(s) into which such Advance is to be
converted or continued and, in the case of a conversion
into or continuation of a LIBOR Rate Advance, the duration
of the LIBOR Interest Period applicable thereto.
D. All payments of the Obligations hereunder shall be made,
without set-off, deduction, or counterclaim, in immediately available
funds to Bank at Bank's address specified herein, by noon (local
time) on the date when due.
E. During the continuance of an Event of Default outstanding
Advances shall bear interest at the applicable Default Rate until
such Event of Default is cured or the Obligations are paid in full.
F. If the adoption of or change in any law or any governmental
or quasi-governmental rule, regulation, policy, guidelines or
directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of Bank therewith,
(i) subjects Bank to any tax, duty, charge or
withholding on or from payments due from Borrower
(excluding federal and state taxation of the overall net
income of Bank), or changes the basis of such taxation of
payments to Bank in respect of its Advances or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, Bank (other than
reserves and assessments taken into account in determining
the interest rate applicable to LIBOR Rate Advances), or
(iii) imposes any other condition, and the result is
to increase the costs of Bank of making, funding or
maintaining loans or reduces any amount receivable by Bank
in connection with loans, or requires Bank to make any
payment calculated by reference to the amount of loans held
or participated in or interest received by it, by an amount
deemed material by Bank,
then, within fifteen (15) days of demand by Bank, Borrower shall pay
Bank that portion of such increased expenses incurred or reduction in
an amount received which Bank determines is attributable to making,
funding and maintaining the Advances and the Credit Facility.
G. If Bank determines the amount of capital required or
expected to be maintained by Bank or any corporate entity controlling
Bank is increased as a result of a Change (as defined below), then,
within fifteen (15) days of demand by Bank, Borrower shall pay Bank
the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which Bank determines
is attributable to this Agreement, its Advances, or its obligation to
make Advances hereunder (after taking into account Bank's policies as
to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines (as defined
below) or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the
force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by Bank or
any corporation controlling any Bank. "Risk-Based Capital
Guidelines" means (i) the risk-based capital guidelines in effect in
the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the United State implementing the July
1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards", including transition rules, and
any amendment to such regulations adopted prior to the date of this
Agreement.
H. If any payment of a LIBOR Rate Advance occurs on a date
which is not the last day of the applicable LIBOR Interest Period,
whether because of acceleration, prepayment or otherwise, or a LIBOR
Rate Advance is not made on the date specified by Borrower for any
reason other than default by Bank, Borrower will indemnify Bank for
any loss or cost incurred by Bank resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the LIBOR Rate Advance.
I. Bank shall deliver a written statement of Bank as to the
amount due, if any, under sections 2.F., 2.G. or 2.H. hereof. Such
written statement shall set forth in reasonable detail the
calculations upon which Bank determined such amount and shall be
final, conclusive and binding on Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in
connection with a LIBOR Rate Advance shall be calculated as though
Bank funded its LIBOR Rate Advance through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a
reference in determining the LIBOR Rate applicable to such Advance,
whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the written statement shall be
payable on demand after receipt, by Borrower of the written
statement. The obligations of Borrower under sections 2.F., 2.G. and
2.H. hereof shall survive payment of the Obligations and termination
of this Agreement.
J. This Agreement shall have a term commencing on the date
hereof and ending at 5:00 p.m. (Chicago time) on December 2, 1996
(the "Maturity Date"); provided, however, that if Borrower desires to
extend the Maturity Date of the Loan, then not later than August 15,
1996 Borrower shall furnish written notice to Bank of Borrower's
desire to extend the term of the Loan beyond the Maturity Date. Bank
shall notify Borrower in writing of Bank's decision on Borrower's
extension request not later than October 15, 1996. If Borrower fails
to request an extension of the Maturity Date or if Bank fails to
agree to Borrower's extension request within the respective time
frames set forth in this section, then in each such event the
Maturity Date shall not be extended and the Loan (and other
Obligations) shall be due and payable on the Maturity Date. In the
event the Maturity Date is extended as provided in this section,
Borrower and Bank agree to promptly confirm the new Maturity Date in
writing. On the new Maturity Date, the Loan, the Note, and all other
Obligations of Borrower to Bank shall be immediately due and payable
in full, without notice or demand and shall be repaid to Bank by a
wire transfer of immediately available federal funds.
3. USE OF CREDIT FACILITY. Borrower shall be entitled to
disbursements under the Credit Facility solely for the following purposes:
(i) funding for any proper corporate purposes not prohibited by the rules
and regulations of the United States Small Business Administration (the
"SBA"), except that such disbursements may not be used for investments in
securities, cash, cash equivalents or investment instruments, provided,
however, that nothing herein shall prohibit the use of such funds for
investing in "small business concerns", as defined in SBA regulations;
(ii) funding payment obligations of Borrower with respect to reverse
repurchase agreements with financial institutions; (iii) funding payments
of dividends (to the extent permitted by this Agreement); (iv) funding
loans by Borrower to third parties ("Third Party Loans"); (v) funding
Borrower's repurchase of participation interests in Third Party Loans;
(vi) funding payment obligations of Borrower to Limited Lenders (as
defined in section 7.A. hereof); or (vii) funding Borrower's retirement of
outstanding commercial paper or outstanding lines of credit pursuant to a
facility or facilities made available to Borrower by any Limited Lender or
Additional Lender.
