Exhibit (b)(1)
================================================================================
CREDIT AND SECURITY AGREEMENT
BY AND BETWEEN
19TH AVENUE/XXXXXXXX LIMITED PARTNERSHIP, AN
ARIZONA LIMITED PARTNERSHIP
AND
XXXXX FARGO CREDIT, INC.
A MINNESOTA CORPORATION
--------------------------------------------------------------------------------
APRIL 22, 2004
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.............................................................................. 1
Section 1.1 Definitions...................................................................... 1
Section 1.2 Other Definitional Terms; Rules of Interpretation................................ 8
ARTICLE II. AMOUNT AND TERMS OF THE CREDIT FACILITY.................................................. 9
Section 2.1 Term Advances.................................................................... 9
Section 2.2 Interest; Default Interest; Participations; Usury................................ 10
Section 2.3 Fees............................................................................. 11
Section 2.4 Time for Interest Payments; Payment on Non-Banking Days; Computation of
Interest and Fees................................................................ 11
Section 2.5 Application of Payments.......................................................... 12
Section 2.6 Voluntary Prepayment............................................................. 12
Section 2.7 Mandatory Prepayment............................................................. 12
Section 2.8 Advances to Pay Obligations...................................................... 12
Section 2.9 Use of Proceeds.................................................................. 12
Section 2.10 Liability Records................................................................ 12
Section 2.11 Increased Costs; Capital Adequacy; Funding Exceptions............................ 13
ARTICLE III. SECURITY INTEREST; OCCUPANCY; SETOFF..................................................... 14
Section 3.1 Grant of Security Interest....................................................... 14
Section 3.2 Financing Statement.............................................................. 14
Section 3.3 Set Off.......................................................................... 14
Section 3.4 Collateral....................................................................... 14
ARTICLE IV. CONDITIONS OF LENDING.................................................................... 15
Section 4.1 Conditions Precedent to Term Advance A........................................... 15
Section 4.2 Conditions Precedent to Term Advance (Tranche B)................................. 18
Section 4.3 Conditions Precedent to All Advances............................................. 19
Section 4.4 Expiration of Commitment......................................................... 19
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................... 19
Section 5.1 Existence and Power; Name; Chief Executive Office; Inventory and
Equipment Locations; Federal Employer Identification Number...................... 19
i
TABLE OF CONTENTS
(continued)
PAGE
Section 5.2 Capitalization................................................................... 19
Section 5.3 Authorization of Borrowing; No Conflict as to Law or Agreements.................. 20
Section 5.4 Legal Agreements................................................................. 20
Section 5.5 Subsidiaries..................................................................... 20
Section 5.6 Financial Condition; No Adverse Change........................................... 20
Section 5.7 Litigation....................................................................... 20
Section 5.8 Regulation U..................................................................... 21
Section 5.9 Taxes............................................................................ 21
Section 5.10 Titles and Liens................................................................. 21
Section 5.11 Plans............................................................................ 21
Section 5.12 Default.......................................................................... 21
Section 5.13 Submissions to Lender............................................................ 21
Section 5.14 Financing Statements............................................................. 22
Section 5.15 Financial Solvency............................................................... 22
ARTICLE VI. COVENANTS................................................................................ 22
Section 6.1 Reporting Requirements........................................................... 22
Section 6.2 Permitted Liens; Financing Statements............................................ 24
Section 6.3 Indebtedness..................................................................... 24
Section 6.4 Guaranties....................................................................... 25
Section 6.5 Investments and Subsidiaries..................................................... 25
Section 6.6 Dividends and Distributions...................................................... 25
Section 6.7 Salaries......................................................................... 25
Section 6.8 Books and Records; Inspection and Examination.................................... 26
Section 6.9 Compliance with Laws............................................................. 26
Section 6.10 Payment of Taxes and Other Claims................................................ 26
Section 6.11 Maintenance of Properties........................................................ 27
Section 6.12 Insurance........................................................................ 27
Section 6.13 Preservation of Existence........................................................ 27
Section 6.14 Restrictions on Nature of Business............................................... 27
ii
TABLE OF CONTENTS
(continued)
PAGE
Section 6.15 Accounting....................................................................... 27
Section 6.16 Plans............................................................................ 27
Section 6.17 Constituent Documents............................................................ 27
Section 6.18 Performance by the Lender........................................................ 27
Section 6.19 Required Merger.................................................................. 28
Section 6.20 Transactions with Affiliates..................................................... 28
ARTICLE VII. EVENTS OF DEFAULT, RIGHTS AND REMEDIES................................................... 28
Section 7.1 Events of Default................................................................ 28
Section 7.2 Rights and Remedies.............................................................. 31
Section 7.3 Certain Notices.................................................................. 32
ARTICLE VIII. MISCELLANEOUS............................................................................ 32
Section 8.1 No Waiver; Cumulative Remedies; Compliance with Laws............................. 32
Section 8.2 Amendments, Etc.................................................................. 32
Section 8.3 Addresses for Notices; Requests for Accounting................................... 33
Section 8.4 Further Documents................................................................ 33
Section 8.5 Costs and Expenses............................................................... 33
Section 8.6 Indemnity........................................................................ 34
Section 8.7 Participants..................................................................... 34
Section 8.8 Execution in Counterparts; Telefacsimile Execution............................... 35
Section 8.9 Retention of Borrower's Records.................................................. 35
Section 8.10 Binding Effect; Assignment; Complete Agreement; Exchanging Information........... 35
Section 8.11 Severability of Provisions....................................................... 35
Section 8.12 Headings......................................................................... 35
Section 8.13 Governing Law; Jurisdiction, Venue; Waiver of Jury Trial......................... 36
Section 8.14 Waiver of Suretyship Defenses.................................................... 36
iii
CREDIT AND SECURITY AGREEMENT
Dated as of April 22, 2004
19TH AVENUE/XXXXXXXX LIMITED PARTNERSHIP, an Arizona limited partnership
(the "Borrower"), and XXXXX FARGO CREDIT, INC., a Minnesota corporation (the
"Lender"), hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided, the following terms shall have the meanings
assigned to them in this Section or in the Section referenced after such term:
"Acquisition Subsidiary" means Xxxxxx Acquisition Corporation, a
corporation organized under the laws of the State of Arizona.
"Advance" means a Term Advance.
"Affiliate" or "Affiliates" means Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx,
Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxx, and any other Person controlled by,
controlling or under common control with the Borrower, including any
subsidiary of the Borrower. For purposes of this definition, "control,"
when used with respect to any specified Person, means the power to direct
the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise.
"Agreement" means this Credit and Security Agreement.
"Banking Day" means a day on which the Federal Reserve Bank of New
York is open for business.
"Bank One Indebtedness" means the indebtedness of the Borrower to
Bank One, Arizona, N.A. and/or Bank One, N.A., including, without
limitation, prepayment and swap breakup fees.
"Base Rate" means the rate of interest publicly announced from time
to time by Xxxxx Fargo Bank at its principal office in San Francisco as
its "prime rate", with the understanding that the "prime rate" is one of
Xxxxx Fargo's base rates (not necessarily the lowest of such rates) and
serves as the basis upon which effective rates of interest are calculated
for loans making reference thereto.
"Borrowing Base" means at any time the sum of:
(i) 100% of Eligible Cash (the "Borrowing Base Cash Component"),
plus
(ii) a percentage of Eligible Marketable Securities (the "Borrowing
Base Marketable Securities Component"), which percentage shall be equal to the
lesser of 90% or Lender's guideline percentages then in effect for such Eligible
Marketable Securities; and
(iii) 65% of the fair market value, as determined by the Lender in
its sole and absolute discretion, of the Eligible Real Property.
"Borrowing Base Cash Component" has the meaning given to in the
definition of "Borrowing Base".
"Borrowing Base Marketable Securities Component" has the
meaning given to in the definition of "Borrowing Base".
"Cash" means, when used in connection with any Person: (a) cash
owned by that Person which is deposited in a demand deposit account
denominated in United States dollars; and (b) a certificate of deposit due
within two hundred seventy (270) days after the date of issuance but not
later than the Maturity Date and issued by a bank, savings and loan or
savings bank doing business in and incorporated under the laws of the
United States of America or any State thereof and having combined capital,
surplus and undivided profits in amount satisfactory to the Lender in its
sole and absolute discretion.
"Change of Control" means the occurrence of any of the following
events:
(a) there shall be any change, directly or indirectly, in the
ownership of the Borrower, except for changes resulting from
transfers of ownership interests for estate planning purposes which
in the aggregate after the date of this Agreement do not exceed 25%
of the ownership interests of the Borrower.
(b) Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxx shall cease to be
general partners of the Borrower.
"Collateral" means all the Borrower's accounts, cash, chattel paper,
deposit accounts, documents, equipment, general intangibles, goods,
instruments, inventory, investment property, letter-of-credit rights,
letters of credit, and real property, together with (i) all substitutions
and replacements for and products of any of the foregoing; (ii) in the
case of all goods, all accessions; (iii) all accessories, attachments,
parts, equipment and repairs now or hereafter attached or affixed to or
used in connection with any goods; (iv) all warehouse receipts, bills of
lading and other documents of title now or hereafter covering such goods;
(v) all collateral subject to the Lien of any Security Document; (vi) any
money, or
-2-
other assets of the Borrower that now or hereafter come into the
possession, custody, or control of the Lender; and (viii) proceeds of any
and all of the foregoing.
"Commitment" means the Lender's commitment to make Advances to the
Borrower pursuant to Article II.
"Constituent Documents" means with respect to any Person, as
applicable, such Person's certificate of incorporation, articles of
incorporation, by-laws, certificate of formation, articles of
organization, limited liability company agreement, management agreement,
operating agreement, shareholder agreement, partnership agreement or
similar document or agreement governing such Person's existence,
organization or management or concerning disposition of ownership
interests of such Person or voting rights among such Person's owners.
"Control Agreements" the control agreements required to be given to
the Lender pursuant to Section 4.1 and/or Section 4.2.
"Credit Facility" means the credit facility being made available to
the Borrower by the Lender under Article II.
"Default" means an event that, with giving of notice or passage of
time or both, would constitute an Event of Default.
"Default Period" means any period of time beginning on the day a
Default or Event of Default occurs and ending on the date the Lender
notifies the Borrower in writing that such Default or Event of Default has
been cured or waived.
"Default Rate" means an annual interest rate equal to three percent
(3%) over the Floating Rate, which interest rate shall change when and as
the Floating Rate changes.
"Director" means a director if the Borrower is a corporation, a
person having authority to govern if the Borrower is a limited liability
company, or a general partner if the Borrower is a partnership.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the IRC.
"Eligible Cash" means Cash over which the Lender has control, in
which the Lender has a first, exclusive and perfected security interest
and which are pledged to the Lender by the Borrower and/or the Guarantors.
-3-
"Eligible Marketable Securities" means the Marketable Securities
over which the Lender has control, in which the Lender has a first,
exclusive and perfected security interest, and which are pledged to the
Lender by Borrower and/or the Guarantors.
"Eligible Real Property" means the Real Property in which the Lender
has a first, exclusive and perfected Lien and assignment of leases and
rents, subject only to the Permitted Liens; and with respect to which the
conditions set forth in Subsections 4.1(p)-(y), inclusive, have been
satisfied by the Borrower at its expense.
"Event of Default" has the meaning specified in Section 7.1.
"Family Trusts" means, collectively, the following trusts: Xxxxx X.
Xxxxxx Family Trust U/T/A Dated June 28, 1983, as amended; and Xxxxx X
Xxxxxx Family Trust U/T/A Dated March 12, 1992, as amended.
"Floating Rate" means with an annual interest rate equal to the sum
of the Base Rate plus the applicable two and fifty hundredths percent
(2.50%), which interest rate shall change when and as the Base Rate
changes.
"Full Remedies Date" has the meaning specified in Section 7.1.