4. AVAILABILITY FEE. As additional compensation to Bank for its
agreement to make the Credit Facility available to Borrower, Borrower
agrees to pay to Bank an Availability Fee to be calculated and paid as
follows:
(a) The Availability Fee for each quarter shall be one-fourth of
0.5% of $7,500,000, payable quarterly, in arrears, on the last
day of each calendar quarter hereafter beginning June 30, 1996,
and ending on the Maturity Date, unless sooner terminated.
Amounts applicable to periods less than a full quarter shall be
pro-rated.
(b) Borrower may terminate this Agreement upon (i) written notice to
Bank stating that Borrower irrevocably terminates its right to
receive any new Advances under the Credit Facility, and
(ii) payment of the entire outstanding balance of the Credit
Facility together with all interest accrued and unpaid thereon,
and any and all other fees and amounts which are then due to
Bank pursuant to this Agreement. After such termination,
Borrower shall have no further obligation to pay the quarterly
Availability Fee for any periods succeeding the date of
termination. The Availability Fee shall be prorated to the date
of termination if termination occurs during a calendar quarter.
5. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
by its execution of this Agreement on the date hereof, and by its request
of each Advance shall be deemed to remake on each Funding Date, the
following matters set forth in this section 5. Each representation and
warranty shall be deemed to be material and shall be conclusively presumed
to have been relied upon by Bank regardless of any information possessed
or any investigation made by Bank. The following representations,
warranties and covenants shall be cumulative and in addition to all other
representations, warranties and agreements which Borrower shall give or
cause to be given to Bank, either now or hereafter.
A. Borrower is a corporation duly organized and existing under
the laws of the State of Wisconsin and is duly authorized under all
applicable provisions of law to carry on its business as presently
conducted. Borrower has the corporate power to enter into this
Agreement and to borrow hereunder.
B. The making of this Agreement and compliance with the terms
hereof by Borrower have been duly authorized by all necessary
corporate action and do not conflict with and are not in
contravention of (1) any provision of the Articles of Incorporation
and By-Laws of Borrower, (2) any indenture, contract or agreement to
which Borrower is a party or to which it is subject, or (3) any law,
ordinance, statute, rule or regulation binding upon Borrower.
C. Borrower is not a party to any litigation or administrative
proceedings, nor so far as it is known by Borrower is any litigation
or administrative proceeding threatened against it which would, if
adversely determined, cause any material adverse change in Borrower's
financial condition or in the conduct of its business, except as
previously disclosed to and approved by the Bank in writing prior to
the date hereof.
D. All copies of documents, contracts, agreements and
assignments which Borrower has furnished to Bank are true and correct
copies. All financial statements heretofore furnished to Bank are
true and correct in all material respects subject to customary year
end adjustments. There has been no material adverse change in the
property or business operations of Borrower since the date of the
last financial statement, except pursuant to the conduct of its
ordinary business, and except as shall have been disclosed in writing
by Borrower to Bank prior to the date of execution of this Agreement.
E. Borrower has paid, and will pay when due, all federal, state
and local taxes, and will promptly prepare and file returns for
accrued taxes.
F. Borrower has filed all statements, if any, which it may be
required to file under the provisions of any applicable state or
federal securities laws or regulations or if any such statements have
not been filed such failure shall not have any material adverse
effect upon the Borrower. Borrower is not engaged in the business of
carrying margin stock within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System.
G. This Agreement is legal, valid, binding upon, and
enforceable against Borrower in accordance with its terms, except to
the extent enforcement is limited by laws relating to bankruptcy or
insolvency.
H. Borrower owns all of its assets free and clear of any liens
or security interests, except liens and security interests permitted
pursuant to section 7.B. of this Agreement.
I. Borrower has all licenses (including all licenses required
by the SBA in order for Borrower to operate as a "Small Business
Investment Company"), registrations, permits, and franchises
necessary for the conduct of its business which violation or failure
to obtain would materially and adversely affects its business or
condition (financially or otherwise).
J. Borrower is not in violation of any laws, ordinances, or
governmental rules or regulations to which it or its business is
subject (including, without limitation, the provisions of 13 C.F.R.
Section 107.210 (1995) relating to small business investment
companies).
6. AFFIRMATIVE COVENANTS OF BORROWER. Borrower covenants and
agrees as follows:
A. Borrower shall furnish Bank monthly financial statements
(i.e., consolidated balance sheets and consolidated income
statements) no later than thirty (30) days subsequent to each month's
end for such month. Together with the monthly financial statements,
Borrower shall provide a report identifying all the banks through
which the Borrower is then issuing commercial paper, and the
principal amount of commercial paper then outstanding issued through
each bank. Within ninety (90) days after the end of each fiscal year
of Borrower, Bank shall be provided with an audited income statement
for such year and an audited balance sheet as of the end of such
year. All statements are to be prepared in accordance with generally
accepted principles of auditing and accounting applied on a basis
consistent with the accounting practices of Borrower reflected in the
audited financial statements for the preceding fiscal year, and year
end statements are to be certified without material qualification by
Price Waterhouse, by any other "big six" national accounting firm, or
by any independent certified public accountants of recognized
standing selected by Borrower and acceptable to Bank. Borrower shall
also furnish to Bank all other financial statements reasonably
requested by Bank.
Borrower shall also furnish to Bank copies of (i) all financial
statements, reports and returns as it shall send to its stockholders,
(ii) all regular, periodic, or special reports (including but not
limited to semi-annual reports on Form N-SAR and amendments to its
registration statements on Form N-5) which it is or may be required
to file with the Securities & Exchange Commission or any governmental
department, bureau, commission or agency succeeding to the functions
of the Securities & Exchange Commission, and (iii) all examination
reports of its affairs which it shall receive from the SBA; all of
which documents shall be delivered to Bank forthwith as and when
sent, filed, or received by Borrower.
Bank may at any time, and without notice to or consent of
Borrower, deliver to any participant in the loans which are the
subject of this Agreement, copies of all financial statements,
reports, or any other documents delivered to Bank hereunder.
B. Borrower shall keep proper books of record and accounts
and, upon application, give any representative of Bank access during
normal business hours to, and permit him or her to examine, any and
all books, records and documents in Borrower's possession relating to
the financial affairs of Borrower and to inspect any of its
properties.
C. Together with each of the monthly financial statements and
the year-end audited financial statements to be provided pursuant to
section 6.A. above, Borrower shall also furnish to Bank a certificate
signed by its President or Chief Financial Officer stating that he or
she has no knowledge of any events of default which have occurred
under this Agreement or of any matters which would with the passage
of time constitute an event of default hereunder, or if he or she
shall have obtained knowledge of any such default or potential
default he or she shall disclose in such statement the default or
potential default and the nature thereof. Each such certificate
shall be dated as of the last day of the month or year for which it
is submitted.
D. Borrower shall maintain all insurable property, real and
personal, owned by it insured at all times against loss or damage by
fire or other normally insured hazards through a responsible
insurance carrier selected by it in such amounts and to the extent of
the coverage as is customary for companies engaged in similar
businesses and in similar locations, but in no event shall said
insurance be less than that which Bank, in good faith, believes is
sufficient and adequate to protect the operating value of the
property of Borrower. Borrower shall also carry insurance to cover
its interest as mortgagee in the property securing the Third Party
Loans to be effective in the event of any failure of the owner of
such property to carry property insurance with respect thereto. The
Collateral Agent (used herein as defined in the Intercreditor
Agreement) shall be named as secured party loss payee in all such
policies. Copies of all such insurance policies shall be delivered
to Bank.
E. Borrower shall keep the properties that are material to the
operation of its business, whether owned or leased, in good
condition, repair and working order.
F. Borrower shall duly pay and discharge all lawful taxes,
assessments and governmental charges upon it or against its
properties prior to the date on which penalties are attached thereto,
unless and to the extent only that the same shall be contested in
good faith and by appropriate proceedings by the Borrower and
provided Borrower has established appropriate reserves for the
payment of said taxes in accordance with generally accepted
accounting practices.
G. Borrower shall do all things necessary to maintain its
corporate existence, to preserve and keep in full force and effect
its rights and franchises necessary to continue its businesses, and
to comply with all applicable laws, regulations and ordinances
(including without limitation any applicable state or federal
securities laws) with respect to which the failure to comply would
have a material adverse effect on the Borrower.
H. Borrower shall pay to Bank, upon demand, all reasonable
charges and expenses incurred by Bank for attorney's fees and
expenses of litigation, in seeking relief from the automatic stay or
any other bankruptcy proceedings, or in connection with or in any way
related to Bank's relationship with Borrower, with respect to the
transactions contemplated by this Agreement, whether hereunder or
otherwise, including without limitation those incurred or expended in
connection with the preparation of this Agreement or any amendment
hereto, extension of the Credit Facility hereunder, and the
protection or enforcement of Bank's rights hereunder.
In addition thereto, Borrower shall pay to Bank all reasonable
charges and expenses incurred by Bank, of every kind or description,
arising subsequent to the occurrence of any event of default,
including but not limited to reasonable attorneys fees and expenses
of litigation.
I. With respect to each of its Plans, if any, under the
Employee Retirement Income Security Act ("ERISA") and the Internal
Revenue Code (the "Code"), Borrower represents and warrants that:
1. all funding requirements have been met and will
continue to be met on an annual basis;
2. no "prohibited transactions" have occurred and that
none of the transactions which are the subject of this Agreement
constitute prohibited transactions under the rulings or
regulations of ERISA or the Code;
3. all such Plans are and will continue to be qualified
Plans; and
4. the Borrower has complied with, and will continue to
comply with, all reporting and disclosure requirements under
ERISA, the Code, and the applicable rulings and regulations with
respect to which the failure to so comply would have a material
adverse effect on the Borrower.
J. Borrower shall maintain its primary operating account at the
Bank or with an Additional Lender.