"GAAP" means generally accepted accounting principles, applied on a
basis consistent with the accounting practices applied in the financial
statements described in SCHEDULE 5.6.
"Guarantors" means collectively the Family Trusts, Xxxxx X. Xxxxxx
and Xxxxx X. Xxxxxx, husband and wife, Xxxxx X. Xxxxxx and Xxxxx X.
Xxxxxx, husband and wife; and any other Person now or hereafter
guarantying the Obligations.
"IRC" means the Internal Revenue Code of 1986.
"Initial Funding Date" means the date Term Advance A is made.
"Lien" means any security interest, mortgage, deed of trust, pledge,
lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including the interest of each lessor under any
capital lease and the interest of any bondsman under any payment or
performance bond, in, of or on any assets or properties of a Person,
whether now owned or hereafter acquired and whether arising by agreement
or operation of law.
"Loan Documents" means this Agreement, the Note and the Security
Documents.
-4-
"Marketable Securities", when used in connection with any Person,
that Person's investments in the following, excluding any debt or equity
securities issued by any Affiliate of the Borrower:
(i) readily marketable United States of America government
bills and notes and securities issued by a governmental agency of
the United States of America whose obligations constitute full faith
and credit obligations of the United States of America;
(ii) readily marketable direct obligations of any State of the
United States of America or any subdivision of any such State having
a credit rating of at least Aa by Xxxxx'x Investors Service, Inc. or
AA by Standard & Poor's Rating Group (a division of XxXxxx-Xxxx,
Inc.);
(iii) readily marketable commercial paper issued by U.S.
corporations doing business in and incorporated under the laws of
the United States of America or any State thereof and rated "A-1" or
"A-2" by Standard & Poor's Corporation or "P-1" or "P-2" by Xxxxx'x
Investors Service commercial paper of corporations, in each case due
within two hundred seventy (270) days after the date of the making
of the investment; and
(iv) unrestricted and freely tradeable securities that are
subject to no restrictions for resale and that are traded on the New
York Stock Exchange, the American Stock Exchange or the NASDAQ
national market system.
"Maturity Date" means the earliest of (i) the third anniversary of
the Initial Funding Date or (ii) April 30, 2007.
"Maximum Line" means $7,000,000.
"Minimum Eligible Cash/Marketable Securities Amount" means the
lesser of (a) the unpaid principal balance of the Term Note or (b) (i)
$750,000 at the time Term Advance A is made and thereafter until the first
Term Advance (Tranche B) is made and (ii) $1,500,000 at the time the first
Term Advance (Tranche B) is made and thereafter.
"Multiemployer Plan" means a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) to which the Borrower or any ERISA Affiliate
contributes or is obligated to contribute.
"Note" means the Term Note.
-5-
"Obligations" means the Note and each and every other debt,
liability and obligation of every type and description which the Borrower
may now or at any time hereafter owe to the Lender, whether such debt,
liability or obligation now exists or is hereafter created or incurred,
whether it arises in a transaction involving the Lender alone or in a
transaction involving other creditors of the Borrower, and whether it is
direct or indirect, due or to become due, absolute or contingent, primary
or secondary, liquidated or unliquidated, or sole, joint, several or joint
and several, and including all indebtedness of the Borrower arising under
any Loan Document or guaranty between the Borrower and the Lender, whether
now in effect or hereafter entered into.
"Officer" means with respect to the Borrower, an officer if the
Borrower is a corporation, a manager if the Borrower is a limited
liability company, or a general partner if the Borrower is a partnership.
"Owner" means with respect to the Borrower, each Person having legal
or beneficial title to an ownership interest in the Borrower or a right to
acquire such an interest.
"Pass-Through Tax Liabilities" means the amount of state and federal
income tax paid or to be paid by the Borrower's Owners on taxable income
earned by the Borrower and attributable to the Owners as a result of the
Borrower's "pass-through" tax status, assuming the highest marginal income
tax rate for federal and state (for the state or states in which any Owner
is liable for income taxes with respect to such income) income tax
purposes, after taking into account any deduction for state income taxes
in calculating the federal income tax liability and all other deductions,
credits, deferrals and other reductions available to the Owners from or
through the Borrower.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) maintained for employees of the Borrower or any ERISA Affiliate and
covered by Title IV of ERISA.
"Permitted Lien" has the meaning given in Section 6.3(a).
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) maintained for employees of the Borrower or any ERISA Affiliate.
"Real Property" means the real property which is owned by the
Borrower and is described in SCHEDULE 1.1B.
-6-
"Real Property Security Document" means the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing, which is
delivered to the Lender pursuant to Section 4.1 to encumber the Real
Property and assign the rents, issues and profits therefrom.
"Related Borrowers" means the Persons listed in SCHEDULE 1.1B.
"Related Credit Facility " means that "Credit Facility", as that
term is defined in the Related Credit Facility Agreement.
"Related Credit Facility Agreement" means that Credit and Security
Agreement dated as of August 13, 2003, between the Related Borrowers, as
the "Borrower", and the Lender, as the "Lender", as it may be from time to
time amended, restated or replaced.
"Related Credit Facility Default" means an "Event of Default", as
that term is defined in the Related Credit Facility Agreement.
"Related Credit Facility Obligations" means the "Obligations", as
that term is defined in the Related Credit Facility Agreement.
"Reportable Event" means a reportable event (as defined in Section
4043 of ERISA), other than an event for which the 30-day notice
requirement under ERISA has been waived in regulations issued by the
Pension Benefit Guaranty Corporation.
"Required Leases" means, collectively, the following real property
leases: (a) the lease dated as of May 1, 1997, between the Borrower, as
landlord, and Xxxxxx Steel Company, as tenant, as amended; (b) the lease
dated as of March 1, 1997 between the Borrower, as landlord, and B&K Steel
Fabricators, Inc. (to whose interest Xxxxxx Steel Company has succeeded),
as tenant, as amended; and (c) the lease dated as of March 1, 1997 between
the Borrower, as landlord, and Xxxxxx Steel Company, as tenant, as
amended.
"Security Documents" means this Agreement, the Real Property
Security Document and any other document delivered to the Lender from time
to time to secure the Obligations.
"Security Interest" has the meaning given in Section 3.1.
"SII" means Xxxxxx International, Inc., a Delaware corporation,
"SII Stock" means common stock of SII, a Delaware corporation, which
is not owned legally or beneficially by an Affiliate of Borrower or a
parent, child or sibling of an Affiliate or by a spouse of any such
Person.
-7-
"SII Stock Transaction" means a transaction by which not later than
October 31, 2004, the Borrower will (i) acquire 100% of the outstanding
stock of SII and (ii) effect a merger of the Acquisition Subsidiary into
SII.
"Subsidiary" means any corporation of which more than 50% of the
outstanding shares of capital stock having general voting power under
ordinary circumstances 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 shall have or might have voting power by reason of
the happening of any contingency, is at the time directly or indirectly
owned by the Borrower, by the Borrower and one or more other Subsidiaries,
or by one or more other Subsidiaries.
"Tax Distributions" means distributions declared and paid by the
Borrower to its Owners, or which could have been declared and paid by the
Borrower, in an amount not to exceed the Pass-Through Tax Liabilities.
"Term Advance" means Term Advance A or a Term Advance (Tranche B);
and "Term Advances" means collectively Term Advance A and the Term
Advances (Tranche B).
"Term Advance A" has the meaning specified in Section 2.1 (a).
"Term Advances (Tranche B)" has the meaning specified in Section
2.2(b).
"Term Note" means the Borrower's promissory note, payable to the
order of the Lender in substantially the form of EXHIBIT A hereto and any
note or notes issued in substitution therefor.
"Termination Date" means the earliest of (i) the Maturity Date, (ii)
the Termination Date (as that term is defined in the Related Credit
Facility Agreement), (iii) the date the Borrower prepays the Term Note in
full, or (iv) the date the Lender demands payment of the Obligations after
an Event of Default pursuant to Section 7.2.
"Title Company" means First American Title Insurance Company, a
California corporation.
"UCC" means the Uniform Commercial Code as in effect in the state
designated in Section 8.13 as the state whose laws shall govern this
Agreement, or in any other state whose laws are held to govern this
Agreement or any portion hereof.
"Xxxxx Fargo Bank" means Xxxxx Fargo Bank, National Association.
Section 1.2 Other Definitional Terms; Rules of Interpretation. The words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to
-8-
this Agreement as a whole and not to any particular provision of this Agreement.
All accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with GAAP. All terms defined in the UCC and not otherwise
defined herein have the meanings assigned to them in the UCC. References to
Articles, Sections, subsections, Exhibits, Schedules and the like, are to
Articles, Sections and subsections of, or Exhibits or Schedules attached to,
this Agreement unless otherwise expressly provided. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". Unless the context in which used herein otherwise clearly requires,
"or" has the inclusive meaning represented by the phrase "and/or". Defined terms
include in the singular number the plural and in the plural number the singular.
Reference to any agreement (including the Loan Documents), document or
instrument means such agreement, document or instrument as amended or modified
and in effect from time to time in accordance with the terms thereof (and, if
applicable, in accordance with the terms hereof and the other Loan Documents),
except where otherwise explicitly provided, and reference to any promissory note
includes any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor. Reference to any law, rule, regulation,
order, decree, requirement, policy, guideline, directive or interpretation means
as amended, modified, codified, replaced or reenacted, in whole or in part, and
in effect on the determination date, including rules and regulations promulgated
thereunder.
ARTICLE II.
AMOUNT AND TERMS OF THE CREDIT FACILITY
Section 2.1 Term Advances.
(a) TERM ADVANCE A. The Lender agrees, subject to the terms and
conditions of this Agreement, to make an Advance (the "Term Advance A") to the
Borrower on the date that all of the conditions set forth in Sections 4.1 and
4.3 have been satisfied (the "Term Advance A") in an amount not exceeding
$3,000,000. The Borrower's obligation to pay Term Advance A shall be evidenced
by the Term Note and shall be secured by the Collateral.
(b) TERM ADVANCE (TRANCHE B). The Lender agrees, subject to the
terms and conditions of this Agreement, to make an advance or advances to the
Borrower [collectively, the "Term Advances (Tranche B")] in an aggregate amount
not exceeding the difference between (i) the Maximum Line and (ii) the original
amount of Term Advance A. The Borrower's obligation to pay Term Advance (Tranche
B) shall be evidenced by the Term Note and shall be secured by the Collateral.
The Borrower shall have no right to request or obtain a Term Advance (Tranche B)
in an amount less than $100,000. The Lender will make each Term Advance (Tranche
B) within five (5) Business Days after all of the conditions set forth in
Sections 4.1, 4.2, 4.3 and 4.4 have been satisfied with respect to it.
(c) MANNER OF TERM ADVANCES. Upon fulfillment of the applicable
conditions to such Advance, the Lender shall disburse the proceeds of Term
Advance A through an escrow established for such purpose with the Title Company
unless the Lender and the Borrower shall agree in writing to another manner of
disbursement. Upon fulfillment of the applicable
-9-
conditions to such Advance, the Lender shall disburse the proceeds of each Term
Advance (Tranche B) in a manner to which the Lender and the Borrower shall have
agreed in writing.
(d) PAYMENT OF TERM NOTE PRINCIPAL. The outstanding principal
balance of the Term Note shall be due and payable as follows: (i) Borrower will
make monthly principal payments of $45,000 each, beginning on June 1, 2004 and
continuing on the first day of each month thereafter; and (ii) in addition to
those principal payments, Borrower will make a principal payment of $1,000,000
on the date six (6) months after the Initial Funding Date and a principal
payment of $600,000 on the date twelve (12) months after the Initial Funding
Date.
(e) FULL PAYMENT ON TERMINATION DATE. On the Termination Date the
entire unpaid principal balance of the Term Note, and all unpaid interest
accrued thereon, shall in any event be due and payable.