K. Borrower shall indemnify, defend and hold Bank, and its
officers, directors, employees, and agents, harmless from and against
all claims, injury, damage, loss, costs (including attorneys' fees
and costs) and liability of any and every kind to any persons or
property by reason of (i) the breach by Borrower of any
representation or warranty herein or in any other Loan Document,
(ii) the failure by Borrower to fulfill any obligation under this
Agreement or under any other Loan Document, or (iii) any other matter
relating to, or action taken by Bank in connection with, the Credit
Facility, unless caused by the gross negligence or willful misconduct
of Bank.
7. NEGATIVE COVENANTS OF BORROWER: Borrower covenants and agrees as
follows:
A. Borrower shall not, without the prior written consent of
Bank, create, incur, assume or have outstanding, any indebtedness for
money except:
(1) the Loans under this Agreement or any renewals
thereof;
(2) indebtedness for other borrowings payable to Bank;
(3) other indebtedness as shown on the financial
statements presented to Bank prior to the closing of the
transactions contemplated hereunder;
(4) unsecured current liabilities incurred in the ordinary
course of business;
(5) debentures issued by Borrower which are guaranteed by
the SBA;
(6) revolving credit facilities (the "Permitted Credit
Facilities") extended by First Bank (N.A.), Firstar Bank
Milwaukee, N.A. and other lenders pursuant to the Intercreditor
Agreement (collectively the "Additional Lenders");
(7) subject to the limitations in 7.B. below, indebtedness
for loans from the State of Wisconsin Investment Board and/or
other institutional lenders (which lenders may include without
limitation the Bank or any one or more of the Additional
Lenders, but may not include other financial institutions of
which the deposits are insured by the FDIC or FSLIC)
(collectively, the "Limited Lenders") which are secured only by
specific Third Party Loans (the "Limited Lenders' Collateral");
(8) indebtedness incurred for the purchase of capital
assets provided said indebtedness is unsecured or is secured
only by purchase money security interests in the assets so
purchased;
(9) indebtedness for commercial paper issued pursuant to
facilities made available to Borrower by the Bank, the
Additional Lenders or the Limited Lenders, provided, however,
that the Borrower shall not permit the principal amount of
commercial paper issued through any of the Additional Lenders
(but excluding the principal amount of any commercial paper
issued through Additional Lenders acting as Limited Lenders and
with respect to which there are separate lending agreements
entered into between Borrower and Additional Lenders acting as
Limited Lenders) to exceed the maximum principal amount
authorized under such Additional Lenders' Permitted Credit
Facility less the principal amount of the loans outstanding
thereunder; and
(10) indebtedness under reverse repurchase agreements with
the Bank or an Additional Lender, if such agreements are secured
by United States Treasury securities the Borrower owns on the
date hereof.
B. Borrower shall not, without prior written consent of the
Bank, create, suffer, or permit to be created any mortgage, pledge,
security interest, assignment, encumbrance or other lien upon any
real property, equipment, fixtures, accounts, contract rights,
chattel paper, instruments, documents, general intangibles,
inventory, or any other property now owned or hereafter acquired by
it, except (i) the Limited Lenders' security interests in the Limited
Lenders' Collateral as described in the next paragraph; (ii) the
purchase money security interests permitted in Section 7.A above;
(iii) existing liens, charges or encumbrances specifically indicated
on the financial statements previously delivered to Bank by Borrower;
(iv) liens for taxes, assessments or governmental charges not
delinquent or being contested in good faith by the Borrower; (v)
construction lien claims not delinquent; (vi) liens or deposits in
connection with workmen's compensation or other insurance or to
secure the performance of bids, trade contracts, leases, public or
statutory obligations of like nature incurred in the ordinary course
of business; (vii) security interests in favor of the Bank, the
Collateral Agent and the Additional Lenders; and (viii) security
interests, if any, in United States Treasury securities now owned and
presently subject to reverse repurchase agreements with the Bank or
an Additional Lender, to the extent such investments are permitted
under section 7.K. below.
A lender can only provide loans as a Limited Lender if, at the
time the Limited Lender makes a loan to Borrower, the Third Party
Loans pledged to the Limited Lender to secure the loan do not have
outstanding principal balances exceeding 110% of all obligations of
Borrower to the Limited Lender plus commercial paper issued through
the Limited Lender.
C. Borrower shall not merge with or into or consolidate with or
into any other corporation or entity, or sell, lease, transfer or
otherwise dispose of all or any substantial part of its property,
assets or business (other than by sales made in the ordinary course
of business and sales of participation interests in Third Party
Loans).
D. Borrower shall not, without prior written consent of Bank,
enter into any agreement providing for the leasing by it of property
which has been, or is to be, sold or transferred by it to the lessor
thereof.
E. Borrower shall not redeem, purchase, or otherwise acquire
directly or indirectly any shares of any class of its capital stock
without the prior written consent of Bank.
F. Borrower shall not permit the ratio, calculated as of the
last day of each month, of (a) the aggregate amount of all of the
Borrower's consolidated indebtedness and liabilities (including
liabilities under guaranties and contingent liabilities), including
all Obligations (numerator), to (b) Adjusted Tangible Net Worth
(denominator), to be more than 7:1.
G. Borrower's aggregate total realized losses on Third Party
Loans during the term of this Agreement shall not exceed the greater
of $1,000,000.00 or two and one-half per cent (2.5%) of the total
principal amount of all outstanding Third Party Loans, as determined
from the then most recent annual audited financial statements to be
provided by Borrower to Bank pursuant to this Agreement. For the
purposes of this section, a loss on a Third Party Loan is "realized"
when the loss is so identified on the Borrower's financial
statements.
H. Borrower shall, at all times, maintain an Adjusted Tangible
Net Worth of not less than $19,500,000.
I. Borrower shall not in any of its fiscal years pay or declare
any dividend or make any other distribution on account of any class
of its stock that would be treated as a return-of-capital dividend
for income tax purposes.
J. The Borrower may not make, have or acquire any investments,
except (i) investments in "small business concerns", as defined in
the SBA regulations, and (ii) investments that are permitted by 13
CFR Section 107.708, or otherwise permitted by the SBA, and are held
by or subject to a security interest in favor of the Bank or an
Additional Lender.
K. The ratio of (i) the sum of the aggregate outstanding
principal balances of all Third Party Loans evidenced by promissory
notes or other agreements held by the Bank or held by the Collateral
Agent pursuant to section 8 this Lending Agreement and securing the
Borrower's obligations to the Bank and the Additional Lenders
pursuant to the Intercreditor Agreement minus the sum of (w) the
aggregate dollar amount of all Participated Third Party Loans (as
defined below), if any, plus (x) if there is more than one Third
Party Loan to a Person or an Affiliate thereof (each, an "Affiliated
Third Party Loan", and collectively, "Affiliated Third Party Loans")
and if any such Affiliated Third Party Loan is (1) a Participated
Third Party Loan, and (2) not separately identifiable (e.g., by means
of a loan identification number) and Borrower does not have
collateral as security for such loan which is separate and distinct
from the collateral pledged to Borrower for any other applicable
Affiliated Third Party Loan, then the aggregate dollar amount of all
such Affiliated Third Party Loans (excluding Participated Third Party
Loans which are included in such aggregate dollar amount), to (ii)
the sum of (y) the outstanding principal balances of the Borrower's
obligations to the Bank hereunder and the Additional Lenders (in
their capacity as Additional Lenders, and not when acting as Limited
Lenders), plus (z) the total principal amount of all of Borrower's
outstanding commercial paper issued pursuant to facilities made
available to Borrower by any Additional Lenders in their capacity as
Additional Lenders, and not when acting as Limited Lenders shall not
at any time be less than 1.25 to 1.0. As used herein, the term
"Participated Third Party Loan" shall mean a Third Party Loan in
which Borrower has sold a participation interest or made an
assignment (in whole or in part) to any third party.
Within thirty (30) days after the end of each calendar month and
at such other times as requested by Bank, Borrower shall deliver to
Bank a certificate with a schedule of all of its Third Party Loans
and stating which Third Party Loans are held by the Collateral Agent
pursuant to the Intercreditor Agreement and which are held by the
various Limited Lenders, the amount of each participation interest
sold by Borrower in each Third Party Loan, and the amounts of each
such participation interests sold on a "first-out" or "with recourse"
basis. The aforesaid certificate shall also set forth the ratio
referred to in the previous paragraph calculated as of the end of the
month for which the certificate is submitted and shall separately
state the amount of each component required to be used in calculating
that ratio.
L. Borrower shall not permit the average monthly percentage
for the preceding three calendar months of the aggregate unpaid
principal balance of all Third Party Loans contractually delinquent
for a period of more than 30 days to exceed ten percent (10%) of the
aggregate unpaid principal balance of all Third Party Loans.
M. Except as provided in the following sentence, Borrower
shall not make (or enter into any agreement to make) any Third Party
Loan, the terms of which would allow for the maximum aggregate
principal advances of such Third Party Loan to exceed eighty percent
(80%) of the fair market value of the property (as such value is set
forth in an appraisal of such property in form and substance
satisfactory to Bank) which is included in Borrower's security for
the repayment of such Third Party Loan. Notwithstanding the
foregoing, Borrower shall be permitted to make Third Party Loans
where the maximum aggregate advances of such loans can equal a
maximum of 100% of the value of the property (as such value is set
forth in an appraisal of such property in form and substance
satisfactory to Bank) which is included in Borrower's security for
the repayment of such Third Party Loans (such Third Party Loans are
referred to herein as "Maximum LTV Third Party Loans"); provided,
however, that the aggregate amount of all such Maximum LTV Third
Party Loans permitted by the preceding clause shall not at any time
exceed 2.5% of the aggregate amount of all Third Party Loans which
constitute collateral for the Loan.
N. At all times during the term of the Loan, Borrower shall
comply (or cause the compliance) with all of the covenants set forth
in the SWIB Documents on the date of this Agreement, which covenants
(to the extent not inconsistent with the covenants contained in this
Agreement) are hereby incorporated into and made a part of this
Agreement. Borrower's covenant contained in the preceding sentence
shall survive the termination, satisfaction, cancellation or
modification of the SWIB Documents or any of the covenants contained
therein.