Section 2.2 Interest; Default Interest; Participations; Usury.
(a) NOTE. Except as set forth in Subsections (b) and (d) and for the
effect of the payments in the nature of interest required under the Loan
Documents, the outstanding principal balance of the Note shall bear interest at
the Floating Rate.
(b) DEFAULT INTEREST RATE. After the occurrence of an Event of
Default and upon notice to the Borrower from the Lender, the principal of the
Advances outstanding from time to time shall bear interest at the Default Rate,
effective as of the first day of the month during which the Default Period as a
result of such Event of Default begins through the last day of such Default
Period. The Lender's election to charge the Default Rate shall be in its sole
discretion and shall not be a waiver of any of its other rights and remedies.
The Lender's election to charge interest at the Default Rate for less than the
entire period during which the Default Rate may be charged shall not be a waiver
of its right to later charge the Default Rate for the entire such period.
(c) PARTICIPATIONS. If any Person shall acquire a participation in
the Advances, the Borrower shall be obligated to the Lender to pay the full
amount of all interest calculated under this Section 2.2, along with all other
fees, charges and other amounts due under this Agreement, regardless if such
Person elects to accept interest with respect to its participation at a lower
rate than that calculated under this Section 2.2, or otherwise elects to accept
less than its pro rata share of such fees, charges and other amounts due under
this Agreement.
(d) USURY. Borrower agrees to pay an effective per annum interest
rate with respect to the Loan equal to the rate stated in this Section 2.2 plus
the rate resulting from all sums in the nature of interest required to be paid
by Borrower under the Loan Documents. However, in no event shall the Borrower
pay interest and other sums in the nature of interest in excess of the highest
rate permitted by applicable law. If any payments of interest or other sums in
the nature of interest are held to be in excess of the limits imposed by any
applicable usury laws, it is agreed that any such amount held to be in excess
shall be considered payment of principal hereunder, and the indebtedness
evidenced hereby shall be reduced by such amount so that the total liability for
payments of interest and other sums in the nature of interest shall not exceed
the applicable
-10-
limits imposed by applicable law, in compliance with the desires of the Borrower
and the Lender. This provision shall never be superseded or waived and shall
control every other provision of the Loan Documents and all agreements between
the Borrower and the Lender, or their successors and assigns.
Section 2.3 Fees.
(a) ORIGINATION FEE. The Borrower shall pay the Lender a fully
earned and non-refundable origination fee of $70,000, due and payable upon the
Initial Funding Date, but not later than April 30, 2004.
(b) PREPAYMENT FEES. If the Term Note is prepaid in whole or in part
for any reason before the Maturity Date [excluding payments due pursuant to
Section 2.1(d)], and whether such prepayment is voluntary or involuntary
(including prepayments due pursuant to Section 2.7 or 7.2), the Borrower shall
pay to the Lender a fee in an amount equal to a percentage of the amount prepaid
as follows: (i) three percent (3%) if prepayment occurs on or before the first
anniversary of the Initial Funding Date; (ii) two percent (2%) if prepayment
occurs after the first anniversary of the Initial Funding Date but on or before
the second anniversary of the Initial Funding Date; and (iii) one percent (1%)
if prepayment occurs after the second anniversary of the Initial Funding Date.
(c) WAIVER OF PREPAYMENT FEES. The Borrower will not be required to
pay the prepayment fees otherwise due under subsection (b) if such termination
or prepayment is made because of refinancing by Xxxxx Fargo Bank.
(d) OTHER FEES. The Lender may from time to time charge additional
fees: (i) in lieu of imposing interest at the Default Rate during a Default
Period; (ii) for wire transfer fees; and (iii) for other fees which are
customarily charged by the Lender and are reasonable in amount. Fees charged
pursuant to clause (i) above will not exceed the Default Rate which could be
charged because of the Default or Event of Default permitting the fees. Neither
the charging nor the payment of any fees shall be deemed to excuse or waive the
Borrower's obligation to comply with the provisions of Section 2.7 or to waive
any Default of the Borrower arising from the Borrower's failure to comply with
the provisions of Section 2.7.
Section 2.4 Time for Interest Payments; Payment on Non-Banking Days;
Computation of Interest and Fees.
(a) TIME FOR INTEREST PAYMENTS. Interest shall be due and payable in
arrears on the same day of each month that the monthly principal installments
are due pursuant to Section 2.1(d).
(b) PAYMENT ON NON-BANKING DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Banking Day, such
payment may be made on the next succeeding Banking Day, and such extension of
time shall in such case be included in the computation of interest on the
Advances.
-11-
(c) COMPUTATION OF INTEREST AND FEES. Interest accruing on the
outstanding principal balance of the Advances and fees hereunder outstanding
from time to time shall be computed on the basis of actual number of days
elapsed in a year of 360 days.
Section 2.5 Application of Payments. All payments to the Lender shall be
made in immediately available funds and shall be applied to the Obligations upon
receipt by the Lender. The Lender may hold all payments not constituting
immediately available funds for two (2) additional days before applying them to
the Obligations.
Section 2.6 Voluntary Prepayment. Except as otherwise provided herein, the
Borrower may prepay the Term Note in whole at any time or from time to time in
part; provided, however, that principal prepayments on the Term Note must be in
an amount of not less than $250,000 or an integral multiple thereof and
principal prepayments. Subject to termination of the Credit Facility and payment
and performance of all Obligations, the Lender shall, at the Borrower's expense,
release or terminate the Security Interest and the Security Documents. Any
partial prepayment by the Borrower on the Term Note will be applied to the Term
Note in the inverse order of maturity.
Section 2.7 Mandatory Prepayment. Without notice or demand, if the
Borrowing Base is less than the outstanding principal balance of the Term Note
or the sum of the Borrowing Base Cash Component and the Borrowing Base
Marketable Securities Component is less than the Minimum Eligible
Cash/Marketable Securities Amount, the Borrower shall within three (3) Business
Days after written demand by the Lender either (a) make a principal payment in
the amount of such deficiency or (b) pledge, or cause the Guarantors to pledge,
to the Lender additional Eligible Cash and Eligible Marketable Securities to the
extent necessary to eliminate such deficiency.
Section 2.8 Advances to Pay Obligations. Notwithstanding anything in
Section 2.1, the Lender may, in its discretion, without the Borrower's request,
withhold from an Advance an amount equal to the portion of the Obligations from
time to time due and payable.
Section 2.9 Use of Proceeds. The Borrower shall use the proceeds of the
Advances as follows: (a) the proceeds of Term Advance A shall be used solely to
repay the Bank One Indebtedness, to pay the fee due pursuant to Section 2.3(a),
to pay amounts due the Lender pursuant to Section 8.5, and to pay other costs of
the Borrower incurred in connection with the transactions contemplated pursuant
to this Agreement; and (b) the proceeds of each Term Advance (Tranche B) shall
be used solely to purchase, or to make a contribution to the Acquisition
Corporation for the sole purpose of its purchasing, SII Stock pursuant to the
SII Stock Transaction, to pay amounts due the Lender pursuant to Section 8.5,
and to pay or reimburse the Borrower for other out-of pocket expenses of the
Borrower or the Acquisition Subsidiary incurred in connection with the SII Stock
Transaction.
Section 2.10 Liability Records. The Lender may maintain from time to time,
at its discretion, records as to the Obligations. All entries made on any such
record shall be presumed correct until the Borrower establishes the contrary.
Upon the Lender's demand, the Borrower will admit and certify in writing the
exact principal balance of the Obligations that the Borrower
-12-
then asserts to be outstanding. Any billing statement or accounting rendered by
the Lender shall be conclusive and fully binding on the Borrower unless the
Borrower gives the Lender specific written notice of exception within 30 days
after receipt.
Section 2.11 Increased Costs; Capital Adequacy; Funding Exceptions. If a
Related Lender (as defined below) determines at any time that its Return (as
defined below) has been reduced as a result of any Rule Change, such Related
Lender may so notify the Borrower and require the Borrower, beginning fifteen
(15) days after such notice, to pay it the amount necessary to restore its
Return to what it would have been had there been no Rule Change. For purposes of
this Section 2.11:
(a) "Capital Adequacy Rule" means any law, rule, regulation,
guideline, directive, requirement or request regarding capital adequacy, or the
interpretation or administration thereof by any governmental or regulatory
authority, central bank or comparable agency, whether or not having the force of
law, that applies to any Related Lender (as defined below), including rules
requiring financial institutions to maintain total capital in amounts based upon
percentages of outstanding loans, binding loan commitments and letters of
credit.
(b) "Related Lender" includes (but is not limited to) the Lender,
any parent of the Lender, any assignee of any interest of the Lender hereunder
and any participant in the Credit Facility.
(c) "Return," for any period, means the percentage determined by
dividing (i) the sum of interest and ongoing fees earned by the Related Lender
under this Agreement during such period, by (ii) the average capital such
Related Lender is required to maintain during such period as a result of its
being a party to this Agreement, as determined by such Related Lender based upon
its total capital requirements and a reasonable attribution formula that takes
account of the Capital Adequacy Rules then in effect, costs of maintaining
amounts received or receivable under this Agreement. Return may be calculated
for each calendar quarter and for the shorter period between the end of a
calendar quarter and the date of termination in whole of this Agreement.
(d) "Rule Change" means any change in any Capital Adequacy Rule
occurring after the date of this Agreement, or any change in the interpretation
or administration thereof by any governmental or regulatory authority, but the
term does not include any changes that at the date of this Agreement are
scheduled to take place under the existing Capital Adequacy Rules or any
increases in the capital that a Related Lender is required to maintain to the
extent that the increases are required due to a regulatory authority's
assessment of such Related Lender's financial condition.
The initial notice sent by the Related Lender shall be sent as promptly as
practicable after such Related Lender learns that its Return has been reduced,
shall include a demand for payment of the amount necessary to restore such
Related Lender's Return for the quarter in which the notice is sent, and shall
state in reasonable detail the cause for the reduction in its Return and its
calculation of the amount of such reduction. Thereafter, such Related Lender may
send a new notice during each calendar quarter setting forth the calculation of
the reduced Return for that
-13-
quarter and including a demand for payment of the amount necessary to restore
its Return for that quarter. The Related Lender's calculation in any such notice
shall be conclusive and binding absent demonstrable error.
ARTICLE III.
SECURITY INTEREST; OCCUPANCY; SETOFF
Section 3.1 Grant of Security Interest. The Borrower hereby pledges,
assigns and grants to the Lender a lien and security interest (collectively
referred to as the "Security Interest") in the Collateral, as security for the
payment and performance of the Obligations and the Related Credit Facility
Obligations. Upon request by the Lender, the Borrower will grant the Lender a
security interest in all commercial tort claims it may have against any Person.
Section 3.2 Financing Statement. The Borrower authorizes the Lender to
file from time to time where permitted by law, such financing statements against
collateral described as "all personal property" or describing specific items of
collateral including commercial tort claims as the Lender deems necessary or
useful to perfect the Security Interest. A carbon, photographic or other
reproduction of this Agreement or of any financing statements signed by the
Borrower is sufficient as a financing statement and may be filed as a financing
statement in any state to perfect the security interests granted hereby. For
this purpose, the following information is set forth:
Name and address of Debtor:
19th Avenue/Xxxxxxxx Limited Partnership
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Federal Employer Identification No. 00-0000000
Organizational Identification No. 2005869
Name and address of Secured Party:
Xxxxx Fargo Credit, Inc.
Xxxxx Xxxxx Xxxxx, XXX X0000-000
000 X. Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Federal Employer Identification No. 00-0000000
Section 3.3 Set Off. The Lender may at any time or from time to time, at
its sole discretion and without demand and without notice to anyone, set off any
liability owed to the Borrower by the Lender, whether or not due, against any
Obligation, whether or not due. In addition, each other Person holding a
participating interest in any Obligations shall have the right to appropriate or
set off any deposit or other liability then owed by such Person to the Borrower,
-14-
whether or not due, and apply the same to the payment of said participating
interest, as fully as if such Person had lent directly to the Borrower the
amount of such participating interest.
Section 3.4 Collateral. This Agreement does not contemplate a sale of
accounts, contract rights or chattel paper, and, as provided by law, the
Borrower is entitled to any surplus and shall remain liable for any DEFICIENCY.
The Lender's duty of care with respect to Collateral in its possession (as
imposed by law) shall be deemed fulfilled if it exercises reasonable care in
physically keeping such Collateral, or in the case of Collateral in the custody
or possession of a bailee or other third person, exercises reasonable care in
the selection of the bailee or other third person, and the Lender need not
otherwise preserve, protect, insure or care for any Collateral. The Lender shall
not be obligated to preserve any rights the Borrower may have against prior
parties, to realize on the Collateral at all or in any particular manner or
order or to apply any cash proceeds of the Collateral in any particular order of
application. The Lender has no obligation to clean up or otherwise prepare the
Collateral for sale. The Borrower waives any right it may have to require the
Lender to pursue any third person for any of the Obligations.
ARTICLE IV.
CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to Term Advance A. The Lender's
obligation to make Term Advance A shall be subject to the condition precedent
that the Lender shall have received all of the following, each in form and
substance satisfactory to the Lender:
(a) This Agreement, properly executed by the Borrower.
(b) The Note, properly executed by the Borrower.
(c) In each case properly executed by the Borrower and any other
necessary party to such agreement: (i) a separate security agreement or
agreements with respect to all or any part of the Collateral in which the
Borrower has an interest; and (ii) a control agreement from each bank at which
the Borrower maintains deposit accounts and from each securities intermediary
holding Marketable Securities or other investment property in which the Borrower
has an interest.
(d) Current searches of appropriate filing offices showing that (i)
no Liens have been filed and remain in effect against the Borrower except
Permitted Liens or Liens held by Persons who have agreed in writing that upon
receipt of proceeds of the initial Advances, they will satisfy, release or
terminate such Liens in a manner satisfactory to the Lender, and (ii) the Lender
has duly filed all financing statements necessary to perfect the Security
Interest, to the extent the Security Interest is capable of being perfected by
filing.
(e) A certificate of the Borrower's Officer certifying that attached
to such certificate are (i) the resolutions of the Borrower's Directors and, if
required, Owners, authorizing the execution, delivery and performance of the
Loan Documents, (ii) true, correct and complete copies of the Borrower's
Constituent Documents, and (iii) examples of the signatures of the
-15-
Borrower's Officers or agents authorized to execute and deliver the Loan
Documents and other instruments, agreements and certificates, including Advance
requests, on the Borrower's behalf.
(f) A current certificate issued by the Secretary of State of
Arizona, certifying that the Borrower is in compliance with all applicable
organizational requirements of the State of Arizona.
(g) Evidence that the Borrower is duly licensed or qualified to
transact business in Arizona and all other jurisdictions where the character of
the property owned or leased or the nature of the business transacted by it
makes such licensing or qualification necessary.
(h) An opinion of counsel to the Borrower with regard to such
matters as the Lender may reasonably require, addressed to the Lender.
(i) Certificates of the insurance required hereunder, with all
hazard insurance containing a lender's loss payable endorsement in the Lender's
favor and with all liability insurance naming the Lender as an additional
insured.
(j) Separate guaranties, properly executed by each of the Family
Trusts, Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxx X. Xxxxxx,
and (if it has been organized) the Acquisition Subsidiary pursuant to which they
jointly, severally and unconditionally guarantee the full and prompt payment of
all Obligations.
(k) In each case properly executed by the Guarantors and any other
necessary party to such agreement: (i) a separate security agreement or
agreements with respect to all or any part of the Collateral in which the
Guarantors have an interest and their interests in common stock of SII; and (ii)
a control agreement from each bank at which the Guarantors maintain deposit
accounts which are part of the Collateral in which the Guarantors have an
interest and from each securities intermediary holding Marketable Securities or
other investment property in which the Guarantors have an interest.
(l) In each case properly executed by such limited partner and any
other necessary party to such agreement, a separate security agreement from each
limited partner of the Borrower with respect to its interest in the Borrower.
(m) An opinion of counsel to each Guarantor and each limited partner
of the Borrower with regard to such matters as the Lender may reasonably
require, addressed to the Lender.
(n) Payment of the fee due under Section 2.3 and the costs and
expenses incurred by the Lender through such date and required to be paid by the
Borrower under Section 8.5, including all legal expenses incurred through the
date of this Agreement.
(o) Evidence that after making the initial Term Advance, the
Borrowing Base exceeds the Maximum Line by at least $200,000.
-16-
(p) The Real Property Security Document, properly executed by the
Borrower owning the Real Property, creating a first and prior lien upon good and
marketable title to the Real Property and first and prior assignment of the
rents, issues, profits and proceeds from the Real Property.
(q) An Environmental Indemnity Agreement, properly executed by the
Borrower.
(r) A current appraisal of the Real Property by an appraiser
acceptable to the Lender, reviewed and found to be satisfactory by the Lender
and showing a value for the Real Property satisfactory to the Lender. The Lender
may require an annual reappraisal of the Real Property at the Borrower's
expense.
(s) Except for the Real Property located at 420 So. 19th Avenue,
Phoenix, Arizona, a current as-built survey of the Real Property by a licensed
surveyor acceptable to the Lender describing the boundaries of the Real Property
and showing the location of the improvements upon the Real Property and all
means of ingress and egress, rights-of-way, easements (each of which shall be
identified by docket and page or recording number where recorded) and all other
customary and relevant information pursuant to ALTA standards and the Title
Company's requirements. All surveys shall be certified to the Lender and the
Title Company.
(t) An ALTA extended coverage mortgagee's title insurance policy
ALTA Loan Policy - 1992 or similar policy acceptable to the Lender, with such
endorsements as the Lender may require, issued by the Title Company in an amount
satisfactory to the Lender in its sole and absolute judgment and insuring that
the lien of the Real Property Security Document to be a first and exclusive lien
upon the Real Property, subject only to such exceptions as the Lender may
expressly approve in writing.
(u) A current preliminary environmental assessment (Phase I
assessment) of the Real Property and adjacent property, plus any sampling and
analysis (Phase II assessment) or special limited assessment that the Lender may
require after review of the Phase I assessment, together with any other
environmental investigations and reports that the Lender may require, all of
which shall be by an environmental consulting firm acceptable to the Lender and
none of which shall reveal any existing or potential environmental condition
adversely affecting the use or value of the Real Property.
(v) Evidence whether the Real Property, or any part thereof, lies
within a "special flood hazard area" as designated on maps prepared by the
Department of Housing and Urban Development.
(w) The Required Leases and all other lease agreements and license
agreements, if any, affecting the Real Property, together with such
subordination and attornment agreements from the tenants, licensees and
subtenants as the Lender may in its sole and absolute discretion require.
-17-
(x) Any recorded documents pertaining to the Real Property.
(y) Evidence that all taxes and assessments levied against or
affecting the Real Property have been paid current, together with, if required
by the Lender, a Type B tax service contract for the Real Property.
(z) The sum of the Borrowing Base Cash Component and the Borrowing
Base Marketable Securities Component is at least $750,000.
(aa) A request for the Advance in form and substance identical to
EXHIBIT B-1 hereto, properly completed and executed by the Borrower.
(bb) Such other documents as the Lender in its discretion may
require.
Section 4.2 Conditions Precedent to each Term Advance (Tranche B). The
Lender's obligation to make Term Advance (Tranche B) shall be subject to the
conditions precedent that all of the conditions required to be satisfied prior
to the making of Term Advance A have been satisfied, Term Advance A has been
made, and the Lender shall have received all of the following, each in form and
substance satisfactory to the Lender:
(a) Evidence that all filings made or required to be made by the
Borrower, the Acquisition Subsidiary and/or SII with the Securities and Exchange
Commission ("SEC") and any state or agency thereof in connection with the SII
Stock Transaction, including, without limitation and if applicable, filings
required under Rule 13e-3 and Regulations 14D and 14E, have been duly made and
are in proper form.
(b) Evidence reasonably satisfactory to the Lender that no
injunction, stop order or similar order has been issued with respect to the SII
Stock Transaction which has not been vacated, including any tender offer
commenced as part of the SII Stock Transaction or the merger contemplated as
part of the SII Stock Transaction.
(c) Evidence reasonably satisfactory to the Lender that the Advance
is for a use permitted pursuant to Section 2.9, together with evidence of the
number of shares of SII Stock for which the Advance is being used to pay the
purchase price or to reimburse the Borrower for the purchase paid by it or paid
by the Acquisition Subsidiary with a contribution made by the Borrower.
(d) A current as-built survey of the Real Property located at 420
So. 19th Avenue, Phoenix, Arizona, by a licensed surveyor acceptable to the
Lender describing the boundaries of such Real Property and showing the location
of the improvements upon the Real Property and all means of ingress and egress,
rights-of-way, easements (each of which shall be identified by docket and page
or recording number where recorded) and all other customary and relevant
information pursuant to ALTA standards and the Title Company's requirements. The
survey shall be certified to the Lender and the Title Company.
-18-
(e) A "date down" endorsement to the title policy issued
pursuant to Section 4.1(t) evidencing that there are no Liens on the Real
Property other than those listed in the title policy and such other endorsements
which the Lender may require to such title policy and could not be issued
without the survey described in Section 4.1(e) or Lender is requiring based upon
the results of such survey.
(f) The sum of the Borrowing Base Cash Component and the
Borrowing Base Marketable Securities Component is at least $1,500,000.
(g) If not already delivered, documents executed by the
Acquisition Subsidiary which are required pursuant to Section 4.1(j) and 4.1(k).
(h) An updated opinion of counsel to the Borrower with regard
to such matters as the Lender may reasonably require, addressed to the Lender.
(i) A request for the Advance in form and substance identical
to EXHIBIT B-2 hereto, properly completed and executed by the Borrower.
(j) Such other documents as the Lender in its discretion may
require.
Section 4.3 Conditions Precedent to All Advances. The Lender's
obligation to make each Advance shall be subject to the further conditions
precedent that:
(a) the representations and warranties contained in Article V
are correct on and as of the date of such Advance as though made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date; and
(b) no event has occurred and is continuing, or would result
from such Advance, which constitutes a Default or an Event of Default.
Section 4.4 Expiration of Commitment. It is a further condition to Term
Advance A that all conditions precedent to Term Advance A have been satisfied on
or before April 30, 2004. It is a further condition to each Term Advance
(Tranche B) that all conditions precedent to such Advance have been satisfied on
or before October 31, 2004
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
Section 5.1 Existence and Power; Name; Chief Executive Office;
Inventory and Equipment Locations; Federal Employer Identification Number. The
Borrower is a limited partnership, duly organized, validly existing and in good
standing under the laws of the State of Arizona and is duly licensed or
qualified to transact business in all jurisdictions where the character of the
property owned or leased or the nature of the business transacted by it makes
such licensing or qualification necessary. The Borrower has all requisite power
and authority to
-19-
conduct its business, to own its properties and to execute and deliver, and to
perform all of its obligations under, the Loan Documents. During its existence,
the Borrower has done business solely under the name(s) set forth in SCHEDULE
5.1 and all of the Borrower's records relating to its business or the Collateral
are kept at the location set forth in SCHEDULE 5.1. The Borrower's chief
executive office and principal place of business is located at the address set
forth in SCHEDULE 5.1. The Borrower's federal employer identification number is
correctly set forth in Section 3.2.
Section 5.2 Capitalization. SCHEDULE 5.2 constitutes a correct and
complete list of all ownership interests of the Borrower and/or having rights to
acquire ownership interests including the record holder, number of interests and
percentage interests on a fully diluted basis.