8. SECURITY: As security for the repayment of the Credit Facility,
and any and all other loans to or obligations of Borrower hereunder (other
than obligations to the Bank acting in its capacity as a Limited Lender),
including any and all extensions and renewals of the foregoing:
A. Borrower has granted to the Bank a security interest in all
of Borrower's general intangibles, accounts, contract rights, chattel
paper and instruments, and Borrower's books and records pertaining to
any of the foregoing, whether now owned or hereafter acquired, and
all proceeds and products of the foregoing. The aforesaid security
interest shall be a first and paramount lien on the foregoing
collateral, subject to, and, on the terms set forth in the
Intercreditor Agreement, on an equal priority with, the security
interest of the Additional Lenders, all as provided in the General
Security Agreement ("Security Agreement") to be entered into by the
Borrower and the Bank; provided, however, the aforesaid security
interest in Third Party Loans constituting the Limited Lenders'
Collateral shall be subordinate to the security interests of the
Limited Lenders. The Bank's rights with respect to its security
interest in the aforesaid property will be subject to the terms and
conditions of the Security Agreement to be executed by Borrower
contemporaneously herewith.
B. Borrower shall execute and deliver to the Collateral Agent
on behalf of the Bank and the Additional Lenders, at any time or
times at the request of Bank or the Collateral Agent, all financing
statements, security agreements, assignments, letters of authority,
pledges, notices and other agreements, instruments and documents
which Bank may request in a form satisfactory to it, to further
evidence, perfect and maintain the security interests and liens
granted or to be granted to Bank in the aforesaid collateral and to
fully consummate all of the transactions contemplated hereunder and
under any other agreement, instrument or documents hereafter executed
by Borrower and delivered to Bank.
Without limiting the obligations of Borrower pursuant to the
foregoing provisions and except as to Third Party Loans constituting
Limited Lenders' Collateral, Borrower shall immediately endorse to
the order of and deliver to the Collateral Agent all promissory notes
or other instruments evidencing Third Party Loans heretofore or
hereafter made by Borrower and shall assign and deliver to such
Collateral Agent any and all mortgages, security agreements, and
other documents evidencing or securing such Third Party Loans.
9. DEFAULT: Bank may, at its option, upon the occurrence of any of
the following events (each an "Event of Default"), without prior notice to
Borrower, immediately terminate Borrower's right to receive Advances under
this Agreement and immediately declare the outstanding balance of the
Note, together with all interest accrued thereon, to be immediately due
and payable, without notice of any kind and notwithstanding anything to
the contrary herein contained. The following are Events of Default:
A. Any representation or warranty made by Borrower in this
Agreement, or in any certificate of Borrower furnished to Bank
hereunder, shall prove to have been incorrect in any material respect
as of the time when made;
B. If Borrower shall fail to pay any interest or principal
under the Credit Facility when due hereunder, or fail to pay when due
any principal or interest on any of its other indebtedness, if any,
to Bank, whether at maturity or by acceleration or otherwise, and
such failure shall continue uncured for a period of five (5) days
after the applicable due date;
C. Borrower shall default in the performance or observance of
any covenant or agreement contained in this Agreement or in any other
agreement between Borrower and Bank, provided, however, that a breach
in the performance or observance of an affirmative covenant or
agreement contained in section 6 of this Agreement shall only
constitute a default if the breach remains uncured for a period of
twenty (20) days after written notice thereof from Bank to Borrower;
D. Borrower shall:
(1) Apply for or consent to the appointment of a receiver,
trustee or liquidator of Borrower or of all or substantial part of
the assets of Borrower,
(2) Be unable to, or admit in writing its inability to,
pay its debts as they mature,
(3) Make a general assignment for the benefit of
creditors,
(4) Be adjudicated a bankrupt or insolvent,
(5) File a voluntary petition in bankruptcy or a petition
or an answer seeking reorganization or an arrangement with creditors
or to take advantage of any insolvency law, or an answer admitting
the material allegations of a petition filed against Borrower in any
bankruptcy, reorganization or insolvency proceeding, or
(6) Corporate action shall be taken by Borrower for the
purpose of effecting any of the foregoing;
E. A petition for an order, judgment or decree shall be filed,
without the application, approval or consent of Borrower, with any
court of competent jurisdiction, seeking reorganization of Borrower,
or the appointment of a receiver, trustee or liquidator of Borrower
or of all or a substantial part of the assets of Borrower, and such
petition shall remain undismissed for any period of sixty (60) days;
F. Borrower shall default in the payment of principal or
interest on any obligation (other than the Credit Facility) for
borrowed money beyond any period of grace provided with respect
thereto or in the performance of any other agreement, term or
condition contained therein or in any agreement or security interest
relating to any such obligation beyond any period of grace provided
with respect thereto, if the effect of such default is to cause or
permit the holder or holders of such obligation (or a trustee or
agent on behalf of such holder or holders) to cause such obligation
to become due prior to its stated maturity;
G. A final judgment which, together with other outstanding
final judgments against it, exceeds an aggregate of Fifty Thousand
Dollars ($50,000.00) shall be entered against Borrower and remain
outstanding and unsatisfied or unstayed after sixty (60) days from
the date of entry thereof, unless an appeal has been taken and
perfected within the time provided by law and suitable bond has been
provided to stay execution of such judgment; or
H. Borrower shall cease to be a Small Business Investment
Company licensed pursuant to the rules and regulations of the SBA, or
the SBA shall have instituted formal proceedings to revoke or cancel
Borrower's license (either of such events to be hereinafter referred
to as an "SBA Termination Event"); provided, however, that if the
Borrower shall give notice to the Bank of the occurrence of an SBA
Termination Event within ten (10) days after the occurrence thereof,
then such SBA Termination Event shall constitute an event of default
hereunder only upon the expiration of ninety (90) days after the
occurrence of such SBA Termination Event. The Bank shall have no
obligation to make any advances to Borrower under the Credit Facility
after the occurrence of an SBA Termination Event; or
I. Either of the following shall occur:
(1) Bando XxXxxxxxxx Capital Corporation ("BMCC") shall
transfer, sell, pledge or hypothecate all or any portion of the
issued and outstanding stock of Borrower (of any class or type) owned
by BMCC from time to time; or
(2) Except for the issued and outstanding stock of
Borrower owned by BMCC, if at any time more than thirty percent (30%)
of the issued and outstanding stock of Borrower, of any class or
type, shall be owned by any one person or entity or Affiliate
thereof.