Section 5.3 Authorization of Borrowing; No Conflict as to Law or
Agreements. The execution, delivery and performance by the Borrower of the Loan
Documents and the borrowings from time to time hereunder have been duly
authorized by all necessary company action and do not and will not (i) require
any consent or approval of the Borrower's Owners; (ii) require any
authorization, consent or approval by, or registration, declaration or filing
with, or notice to, any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any third party, except such
authorization, consent, approval, registration, declaration, filing or notice as
has been obtained, accomplished or given prior to or on the date hereof; (iii)
violate any provision of any law, rule or regulation (including Regulation X of
the Board of Governors of the Federal Reserve System) or of any order, writ,
injunction or decree presently in effect having applicability to the Borrower or
of the Borrower's Constituent Documents; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other material agreement, lease or instrument to which the Borrower is a party
or by which it or its properties may be bound or affected; or (v) result in, or
require, the creation or imposition of any Lien (other than the Security
Interest) upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower.
Section 5.4 Legal Agreements. This Agreement constitutes and, upon due
execution by the Borrower, the other Loan Documents will constitute the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms.
Section 5.5 Subsidiaries. Except as set forth in SCHEDULE 5.5 hereto,
the Borrower has no Subsidiaries.
Section 5.6 Financial Condition; No Adverse Change. The Borrower has
furnished to the Lender the financial statements of the Seller set forth in
SCHEDULE 5.6 hereto, and those statements include the most recent financial
statements of the Borrower and fairly present in all material respects the
Seller's financial condition on the dates thereof and the results of its
operations and cash flows for the periods then ended and were prepared in
accordance with generally accepted accounting principles. Since the date of the
most recent financial statements of the Seller, to the knowledge of the
Borrower, there has been no material adverse change in the Seller's business,
properties or condition (financial or otherwise). Since the date of the most
-20-
recent financial statements of the Borrower, there has been no material adverse
change in the Borrower's business, properties or condition (financial or
otherwise).
Section 5.7 Litigation. Except as set forth in SCHEDULE 5.7 hereto are
no actions, suits or proceedings pending or, to the Borrower's knowledge,
threatened against or affecting the Borrower or any of its Affiliates or the
properties of the Borrower or any of its Affiliates before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the Borrower or any of
its Affiliates, would have a material adverse effect on the financial condition,
properties or operations of the Borrower or any of its Affiliates.
Section 5.8 Regulation U. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.
Section 5.9 Taxes. The Borrower has paid or caused to be paid to the
proper authorities when due all federal, state and local taxes required to be
withheld by each of them. The Borrower and its Affiliates have filed all
federal, state and local tax returns which to the knowledge of the Officers of
the Borrower or any Affiliate, as the case may be, are required to be filed, and
the Borrower has paid or caused to be paid to the respective taxing authorities
all taxes as shown on the returns of the Borrower or on any assessment received
by the Borrower to the extent such taxes have become due.
Section 5.10 Titles and Liens. The Borrower has good and absolute title
to all Collateral free and clear of all Liens other than Permitted Liens. No
financing statement naming the Borrower as debtor is on file in any office
except to perfect only Permitted Liens.
Section 5.11 Plans. Except as disclosed to the Lender in writing prior
to the date hereof, neither the Borrower nor any ERISA Affiliate (i) maintains
or has maintained any Pension Plan, (ii) contributes or has contributed to any
Multiemployer Plan or (iii) provides or has provided post-retirement medical or
insurance benefits with respect to employees or former employees (other than
benefits required under Section 601 of ERISA, Section 4980B of the IRC or
applicable state law). Neither the Borrower nor any ERISA Affiliate has received
any notice or has any knowledge to the effect that it is not in full compliance
with any of the requirements of ERISA, the IRC or applicable state law with
respect to any Plan. Each Plan which is intended to qualify under the IRC is so
qualified, and no fact or circumstance exists which may have an adverse effect
on the Plan's tax-qualified status. Neither the Borrower nor any ERISA Affiliate
has (i) any accumulated funding deficiency (as defined in Section 302 of ERISA
and Section 412 of the IRC) under any Plan, whether or not waived, (ii) any
liability under Section 4201 or 4243 of ERISA for any withdrawal, partial
withdrawal, reorganization or other event under any Multiemployer Plan or (iii)
any liability or knowledge of any facts or circumstances which could result in
any liability to the Pension Benefit Guaranty Corporation, the Internal Revenue
Service,
-21-
the Department of Labor or any participant in connection with any Plan (other
than routine claims for benefits under the Plan).
Section 5.12 Default. The Borrower is in compliance with all provisions
of all agreements, instruments, decrees and orders to which it is a party or by
which it or its property is bound or affected, the breach or default of which
could have a material adverse effect on the Borrower's financial condition,
properties or operations.
Section 5.13 Submissions to Lender. All financial and other information
provided to the Lender by or on behalf of the Borrower in connection with the
Borrower's request for the Credit Facility is (i) true and correct in all
material respects, (ii) does not omit any material fact necessary to make such
information not misleading and, (iii) as to projections, valuations or pro forma
financial statements, present a good faith opinion as to such projections,
valuations and pro forma condition and results.
Section 5.14 Financing Statements. The Borrower has authorized the
filing of financing statements sufficient when filed to perfect the Security
Interest and the other security interests created by the Security Documents.
When such financing statements are filed in the offices noted therein, the
Lender will have a valid and perfected security interest in all Collateral which
is capable of being perfected by filing financing statements. None of the
Collateral is or will become a fixture on real estate, unless a sufficient
fixture filing is in effect with respect thereto.
Section 5.15 Financial Solvency. Both before and after giving effect to
the transactions contemplated in the Loan Documents, Borrower:
(a) was not and will not be insolvent, as that term is used
and defined in Section 101(32) of the United States Bankruptcy Code and Section
2 of the Uniform Fraudulent Transfer Act;
(b) does not have unreasonably small capital or is engaged or
about to engage in a business or a transaction for which any remaining assets of
the Borrower is unreasonably small;
(c) by executing, delivering or performing its obligations
under the Loan Documents or other documents to which it is a party or by taking
any action with respect thereto, does not intend to, and does not believes that
it will, incur debts beyond its ability to pay them as they mature;
(d) by executing, delivering or performing its obligations
under the Loan Documents or other documents to which it is a party or by taking
any action with respect thereto, does not intend to hinder, delay or defraud
either its present or future creditors; and
(e) at this time does not contemplate a filing a petition in
bankruptcy or for an arrangement or reorganization or similar proceeding under
any law of any jurisdiction, or, to the knowledge of the Borrower, is not the
subject of any actual, pending or threatened bankruptcy, insolvency or similar
proceedings under any law of any jurisdiction.
-22-
ARTICLE VI.
COVENANTS
So long as the Obligations shall remain unpaid, or the Credit Facility
shall remain outstanding, the Borrower will comply with the following
requirements, unless the Lender shall otherwise consent in writing:
Section 6.1 Reporting Requirements. The Borrower will deliver, or cause
to be delivered, to the Lender each of the following, which shall be in form and
detail reasonably acceptable to the Lender:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
any event within 90 days after the end of each fiscal year of the Borrower, the
Borrower will deliver, or cause to be delivered, to the Lender, the Borrower's
financial statements reviewed or compiled by independent certified public
accountants selected by the Borrower and acceptable to the Lender, which annual
financial statements shall include the Borrower's balance sheet as at the end of
such fiscal year and the related statements of the Borrower's income, retained
earnings and cash flows for the fiscal year then ended, all in reasonable detail
and prepared in accordance with GAAP[, together with a certificate of the
Borrower's chief financial Officer stating that such financial statements have
been prepared in accordance with GAAP, fairly represent the Borrower's financial
position and the results of its operations, and whether or not such officer has
knowledge of the occurrence of any Default or Event of Default and, if so,
stating in reasonable detail the facts with respect thereto.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 20 days after the end of each fiscal quarter, the Borrower
will deliver to the Lender an unaudited/internal balance sheet and statements of
income and retained earnings of the Borrower as at the end of and for such
quarter and for the year to date period then ended, prepared in reasonable
detail and stating in comparative form the figures for the corresponding date
and periods in the previous year, all prepared in accordance with GAAP, subject
to year-end adjustments, and fairly representing the Borrower's financial
position and the results of its operations; and accompanied by a certificate of
the Borrower's chief financial Officer, substantially in the form of EXHIBIT C
hereto, stating (i) that such financial statements have been prepared in
accordance with GAAP, subject to year-end adjustments, and (ii) whether or not
such officer has knowledge of the occurrence of any Default or Event of Default
not theretofore reported and remedied and, if so, stating in reasonable detail
the facts with respect thereto.
(c) LITIGATION. Immediately after the commencement thereof,
the Borrower will deliver to the Lender notice in writing of all litigation and
of all proceedings before any governmental or regulatory agency affecting the
Borrower (i) of the type described in Section 5.7 or (ii) which seek a monetary
recovery against the Borrower in excess of $100,000.
(d) DEFAULTS. As promptly as practicable (but in any event not
later than five Business Days) after an Officer of the Borrower obtains
knowledge of the occurrence of any Default or Event of Default, the Borrower
will deliver to the Lender notice of such occurrence,
-23-
together with a detailed statement by a responsible Officer of the Borrower of
the steps being taken by the Borrower to cure the effect thereof.
(e) COLLATERAL. Promptly upon knowledge thereof, the Borrower
will deliver to the Lender notice of any material damage to any material portion
of Collateral or of any substantial adverse change in any Collateral.
(f) TAX RETURNS. For each of the Guarantors which is an
individual, as soon as possible after the end of each year, and in any event by
not later five Business Days after such tax returns for such year are due,
copies of state and federal tax returns and all schedules thereto and an updated
personal financial statement.
(g) SEC FILINGS. The Borrower will deliver to the Lender
copies of all items which the Borrower shall file with the Securities and
Exchange Commission or any national securities exchange.
(h) VIOLATIONS OF LAW. Promptly upon knowledge thereof, the
Borrower will deliver to the Lender notice of the Borrower's violation of any
law, rule or regulation, the non-compliance with which could materially and
adversely affect the Borrower's business or its financial condition.
(i) OTHER REPORTS. From time to time, with reasonable
promptness, the Borrower will deliver to the Lender any and all reports, records
or information as the Lender may reasonably request.
Section 6.2 Permitted Liens; Financing Statements.
(a) The Borrower will not, and will not permit any Subsidiary
to, create, incur or suffer to exist any Lien upon or of any of its assets, now
owned or hereafter acquired, to secure any indebtedness; excluding, however,
from the operation of the foregoing, the following (collectively, "Permitted
Liens"):
(i) In the case of any of the Real Property, covenants,
restrictions, rights, easements and minor irregularities
in title which do not (A) materially interfere with the
use of the Real Property or (B) diminish the value of
the Real Property;
(ii) Liens in existence on the date hereof and listed in
SCHEDULE 6.2 hereto;
(iii) the Security Interest and Liens created by the Security
Documents; and
(iv) if a Related Borrower becomes a Subsidiary of the
Borrower, Liens of such Person expressly permitted by
the terms of the Related Credit Facility Agreement.
-24-
(b) The Borrower will not, and will not permit any Subsidiary
to, amend any financing statements in favor of the Lender except as permitted by
law. Any authorization by the Lender to any Person to amend financing statements
in favor of the Lender shall be in writing.
Section 6.3 Indebtedness. The Borrower will not, and will not permit
any Subsidiary to, incur, create, assume or permit to exist any indebtedness or
liability on account of deposits or advances or any indebtedness for borrowed
money or letters of credit issued on the Person's behalf, or any other
indebtedness or liability evidenced by notes, bonds, debentures or similar
obligations, except:
(a) indebtedness arising hereunder;
(b) indebtedness of the Borrower in existence on the date
hereof and listed in SCHEDULE 6.3 hereto;
(c) indebtedness relating to Permitted Liens; and
(d) if a Related Borrower becomes a Subsidiary of the
Borrower, indebtedness such Person expressly permitted by the terms of the
Related Credit Facility Agreement.
Section 6.4 Guaranties. The Borrower will not, and will not permit any
Subsidiary to, assume, guarantee, endorse or otherwise become directly or
contingently liable in connection with any obligations of any other Person,
except:
(a) the endorsement of negotiable instruments by the Borrower
for deposit or collection or similar transactions in the ordinary course of
business;
(b) guaranties, endorsements and other direct or contingent
liabilities in connection with the obligations of other Persons, in existence on
the date hereof and listed in SCHEDULE 6.4 hereto;
(c) the Security Interest and Lien created by the Security
Documents as security for the Related Credit Facility Obligations;
(d) the guaranty by the Acquisition Subsidiary of the
Obligations; and
(e) if a Related Borrower becomes a Subsidiary of the
Borrower, as expressly permitted to such Person by the terms of the Related
Credit Facility Agreement.
Section 6.5 Investments and Subsidiaries. The Borrower will not, and
will not permit any Subsidiary to, purchase or hold beneficially any stock or
other securities or evidences of indebtedness of, make or permit to exist any
loans or advances to, or make any investment or acquire any interest whatsoever
in, any other Person, including any partnership or joint venture, except for the
following: (a) Eligible Cash; (b) Eligible Marketable Securities; (c) to the
extent contributed to the Borrower by an Affiliate of the Borrower in exchange
for an ownership interest in the Borrower or acquired as part of the SII Stock
Transaction, SII Stock; and (e) if a Related
-25-
Borrower becomes a Subsidiary of the Borrower, as permitted to such Person by
the terms of the Related Credit Facility Agreement.
Section 6.6 Dividends and Distributions. Except as provided in the
following sentence, the Borrower will not declare or pay any dividends on any
class of its ownership interests or make any payment on account of the purchase,
redemption or other retirement of such ownership interests or make any
distribution in respect thereof, either directly or indirectly. So long as the
Borrower is a "pass-through" tax entity for United States federal income tax
purposes, and after first providing such supporting documentation as the Lender
may request (including the personal state and federal tax returns (and all
schedules thereto) of each owner of the Borrower), the Borrower may pay Tax
Distributions.
Section 6.7 Salaries. The Borrower will not, and will not permit any
Subsidiary to, pay excessive or unreasonable salaries, bonuses, commissions,
consultant fees or other compensation; or increase the salary, bonus,
commissions, consultant fees or other compensation of any Director, Officer or
consultant, or any member of their families, by more than 15% in any one year,
either individually or for all such persons in the aggregate, or pay any such
increase from any source other than profits earned in the year of payment.
Section 6.8 Books and Records; Inspection and Examination. The Borrower
will keep accurate books of record and account for itself pertaining to the
Collateral and pertaining to the Borrower's business and financial condition and
such other matters as the Lender may from time to time request in which true and
complete entries will be made in accordance with GAAP and, upon the Lender's
request, will permit any officer, employee, attorney or accountant for the
Lender to audit, review, make extracts from or copy any and all company and
financial books and records of the Borrower at all times during ordinary
business hours, to send to and discuss with obligors of the Borrower requests
for verification of amounts owed to the Borrower, and to discuss the Borrower's
affairs with any of its Directors, Officers, employees or agents. The Borrower
hereby irrevocably authorizes all accountants and third parties to disclose and
deliver to Lender, at the Borrower's expense, all financial information, books
and records, work papers, management reports and other information in their
possession regarding the Borrower unless such information is subject to
attorney/client privilege. The Borrower will permit the Lender, or its
employees, accountants, attorneys or agents, to examine and inspect any
Collateral or any other property of the Borrower at any time during ordinary
business hours.
Section 6.9 Compliance with Laws.
(a) The Borrower will (i) comply with the requirements of
applicable laws and regulations, the non-compliance with which would materially
and adversely affect its business or its financial condition and (ii) use and
keep the Collateral, and require that others use and keep the Collateral, only
for lawful purposes, without material violation of any federal, state or local
law, statute or ordinance.
(b) Without limiting the foregoing undertakings, the Borrower
specifically agrees that it will comply in all material respects with all
applicable Environmental Laws (as defined in the Real Property Security
Document) and obtain and comply in all material respects
-26-
with all permits, licenses and similar approvals required by any Environmental
Laws, and will not generate, use, transport, treat, store or dispose of any
Hazardous Substances (as defined in the Real Property Security Document) in such
a manner as to create any material liability or obligation under the common law
of any jurisdiction or any Environmental Law.
Section 6.10 Payment of Taxes and Other Claims. The Borrower will, and
will cause each Subsidiary to, pay or discharge, when due, (a) all taxes,
assessments and governmental charges levied or imposed upon it or upon its
income or profits, upon any properties belonging to it (including the
Collateral) or upon or against the creation, perfection or continuance of the
Security Interest, prior to the date on which penalties attach thereto, (b) all
federal, state and local taxes required to be withheld by it, and (c) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
Lien upon any properties of the Borrower; provided, that the Borrower shall not
be required to pay any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which proper reserves have been made.
Section 6.11 Maintenance of Properties. The Borrower will defend the
Collateral against all Liens, claims or demands of all Persons (other than the
Lender) claiming the Collateral or any interest therein.
Section 6.12 Insurance. The Borrower will obtain and maintain,
insurance with insurers believed by them to be responsible and reputable, in
such amounts and against such risks as may from time to time be required by the
Lender, but in all events in such amounts and against such risks as is usually
carried by companies engaged in similar business and owning similar properties
in the same general areas in which they operate. Without limiting the generality
of the foregoing, the Borrower will at all times maintain business interruption
insurance including coverage for force majeure; and the Borrower will at all
times keep all tangible Collateral given by it insured against risks of fire
(including so-called extended coverage), theft, collision (for Collateral
consisting of motor vehicles) and such other risks and in such amounts as the
Lender may reasonably request, with any loss payable to the Lender to the extent
of its interest, and all policies of such insurance shall contain a lender's
loss payable endorsement for the Lender's benefit. All policies of liability
insurance required hereunder shall name the Lender as an additional insured.
Section 6.13 Preservation of Existence. The Borrower will, and will
cause each Subsidiary to, preserve and maintain its existence and all of its
rights, privileges and franchises necessary or desirable in the normal conduct
of its business and shall conduct its business in an orderly, efficient and
regular manner.
Section 6.14 Restrictions on Nature of Business. The Borrower will not
engage in any line of business other than the ownership, leasing and management
of the Real Property and the ownership of and investment in Cash, Eligible
Marketable Securities and the Stock of Acquisition Subsidiary and will not
purchase, lease or otherwise acquire assets not related to its business. The
Borrower will not permit the Acquisition Subsidiary to engage in any business
other than the acquisition and ownership of SII Stock in connection with the SII
Stock
-27-
Transaction and, if a Related Borrower becomes a Subsidiary, as expressly
permitted to such Person by the terms of the Related Credit Facility Agreement.
Section 6.15 Accounting. The Borrower will not adopt any material
change in accounting principles other than as required by GAAP. The Borrower
will not adopt, permit or consent to any change in its fiscal year.
Section 6.16 Plans. Unless disclosed to the Lender pursuant to Section
5.12, neither the Borrower nor any ERISA Affiliate will (i) adopt, create,
assume or become a party to any Pension Plan, (ii) incur any obligation to
contribute to any Multiemployer Plan, (iii) incur any obligation to provide
post-retirement medical or insurance benefits with respect to employees or
former employees (other than benefits required by law) or (iv) amend any Plan in
a manner that would materially increase its funding obligations.
Section 6.17 Constituent Documents. The Borrower will not amend its
Constituent Documents. The Borrower will not permit the Acquisition Subsidiary
to amend its constituent documents except as is necessary to consummate the
merger which is a part of the SII Stock Transaction. The Borrower will not
change its status as a "pass-through" tax entity for United States federal
income tax purposes.
Section 6.18 Performance by the Lender. If the Borrower at any time
fails to perform or observe any of the foregoing covenants contained in this
Article VI or elsewhere herein, and if such failure shall continue for a period
of ten calendar days after the Lender gives the Borrower written notice thereof
(or in the case of the agreements contained in Sections 6.11 and 6.13
immediately upon the occurrence of such failure, without notice or lapse of
time), the Lender may, but need not, perform or observe such covenant on behalf
and in the name, place and stead of the Borrower (or, at the Lender's option, in
the Lender's name) and may, but need not, take any and all other actions which
the Lender may reasonably deem necessary to cure or correct such failure
(including the payment of taxes, the satisfaction of Liens, the performance of
obligations owed to account debtors or other obligors, the procurement and
maintenance of insurance, the execution of assignments, security agreements and
financing statements, and the endorsement of instruments); and the Borrower
shall thereupon pay to the Lender on demand the amount of all monies expended
and all costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Lender in connection with or as a result of the
performance or observance of such agreements or the taking of such action by the
Lender, together with interest thereon from the date expended or incurred at the
Default Rate. To facilitate the Lender's performance or observance of such
covenants of the Borrower, the Borrower hereby irrevocably appoints the Lender,
or the Lender's delegate, acting alone, as the Borrower's attorney in fact
(which appointment is coupled with an interest) with the right (but not the
duty) from time to time to create, prepare, complete, execute, deliver, endorse
or file in the name and on behalf of the Borrower any and all instruments,
documents, assignments, security agreements, financing statements, applications
for insurance and other agreements and writings required to be obtained,
executed, delivered or endorsed by the Borrower under this Section 6.18.
-28-
Section 6.19 Required Merger. The Borrower will cause the Acquisition
Subsidiary to merge into SII simultaneously with the acquisition by the
Acquisition Subsidiary of 100% of the stock of SII.
Section 6.20 Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, engage in any transaction with any Affiliate
of the Borrower, except as follows: (a) for reasonable allocations of overhead
to such Affiliate; (b) in the ordinary course of business, pursuant to the
reasonable requirements of the Borrower's business, upon fair and reasonable
terms no less favorable to the Borrower than the Borrower would obtain in a
comparable arms' length transaction, and with the obligations owing to the
Affiliate fully subordinated to the Obligations pursuant to a subordination
agreement acceptable to the Lender in its sole and absolute discretion; and (c)
for the SII Stock Transaction.
ARTICLE VII.