In the event of any occurrence of any event of default, Borrower
shall pay all Bank's Expenses which may be incurred by Bank with
respect thereto, including reasonable attorneys' fees, and all such
sums shall be and become part of the indebtedness pursuant to this
Agreement. In addition to and not in lieu of any other right or
remedy it may have at any time, Bank at any time and from time to
time at its election, may (but it shall not be required to) do or
perform or comply with or cause to be done or performed or complied
with anything which Borrower may be required to do or comply with
under this Agreement if Borrower shall fail to do so; Borrower shall
reimburse Bank upon demand for any cost or expense Bank may pay or
incur in such respect, together with interest thereon at the Default
Rate of interest set forth herein for the Credit Facility from the
date of such demand until paid. The failure of Bank at any time or
from time to time to exercise any right or remedy, whether arising
from or by virtue of any Event of Default or otherwise, shall not
constitute a waiver of any such right or remedy and shall not impair
the right of Bank to exercise such right or remedy or any other right
or remedy thereafter or to insist upon strict performance. No waiver
of any right or remedy by Bank shall be valid or effective unless
made in writing and signed by an officer of Bank. Any effective
waiver of any right or remedy shall not be deemed to constitute a
waiver of any other right or remedy then existing or which may
thereafter arise or accrue. Upon the occurrence of any Event of
Default, and pursuant to the provisions of this paragraph, Bank may
xxx to enforce the obligations of Borrower pursuant to this
Agreement. Presentment, demand, protest and notice of every kind are
hereby expressly waived.
10. CONDITIONS OF DISBURSEMENT: Bank shall be under no obligation
to make any Advances under the Credit Facility pursuant to this Agreement
unless the following conditions shall have been fulfilled:
A. The representations and warranties of Borrower contained
herein shall be true at the time of the initial Advance and at the
time of each subsequent Advance under this Agreement as though such
representations and warranties were made at such time.
B. Borrower shall have performed and complied with all
agreements and conditions required by this Agreement to be performed
or complied with by it.
C. Prior to the initial advance under this Agreement Borrower
shall have delivered to Bank an opinion in writing of Borrower's
legal counsel, Xxxxx & Xxxxxxx, dated on or after the date of this
Agreement, to the effect that (i) Borrower is a corporation validly
existing under the laws of the State of Wisconsin, and has the
corporate power and authority to enter into this Agreement and to
make borrowings and execute and deliver the notes as provided for
herein; (ii) the making of this Agreement and compliance with the
terms hereof by Borrower and the execution and delivery of the Note
pursuant hereto do not conflict with or contravene any provision of
the Articles of Incorporation, or By-Laws of Borrower, or any
material indenture, contract or agreement of which such counsel has
knowledge, to which Borrower is a party or to which it is subject (or
that any such contravention has been appropriately waived), or, to
the extent of the business of the Borrower of which such counsel has
knowledge, any statute, rule or regulation binding upon Borrower;
(iii) all corporate action necessary to authorize Borrower to enter
into this Agreement, to perform its obligations hereunder, and to
execute and deliver any and all documents necessary to comply with
the provisions of this Agreement has been taken; (iv) the obtaining
of the Credit Facility hereunder has been authorized and approved by
all necessary corporate action; (v) this Agreement and Note have been
duly executed by the Borrower; (vi) this Agreement, the Note, and the
Security Agreement referred to in this Agreement, constitute the
legal, valid and binding obligations of Borrower and are enforceable
against Borrower in accordance with their terms, subject to customary
bankruptcy exceptions; (vii) no consent of any public body, agency,
commission or board is necessary to the making and assumption of
obligations hereunder by Borrower; and (viii) so far as it is known
to such counsel there is no material litigation, and there are no
proceedings by any public body, agency, or authority, pending or
threatened against Borrower.