EVENTS OF DEFAULT, RIGHTS AND REMEDIES
Section 7.1 Events of Default. "Event of Default", wherever used
herein, means any one of the following events:
(a) Default in the payment of any Obligations when they become
due and payable;
(b) Default in the performance, or breach, of any covenant or
agreement of the Borrower contained in this Agreement, except the covenants and
agreements described in Section 6.19 and the covenants and agreements described
in Section 7.1(d), and the continuation of such default for three (3) Business
Days;
(c) A Change of Control shall occur;
(d) A Default in the performance, or breach of any covenant or
agreement of the Borrower in Section 6.1, 6.9, 6.10, 6.11, 6.12, 6.13, 6.15 or
6.16 which is not cured within ten (10) days after the Lender gives the Borrower
notice of such default, provided that no notice or cure period shall be
applicable with respect to the second and subsequent defaults in respect of the
same provisions of this Agreement during the same fiscal year of the Borrower;
(e) The Borrower or any Guarantor shall be or become
insolvent, or admit in writing its or his inability to pay its or his debts as
they mature, or make an assignment for the benefit of creditors; or the Borrower
or any Guarantor shall apply for or consent to the appointment of any receiver,
trustee, or similar officer for it or him or for all or any substantial part of
its or his property; or such receiver, trustee or similar officer shall be
appointed without the application or consent of the Borrower or such Guarantor,
as the case may be; or the Borrower or any Guarantor shall institute (by
petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it or him under the laws of any jurisdiction; or
any such proceeding shall be instituted (by petition, application or otherwise)
against the Borrower or
-29-
any such Guarantor; or any judgment, writ, warrant of attachment or execution or
similar process shall be issued or levied against a substantial part of the
property of the Borrower or any Guarantor;
(f) A petition shall be filed by or (unless dismissed or
stayed within 120 days after filing) against the Borrower or any Guarantor under
the United States Bankruptcy Code naming the Borrower or such Guarantor as
debtor; provided, however, that in the case of a filing of a petition against a
Person, if the Person has commenced controverting such petition within thirty
(30) days after the filing of the petition and is diligently continuing to
controvert the petition, the Lender's remedy shall be limited to ceasing to make
Term Advances until the earlier (the "Full Remedies Date") of the date ninety
(90) days after the filing of the petition or the date an order for relief is
entered against the Person;
(g) Any representation or warranty made by the Borrower in
this Agreement, by any Guarantor in any guaranty delivered to the Lender, or by
the Borrower (or any of its Officers) or any Guarantor in any agreement,
certificate, instrument or financial statement or other statement contemplated
by or made or delivered pursuant to or in connection with this Agreement or any
such guaranty shall prove to have been incorrect in any material respect when
deemed to be effective;
(h) The rendering against the Borrower of an arbitration
award, final judgment, decree or order for the payment of money, which when
aggregated with all other such awards, judgments, decrees and orders against the
Borrower and its Subsidiaries, exceeds the sum of $100,000.00 plus any reserves
made for such awards, judgments, decrees and orders, and the continuance of such
award, judgment, decree or order unsatisfied and in effect for any period of 30
consecutive days without a stay of execution;
(i) A material default under any bond, debenture, note or
other evidence of material indebtedness of the Borrower owed to any Person other
than the Lender, or under any indenture or other instrument under which any such
evidence of material indebtedness has been issued or by which it is governed, or
under any Required Lease or any other material lease or material contract, and
the expiration of the applicable period of grace, if any, specified in such
evidence of indebtedness, indenture, instrument, lease or contract, provided
that only in the case of a default which does not involve the failure to pay a
monetary obligation or a default which can be cured by the payment of money
alone, the default must also permit acceleration of the obligations under such
agreement or the termination of such agreement;
(j) Any Reportable Event, which the Lender determines in good
faith might constitute grounds for the termination of any Pension Plan or for
the appointment by the appropriate United States District Court of a trustee to
administer any Pension Plan, shall have occurred and be continuing 30 days after
written notice to such effect shall have been given to the Borrower by the
Lender; or a trustee shall have been appointed by an appropriate United States
District Court to administer any Pension Plan; or the Pension Benefit Guaranty
Corporation shall have instituted proceedings to terminate any Pension Plan or
to appoint a trustee to administer any Pension Plan; or the Borrower or any
ERISA Affiliate shall have filed for a distress termination of any Pension Plan
under Title IV of ERISA; or the Borrower or any ERISA
-30-
Affiliate shall have failed to make any quarterly contribution required with
respect to any Pension Plan under Section 412(m) of the IRC, which by itself or
in combination with any such failures likely to occur in the future is likely to
result in the imposition of a Lien on the Borrower's assets in favor of the
Pension Plan; or any withdrawal, partial withdrawal, reorganization or other
event occurs with respect to a Multiemployer Plan which results or could
reasonably be expected to result in a material liability of the Borrower to the
Multiemployer Plan under Title IV of ERISA.
(k) An Event of Default (as defined in such Security Document)
shall occur under any Security Document or any other event shall occur under a
Security Document which entitles the Lender to accelerate the repayment of any
of the Notes;
(l) The Borrower shall liquidate, dissolve, terminate or
suspend its business operations or otherwise fail to operate its business in the
ordinary course, or sell or attempt to sell all or substantially all of its
assets, without the Lender's prior written consent;
(m) Default in the payment of any amount owed by the Borrower
to the Lender other than any indebtedness;
(n) (i) the Borrower shall have failed to perform its
obligations under Section 6.19; or (ii) on November 1, 2004, any one of the
following events has not yet happened: (A) the merger of the Acquisition
Subsidiary into SII as the result of which the Borrower becomes the owner of
100% of the stock of SII; (B) an Event of Default also being a Related Credit
Facility Default; and (C) the "Collateral" (as that term is defined in the
Related Credit Facility Agreement) also being security for the Obligations;
(o) (i) Any Guarantor or person signing a support agreement in
favor of the Lender shall repudiate, purport to revoke or fail to perform his
obligations under his guaranty or support agreement in favor of the Lender, or
(ii) any individual Guarantor shall die and a claim on the decedent's guaranty
is barred;
(p) Any default in the payment of rent or other breach or
default on the part of the lessee shall occur under the Required Real Property
Lease and any grace or cure period applicable thereto shall have lapsed; any
material breach or default on the part of the landlord shall occur under the
Required Real Property Lease and any grace or cure period applicable thereto
shall have lapsed; or the Required Real Property Lease shall have expired or
been terminated or surrendered;
(q) Any event or circumstance with respect to the Borrower
shall occur such that the Lender shall believe in good faith that the prospect
of payment of all or any part of the Obligations or the performance by the
Borrower under the Loan Documents is impaired; or any material adverse change in
the business or financial condition of the Borrower shall occur; or
(r) An "Event of Default" as that term is defined in the
Related Credit Facility Agreement, has occurred; or any breach, default or event
of default by or attributable to any Guarantor, any Related Borrower or the
Borrower under any agreement between such Person and
-31-
the Lender shall occur, which breach, default or event of default is not
otherwise enumerated in this Section 6.1 as an Event of Default and for which
any applicable grace period has lapsed without cure thereof.
Section 7.2 Rights and Remedies. During any Default Period, the Lender
may exercise any or all of the following rights and remedies:
(a) the Lender may, by notice to the Borrower, declare the
Commitment to be terminated, whereupon the same shall forthwith terminate;
(b) the Lender may, by notice to the Borrower (the "Actual
Acceleration Notice"), declare the Obligations to be forthwith due and payable,
whereupon all Obligations shall become and be forthwith due and payable, without
demand, presentment, protest, or other notice of any kind (including, without
limitation, notice of dishonor, notice of default, and notice of intent to
accelerate the maturity of the Obligation), all of which the Borrower waives
except for the Actual Acceleration Notice;
(c) the Lender may, without notice to the Borrower and without
further action, apply any and all money owing by the Lender to the Borrower to
the payment of the Obligations;
(d) the Lender may exercise and enforce any and all rights and
remedies available upon default to a secured party under the UCC, including the
right to take possession of Collateral, or any evidence thereof, proceeding
without judicial process or by judicial process (without a prior hearing or
notice thereof, which the Borrower hereby expressly waives) and the right to
sell, lease or otherwise dispose of any or all of the Collateral (with or
without giving any warranties as to the Collateral, title to the Collateral or
similar warranties), and, in connection therewith, the Borrower will on demand
assemble the Collateral and make it available to the Lender at a place to be
designated by the Lender which is reasonably convenient to both parties;
(e) the Lender may exercise and enforce its rights and
remedies under the Loan Documents;
(f) give any instructions which it is entitled to give
pursuant to the Control Agreements (which the Lender agrees not to give before
an Event of Default, notwithstanding anything to the contrary in the Control
Agreements); and
(g) the Lender may exercise any other rights and remedies
available to it by law or agreement.
Notwithstanding the foregoing or anything to the contrary in any of the other
Loan Documents, upon the occurrence of an Event of Default described in
subsections (e) or (f) of Section 7.1, the Obligations shall be immediately due
and payable automatically without presentment, demand, protest or notice of any
kind; provided, however, that in the case of an involuntary petition resulting
in an Event of Default under subsection (f) of Section 7.1, the Obligations
shall be immediately due and payable automatically on the Full Remedies Date
without demand, presentment, protest, or notice of any kind (including, without
limitation, notice of dishonor,
-32-
notice of default, notice of intent to accelerate the maturity of the Obligation
and actual notice of acceleration), all of which the Borrower waives without
presentment, demand, protest or notice of any kind. If the Lender sells any of
the Collateral on credit, the Obligations will be reduced only to the extent of
payments actually received. If the purchaser fails to pay for the Collateral,
the Lender may resell the Collateral and shall apply any proceeds actually
received to the Obligations.
Section 7.3 Certain Notices. If notice to the Borrower of any intended
disposition of Collateral or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given (in the manner specified in Section 8.3) at least ten calendar days before
the date of intended disposition or other action.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies; Compliance with Laws. No
failure or delay by the Lender in exercising any right, power or remedy under
the Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law. The Lender may
comply with any applicable state or federal law requirements in connection with
a disposition of the Collateral and such compliance will not be considered
adversely to affect the commercial reasonableness of any sale of the Collateral.
Section 8.2 Amendments, Etc. No amendment, modification, termination or
waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom or any release of a Security Interest shall be effective
unless the same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
Section 8.3 Addresses for Notices; Requests for Accounting. Except as
otherwise expressly provided herein, all notices, requests, demands and other
communications provided for under the Loan Documents shall be in writing and
shall be (a) personally delivered, (b) sent by first class United States mail,
(c) sent by overnight courier of national reputation, or (d) transmitted by
telecopy, in each case addressed or telecopied to the party to whom notice is
being given at its address or telecopier number as set forth below next to its
signature or, as to each party, at such other address or telecopier number as
may hereafter be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section. All such notices,
requests, demands and other communications shall be deemed to have been given on
(a) the date received if personally delivered, (b) when deposited in the mail if
delivered by mail, (c) the date sent if sent by overnight courier, or (d) the
date of transmission if delivered
-33-
by telecopy, except that notices or requests to the Lender pursuant to any of
the provisions of Article II shall not be effective until received by the
Lender. All requests under Section 9-210 of the UCC (i) shall be made in a
writing signed by a person authorized under Section 2.2(a), (ii) shall be
personally delivered, sent by registered or certified mail, return receipt
requested, or by overnight courier of national reputation, (iii) shall be deemed
to be sent when received by the Lender and (iv) shall otherwise comply with the
requirements of Section 9-210. The Borrower requests that the Lender respond to
all such requests which on their face appear to come from an authorized
individual and releases the Lender from any liability for so responding. The
Borrower shall pay Lender the maximum amount allowed by law for responding to
such requests.
Section 8.4 Further Documents. The Borrower will from time to time
execute and deliver or endorse any and all instruments, documents, conveyances,
assignments, security agreements, financing statements, control agreements and
other agreements and writings that the Lender may reasonably request in order to
secure, protect, perfect or enforce the Security Interest or the Lender's rights
under the Loan Documents (but any failure to request or assure that the Borrower
executes, delivers or endorses any such item shall not affect or impair the
validity, sufficiency or enforceability of the Loan Documents and the Security
Interest, regardless of whether any such item was or was not executed, delivered
or endorsed in a similar context or on a prior occasion).
Section 8.5 Costs and Expenses. The Borrower shall pay on demand all
costs and expenses, including reasonable attorneys' fees (exclusive of
photocopying and long distance charges, search costs and other out-of-pocket
expenses) incurred by the Lender in connection with the Obligations, this
Agreement, the Loan Documents, and any other document or agreement related
hereto or thereto, and the transactions contemplated hereby, including all such
costs, expenses and fees incurred in connection with the negotiation,
preparation, execution, amendment, administration, performance, collection and
enforcement of the Obligations and all such documents and agreements and the
creation, perfection, protection, satisfaction, foreclosure or enforcement of
the Security Interest.
Section 8.6 Indemnity. In addition to the payment of expenses pursuant
to Section 8.5, the Borrower shall indemnify, defend and hold harmless the
Lender, and any of its participants, parent corporations, subsidiary
corporations, affiliated corporations, successor corporations, and all present
and future officers, directors, employees, attorneys and agents of the foregoing
(the "Indemnitees") from and against any of the following (collectively,
"Indemnified Liabilities"):
(i) any and all transfer taxes, documentary taxes, assessments
or charges made by any governmental authority by reason of the
execution and delivery of the Loan Documents or the making of the
Advances;
(ii) any claims, loss or damage to which any Indemnitee may be
subjected as a result of any violation of the covenant contained in
Section 6.9(b); and
(iii) except to the extent arising from judgments in favor of
the Borrower against the Lender on account of the Lender's breach of
its obligations
-34-
under this Agreement, any and all other liabilities, losses, damages,
penalties, judgments, suits, claims, costs and expenses of any kind or
nature whatsoever (including the reasonable fees and disbursements of
counsel) in connection with the foregoing and any other investigative,
administrative or judicial proceedings, whether or not such Indemnitee
shall be designated a party thereto, which may be imposed on, incurred
by or asserted against any such Indemnitee, in any manner related to or
arising out of or in connection with the making of the Advances and the
Loan Documents or the use or intended use of the proceeds of the
Advances, except to the extent caused by such Indemnitee's gross
negligence or willful misconduct.
If any investigative, judicial or administrative proceeding arising from any of
the foregoing is brought against any Indemnitee, upon such Indemnitee's request,
the Borrower, or counsel designated by the Borrower and reasonably satisfactory
to the Indemnitee, will resist and defend such action, suit or proceeding to the
extent and in the manner directed by the Indemnitee, at the Borrower's sole
costs and expense. Each Indemnitee will use its best efforts to cooperate in the
defense of any such action, suit or proceeding. If the foregoing undertaking to
indemnify, defend and hold harmless may be held to be unenforceable because it
violates any law or public policy, the Borrower shall nevertheless make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Borrower's obligation
under this Section 8.6 shall survive the termination of this Agreement and the
discharge of the Borrower's other obligations hereunder.
Section 8.7 Participants. The Lender and its participants, if any, are
not partners or joint venturers, and the Lender shall not have any liability or
responsibility for any obligation, act or omission of any of its participants.
All rights and powers specifically conferred upon the Lender may be transferred
or delegated to any of the Lender's participants, successors or assigns.
Section 8.8 Execution in Counterparts; Telefacsimile Execution. This
Agreement and other Loan Documents may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts, taken together, shall constitute but
one and the same instrument. Delivery of an executed counterpart of this
Agreement by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.
Section 8.9 Retention of Borrower's Records. The Lender shall have no
obligation to maintain any electronic records or any documents, schedules,
invoices, agings, or other papers delivered to the Lender by the Borrower or in
connection with the Loan Documents for more than four months after receipt by
the Lender.
Section 8.10 Binding Effect; Assignment; Complete Agreement; Exchanging
Information. The Loan Documents shall be binding upon and inure to the benefit
of the
-35-
Borrower and the Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights thereunder or any
interest therein without the Lender's prior written consent. To the extent
permitted by law, the Borrower waives and will not assert against any assignee
of the Lender any claims, defenses or set-offs which the Borrower could assert
against the Lender. This Agreement shall also bind all Persons who become a
party to this Agreement as a borrower. THIS AGREEMENT, TOGETHER WITH THE LOAN
DOCUMENTS, COMPRISES THE COMPLETE AND INTEGRATED AGREEMENT OF THE PARTIES ON THE
SUBJECT MATTER THEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS, WRITTEN OR ORAL, ON
THE SUBJECT MATTER THEREOF; AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Without limiting the Lender's
right to share information regarding the Borrower and its Affiliates with the
Lender's participants, accountants, lawyers and other advisors, the Lender,
Xxxxx Fargo & Company, and all direct and indirect subsidiaries of Xxxxx Fargo &
Company, may exchange any and all information they may have in their possession
regarding the Borrower and its Affiliates, and the Borrower waives any right of
confidentiality it may have with respect to such exchange of such information.
To the extent of any inconsistency between the Loan Documents, such
inconsistencies shall be resolved in favor of granting to the Lender the
greatest rights and remedies and imposing upon the Borrower the greatest
obligations.
Section 8.11 Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
Section 8.12 Headings. Article, Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.13 Governing Law; Jurisdiction, Venue; Waiver of Jury Trial.
The Loan Documents shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of Arizona. The parties
hereto hereby (i) consent to the personal jurisdiction of the state and federal
courts located in the State of Arizona in connection with any controversy
related to this Agreement; (ii) waive any argument that venue in any such forum
is not convenient, (iii) agree that any litigation initiated by the Lender or
the Borrower in connection with this Agreement or the other Loan Documents may
be venued in either the State or Federal courts located in Maricopa County,
Arizona; and (iv) agree that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
-36-
Section 8.14 Waiver of Suretyship Defenses.
(a) Neither demand on, nor the pursuit of any remedies against, any
Related Borrower shall be required as a condition precedent to, and neither the
pendency nor the prior termination of any action, suit or proceeding against any
Related Borrower (whether for the same or a different remedy) shall bear on or
prejudice the making of a demand on the Borrower by the Lender and commencement
against the Borrower after such demand, of any action, suit or proceeding, at
law or in equity, for the enforcement of the Lender's remedies in respect of the
Collateral on account of a Related Credit Facility Default.
(b) Neither (i) the exercise or the failure to exercise by the
Lender of any rights or remedies conferred on it under the Related Credit
Facility Documents, hereunder or existing at law or otherwise, or against any
security for performance of the Related Credit Facility Obligations, (ii) the
commencement of an action at law or the recovery of a judgment at law against
any Related Borrower or any surety and the enforcement thereof through levy or
execution or otherwise, (iii) the taking or institution or any other action or
proceeding against any Related Borrower or any surety nor (iv) any delay in
taking, pursuing or exercising any of the foregoing actions, rights, powers or
remedies by the Lender or anyone acting for the Lender, shall extinguish or
affect the Lender's remedies in respect of the Collateral on account of a
Related Credit Facility Default.
(c) The Borrower, as a surety for the Related Credit Facility
Obligations, hereby expressly waives: (i) all diligence in collection or
protection of or realization on the Related Credit Facility Obligations or any
part thereof or any security for or guarantee of any of the foregoing; (ii) any
defense based upon a marshaling of assets; (iii) any defense arising because of
the Lender's election under Section 1111(b)(2) of the United States Bankruptcy
Code ("Bankruptcy Code") in any proceeding instituted under the Bankruptcy Code;
(iv) any defense based on post-petition borrowing or the grant of a security
interest by any Related Borrower under Section 364 of the Bankruptcy Code; (v)
any duty on the part of the Lender to disclose to the Borrower any facts Lender
may now or hereafter know about any Related Borrower, regardless of whether the
Lender has reason to believe that any such facts materially increase the risk
beyond that which the Borrower intends to assume or has reason to believe that
such facts are known the Borrower or has a reasonable opportunity to communicate
such facts to the Borrower, because the Borrower represents and warrants that it
is fully responsible for being and keeping informed of the financial condition
of the Related Borrowers and of all circumstances bearing on the risk of
non-payment of any Related Credit Facility Obligations; (vi) any and all
suretyship defenses and defenses in the nature thereof under Arizona and/or any
other applicable law, including, without limitation, the benefits of the
provisions of Sections 12-1641 through 12-1646, of the Arizona Revised Statutes,
Sections 17 and 21, A.R.C.P., and all other laws of similar import; and (vii)
all rights and defenses arising out of an election of remedies by the Lender,
even though that election of remedies, such as a non-judicial foreclosure with
respect to security for a guaranteed obligation, has destroyed the Borrower's
rights of subrogation and reimbursement against the principal by the operation
of law or otherwise.
-37-
(d) The Borrower agrees that it will not assert against the Lender
any defense of waiver, release, discharge in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute, fraud, usury,
illegality or unenforceability which may be available to the Related Borrowers
with respect to the Related Credit Facility Documents (or the Related Credit
Facility), or any set off available to the Related Borrowers against the Lender,
whether or not on account of a related transaction.
(e) The benefits, remedies and rights provided or intended to be
provided hereby for the Lender are in addition to and without prejudice to any
rights, benefits, remedies or security to which the Lender might otherwise be
entitled.
(f) Anything else contained herein to the contrary notwithstanding,
the Lender, from time to time, without notice to the Borrower, may take all or
any of the following actions without in any manner affecting or impairing the
obligations of the Borrower in respect of the Related Credit Facility
Obligations: (i) obtain a lien on or a security interest in any property to
secure any of the Related Credit Facility Obligations, either consensually or by
operation of law; (ii) retain or obtain the primary or secondary liability of
any Person(s), in addition to the Persons comprising the Borrower, with respect
to any of the Obligations; (iii) renew, extend or otherwise change the time for
payment or performance of any of the Related Credit Facility Obligations for any
period; (iv) release or compromise any liability of any nature of any other
Person with respect to the Related Credit Facility Obligations; (v) exchange,
enforce, waive, release and apply any security for the performance of the
Related Credit Facility Obligations and direct the order or manner of the
proceeds of such security for any of the Related Credit Facility Obligations,
whether or not the Lender shall proceed against any other Person primarily or
secondarily liable on any of the Related Credit Facility Obligations; (vi) agree
to any amendment (including, without limitation, any amendment which changes the
amount of interest to be paid under the Related Credit Facility Documents or
extends the period of time during which the Related Borrowers may obtain
advances or letters of credit) to the Related Credit Facility Documents or any
waiver of any provisions of the Related Credit Facility Documents and/or
exercise the Lender's rights to consent to any action or non-action of the
Lender which may violate the covenants and agreements contained in the Related
Credit Facility Documents with or without consideration, on such terms and
conditions as may be acceptable to the Lender in the Lender's discretion; or
(vii) exercise any of the Lender's rights conferred by the Related Credit
Facility Documents or by law.
(g) If at any time all or any part of any payment theretofore
applied by the Lender to any of the Related Credit Facility Obligations is or
must be rescinded or returned by the Lender for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
any Related Borrower), such Related Credit Facility Obligations, for purposes of
this Agreement, to the extent that such payment is or must be rescinded or
returned, shall be deemed to have never been performed.
(h) To the extent not prohibited by law, until the Related Credit
Facility Obligations have been paid and performed in full and the Lender has no
further obligation to extend credit to any Related Borrower under the Related
Credit Facility Documents, the
-38-
Borrower shall have no right of subrogation with respect to the Related Credit
Facility Obligations or any rights of indemnification, reimbursement or
contribution from any Related Borrower or from any surety with respect to the
Related Credit Facility Obligations regardless of any payment made by the
Borrower with respect to the Related Credit Facility Obligations; and the
Borrower hereby unconditionally waives any such right of subrogation,
indemnification, reimbursement or contribution for such period. The Borrower
agrees that it will not have or assert any such rights against one another or
their respective successors and assigns or any other party (including any
surety), either directly or as an attempted set off to any action commenced
against any Related Borrower or other Person.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
19th Avenue/Xxxxxxxx Limited Partnership 19TH AVENUE/XXXXXXXX LIMITED
0000 Xxxx Xxxxxxxx Xxxxxx PARTNERSHIP, an Arizona limited
Xxxxxxx, Xxxxxxx 00000 partnership
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
e-mail: By: /s/ Xxxxx X. Xxxxxx
--------------------- --------------------------------
Xxxxx X. Xxxxxx, a General
Partner
Xxxxx Fargo Credit, Inc XXXXX FARGO CREDIT, INC.
Xxxxx Xxxxx Xxxxx, XXX X0000-000
000 Xxxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000 By /s/ Xxxxxx X. Xxxxxx
---------------------------------
Telecopier: (000) 000-0000 Xxxxxx X. Xxxxxx
Attention: Xxxxxx X. Xxxxxx Its Assistant Vice President
e-mail: xxxxxxxx@xxxxxxxxxx.xxx
-39-