D. Borrower shall furnish to Bank copies of its most recent
financial statements prepared in accordance with the provisions of
section 6.A. of this Agreement.
E. Prior to the initial Advance under this Agreement, Borrower
shall furnish Bank with certified resolutions of its Board of
Directors authorizing its entry into this Agreement and performance
of the covenants contained herein.
F. Borrower shall furnish Bank with a certificate of incumbency
with respect to the persons authorized to execute this Agreement, the
Note, and all other documents to be executed in connection with the
transactions which are the subject of this Agreement.
G. Prior to the initial Advance under this Agreement, Borrower
shall deliver to Bank copies of all agreements between Borrower and
the SBA relating to the SBA's guarantee of obligations of Borrower,
together with copies of all outstanding debentures or other evidence
of debt issued by Borrower and guaranteed by the SBA.
H. Prior to the initial Advance hereunder, the Bank and the
parties to the Intercreditor Agreement shall have executed an
amendment to the Intercreditor Agreement in form and substance
satisfactory to the Bank, and copies of all such loan agreements, in
form and substance acceptable to Bank, shall have been delivered to
Bank.
11. MISCELLANEOUS.
A. The provisions of this Agreement shall inure to the benefit
of and be binding upon any successor to any of the parties hereto and
shall extend and be available to any holder of the Note and renewals
thereof. Borrower may not assign or otherwise transfer its rights
under this Agreement except with the prior written consent of the
Bank.
Borrower shall not assign or attempt to assign its rights under
this Agreement. Bank shall have the right to assign, transfer, sell,
negotiate, pledge or otherwise hypothecate this Agreement and any of
its rights and security hereunder, including the Note and any other
Loan Document to any affiliate of Bank or to any bank or other entity
which in Bank's good faith judgment has the capacity to perform
Bank's obligations hereunder. Borrower hereby agrees that all of the
rights and remedies of Bank in connection with the interest so
assigned shall be enforceable against Borrower by such assignee with
the same force and effect and to the same extent as the same would
have been enforceable by Bank but for such assignment. Borrower
agrees that Bank shall have the right to sell participations in the
Loan without the consent of Borrower. Notwithstanding Bank's
participation of any part of the Loan, Bank shall remain responsible
for the performance of all its obligations hereunder.
B. No failure on the part of Bank to exercise, and no delay in
exercising any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by Bank of any right hereunder
preclude any other or future exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
C. In the event that any date provided herein for any payment
by Borrower shall not be a Business Day, such payment date shall be
deemed to be the next following Business Day.
D. All representations and warranties made herein shall survive
the extension of any Advance under this Agreement and the execution
and the delivery of the Note or renewals thereof.
E. All notices, statements, requests and demands herein
provided for shall be deemed to have been given or made when
deposited in the mails, postage prepaid, or delivered to a telegraph
company, charges prepaid, in the case of Borrower, when addressed to
Borrower, 00000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, Chairman of the Board, and in
the case of Bank, at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxx X. Xxxxx, Senior Vice President; or in such
other manner, as to any party hereto, as such shall designate in a
written notice to the other party hereto.
F. This Agreement shall be deemed to be a contract made under
the laws of the State of Illinois and shall be construed and enforced
in accordance with the laws of said State.
G. Section headings in this Agreement and the other Loan
Documents are for convenience of reference only, and shall not govern
the interpretation of any of the provisions of this Agreement and the
other Loan Documents.
H. This Agreement and all other agreements referred to herein
or delivered in connection herewith shall constitute the entire
agreement between the parties relating to the subject matter hereof,
shall rescind all prior agreements and understandings between the
parties hereto relating to the subject matter hereof, and shall not
be changed or terminated orally.
I. All representations, warranties, and covenants made by
Borrower under this Agreement or any other Loan Document shall be
considered to have been relied upon by Bank and shall survive the
delivery to Bank of the Note and the making of the Loan herein
contemplated regardless of any investigation made by Bank or on its
behalf.
J. Any provision in this Agreement or any other Loan Document
that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions
in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.
K. Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of any United States federal or Illinois state court
sitting in Chicago in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document and Borrower
hereby irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in any such court and
irrevocably waives any objection it may now or hereafter have as to
the venue of any such suit, action or proceeding brought in such a
court or that such court is an inconvenient forum. Nothing herein
shall limit the right of the Bank to bring proceedings against
Borrower in the courts of any other jurisdiction. Any judicial
proceeding by Borrower against the Bank or any affiliate of the Bank
involving, directly or indirectly, any matter in any way arising out
of, related to, or connected with this Agreement or any other Loan
Document shall be brought only in a court in Chicago, Illinois.
L. BORROWER AND THE BANK EACH HEREBY WAIVE TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT AND ANY OTHER
LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR
THEREUNDER.
M. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement
by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
BANDO XxXXXXXXXX SMALL BUSINESS
INVESTMENT CORPORATION
By:
Xxxxxx X. Xxxxxxxx,
Chairman of the Board and
Chief Executive Officer
LASALLE NATIONAL BANK
By:
Title:
