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LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
CONGRESS FINANCIAL CORPORATION (NEW ENGLAND)
AS LENDER
AND
TRANSPRO, INC., EVAP, INC.,
AND GO/XXX INDUSTRIES, INC.
AS BORROWERS
DATED: JANUARY __, 2001
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TABLE OF CONTENTS
Page
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1. DEFINITIONS................................................................................. 1
2. CREDIT FACILITIES........................................................................... 12
2.1 Revolving Loans........................................................................... 12
2.2 Letter of Credit Accommodations........................................................... 13
2.3 Term Loan................................................................................. 15
2.4 Availability Reserves..................................................................... 16
2.5 Appointment of TransPro as Agent for Borrowers............................................ 16
3. INTEREST AND FEES........................................................................... 16
3.1 Interest.................................................................................. 16
3.2 Closing Fee............................................................................... 18
3.3 Servicing Fee............................................................................. 18
3.4 Unused Line Fee........................................................................... 18
3.5 Changes in Laws and Increased Costs of Loans.............................................. 19
4. CONDITIONS PRECEDENT........................................................................ 19
4.1 Conditions Precedent to Initial Loans and Letter of Credit Accommodations................. 19
4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations..................... 21
5. GRANT OF SECURITY INTEREST.................................................................. 22
6. COLLECTION AND ADMINISTRATION............................................................... 23
6.1 Borrower's Loan Account................................................................... 23
6.2 Statements................................................................................ 23
6.3 Collection of Accounts.................................................................... 23
6.4 Payments.................................................................................. 24
6.5 Authorization to Make Loans............................................................... 24
6.6 Use of Proceeds........................................................................... 25
7. COLLATERAL REPORTING AND COVENANTS.......................................................... 25
7.1 Collateral Reporting...................................................................... 25
7.2 Accounts Covenants........................................................................ 25
7.3 Inventory Covenants....................................................................... 27
7.4 Equipment Covenants....................................................................... 28
7.5 Power of Attorney......................................................................... 28
7.6 Right to Cure............................................................................. 29
7.7 Access to Premises........................................................................ 29
8. REPRESENTATIONS AND WARRANTIES.............................................................. 30
8.1 Corporate Existence, Power and Authority; Subsidiaries.................................... 30
(i)
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8.2 Financial Statements; No Material Adverse Change.......................................... 30
8.3 Chief Executive Office; Collateral Locations.............................................. 30
8.4 Priority of Liens; Title to Properties.................................................... 30
8.5 Tax Returns............................................................................... 31
8.6 Litigation................................................................................ 31
8.7 Compliance with Other Agreements and Applicable Laws...................................... 31
8.8 Bank Accounts............................................................................. 31
8.9 Accuracy and Completeness of Information.................................................. 31
8.10 Employee Benefits........................................................................ 32
8.11 Environmental Compliance................................................................ 32
Bonds and Bond Financing Documents............................................................. 33
8.12 Survival of Warranties; Cumulative....................................................... 33
9. AFFIRMATIVE AND NEGATIVE COVENANTS.......................................................... 34
9.1 Maintenance of Existence.................................................................. 34
9.2 New Collateral Locations.................................................................. 34
9.3 Compliance with Laws, Regulations, Etc.................................................... 34
9.4 Payment of Taxes and Claims............................................................... 35
9.5 Insurance................................................................................. 35
9.6 Financial Statements and Other Information................................................ 36
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc................................... 37
9.8 Encumbrances.............................................................................. 38
9.9 Indebtedness.............................................................................. 38
9.10 Loans, Investments, Guarantees, Etc...................................................... 39
9.11 Dividends and Redemptions................................................................ 39
9.12 Transactions with Affiliates............................................................. 39
9.13 Additional Bank Accounts................................................................. 40
9.14 Working Capital.......................................................................... 40
9.15 Adjusted Net Worth....................................................................... 40
9.16 Costs and Expenses....................................................................... 40
9.17 Compliance with ERISA................................................................... 41
9.18 Bond Financing Covenants................................................................. 41
9.19 Further Assurances....................................................................... 41
10. EVENTS OF DEFAULT AND REMEDIES.............................................................. 42
10.1 Events of Default........................................................................ 42
10.2 Remedies................................................................................. 43
11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW................................ 45
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.................... 45
11.2 Waiver of Notices........................................................................ 46
11.3 Amendments and Waivers................................................................... 46
11.4 Waiver of Counterclaims.................................................................. 47
11.5 Indemnification.......................................................................... 47
11.6 WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND HEARING................................. 47
(ii)
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12. TERM OF AGREEMENT; MISCELLANEOUS............................................................ 48
12.1 Term..................................................................................... 48
12.2 Notices.................................................................................. 49
12.3 Partial Invalidity....................................................................... 49
12.4 Successors............................................................................... 50
12.5 Joint and Several Liability.............................................................. 50
12.6 Suretyship Waivers and Consents.......................................................... 50
12.7 Contribution Agreement................................................................... 53
12.8 Confidentiality.......................................................................... 53
12.9 Participant's Security Interest.......................................................... 53
12.10 Entire Agreement........................................................................ 54
INDEX TO
EXHIBITS AND SCHEDULES
Exhibit A Information Certificate
Schedule 1.12(m) Account Debtor Concentrations
Schedule 7.2(c) Accounts Covenants
Schedule 8.1 Inactive Subsidiaries
Schedule 8.4 Existing Liens
Schedule 8.8 Bank Accounts
Schedule 8.10 ERISA
Schedule 8.11 Environmental Matters
Schedule 9.9 Existing Indebtedness
Schedule 9.10 Existing Loans, Advances and Guarantees
(iii)
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LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement dated January __, 2001 is entered into by and
between Congress Financial Corporation (New England), a Massachusetts
corporation ("Lender") and TransPro, Inc., a Delaware corporation ("TransPro"),
Evap, Inc., a Texas corporation ("Evap"), and GO/XXX Industries, Inc., a
Delaware corporation ("GDI" or "GO/XXX") (TransPro, Evap, and GDI are each
referred to herein as a "Borrower" and are collectively referred to as
"Borrowers").
W I T N E S S E T H:
WHEREAS, Borrowers have requested that Lender enter into certain financing
arrangements with Borrowers pursuant to which Lender may make loans and provide
other financial accommodations to Borrowers; and
WHEREAS, Lender is willing to make such loans and provide such financial
accommodations on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
All terms used herein which are defined in Article 1 or Article 9 of the Uniform
Commercial Code as in effect from time to time in the Commonwealth of
Massachusetts shall have the meanings given therein unless otherwise defined in
this Agreement. All references to the plural herein shall also mean the singular
and to the singular shall also mean the plural unless the context otherwise
requires. All references to Borrowers and Lender pursuant to the definitions set
forth in the recitals hereto, or to any other person herein, shall include their
respective successors and assigns. The words "hereof", "herein", "hereunder",
"this Agreement" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not any particular provision of this
Agreement and as this Agreement now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced. The word
"including" when used in this Agreement shall mean "including, without
limitation". An Event of Default shall exist or continue or be continuing until
such Event of Default is waived in accordance with Section 11.3 or is cured in a
manner satisfactory to Lender, if such Event of Default is capable of being
cured as determined by Lender. Any accounting term used herein unless otherwise
defined in this Agreement shall have the meanings customarily given to such term
in accordance with GAAP. For purposes of this Agreement, the following terms
shall have the respective meanings given to them below:
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1.1 "Accounts" shall mean all present and future rights of a Borrower
to payment for goods sold or leased or for services rendered, which are not
evidenced by instruments or chattel paper, and whether or not earned by
performance.
1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded
upwards, if necessary, to the next one-sixteenth (1/16) of one (1%) percent)
determined by dividing (a) the Eurodollar Rate for such Interest Period by (b) a
percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes
hereof, "Reserve Percentage" shall mean the reserve percentage, expressed as a
decimal, prescribed by any United States or foreign banking authority for
determining the reserve requirement which is or would be applicable to deposits
of United States dollars in a non-United States or an international banking
office of Reference Bank used to fund a Eurodollar Rate Loan or any Eurodollar
Rate Loan made with the proceeds of such deposit, whether or not the Reference
Bank actually holds or has made any such deposits or loans. The Adjusted
Eurodollar Rate shall be adjusted on and as of the effective day of any change
in the Reserve Percentage.
1.3 "Adjusted Net Worth" shall mean as to any Person, at any time, in
accordance with GAAP (except as otherwise specifically set forth below), on a
consolidated basis for such Person and its subsidiaries (if any), the amount
equal to: (a) the difference between: (i) the aggregate net book value of all
assets of such Person and its subsidiaries, calculating the book value of
inventory for this purpose on a first-in-first-out basis, after deducting from
such book values all appropriate reserves in accordance with GAAP (including all
reserves for doubtful receivables, obsolescence, depreciation and amortization)
and (ii) the aggregate amount of the indebtedness and other liabilities of such
Person and its subsidiaries (including tax and other proper accruals) plus (b)
indebtedness of such Person and its subsidiaries which is subordinated in right
of payment to the full and final payment of all of the Obligations on terms and
conditions acceptable to Lender.
1.4 "Availability Reserves" shall mean, as of any date of
determination, such amounts as Lender may from time to time establish and revise
in good faith reducing the amount of Revolving Loans and Letter of Credit
Accommodations which would otherwise be available to Borrowers under the lending
formula(s) provided for herein: (a) to reflect events, conditions, contingencies
or risks which, as determined by Lender in good faith, do or may affect either
(i) the Collateral or any other property which is security for the Obligations
or its value, (ii) the assets, business or prospects of any Borrower or any
Obligor or (iii) the security interests and other rights of Lender in the
Collateral (including the enforceability, perfection and priority thereof) or
(b) to reflect Lender's good faith belief that any collateral report or
financial information furnished by or on behalf of any Borrower or any Obligor
to Lender is or may have been incomplete, inaccurate or misleading in any
material respect or (c) to reflect outstanding Letter of Credit Accommodations
as provided in Section 2.2 hereof or (d) in respect of any state of facts which
Lender determines in good faith constitutes an Event of Default or may, with
notice or passage of time or both, constitute an Event of Default.
1.5 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.
1.6 "Bond Financing Documents" shall mean the Lease Agreement, dated as
of February 1, 1983 between the Connecticut Development Authority and The Xxxxx
Group, Inc.
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(predecessor in interest to TransPro), the Indenture of Trust, dated as of
February 1, 1983 with respect to the Bonds and all other agreements, instruments
and documents executed in connection with or relating to or securing any of the
foregoing.
1.7 "Bonds" shall mean the $5,000,000 Floating Rate Monthly Demand
Industrial Development Bonds (The Xxxxx Group, Inc. Project - 1983 Series).
1.8 "Business Day" shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks are authorized or required to close under
the laws of the State of New York, the State of Connecticut, the Commonwealth of
Pennsylvania or the State of North Carolina, and a day on which the Reference
Bank and Lender are open for the transaction of business, except that if a
determination of a Business Day shall relate to any Eurodollar Rate Loans, the
term Business Day shall also exclude any day on which banks are closed for
dealings in dollar deposits in the London interbank market or other applicable
Eurodollar Rate market.
1.9 "Change in Control" shall mean, at any time, that any Person,
together with the affiliates and associates of such Person within the meaning of
Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), shall acquire beneficial ownership within the meaning of Rule 13d of the
Exchange Act of more than thirty (30%) percent of the voting stock or total
equity of another Person, or if a change in the Board of Directors of such other
Person occurs in which the individuals who constituted the Board of Directors at
the beginning of the two (2) year period immediately preceding such change
(together with any other director whose election by the Board of Directors was
approved by at least two-thirds of the directors then in office at the beginning
of such period) cease for any reason to constitute a majority of the directors
of such other Person then in office.
1.10 "Code" shall mean the Internal Revenue Code of 1986, as the same
now exists or may from time to time hereafter be amended, modified, recodified
or supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
1.11 "Collateral" shall have the meaning set forth in Section 5 hereof.
1.12 "Eligible Accounts" shall mean Accounts created by a Borrower
which are and continue to be acceptable to Lender based on the criteria set
forth below. In general, Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide sale and
delivery of goods by a Borrower or rendition of services by a Borrower in the
ordinary course of its business which transactions are completed in accordance
with the terms and provisions contained in any documents related thereto;
(b) such Accounts are not unpaid more than sixty (60) days
after the due date in the original invoice for them, but in any event are not
unpaid more than one hundred twenty (120) days after the date the original
invoice for them;
(c) such Accounts comply with the terms and conditions
contained in Section 7.2(c) of this Agreement;
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(d) such Accounts do not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms under which
payment by the account debtor may be conditional or contingent;
(e) the chief executive office of the account debtor with
respect to such Accounts is located in the United States of America or Canada,
or, at Lender's option, if either: (i) the account debtor has delivered to a
Borrower an irrevocable letter of credit issued or confirmed by a bank
satisfactory to Lender and payable only in the United States of America and in
U.S. dollars, sufficient to cover such Account, in form and substance
satisfactory to Lender and, if required by Lender, the original of such letter
of credit has been delivered to Lender or Lender's agent and the issuer thereof
notified of the assignment of the proceeds of such letter of credit to Lender,
or (ii) such Account is subject to credit insurance payable to Lender issued by
an insurer and on terms and in an amount acceptable to Lender, or (iii) such
Account is otherwise acceptable in all respects to Lender (subject to such
lending formula with respect thereto as Lender may determine);
(f) such Accounts do not consist of progress xxxxxxxx, xxxx
and hold invoices or retainage invoices, except as to xxxx and hold invoices, if
Lender shall have received an agreement in writing from the account debtor, in
form and substance satisfactory to Lender, confirming the unconditional
obligation of the account debtor to take the goods related thereto and pay such
invoice;
(g) the account debtor with respect to such Accounts has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to, any right of setoff against such
Accounts (but the portion of the Accounts of such account debtor in excess of
the amount at any time and from time to time owed by a Borrower to such account
debtor or claimed owed by such account debtor may be deemed Eligible Accounts);
(h) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Accounts or reduce
the amount payable or delay payment thereunder;
(i) such Accounts are subject to the first priority, valid and
perfected security interest of Lender and any goods giving rise thereto are not,
and were not at the time of the sale thereof, subject to any liens except those
permitted in this Agreement;
(j) neither the account debtor nor any officer or employee of
the account debtor with respect to such Accounts is an officer, employee or
agent of or affiliated with a Borrower directly or indirectly by virtue of
family membership, ownership, control, management or otherwise;
(k) the account debtors with respect to such Accounts are not
any foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Lender's
request, the
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Federal Assignment of Claims Act of 1940, as amended or any similar State or
local law, if applicable, has been complied with in a manner satisfactory to
Lender;
(l) there are no proceedings or actions which are threatened
or pending against the account debtors with respect to such Accounts which might
result in any material adverse change in any such account debtor's financial
condition;
(m) such Accounts of a single account debtor or its affiliates
owing to any Borrower do not constitute more than twenty (20%) percent or for
the account debtors listed on Schedule 1.12(m) hereto, the percentage set forth
thereon for each such account debtor, of all otherwise Eligible Accounts due to
such Borrower (but the portion of the Accounts not in excess of such percentage
may be deemed Eligible Accounts);
(n) such Accounts are not owed by an account debtor who has
Accounts unpaid more than sixty (60) days after the due date in the original
invoice for them but in any event are unpaid more than ninety (90) days after
the date of the original invoice for them which constitute more than fifty (50%)
percent of the total Accounts of such account debtor;
(o) such Accounts are owed by account debtors whose total
indebtedness to any Borrower does not exceed the credit limit with respect to
such account debtors as determined by Lender, in good faith, from time to time
(but the portion of the Accounts not in excess of such credit limit may be
deemed Eligible Accounts);
(p) such Accounts are owed by account debtors deemed
creditworthy at all times by Lender, as determined by Lender, in good faith; and
(q) such Accounts, if subject to the Borrowers' Accounts
extended terms program as in effect on the date of this Agreement or as modified
in accordance with this Agreement, are not unpaid more than thirty (30) days
after the due date in the original invoice for them but in any event are not
unpaid more than one hundred fifty (150) days after the date of the original
invoice for them; provided that the aggregate Net Amount of all Eligible
Accounts under the Borrowers' Accounts extended terms program shall not, at any
time, exceed the lesser of $6,000,000 or fifteen (15%) percent of the aggregate
Net Amount of all Eligible Accounts (but the portion of the extended terms
Accounts not in excess of such limit may be deemed Eligible Accounts).
General criteria for Eligible Accounts may be established and revised from time
to time by Lender in good faith to reflect events, conditions, contingencies or
risks which, as determined by Lender, in good faith, affect or may affect all or
any of Borrowers' Accounts or the net amount thereof. Any Accounts which are not
Eligible Accounts shall nevertheless be part of the Collateral.
1.13 "Eligible Equipment" shall mean Equipment owned by a Borrower, in
good order, repair, running and in marketable condition (ordinary wear and tear
excepted), located at a Borrower's premises and otherwise acceptable to Lender
in all respects. General criteria for Eligible Equipment may be established and
revised from time to time by Lender in Lender's good faith judgment to reflect
events, conditions, contingencies or risks which, as determined by Lender in
good faith, affect or may affect all or any of Borrowers' Equipment or the value
thereof. In
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determining such eligibility Lender may, but need not, rely on reports furnished
to Lender by Borrowers, but reliance thereon by Lender from time to time shall
not be deemed to limit Lender's right to revise standards of eligibility at any
time. In general, except in Lender's discretion, Eligible Equipment shall not
include (a) Equipment at the premises of third parties or subject to a security
interest or lien in favor of any third parties, (b) Equipment which is not
subject to Lender's perfected security interest, (c) fixtures, (d) defective,
inoperable, damaged or unsaleable Equipment, (e) leased Equipment, or (f)
Equipment not used or usable in the ordinary course of Borrower's business as
presently conducted; provided, however, any Equipment which would otherwise be
deemed Eligible Equipment at locations which are not owned and operated by
Borrower may nevertheless be considered Eligible Equipment if Lender shall have
received an agreement in writing, in form and substance satisfactory to Lender,
from the owner and/or operator of such location, as the case may be, pursuant to
which such owner and/or operator, if required by Lender: (i) acknowledges the
first priority lien of Lender on such Equipment, (ii) agrees to waive any and
all claims such owner and/or operator may, at any time, have against such
Equipment and (iii) grants to Lender the right to enter and remain on the
premises in order to exercise Lender's rights and remedies on terms acceptable
to Lender. Any Equipment which Lender determines, in good faith, to be
ineligible or unacceptable for purposes of the lending formula shall
nevertheless be and remain at all times part of the Collateral.
1.14 "Eligible Inventory" shall mean Inventory consisting of finished
goods held for resale in the ordinary course of the business of a Borrower and
raw materials for such finished goods which are acceptable to Lender based on
the criteria set forth below. In general, Eligible Inventory shall not include
(a) work-in-process; (b) components which are not part of finished goods; (c)
spare parts for equipment; (d) packaging and shipping materials; (e) supplies
used or consumed in a Borrower's business; (f) Inventory at premises other than
those owned and controlled by a Borrower, except if Lender shall have received
an agreement in writing from the person in possession of such Inventory and/or
the owner or operator of such premises in form and substance satisfactory to
Lender acknowledging Lender's first priority security interest in the Inventory,
waiving security interests and claims by such person against the Inventory and
permitting Lender access to, and the right to remain on, the premises so as to
exercise Lender's rights and remedies and otherwise deal with the Collateral;
(g) Inventory subject to a security interest or lien in favor of any person
other than Lender except those permitted in this Agreement; (h) xxxx and hold
goods; (i) unserviceable, obsolete or slow moving Inventory; (j) Inventory which
is not subject to the first priority, valid and perfected security interest of
Lender; (k) returned (unless determined by Borrowers in accordance with their
customary procedures and policies to be new, unused and in first quality
condition and for which an appropriate stock adjustment to finished goods has
been made on Borrowers' books), damaged and/or defective Inventory; and (l)
Inventory purchased or sold on consignment. General criteria for Eligible
Inventory may be established and revised from time to time by Lender in good
faith to reflect events, conditions, contingencies or risks which, as determined
by Lender in good faith, affect or may affect all or any of Borrowers' Inventory
or the value thereof. Any Inventory which is not Eligible Inventory shall
nevertheless be part of the Collateral.
1.15 "Environmental Law" shall mean all foreign, Federal, State and
local laws (including common law), legislation, rules, codes, licenses, permits
(including conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between
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any Borrower and any governmental authority: (a) relating to pollution and the
protection, preservation or restoration of the environment (including air, water
vapor, surface water, ground water, drinking water, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, (b) relating to the exposure to, or the
use, storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials, or (c) relating to all
laws with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials. The term "Environmental Laws"
includes (i) the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act,
the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act,
the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (ii) applicable state counterparts to such laws, and (iii) any
common law or equitable doctrine that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the presence of or
exposure to any Hazardous Materials.
1.16 "Equipment" shall mean all of Borrowers' now owned and hereafter
acquired equipment, machinery, computers and computer hardware and software
(whether owned or licensed), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.
1.17 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, as the same now exists or may hereafter from time to time
be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.
1.18 "ERISA Affiliate" shall mean any person required to be aggregated
with any Borrower or any of its Subsidiaries under Sections 414(b), 414(c),
414(m) or 414(o) of the Code.
1.19 "Eurodollar Rate Loans" shall mean any Loans or portion thereof
on which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.
1.20 "Eurodollar Rate" shall mean with respect to the Interest Period
for a Eurodollar Rate Loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the next one-sixteenth (1/16) of one (1%) percent) at which Reference Bank is
offered deposits of United States dollars in the London interbank market (or
other Eurodollar Rate market selected by Borrower and approved by Lender) on or
about 9:00 a.m. (New York time) two (2) Business Days prior to the commencement
of such Interest Period in amounts substantially equal to the principal amount
of the Eurodollar Rate Loans requested by and available to Borrowers in
accordance with this Agreement, with a maturity of comparable duration to the
Interest Period selected by Borrower.
1.21 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 10.1 hereof.
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1.22 "Excess Availability" shall mean the amount, as determined by
Lender, calculated at any time, equal to (a) the lesser of: (i) the amount of
the Revolving Loans available to Borrowers as of such time based on the
applicable lending formulas multiplied by the Net Amount of Eligible Accounts
and the Value of Eligible Inventory, as determined by Lender, and subject to the
sublimits and Availability Reserves from time to time established by Lender
hereunder, and (ii) the Maximum Credit (less the then outstanding principal
amount of the Term Loan), minus (b) the sum of: (i) the amount of all then
outstanding and unpaid Obligations (but not including for this purpose the then
outstanding principal amount of the Term Loan), plus (ii) the aggregate amount
of all then outstanding and unpaid trade payables of Borrowers which are more
than sixty (60) days past due as of such time, plus (iii) the amount of checks
issued by Borrowers to pay trade payables, but not yet sent and the book
overdraft of any Borrower.
1.23 "Financing Agreements" shall mean, collectively, this Agreement,
the Bond Financing Documents and all notes, guarantees, security agreements and
other agreements, documents and instruments now or at any time hereafter
executed and/or delivered by any Borrower or any Obligor in connection with this
Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.24 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Sections 9.14 and 9.15 hereof, GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent with those
used in the preparation of the audited financial statements delivered to Lender
prior to the date hereof.
1.25 "Good Faith" or "good faith" shall have the meaning given such
term in the Uniform Commercial Code as in effect from time to time in the
Commonwealth of Massachusetts.
1.26 "G&O Division" shall mean The G&O Manufacturing Company division
of TransPro.
1.27 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).
1.28 "Inactive Subsidiaries" shall mean Crown Crew Cab, Inc., a
Delaware corporation, and TransPro Industries, Ltd., a company organized under
the laws of Maritius.
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1.29 "Information Certificate" shall mean the Information Certificates
of Borrowers constituting Exhibit A hereto containing material information with
respect to Borrowers, their business and assets provided by or on behalf of
Borrowers to Lender in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.
1.30 "Interest Period" shall mean for any Eurodollar Rate Loan, a
period of approximately one (1), two (2), or three (3) months duration as
Borrowers may elect, the exact duration to be determined in accordance with the
customary practice in the applicable Eurodollar Rate market; provided, that,
Borrowers may not elect an Interest Period which will end after the last day of
the then-current term of this Agreement.
1.31 "Interest Rate" shall mean, as to Prime Rate Loans, a rate of zero
(0.00%) percent per annum in excess of the Prime Rate and, as to Eurodollar Rate
Loans, a rate of two and one-half (2.50%) percent per annum in excess of the
Adjusted Eurodollar Rate (based on the Eurodollar Rate applicable for the
Interest Period selected by Borrowers as in effect three (3) Business Days after
the date of receipt by Lender of the request of Borrowers for such Eurodollar
Rate Loans in accordance with the terms hereof, whether such rate is higher or
lower than any rate previously quoted to Borrowers); provided, that, the
Interest Rate shall mean the rate of three (3%) percent per annum in excess of
the Prime Rate as to Prime Rate Loans and the rate of five and one-half (5.50%)
percent per annum in excess of the Adjusted Eurodollar Rate as to Eurodollar
Rate Loans, at Lender's option, without notice, (a) for the period (i) from and
after the date of termination or non-renewal hereof until Lender has received
full and final payment of all obligations (notwithstanding entry of a judgment
against any Borrower) and (ii) from and after the date of the occurrence of an
Event of Default for so long as such Event of Default is continuing as
determined by Lender, and (b) on the Revolving Loans at any time outstanding in
excess of the amounts available to Borrowers under Section 2 (whether or not
such excess(es), arise or are made with or without Lender's knowledge or consent
and whether made before or after an Event of Default), provided that if such
excess is the sole and direct result of an adjustment made by Lender to the
criteria for Eligible Accounts or Eligible Inventory or to Availability
Reserves, the higher rate of interest provided herein shall not go into effect
until ten (10) days after such adjustment by Lender became effective and
provided that Borrowers shall not have eliminated such excess within such ten
(10) day period. The Interest Rate shall be subject to further adjustment as
provided in Section 3.1(e) hereof.
1.32 "Inventory" shall mean all of Borrowers' now owned and hereafter
existing or acquired raw materials, work in process, finished goods and all
other inventory of whatsoever kind or nature, wherever located.
1.33 "Investment Property" shall mean all of Borrowers' now owned and
hereafter existing or acquired securities, financial assets, securities
accounts, securities entitlements and all other investment property of
whatsoever kind or nature, wherever located, including, without limitation,
securities issued to a Borrower by any subsidiary of such Borrower.
1.34 "Lead Borrower" shall mean TransPro or such other Borrower as may
be appointed by Lender under Section 2.5 hereof.
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1.35 "Letter of Credit Accommodations" shall mean the letters of
credit, merchandise purchase or other guaranties which are from time to time
either (a) issued or opened by Lender for the account of any Borrower or any
Obligor or (b) with respect to which Lender has agreed to indemnify the issuer
or guaranteed to the issuer the performance by any Borrower of its obligations
to such issuer.
1.36 "Loans" shall mean the Revolving Loans and the Term Loan.
1.37 "Maximum Credit" shall mean the amount of $65,000,000.00.
1.38 "Mortgages" shall mean, individually and not collectively, each of
the following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Open End
Leasehold Mortgage and Security Agreement, dated of even date herewith, by
TransPro in favor of Lender with respect to the Real Property and related assets
of TransPro located in New Haven, Connecticut and (b) the Deed of Trust,
Security Agreement and Fixture Financing Statement, dated of even date herewith,
of TransPro in favor of Lender with respect to the Real Property and related
assets of TransPro located in Jackson, Mississippi.
1.39 "Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof and (b) returns, discounts, claims, credits and allowances of any nature
at any time issued, owing, granted, outstanding, available or claimed with
respect thereto.
1.40 "Obligations" shall mean any and all Revolving Loans, the Term
Loan, Letter of Credit Accommodations and all other obligations, liabilities and
indebtedness of every kind, nature and description owing by any Borrowers to
Lender and/or its affiliates, including principal, interest, charges, fees,
costs and expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether arising under this Agreement or otherwise,
whether now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of this Agreement or after the
commencement of any case with respect to any Borrower under the United States
Bankruptcy Code or any similar statute (including the payment of interest and
other amounts which would accrue and become due but for the commencement of such
case, whether or not such amounts are allowed or allowable in whole or in part
in such case), whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or unliquidated,
secured or unsecured, and however acquired by Lender.
1.41 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than a Borrower.
1.42 "Participant" shall mean any person which at any time participates
with Lender in respect of the Loans, the Letter of Credit Accommodations or
other Obligations or any portion thereof.
1.43 "Payment Account" shall have the meaning set forth in Section 6.3
hereof.
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1.44 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation which elects
subchapter S status under the Internal Revenue Code of 1986, as amended),
limited liability company, limited liability partnership, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity or any government or any agency or instrumentality or political
subdivision thereof.
1.45 "Prime Rate" shall mean the rate announced by First Union National
Bank, or its successors, from time to time as its prime rate, whether or not
such announced rate is the best rate available at such bank.
1.46 "Prime Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Prime Rate in accordance with the terms
thereof.
1.47 "Real Property" shall mean all now owned and hereafter acquired
real property of Borrowers, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located, including the
real property and related assets more particularly described in the Mortgages
located in New Haven, Connecticut and Jackson, Mississippi.
1.48 "Records" shall mean all of Borrowers' present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrowers with respect to the
foregoing maintained with or by any other person).
1.49 "Reference Bank" shall mean First Union National Bank, or such
other bank as Lender may from time to time designate.
1.50 "Revolving Loan Ceiling" shall mean the amount of $60,000,000.00.
1.51 "Revolving Loans" shall mean the loans now or hereafter made by
Lender to or for the benefit of Borrowers on a revolving basis (involving
advances, repayments and readvances) as set forth in Section 2.1 hereof.
1.52 "Term Loan" shall mean the term loans made by Lender to Borrowers
as provided for in Section 2.3 hereof.
1.53 "Value" shall mean, as determined by Lender in good faith, with
respect to Inventory, the lower of (a) cost computed on a first-in-first-out
basis in accordance with GAAP or (b) market value.
1.54 "Working Capital" shall mean as to any Person, at any time, in
accordance with GAAP, on a consolidated basis for such Person and its
subsidiaries (if any), the amount equal to the difference between: (a) the
aggregate net book value of all current assets of such Person and its
subsidiaries (as determined in accordance with GAAP), calculating the book value
of inventory
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for this purpose on a first-in-first-out basis, and (b) all current liabilities
of such Person and its subsidiaries (as determined in accordance with GAAP),
provided, that, as to Borrowers, for purposes of Section 9.14, the liabilities
of Borrowers and their subsidiaries to Lender under this Agreement shall not be
considered current liabilities (whether or not classified as current liabilities
in accordance with GAAP).
2. CREDIT FACILITIES
2.1 Revolving Loans.
(a) Subject to and upon the terms and conditions contained
herein, Lender agrees to make Revolving Loans to Borrowers from time to time in
amounts requested by Borrower up to the amount equal to the lessor of the
Revolving Loan Ceiling or the sum of:
(i) the sum of seventy-five (75%) percent of the Net
Amount of Eligible Accounts of GO/XXX and Evap plus, eighty
(80%) percent of the Net Amount of Eligible Accounts of the
G&O Division, plus
(ii) the lesser of: (A) the sum of fifty-five (55%)
percent of the Value of Eligible Inventory consisting of
finished goods plus, forty-five (45%) percent of the Value of
Eligible Inventory consisting of raw materials for the
finished goods of the G&O Division and GO/XXX plus thirty
(30%) of the Value of Eligible Inventory consisting of raw
materials for the finished goods of Evap, or (B)
$35,000,000.00, less
(iii) any Availability Reserves.
(b) Lender may, in its good faith discretion, from time to
time, upon not less than five (5) days prior written notice to Borrowers, (i)
reduce the lending formula with respect to Eligible Accounts to the extent that
Lender determines in good faith that: (A) the dilution with respect to the
Accounts for any period (based on the ratio of (1) the aggregate amount of
reductions in Accounts other than as a result of payments in cash to (2) the
aggregate amount of total sales) has increased in any material respect or may be
reasonably anticipated to increase in any material respect above historical
levels, or (B) the general creditworthiness of account debtors has declined in
any material respect or (ii) reduce the lending formula(s) with respect to
Eligible Inventory to the extent that Lender determines in good faith that: (A)
the number of days of the turnover of the Inventory for any period has changed
in any material respect or (B) the liquidation value of the Eligible Inventory,
or any category thereof, has decreased in any material respect, or (C) the
nature and quality of the Inventory has deteriorated in any material respect. In
determining whether to reduce the lending formula(s), Lender may consider in
good faith, events, conditions, contingencies or risks which are also considered
in determining Eligible Accounts, Eligible Inventory or in establishing
Availability Reserves.
(c) Except in Lender's discretion, the aggregate amount of the
Revolving Loans and the Letter of Credit Accommodations outstanding at any time
shall not exceed the Revolving Loan Ceiling and the aggregate amount of Loans
and the Letter of Credit Accommodation outstanding at any time shall not exceed
the Maximum Credit. In the event that the outstanding
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amount of any component of the Loans, or the aggregate amount of the outstanding
Loans and Letter of Credit Accommodations, exceed the amounts available under
the lending formulas, the sublimits for Letter of Credit Accommodations set
forth in Section 2.2(d), the Revolving Loan Ceiling or the Maximum Credit, as
applicable, such event shall not limit, waive or otherwise affect any rights of
Lender in that circumstance or on any future occasions and Borrowers shall, upon
demand by Lender, which may be made at any time or from time to time,
immediately repay to Lender the entire amount of any such excess(es) for which
payment is demanded.
(d) For purposes only of applying the sublimit on Revolving
Loans based on Eligible Inventory pursuant to Section 2.1(a)(ii)(B), Lender may
treat the then undrawn amounts of outstanding Letter of Credit Accommodations
for the purpose of purchasing Eligible Inventory as Revolving Loans to the
extent Lender is in effect basing the issuance of the Letter of Credit
Accommodations on the Value of the Eligible Inventory being purchased with such
Letter of Credit Accommodations. In determining the actual amounts of such
Letter of Credit Accommodations to be so treated for purposes of the sublimit,
the outstanding Revolving Loans and Availability Reserves shall be attributed
first to any components of the lending formulas in Section 2.1(a) that are not
subject to such sublimit, before being attributed to the components of the
lending formulas subject to such sublimit.
2.2 Letter of Credit Accommodations.
(a) Subject to and upon the terms and conditions contained
herein, at the request of Borrowers, Lender agrees to provide or arrange for
Letter of Credit Accommodations for the account of Borrowers containing terms
and conditions acceptable to Lender and the issuer thereof. Any payments made by
Lender to any issuer thereof and/or related parties in connection with the
Letter of Credit Accommodations shall constitute additional Revolving Loans to
Borrowers pursuant to this Section 2.
(b) In addition to any charges, fees or expenses charged by
any bank or issuer in connection with the Letter of Credit Accommodations,
Borrowers shall pay to Lender a letter of credit fee at a rate equal to two
(2.00%) percent per annum on the daily outstanding balance of the Letter of
Credit Accommodations for the immediately preceding month (or part thereof),
payable in arrears as of the first day of each succeeding month, except that
Borrower shall pay to Lender such letter of credit fee, at Lender's option,
without notice, at a rate equal to five (5%) percent per annum on such daily
outstanding balance for: (i) the period from and after the date of termination
or non-renewal hereof until Lender has received full and final payment of all
Obligations (notwithstanding entry of a judgment against any Borrower) and (ii)
the period from and after the date of the occurrence of an Event of Default for
so long as such Event of Default is continuing as determined by Lender. Such
letter of credit fee shall be calculated on the basis of a three hundred sixty
(360) day year and actual days elapsed and the obligation of Borrowers to pay
such fee shall survive the termination or non-renewal of this Agreement.
(c) No Letter of Credit Accommodations shall be available
unless on the date of the proposed issuance of any Letter of Credit
Accommodations, the Revolving Loans available to Borrowers (subject to the
Revolving Loan Ceiling, Maximum Credit and any Availability Reserves) are equal
to or greater than: (i) if the proposed Letter of Credit Accommodation is for
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the purpose of purchasing Eligible Inventory, the sum of (A) the percentage
equal to one hundred (100%) percent minus the then applicable percentage set
forth in Section 2.1(a)(ii)(A) above of the Value of such Eligible Inventory,
plus (B) freight, taxes, duty and other amounts which Lender estimates in good
faith must be paid in connection with such Inventory upon arrival and for
delivery to one of Borrowers' locations for Eligible Inventory within the United
States of America and (ii) if the proposed Letter of Credit Accommodation is for
any other purpose, an amount equal to one hundred (100%) percent of the face
amount thereof and all other commitments and obligations made or incurred by
Lender with respect thereto. Effective on the issuance of each Letter of Credit
Accommodation, an Availability Reserve shall be established in the applicable
amount set forth in Section 2.2(c)(i) or Section 2.2(c)(ii).
(d) Except in Lender's discretion, the amount of all
outstanding Letter of Credit Accommodations and all other commitments and
obligations made or incurred by Lender in connection therewith shall not at any
time exceed $12,000,000.00. At any time an Event of Default exists or has
occurred and is continuing, upon Lender's request, Borrowers will either furnish
cash collateral to secure the reimbursement obligations to the issuer in
connection with any Letter of Credit Accommodations or furnish cash collateral
to Lender for the Letter of Credit Accommodations, and in either case, the
Revolving Loans otherwise available to Borrowers shall not be reduced as
provided in Section 2.2(c) to the extent of such cash collateral.
(e) Borrowers shall indemnify and hold Lender harmless from
and against any and all losses, claims, damages, liabilities, costs and expenses
which Lender may suffer or incur in connection with any Letter of Credit
Accommodations and any documents, drafts or acceptances relating thereto,
including any losses, claims, damages, liabilities, costs and expenses due to
any action taken by any issuer or correspondent with respect to any Letter of
Credit Accommodation. Borrowers assume all risks with respect to the acts or
omissions of the drawer under or beneficiary of any Letter of Credit
Accommodation and for such purposes the drawer or beneficiary shall be deemed
Borrowers' agent. Borrowers assume all risks for, and agrees to pay, all
foreign, Federal, State and local taxes, duties and levies relating to any goods
subject to any Letter of Credit Accommodations or any documents, drafts or
acceptances thereunder. Borrowers hereby release and hold Lender harmless from
and against any acts, waivers, errors, delays or omissions, whether caused by
any Borrower, by any issuer or correspondent or otherwise with respect to or
relating to any Letter of Credit Accommodation. The provisions of this Section
2.2(e) shall survive the payment of Obligations and the termination or
non-renewal of this Agreement.
(f) Nothing contained herein shall be deemed or construed to
grant Borrowers any right or authority to pledge the credit of Lender in any
manner. Lender shall have no liability of any kind with respect to any Letter of
Credit Accommodation provided by an issuer other than Lender unless Lender has
duly executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation.
Borrowers shall be bound by any interpretation made in good faith by Lender, or
any other issuer or correspondent under or in connection with any Letter of
Credit Accommodation or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of Borrowers. Lender shall have the sole and exclusive right and
authority to, and Borrowers shall not: (i) at any time an Event of Default
exists or has
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occurred and is continuing, (A) approve or resolve any questions of
non-compliance of documents, (B) give any instructions as to acceptance or
rejection of any documents or goods or (C) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, and (ii) at all
times, (A) grant any extensions of the maturity of, time of payment for, or time
of presentation of, any drafts, acceptances, or documents, and (B) agree to any
amendments, renewals, extensions, modifications, changes or cancellations of any
of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters of
credit included in the Collateral. Lender may take such actions either in its
own name or in any Borrower's name.
(g) Any rights, remedies, duties or obligations granted or
undertaken by any Borrower to any issuer or correspondent in any application for
any Letter of Credit Accommodation, or any other agreement in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by Borrowers to Lender. Any duties or
obligations undertaken by Lender to any issuer or correspondent in any
application for any Letter of Credit Accommodation, or any other agreement by
Lender in favor of any issuer or correspondent relating to any Letter of Credit
Accommodation, shall be deemed to have been undertaken by Borrowers to Lender
and to apply in all respects to all Borrowers.
2.3 Term Loan. Effective on the satisfaction of the conditions
precedent in Section 4 of this Agreement, Lender is making a Term Loan to
Borrowers in the original principal amount of $3,600,000. From the date of this
Agreement through February 28, 2001, subject to the continued satisfaction of
the conditions precedent in Sections 4.1 and 4.2 of this Agreement and provided
that no Event of Default or event or condition which with notice or the passage
of time or both would constitute an Event of Default has occurred and is
continuing, the Lender agrees following the written request of Borrowers to make
an additional Term Loan to Borrowers in the original principal amount not to
exceed the lesser of (a) $1,400,000.00, or (b) eighty (80%) of the appraised
value of Borrower's Eligible Equipment less $3,600,000.00. For purposes hereof,
appraised value of Eligible Equipment shall be the net orderly liquidation value
thereof as determined by an appraiser acceptable to Lender pursuant to an
appraisal in form, scope and methodology satisfactory to Lender. Each Term Loan
is and shall be (a) evidenced by a Term Promissory Note in such original
principal amount duly executed and delivered by Borrowers to Lender; (b) to be
repaid, together with interest and other amounts, in accordance with this
Agreement, the Term Promissory Note, and the other Financing Agreements and (c)
secured by all of the Collateral.
2.4 Availability Reserves. All Revolving Loans otherwise available to
Borrower pursuant to the lending formulas and subject to the Maximum Credit and
other applicable limits hereunder shall be subject to Lender's continuing right
to establish and revise in good faith Availability Reserves.
2.5 Appointment of TransPro as Agent for Borrowers. Each Borrower
hereby irrevocably appoints TransPro, and TransPro agrees to act under this
Agreement, as the "Lead Borrower" to act as agent and representative of the
Borrowers for all purposes under this Agreement, including, without limitation,
requesting Loans, receiving the proceeds of Loans,
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selecting whether any Loan or portion thereof is to bear interest as a Prime
Rate Loan or Eurodollar Rate Loan, providing notices, reports and certificates
from the Borrowers, and receiving any notices and communications to the
Borrowers from the Lender. Lender may rely, and shall be fully protected in
relying, on any notice, reports, requests, information or other communication
made or given by TransPro whether in its own name, or on behalf of the Borrowers
and Lender shall have no obligation to make any inquiry or request any
confirmation from or on behalf of TransPro as to the binding effect thereof on
all of the Borrowers. This appointment of TransPro is irrevocable and shall
continue in effect until the termination of the Agreement and the repayment of
all Obligations as required herein except that Lender may terminate this
appointment and select a replacement to TransPro as Lead Borrower or elect to
proceed without a Lead Borrower at any time that an Event of Default or an event
or condition which with notice or the passage of time or both might become an
Event of Default has occurred and is continuing.
3. INTEREST AND FEES
3.1 Interest.
(a) Borrowers shall pay to Lender interest on the outstanding
principal amount of the non-contingent Obligations at the Interest Rate. All
interest accruing hereunder on and after the date of any Event of Default or
termination or non-renewal hereof shall be payable on demand.
(b) Borrowers may from time to time request that Prime Rate
Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar Rate
Loans continue for an additional Interest Period. Such request from Borrowers
shall specify the amount of the Prime Rate Loans which will constitute
Eurodollar Rate Loans (subject to the limits set forth below) and the Interest
Period to be applicable to such Eurodollar Rate Loans. Subject to the terms and
conditions contained herein, three (3) Business Days after receipt by Lender of
such a request from Borrowers, such Prime Rate Loans shall be converted to
Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case
may be, provided, that, (i) no Event of Default, or event which with notice or
passage of time or both would constitute an Event of Default exists or has
occurred and is continuing, (ii) no party hereto shall have sent any notice of
termination or non-renewal of this Agreement, (iii) Borrowers shall have
complied with such customary procedures as are established by Lender and
specified by Lender to Borrowers from time to time for requests by Borrowers for
Eurodollar Rate Loans, (iv) no more than four (4) Interest Periods may be in
effect at any one time, (v) the aggregate amount of the Eurodollar Rate Loans
must be in an amount not less than $5,000,000.00 or an integral multiple of
$1,000,000.00 in excess thereof, (vi) the maximum amount of the Eurodollar Rate
Loans at any time requested by Borrowers shall not exceed the amount equal to
(A) the principal amount of the Term Loan which it is anticipated will be
outstanding as of the last day of the applicable Interest Period plus (B) eighty
(80%) percent of the lowest principal amount of the Revolving Loans which it is
anticipated will be outstanding during the applicable Interest Period, in each
case as determined by Lender (but with no obligation of Lender to make such
Revolving Loans) and (vii) Lender shall have determined that the Interest Period
or Adjusted Eurodollar Rate is available to Lender
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through the Reference Bank and can be readily determined as of the date of the
request for such Eurodollar Rate Loan by Borrower. Any request by Borrowers to
convert Prime Rate Loans to Eurodollar Rate Loans or to continue any existing
Eurodollar Rate Loans shall be irrevocable. Notwithstanding anything to the
contrary contained herein, Lender and Reference Bank shall not be required to
purchase United States Dollar deposits in the London interbank market or other
applicable Eurodollar Rate market to fund any Eurodollar Rate Loans, but the
provisions hereof shall be deemed to apply as if Lender and Reference Bank had
purchased such deposits to fund the Eurodollar Rate Loans.
(c) Any Eurodollar Rate Loans shall automatically convert to
Prime Rate Loans upon the last day of the applicable Interest Period, unless
Lender has received and approved a request to continue such Eurodollar Rate Loan
at least three (3) Business Days prior to such last day in accordance with the
terms hereof. Any Eurodollar Rate Loans shall, at Lender's option, upon notice
by Lender to Borrowers, convert to Prime Rate Loans in the event that (i) an
Event of Default or event which, with the notice or passage of time, or both,
would constitute an Event of Default, shall exist, (ii) this Agreement shall
terminate or not be renewed, or (iii) the aggregate principal amount of the
Prime Rate Loans which have previously been converted to Eurodollar Rate Loans
or existing Eurodollar Rate Loans continued, as the case may be, at the
beginning of an Interest Period shall at any time during such Interest Period
exceed either (A) the aggregate principal amount of the Loans then outstanding,
or (B) the sum of the then outstanding principal amount of the Term Loan plus
the Revolving Loans then available to Borrowers under Section 2 hereof.
Borrowers shall pay to Lender, upon demand by Lender (or Lender may, at its
option, charge any loan account of Borrowers) any amounts required to compensate
Lender, the Reference Bank or any participant with Lender for any loss
(including loss of anticipated profits), cost or expense incurred by such
person, as a result of the conversion of Eurodollar Rate Loans to Prime Rate
Loans pursuant to any of the foregoing.
(d) Interest shall be payable by Borrowers to Lender monthly
in arrears not later than the first day of each calendar month and shall be
calculated on the basis of a three hundred sixty (360) day year and actual days
elapsed. The interest rate on non-contingent Obligations (other than Eurodollar
Rate Loans) shall increase or decrease by an amount equal to each increase or
decrease in the Prime Rate effective on the first day of the month after any
change in such Prime Rate is announced based on the Prime Rate in effect on the
last day of the month in which any such change occurs. In no event shall charges
constituting interest payable by Borrowers to Lender exceed the maximum amount
or the rate permitted under any applicable law or regulation, and if any such
part or provision of this Agreement is in contravention of any such law or
regulation, such part or provision shall be deemed amended to conform thereto.
(e) In the event that Borrowers' audited financial statements
prepared in accordance with Section 9.6(a)(ii) for its fiscal year ended
December 31, 2001 or thereafter evidence that TransPro's pretax profit
(excluding extraordinary or nonrecurring gains and losses) for any such fiscal
year equals or exceeds the greater of $750,000 or 75% of the pretax profit
projected in TransPro's Annual Plan for such fiscal year delivered to Lender
pursuant to Section 9.6(e), the Interest Rate as to Eurodollar Rate Loans shall
decrease by .25%, provided that in no event shall such Interest Rate be reduced
to an Interest Rate that is less than the Adjusted Eurodollar Rate plus two
(2.00%) and if such financial statements evidence that TransPro's
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pretax profit (excluding of extraordinary or nonrecurring gains and losses) was
less than the greater of $750,000 or 75% of the projected annual pretax profit
in such Annual Plan, the Interest Rate with respect to Eurodollar Rate Loans
will be increased by .25% provided that in no event shall the Interest Rate with
respect to Eurodollar Rate Loans exceed the Adjusted Eurodollar Rate plus two
and one half (2.50%) percent. Any such adjustment shall be effective as to any
Eurodollar Rate Loans that are made or continued after the date that the
Borrowers' audited financial statements are required to be delivered to Lender
under Section 9.6(a)(ii) hereof and any such adjustment shall be subject to
Lender's right to institute higher Interest Rates during the continuance of an
Event of Default or following the occurrence of the other conditions described
in the definition of "Interest Rate".
3.2 Closing Fee. Borrowers shall pay to Lender as a closing fee the
amount of $487,500.00, which shall be fully earned as of and payable on the date
hereof.
3.3 Servicing Fee. Borrowers shall pay to Lender monthly a servicing
fee in an amount equal to $2,500.00 in respect of Lender's services for each
month (or part thereof) while this Agreement remains in effect and for so long
thereafter as any of the Obligations are outstanding, which fee shall be fully
earned as of and payable in advance on the date hereof and on the first day of
each month hereafter.
3.4 Unused Line Fee. Borrowers shall pay to Lender monthly an unused
line fee at a rate equal to three eighths of one (.375%) percent per annum
calculated upon the amount by which Revolving Loan Ceiling exceeds the average
daily principal balance of the outstanding Revolving Loans and Letter of Credit
Accommodations during the immediately preceding month (or part thereof) while
this Agreement is in effect and for so long thereafter as any of the Obligations
are outstanding, which fee shall be payable on the first day of each month in
arrears.
3.5 Changes in Laws and Increased Costs of Loans.
(a) Notwithstanding anything to the contrary contained herein,
all Eurodollar Rate Loans shall, upon notice by Lender to Borrowers, convert to
Prime Rate Loans in the event that (i) any change in applicable law or
regulation (or the interpretation or administration thereof) shall either (A)
make it unlawful for Lender, Reference Bank or any participant to make or
maintain Eurodollar Rate Loans or to comply with the terms hereof in connection
with the Eurodollar Rate Loans, or (B) shall result in the increase in the costs
to Lender, Reference Bank or any participant of making or maintaining any
Eurodollar Rate Loans by an amount deemed by Lender to be material, or (C)
reduce the amounts received or receivable by Lender in respect thereof, by an
amount deemed by Lender to be material or (ii) the cost to Lender, Reference
Bank or any participant of making or maintaining any Eurodollar Rate Loans shall
otherwise increase by an amount deemed by Lender to be material. Borrowers shall
pay to Lender, upon demand by Lender (or Lender may, at its option, charge any
loan account of Borrowers) any amounts required to compensate Lender, the
Reference Bank or any participant with Lender for any loss (including loss of
anticipated profits), cost or expense incurred by such person as a result of the
foregoing, including, without limitation, any such loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such person to make or maintain the Eurodollar Rate Loans or any
portion thereof. A certificate of Lender setting forth
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the basis for the determination of such amount necessary to compensate Lender as
aforesaid shall be delivered to Borrowers and shall be conclusive, absent
manifest error.
(b) If any payments or prepayments in respect of the
Eurodollar Rate Loans are received by Lender other than on the last day of the
applicable Interest Period (whether pursuant to acceleration, upon maturity or
otherwise), including any payments pursuant to the application of collections
under Section 6.3 or any other payments made with the proceeds of Collateral,
Borrowers shall pay to Lender upon demand by Lender (or Lender may, at its
option, charge any loan account of Borrowers) any amounts required to compensate
Lender, the Reference Bank or any participant with Lender for any additional
loss (including loss of anticipated profits), cost or expense incurred by such
person as a result of such prepayment or payment, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such person to make or maintain such
Eurodollar Rate Loans or any portion thereof.
4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to Lender making
the initial Loans and providing the initial Letter of Credit Accommodations
hereunder:
(a) Lender shall have received, in form and substance
satisfactory to Lender, all releases, terminations and such other documents as
Lender may request to evidence and effectuate the termination by the existing
lender or lenders to Borrowers of their respective financing arrangements with
Borrowers and the termination and release by it or them, as the case may be, of
any interest in and to any assets and properties of each Borrower and each
Obligor, duly authorized, executed and delivered by it or each of them,
including, but not limited to, (i) UCC termination statements for all UCC
financing statements previously filed by it or any of them or their
predecessors, as secured party and any Borrower or any Obligor, as debtor and
(ii) satisfactions and discharges of any mortgages, deeds of trust or deeds to
secure debt by any Borrower or any Obligor in favor of such existing lender or
lenders, in form acceptable for recording in the appropriate government office;
(b) Lender shall have received evidence, in form and substance
satisfactory to Lender, that Lender has valid perfected and first priority
security interests in and liens upon the Collateral and any other property which
is intended to be security for the Obligations or the liability of any Obligor
in respect thereof, subject only to the security interests and liens permitted
herein or in the other Financing Agreements;
(c) all requisite corporate action and proceedings in
connection with this Agreement and the other Financing Agreements shall be
satisfactory in form and substance to Lender, and Lender shall have received all
information and copies of all documents, including records of requisite
corporate action and proceedings which Lender may have requested in connection
therewith, such documents where requested by Lender or its counsel to be
certified by appropriate corporate officers or governmental authorities;
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(d) no material adverse change shall have occurred in the
assets, business or prospects of any Borrower since the date of Lender's latest
field examination and no change or event shall have occurred which would impair
the ability of any Borrower or any Obligor to perform its obligations hereunder
or under any of the other Financing Agreements to which it is a party or of
Lender to enforce the Obligations or realize upon the Collateral;
(e) Lender shall have completed a field review of the Records
and such other information with respect to the Collateral as Lender may require
to determine the amount of Revolving Loans available to Borrowers, the results
of which shall be satisfactory to Lender, not more than three (3) business days
prior to the date hereof;
(f) Lender shall have received, in form and substance
satisfactory to Lender, all consents, waivers, acknowledgments and other
agreements from third persons which Lender may deem necessary or desirable in
order to permit, protect and perfect its security interests in and liens upon
the Collateral or to effectuate the provisions or purposes of this Agreement and
the other Financing Agreements, including acknowledgments by lessors, mortgagees
and warehousemen of Lender's security interests in the Collateral, waivers by
such persons of any security interests, liens or other claims by such persons to
the Collateral and agreements permitting Lender access to, and the right to
remain on, the premises to exercise its rights and remedies and otherwise deal
with the Collateral;
(g) the Excess Availability as determined by Lender, as of the
date hereof, shall be not less than $7,000,000.00 after giving effect to the
initial Loans made or to be made and Letter of Credit Accommodations issued or
to be issued in connection with the initial transactions hereunder;
(h) Lender shall have received evidence of insurance and loss
payee endorsements required hereunder and under the other Financing Agreements,
in form and substance satisfactory to Lender, and certificates of insurance
policies and/or endorsements naming Lender as loss payee;
(i) Lender shall have received copies of all environmental
audits and reports on Borrowers' plants and the Real Property that have been
prepared for the Borrowers or that the Borrowers have in their possession and
such audits and reports shall not indicate that (i) Borrowers are in
noncompliance with any material applicable Environmental Laws or (ii) that there
are material environmental problems with Borrower's plants and Real Property;
(j) Lender shall have received, in form and substance
satisfactory to Lender, a valid and effective title insurance policy issued by a
company and agent acceptable to Lender (i) insuring the priority, amount and
sufficiency of the Mortgages, (ii) insuring against matters that would be
disclosed by surveys, (iii) containing any legally available endorsements,
assurances or affirmative coverage requested by Lender for protection of its
interests, and (iv) subject to only such exceptions to title as Lender may
accept in its discretion;
(k) Lender shall have received, in form and substance
satisfactory to Lender, such opinion letters of counsel to Borrowers and
Obligors with respect to the Financing Agreements and such other matters as
Lender may request; and
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(l) the other Financing Agreements and all instruments and
documents hereunder and thereunder shall have been duly executed and delivered
to Lender, in form and substance satisfactory to Lender.
4.2 Conditions Precedent to All Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
Lender making Loans and/or providing Letter of Credit Accommodations to
Borrowers, including the initial Loans and Letter of Credit Accommodations and
any future Loans and Letter of Credit Accommodations:
(a) all representations and warranties contained herein and in
the other Financing Agreements shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of the making of each such Loan or providing
each such Letter of Credit Accommodation and after giving effect thereto; and
(b) no Event of Default and no event or condition which, with
notice or passage of time or both, would constitute an Event of Default, shall
exist or have occurred and be continuing on and as of the date of the making of
such Loan or providing each such Letter of Credit Accommodation and after giving
effect thereto.
5. GRANT OF SECURITY INTEREST
To secure payment and performance of all Obligations, each Borrower hereby
grants to Lender a continuing security interest in, a lien upon, and a right of
set off against, and hereby assigns to Lender as security, the following
property and interests in property of each Borrower, whether now owned or
hereafter acquired or existing, and wherever located (collectively, the
"Collateral"):
5.1 Accounts;
5.2 all present and future contract rights, general intangibles
(including tax and duty refunds, registered and unregistered patents,
trademarks, service marks, copyrights, trade names, applications for the
foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer
lists, licenses, whether as licensor or licensee, choses in action and other
claims and existing and future leasehold interests in equipment, real estate and
fixtures), chattel paper, documents, instruments, securities and other
investment property, letters of credit, bankers' acceptances and guaranties;
5.3 all present and future monies, securities, credit balances,
deposits, deposit accounts and other property of each Borrower now or hereafter
held or received by or in transit to Lender or its affiliates or at any other
depository or other institution from or for the account of any Borrower, whether
for safekeeping, pledge, custody, transmission, collection or otherwise, and all
present and future liens, security interests, rights, remedies, title and
interest in, to and in respect of Accounts and other Collateral, including (a)
rights and remedies under or relating to guaranties, contracts of suretyship,
letters of credit and credit and other insurance related to the Collateral, (b)
rights of stoppage in transit, replevin, repossession, reclamation and other
rights and remedies of an unpaid vendor, lienor or secured party, (c) goods
described in invoices, documents,
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contracts or instruments with respect to, or otherwise representing or
evidencing, Accounts or other Collateral, including returned, repossessed and
reclaimed goods, and (d) deposits by and property of account debtors or other
persons securing the obligations of account debtors;
5.4 Inventory;
5.5 Equipment;
5.6 Investment Property;
5.7 Real Property;
5.8 Records; and
5.9 All products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of any or all of the foregoing.
6. COLLECTION AND ADMINISTRATION
6.1 Borrower's Loan Account. Lender shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of Borrowers and (c) all other appropriate debits and
credits as provided in this Agreement, including fees, charges, costs, expenses
and interest. All entries in the loan account(s) shall be made in accordance
with Lender's customary practices as in effect from time to time.
6.2 Statements. Lender shall render to Borrowers each month a statement
setting forth the balance in the Borrowers' loan account(s) maintained by Lender
for Borrowers pursuant to the provisions of this Agreement, including principal,
interest, fees, costs and expenses. Each such statement shall be subject to
subsequent adjustment by Lender but shall, absent manifest errors or omissions,
be considered correct and deemed accepted by Borrowers and conclusively binding
upon Borrowers as an account stated except to the extent that Lender receives a
written notice from Borrowers of any specific exceptions of Borrowers thereto
within thirty (30) days after the date such statement has been mailed by Lender.
Until such time as Lender shall have rendered to Borrowers a written statement
as provided above, the balance in Borrowers' loan account(s) shall be
presumptive evidence of the amounts due and owing to Lender by Borrowers.
6.3 Collection of Accounts.
(a) Borrowers shall establish and maintain, at their expense,
blocked accounts or lockboxes and related blocked accounts (in either case,
"Blocked Accounts"), as Lender may specify, with such banks as are acceptable to
Lender into which each Borrower shall promptly deposit and direct its account
debtors to directly remit all payments on Accounts and all payments constituting
proceeds of Inventory or other Collateral in the identical form in which such
payments are made, whether by cash, check or other manner. The banks at which
the Blocked
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Accounts are established shall enter into an agreement, in form and substance
satisfactory to Lender, providing that all items received or deposited in the
Blocked Accounts are the property of Lender, that the depository bank has no
lien upon, or right to setoff against, the Blocked Accounts, the items received
for deposit therein, or the funds from time to time on deposit therein and that
the depository bank will wire, or otherwise transfer, in immediately available
funds, on a daily basis, all funds received or deposited into the Blocked
Accounts to such bank account of Lender as Lender may from time to time
designate for such purpose ("Payment Account"). Borrowers agree that all
payments made to such Blocked Accounts or other funds received and collected by
Lender, whether on the Accounts or as proceeds of Inventory or other Collateral
or otherwise shall be the property of Lender.
(b) For purposes of calculating the amount of the Loans
available to Borrowers, such payments will be applied (conditional upon final
collection) to the Obligations on the business day of receipt by Lender of
immediately available funds in the Payment Account provided such payments and
notice thereof are received in accordance with Lender's usual and customary
practices as in effect from time to time and within sufficient time to credit
Borrowers' loan account(s) on such day, and if not, then on the next business
day. For the purposes of calculating interest on the Obligations, such payments
or other funds received will be applied (conditional upon final collection) to
the Obligations one (1) business day following the date of receipt of
immediately available funds by Lender in the Payment Account provided such
payments or other funds and notice thereof are received in accordance with
Lender's usual and customary practices as in effect from time to time and within
sufficient time to credit Borrowers' loan account on such day, and if not, then
on the next business day.
(c) Each Borrower and all of its affiliates, subsidiaries,
shareholders, directors, employees or agents shall, acting as trustee for
Lender, receive, as the property of Lender, any monies, checks, notes, drafts or
any other payment relating to and/or proceeds of Accounts or other Collateral
which come into their possession or under their control and immediately upon
receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to
Lender. In no event shall the same be commingled with Borrowers' own funds.
Borrowers agree to reimburse Lender on demand for any amounts owed or paid to
any bank at which a Blocked Account is established or any other bank or person
involved in the transfer of funds to or from the Blocked Accounts arising out of
Lender's payments to or indemnification of such bank or person. The obligation
of Borrowers to reimburse Lender for such amounts pursuant to this Section 6.3
shall survive the termination or non-renewal of this Agreement.
6.4 Payments. All Obligations shall be payable to the Payment Account
as provided in Section 6.3 or such other place as Lender may designate from time
to time. Lender may apply payments received or collected from Borrowers or for
the account of Borrowers (including the monetary proceeds of collections or of
realization upon any Collateral) to such of the Obligations, whether or not then
due, in such order and manner as Lender determines in good faith. At Lender's
option, all principal, interest, fees, costs, expenses and other charges
provided for in this Agreement or the other Financing Agreements may be charged
directly to the loan account(s) of Borrowers. Borrowers shall make all payments
to Lender on the Obligations free and clear of, and without deduction or
withholding for or on account of, any setoff, counterclaim, defense,
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duties, taxes, levies, imposts, fees, deductions, withholding, restrictions or
conditions of any kind. If after receipt of any payment of, or proceeds of
Collateral applied to the payment of, any of the Obligations, Lender is required
to surrender or return such payment or proceeds to any Person for any reason,
then the Obligations intended to be satisfied by such payment or proceeds shall
be reinstated and continue and this Agreement shall continue in full force and
effect as if such payment or proceeds had not been received by Lender. Borrowers
shall be liable to pay to Lender, and does hereby indemnify and hold Lender
harmless for the amount of any payments or proceeds surrendered or returned.
This Section 6.4 shall remain effective notwithstanding any contrary action
which may be taken by Lender in reliance upon such payment or proceeds. This
Section 6.4 shall survive the payment of the Obligations and the termination or
non-renewal of this Agreement.
6.5 Authorization to Make Loans. Lender is authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of a Borrower or
other authorized person or, at the discretion of Lender, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested advance
is to be made or Letter of Credit Accommodations established (which day shall be
a business day) and the amount of the requested Loan. Requests received after
11:00 a.m. Boston, Massachusetts time on any day shall be deemed to have been
made as of the opening of business on the immediately following business day.
All Loans and Letter of Credit Accommodations under this Agreement shall be
conclusively presumed to have been made to, and at the request of and for the
benefit of, Borrowers when deposited to the credit of Borrowers or otherwise
disbursed or established in accordance with the instructions of Borrowers or in
accordance with the terms and conditions of this Agreement.
6.6 Use of Proceeds. Borrowers shall use the initial proceeds of the
Loans provided by Lender to Borrowers hereunder only for: (a) payments to each
of the persons listed in the disbursement direction letter furnished by
Borrowers to Lender on or about the date hereof and (b) costs, expenses and fees
in connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Financing Agreements. All other Loans made or Letter of
Credit Accommodations provided by Lender to Borrowers pursuant to the provisions
hereof shall be used by Borrowers only for general operating, working capital
and other proper corporate purposes of Borrowers not otherwise prohibited by the
terms hereof. None of the proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security or for the purposes of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause any of
the Loans to be considered a "purpose credit" within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System, as amended.
7. COLLATERAL REPORTING AND COVENANTS
7.1 Collateral Reporting. Borrowers shall provide Lender with the
following documents in a form satisfactory to Lender: (a) on a regular basis as
required by Lender, a schedule of Accounts, sales made, credits issued and cash
received; (b) on a monthly basis or
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more frequently as Lender may request, (i) perpetual inventory reports, (ii)
inventory reports by category and location, and (iii) agings of accounts
payable, (c) upon Lender's request, (i) copies of customer statements and credit
memos, remittance advices and reports, and copies of deposit slips and bank
statements, (ii) copies of shipping and delivery documents, and (iii) copies of
purchase orders, invoices and delivery documents for Inventory and Equipment
acquired by any Borrower; (d) agings of accounts receivable on a monthly basis
or more frequently as Lender may request; and (e) such other reports as to the
Collateral as Lender shall request from time to time. If any of Borrowers'
records or reports of the Collateral are prepared or maintained by an accounting
service, contractor, shipper or other agent, Borrowers hereby irrevocably
authorize such service, contractor, shipper or agent to deliver such records,
reports, and related documents to Lender and to follow Lender's instructions
with respect to further services at any time that an Event of Default exists or
has occurred and is continuing.
7.2 Accounts Covenants.
(a) Borrowers shall notify Lender promptly of: (i) any
material delay in any Borrower's performance of any of its obligations to any
account debtor or the assertion of any claims, offsets, defenses or
counterclaims by any account debtor, or any disputes with account debtors, or
any settlement, adjustment or compromise thereof, (ii) all material adverse
information relating to the financial condition of any account debtor and (iii)
any event or circumstance which, to Borrowers' knowledge would cause Lender to
consider any then existing Accounts as no longer constituting Eligible Accounts.
No credit, discount, allowance or extension or agreement relating to any of the
foregoing items listed in (i) through (iii) above shall be granted to any
account debtor without Lender's consent, except in the ordinary course of
Borrowers' business in accordance with practices and policies previously
disclosed in writing to Lender. So long as no Event of Default exists or has
occurred and is continuing, Borrowers shall settle, adjust or compromise any
claim, offset, counterclaim or dispute with any account debtor. At any time that
an Event of Default exists or has occurred and is continuing, Lender shall, at
its option, have the exclusive right to settle, adjust or compromise any claim,
offset, counterclaim or dispute with account debtors or grant any credits,
discounts or allowances.
(b) Without limiting the obligation of Borrower to deliver any
other information to Lender, Borrowers shall promptly report to Lender any
return of Inventory by any one account debtor if the inventory so returned in
such case has a value in excess of $200,000.00. At any time that Inventory is
returned, reclaimed or repossessed, the Account (or portion thereof) which arose
from the sale of such returned, reclaimed or repossessed Inventory shall not be
deemed an Eligible Account. In the event any account debtor returns Inventory
when an Event of Default exists or has occurred and is continuing, Borrowers
shall, upon Lender's request, (i) hold the returned Inventory in trust for
Lender, (ii) segregate all returned Inventory from all of its other property,
(iii) dispose of the returned Inventory solely according to Lender's
instructions, and (iv) not issue any credits, discounts or allowances with
respect thereto without Lender's prior written consent.
(c) With respect to each Account: (i) the amounts shown on any
invoice delivered to Lender or schedule thereof delivered to Lender shall be
true and complete, (ii) no payments shall be made thereon except payments
immediately delivered to Lender pursuant to the terms of this Agreement, (iii)
no credit, discount, allowance or extension or agreement for any of
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the foregoing shall be granted to any account debtor except as reported to
Lender in accordance with this Agreement and except for credits, discounts,
allowances or extensions including, without limitation, under Borrowers'
Accounts extended terms program, made or given in the ordinary course of
Borrowers' business in accordance with practices and policies previously
disclosed to Lender (including pursuant to the practices and policies set forth
on Schedule 7.2(c)), (iv) there shall be no setoffs, deductions, contras,
defenses, counterclaims or disputes existing or asserted with respect thereto
except as reported to Lender in accordance with the terms of this Agreement, (v)
Borrowers shall not modify their Accounts extended terms program from the
practices and policies previously disclosed to Lender except upon prior written
notice to Lender, and (vi) none of the transactions giving rise thereto will
violate any applicable State or Federal laws or regulations, all documentation
relating thereto will be legally sufficient under such laws and regulations and
all such documentation will be legally enforceable in accordance with its terms.
(d) Lender shall have the right at any time or times, in
Lender's name or in the name of a nominee of Lender, to verify the validity,
amount or any other matter relating to any Account or other Collateral, by mail,
telephone, facsimile transmission or otherwise.
(e) Borrowers shall deliver or cause to be delivered to
Lender, with appropriate endorsement and assignment, with full recourse to
Borrowers, all chattel paper and instruments which Borrowers now own or may at
any time acquire immediately upon any Borrower's receipt thereof, except as
Lender may otherwise agree.
(f) Lender may, at any time or times that an Event of Default
exists or has occurred and is continuing, (i) notify any or all account debtors
that the Accounts have been assigned to Lender and that Lender has a security
interest therein and Lender may direct any or all accounts debtors to make
payment of Accounts directly to Lender, (ii) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and all Accounts or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Accounts or such other obligations, but without any duty
to do so, and Lender shall not be liable for its failure to collect or enforce
the payment thereof nor for the negligence of its agents or attorneys with
respect thereto and (iv) take whatever other action Lender may deem necessary or
desirable for the protection of its interests. At any time that an Event of
Default exists or has occurred and is continuing, at Lender's request, all
invoices and statements sent to any account debtor shall state that the Accounts
and such other obligations have been assigned to Lender and are payable directly
and only to Lender and Borrowers shall deliver to Lender such originals of
documents evidencing the sale and delivery of goods or the performance of
services giving rise to any Accounts as Lender may require.
7.3 Inventory Covenants. With respect to the Inventory: (a) Borrowers
shall at all times maintain inventory records reasonably satisfactory to Lender,
keeping correct and accurate records itemizing and describing the kind, type,
quality and quantity of Inventory, Borrowers' cost therefor and daily
withdrawals therefrom and additions thereto; (b) Borrowers shall conduct a
physical count of the Inventory at least once each year, but at any time or
times as Lender may request on or after an Event of Default, and promptly
following such physical inventory shall
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supply Lender with a report in the form and with such specificity as may be
reasonably satisfactory to Lender concerning such physical count; (c) Borrowers
shall not remove any Inventory from the locations set forth or permitted herein,
without the prior written consent of Lender, except for sales of Inventory in
the ordinary course of Borrowers' business and except to move Inventory directly
from one location set forth or permitted herein to another such location; (d)
upon Lender's request, Borrowers shall, at their expense, no more than once in
any twelve (12) month period, but at any time or times as Lender may request on
or after an Event of Default, deliver or cause to be delivered to Lender written
reports or appraisals as to the Inventory in form, scope and methodology
acceptable to Lender and by an appraiser acceptable to Lender, addressed to
Lender or upon which Lender is expressly permitted to rely and Borrowers also
shall cause to be furnished to Lender quarterly "desk top" updates to such
appraisals; (e) Borrowers shall produce, use, store and maintain the Inventory
with all reasonable care and caution and in accordance with applicable standards
of any insurance and in conformity with applicable laws (including the
requirements of the Federal Fair Labor Standards Act of 1938, as amended and all
rules, regulations and orders related thereto); (f) Borrowers assume all
responsibility and liability arising from or relating to the production, use,
sale or other disposition of the Inventory; (g) Borrowers shall not sell
Inventory to any customer on approval, or any other basis which entitles the
customer to return or may obligate Borrowers to repurchase such Inventory,
except for de minimus Inventory that in accordance with Borrowers' customary
practices and policies previously disclosed in writing to Lender may from time
to time be subject to return under stock adjustment programs with customers; (h)
Borrowers shall keep the Inventory in good and marketable condition; and (i)
Borrowers shall not, without prior written notice to Lender, acquire or accept
any Inventory on consignment or approval.
7.4 Equipment Covenants. With respect to the Equipment: (a) upon
Lender's request, Borrowers shall, at their expense, at any time or times as
Lender may request on or after an Event of Default, deliver or cause to be
delivered to Lender written reports or appraisals as to the Equipment in form,
scope and methodology acceptable to Lender and by an appraiser acceptable to
Lender; (b) Borrowers shall keep the Equipment in good order, repair, running
and marketable condition (ordinary wear and tear excepted); (c) Borrowers shall
use the Equipment with all reasonable care and caution and in accordance with
applicable standards of any insurance and in conformity with all applicable
laws; (d) the Equipment is and shall be used in Borrowers' business and not for
personal, family, household or farming use; (e) Borrowers shall not remove any
Equipment from the locations set forth or permitted herein, except to the extent
necessary to have any Equipment repaired or maintained in the ordinary course of
the business of Borrowers or to move Equipment directly from one location set
forth or permitted herein to another such location and except for the movement
of motor vehicles used by or for the benefit of Borrowers in the ordinary course
of business; (f) the Equipment is now and shall remain personal property and
Borrowers shall not permit any of the Equipment to be or become a part of or
affixed to real property; and (g) Borrowers assumes all responsibility and
liability arising from the use of the Equipment.
7.5 Power of Attorney. Each Borrower hereby irrevocably designates and
appoints Lender (and all persons designated by Lender) as such Borrower's true
and lawful attorney-in-fact, and authorizes Lender, in any Borrower's or
Lender's name, to: (a) at any time an Event of Default or event which with
notice or passage of time or both would constitute an Event of
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Default exists or has occurred and is continuing (i) demand payment on Accounts
or other proceeds of Inventory or other Collateral, (ii) enforce payment of
Accounts by legal proceedings or otherwise, (iii) exercise all of a Borrower's
rights and remedies to collect any Account or other Collateral, (iv) sell or
assign any Account upon such terms, for such amount and at such time or times as
the Lender deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Account, (vii) prepare, file and sign
any Borrower's name on any proof of claim in bankruptcy or other similar
document against an account debtor, (viii) notify the post office authorities to
change the address for delivery of any Borrower's mail to an address designated
by Lender, and open and dispose of all mail addressed to any Borrower, and (ix)
do all acts and things which are necessary, in Lender's determination, to
fulfill any Borrower's obligations under this Agreement and the other Financing
Agreements and (b) at any time to (i) take control in any manner of any item of
payment or proceeds thereof, (ii) have access to any lockbox or postal box into
which any Borrower's mail is deposited, (iii) endorse each Borrower's name upon
any items of payment or proceeds thereof and deposit the same in the Lender's
account for application to the Obligations, (iv) endorse each Borrower's name
upon any chattel paper, document, instrument, invoice, or similar document or
agreement relating to any Account or any goods pertaining thereto or any other
Collateral, (v) sign each Borrower's name on any verification of Accounts and
notices thereof to account debtors and (vi) execute in any Borrower's name and
file any UCC financing statements or amendments thereto. Each Borrower hereby
releases Lender and its officers, employees and designees from any liabilities
arising from any act or acts under this power of attorney and in furtherance
thereof, whether of omission or commission, except as a result of Lender's own
gross negligence or willful misconduct as determined pursuant to a final
non-appealable order of a court of competent jurisdiction.
7.6 Right to Cure. Lender may, at its option upon prior written notice
to Borrowers, unless an Event of Default or an event or condition which with
notice or the passage of time or both may become an Event of Default has
occurred and is continuing, in which case no notice to Borrowers shall be
required hereunder, (a) cure any default by any Borrower under any agreement
with a third party or pay or bond on appeal any judgment entered against any
Borrower, (b) discharge taxes, liens, security interests or other encumbrances
at any time levied on or existing with respect to the Collateral and (c) pay any
amount, incur any expense or perform any act which, in Lender's judgment, is
necessary or appropriate to preserve, protect, insure or maintain the Collateral
and the rights of Lender with respect thereto provided that to the extent
Borrowers are permitted under the terms of this Agreement to contest any of the
foregoing in good faith by appropriate proceedings diligently pursued and
available to Borrowers and have set aside adequate reserves with respect thereto
so long as there is no risk to the Collateral or to Lender's rights therein,
Lender will allow Borrowers a reasonable period of time to continue to pursue
such action. Lender may add any amounts so expended to the Obligations and
charge Borrowers' account(s) therefor, such amounts to be repayable by Borrowers
on demand. Lender shall be under no obligation to effect such cure, payment or
bonding and shall not, by doing so, be deemed to have assumed any obligation or
liability of any Borrower. Any payment made or other action taken by Lender
under this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed accordingly.
7.7 Access to Premises. From time to time as requested by Lender, at
the cost and expense of Borrowers, (a) Lender or its designee shall have
complete access to all of Borrowers'
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premises during normal business hours and after notice to Borrowers, or at any
time and without notice to Borrowers if an Event of Default exists or has
occurred and is continuing, for the purposes of inspecting, verifying and
auditing the Collateral and all of Borrowers' books and records, including the
Records, and (b) Borrowers shall promptly furnish to Lender such copies of such
books and records or extracts therefrom as Lender may request, and (c) use
during normal business hours such of Borrowers' personnel, equipment, supplies
and premises as may be reasonably necessary for the foregoing and if an Event of
Default exists or has occurred and is continuing for the collection of Accounts
and realization of other Collateral.
8. REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to Lender the following (which
shall survive the execution and delivery of this Agreement), the truth and
accuracy of which are a continuing condition of the making of Loans and
providing Letter of Credit Accommodations by Lender to Borrowers:
8.1 Corporate Existence, Power and Authority; Subsidiaries. Each
Borrower is a corporation duly organized and in good standing under the laws of
its state of incorporation and is duly qualified as a foreign corporation and in
good standing in all states or other jurisdictions where the nature and extent
of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on a Borrower's financial
condition, results of operation or business or the rights of Lender in or to any
of the Collateral. The execution, delivery and performance of this Agreement,
the other Financing Agreements and the transactions contemplated hereunder and
thereunder are all within each Borrower's corporate powers, have been duly
authorized and are not in contravention of law or the terms of any Borrower's
certificate of incorporation, by-laws, or other organizational documentation, or
any indenture, agreement or undertaking to which any Borrower is a party or by
which any Borrower or its property are bound. This Agreement and the other
Financing Agreements constitute legal, valid and binding obligations of
Borrowers enforceable in accordance with their respective terms. Borrowers do
not have any subsidiaries except as set forth on the Information Certificate.
Except as set forth on Schedule 8.1, the Inactive Subsidiaries have no assets or
liabilities and have conducted no business activities of any kind for the past
three years.
8.2 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrowers which have been or may hereafter be delivered
by Borrowers to Lender have been prepared in accordance with GAAP and fairly
present the financial condition and the results of operation of Borrowers as at
the dates and for the periods set forth therein. Except as disclosed in any
interim financial statements furnished by Borrowers to Lender prior to the date
of this Agreement, there has been no material adverse change in the assets,
liabilities, properties and condition, financial or otherwise, of Borrowers,
since the date of the most recent audited financial statements furnished by
Borrowers to Lender prior to the date of this Agreement.
8.3 Chief Executive Office; Collateral Locations. The chief executive
office of each Borrower and Borrowers' Records concerning Accounts are located
only at the addresses set
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forth below and their only other places of business and the only other locations
of Collateral, if any, are the addresses set forth in the Information
Certificate, subject to the right of Borrowers to establish new locations in
accordance with Section 9.2 below. The Information Certificate correctly
identifies any of such locations which are not owned by Borrowers and sets forth
the owners and/or operators thereof and to the best of Borrowers' knowledge, the
holders of any mortgages on such locations.
8.4 Priority of Liens; Title to Properties. The security interests and
liens granted to Lender under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4
hereto and the other liens permitted under Section 9.8 hereof. Borrowers have
good and marketable title to all of their properties and assets subject to no
liens, mortgages, pledges, security interests, encumbrances or charges of any
kind, except those granted to Lender and such others as are specifically listed
on Schedule 8.4 hereto or permitted under Section 9.8 hereof.
8.5 Tax Returns. Borrowers have filed, or caused to be filed, in a
timely manner (including any extensions) all tax returns, reports and
declarations which are required to be filed by them and have, if requested by
Lender, disclosed in writing to Lender all requests for extensions to such
filings. All information in such tax returns, reports and declarations is
complete and accurate in all material respects. Borrowers have paid or caused to
be paid all taxes due and payable or claimed due and payable in any assessment
received by them, except taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to Borrowers
and with respect to which adequate reserves have been set aside on their books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.
8.6 Litigation. Except as set forth on the Information Certificate,
there is no present investigation by any governmental agency pending, or to the
best of Borrowers' knowledge threatened, against or affecting any Borrower, its
assets or business and there is no action, suit, proceeding or claim by any
Person pending, or to the best of Borrowers' knowledge threatened, against any
Borrower or its assets or goodwill, or against or affecting any transactions
contemplated by this Agreement, which if adversely determined against any
Borrower would result in any material adverse change in the assets, business or
prospects of any Borrower or would impair the ability of any Borrower to perform
its obligations hereunder or under any of the other Financing Agreements to
which it is a party or of Lender to enforce any Obligations or realize upon any
Collateral.
8.7 Compliance with Other Agreements and Applicable Laws. No Borrower
is in default in any material respect under, or in violation in any material
respect of any of the terms of, any agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any of its assets are
bound and Borrowers are in compliance in all material respects with all
applicable provisions of laws, rules, regulations, licenses, permits, approvals
and orders of any foreign, Federal, State or local governmental authority.
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8.8 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by Borrowers maintained at any bank or
other financial institution are set forth on Schedule 8.8 hereto, subject to the
right of Borrowers to establish new accounts in accordance with Section 9.13
below.
8.9 Accuracy and Completeness of Information. All information furnished
by or on behalf of Borrowers' in writing to Lender in connection with this
Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, including all information on the Information
Certificate is true and correct in all material respects on the date as of which
such information is dated or certified and does not omit any material fact
necessary in order to make such information not misleading. No event or
circumstance has occurred which has had or could reasonably be expected to have
a material adverse affect on the business, assets or prospects of any Borrower,
which has not been fully and accurately disclosed to Lender in writing.
8.10 Employee Benefits.
(a) Borrowers have not engaged in any transaction in
connection with which any Borrower or any of its ERISA Affiliates could be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Code, including any accumulated funding
deficiency described in Section 8.10(c) hereof and any deficiency with respect
to vested accrued benefits described in Section 8.10(d) hereof.
(b) No liability to the Pension Benefit Guaranty Corporation
has been or is expected by Borrowers to be incurred with respect to any employee
benefit plan of Borrower or any of its ERISA Affiliates. There has been no
reportable event (within the meaning of Section 4043(b) of ERISA) or any other
event or condition with respect to any employee pension benefit plan of any
Borrower or any of its ERISA Affiliates which presents a risk of termination of
any such plan by the Pension Benefit Guaranty Corporation.
(c) Full payment has been made of all amounts which any
Borrower or any of its ERISA Affiliates is required under Section 302 of ERISA
and Section 412 of the Code to have paid under the terms of each employee
benefit plan as contributions to such plan as of the last day of the most recent
fiscal year of such plan ended prior to the date hereof, and no accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, exists with respect to any employee benefit plan,
including any penalty or tax described in Section 8.10(a) hereof and any
deficiency with respect to vested accrued benefits described in Section 8.10(d)
hereof.
(d) Except as set forth on Schedule 8.10 hereto, the current
value of all vested accrued benefits under all employee benefit plans maintained
by Borrowers that are subject to Title IV of ERISA does not exceed the current
value of the assets of such plans allocable to such vested accrued benefits,
including any penalty or tax described in Section 8.10(a) hereof and any
accumulated funding deficiency described in Section 8.10(c) hereof. The terms
"current value" and "accrued benefit" have the meanings specified in ERISA.
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(e) Except as set forth on Schedule 8.10 hereto, neither any
Borrower nor any of its ERISA Affiliates is or has ever been obligated to
contribute to any "multiemployer plan" (as such term is defined in Section
4001(a)(3) of ERISA) that is subject to Title IV of ERISA.
8.11 Environmental Compliance.
(a) Except as set forth on Schedule 8.11 hereto, Borrowers
have not generated, used, stored, treated, transported, manufactured, handled,
produced or disposed of any Hazardous Materials, on or off its premises (whether
or not owned by it) in any manner which at any time violates any applicable
Environmental Law or any license, permit, certificate, approval or similar
authorization thereunder and the operations of Borrowers comply in all material
respects with all Environmental Laws and all licenses, permits, certificates,
approvals and similar authorizations thereunder.
(b) Except as set forth on Schedule 8.11 hereto, there has
been no investigation, proceeding, complaint, order, directive, claim, citation
or notice by any governmental authority or any other person nor is any pending
or to the best of Borrowers' knowledge threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
any Borrower or the release, spill or discharge, threatened or actual, of any
Hazardous Material or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials or any
other environmental, health or safety matter, which affects any Borrower or its
business, operations or assets or any properties at which any Borrower has
transported, stored or disposed of any Hazardous Materials.
(c) Borrowers have no material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials.
(d) Borrowers have all licenses, permits, certificates,
approvals or similar authorizations required to be obtained or filed in
connection with the operations of Borrower under any Environmental Law and all
of such licenses, permits, certificates, approvals or similar authorizations are
valid and in full force and effect.
8.12 Bonds and Bond Financing Documents. The Bonds have been duly and
properly authorized and issued in compliance with the Bond Financing Documents
and all applicable laws, statutes, rules and regulations, orders and
stipulations. The Bonds and Bond Financing Documents are in full force and
effect and enforceable in accordance with their respective terms. TransPro and,
to the knowledge of the Borrowers, the Connecticut Development Authority
("Authority"), State Street Bank and Trust Company of Connecticut, N.A. (the
"Trustee"), Fleet National Bank (the "Original LC Issuer") and all other persons
party to the Bond Financing Documents (collectively, the "Bond Parties"), have
complied and continue to comply with all of the terms and provisions of the Bond
Financing Documents and the requirements of all laws, statutes, rules,
regulations, orders and stipulations applicable to the Bonds or the transactions
contemplated under the Bond Financing Documents. No breach, default or event of
default exists or has occurred and is continuing under the Bonds or any of the
Bond Financing Documents.
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8.13 Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Lender on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Lender regardless of any investigation made or information
possessed by Lender. The representations and warranties set forth herein shall
be cumulative and in addition to any other representations or warranties which
Borrowers shall now or hereafter give, or cause to be given, to Lender.
9. AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Maintenance of Existence. Each Borrower shall at all times
preserve, renew and keep in full, force and effect its corporate existence and
rights and franchises with respect thereto and maintain in full force and effect
all permits, licenses, trademarks, tradenames, approvals, authorizations, leases
and contracts necessary to carry on in all material respects the business as
presently or proposed to be conducted. Borrowers shall give Lender thirty (30)
days prior written notice of any proposed change in the corporate name of any
Borrower, which notice shall set forth the new name and Borrowers shall deliver
to Lender a copy of the amendment to the Certificate of Incorporation of a
Borrower providing for a name change certified by the Secretary of State of the
jurisdiction of incorporation of such Borrower as soon as it is available.
9.2 New Collateral Locations. Borrowers may open any new location
within the continental United States provided Borrowers (a) gives Lender thirty
(30) days prior written notice of the intended opening of any such new location
and (b) execute and deliver, or cause to be executed and delivered, to Lender
such agreements, documents, and instruments as Lender may deem reasonably
necessary or desirable to protect its interests in the Collateral at such
location, including UCC financing statements.
9.3 Compliance with Laws, Regulations, Etc.
(a) Borrowers shall, at all times, comply in all material
respects with all laws, rules, regulations, licenses, permits, approvals and
orders applicable to it and duly observe all requirements of any Federal, State
or local governmental authority, including the Employee Retirement Security Act
of 1974, as amended, the Occupational Safety and Health Act of 1970, as amended,
the Fair Labor Standards Act of 1938, as amended, and all statutes, rules,
regulations, orders, permits and stipulations relating to environmental
pollution and employee health and safety, including all of the Environmental
Laws.
(b) Borrowers shall establish and maintain, at their expense,
a system to assure and monitor its continued compliance with all Environmental
Laws in all of their operations, which system shall include annual reviews of
such compliance by employees or agents of Borrowers who are familiar with the
requirements of the Environmental Laws. Copies of all environmental surveys,
audits, assessments, feasibility studies and results of remedial investigations
shall be promptly furnished, or caused to be furnished, by Borrowers to Lender.
Borrowers shall take prompt and appropriate action to respond to any
non-compliance with any of the Environmental Laws and shall regularly report to
Lender on such response.
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(c) Borrowers shall give both oral and written notice to
Lender immediately upon any Borrower's receipt of any notice of, or Borrowers'
otherwise obtaining knowledge of, (i) the occurrence of any event involving the
release, spill or discharge, threatened or actual, of any Hazardous Material or
(ii) any investigation, proceeding, complaint, order, directive, claims,
citation or notice with respect to: (A) any non-compliance with or violation of
any Environmental Law by Borrowers or (B) the release, spill or discharge,
threatened or actual, of any Hazardous Material or (C) the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or (D) any other environmental, health or
safety matter, which affects any Borrower or its business, operations or assets
or any properties at which any Borrower transported, stored or disposed of any
Hazardous Materials.
(d) Without limiting the generality of the foregoing, whenever
Lender reasonably determines that there is non-compliance, or any condition
which requires any action by or on behalf of Borrowers in order to avoid any
material non-compliance, with any Environmental Law, Borrowers shall, at
Lender's request and Borrowers' expense: (i) cause an independent environmental
engineer acceptable to Lender to conduct such tests of the site where Borrowers'
non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to Lender a report as
to such non-compliance setting forth the results of such tests, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof and (ii) provide to Lender a supplemental report of such
engineer whenever the scope of such non-compliance, or Borrowers' response
thereto or the estimated costs thereof, shall change in any material respect.
(e) Borrowers shall indemnify and hold harmless Lender, its
directors, officers, employees, agents, invitees, representatives, successors
and assigns, from and against any and all losses, claims, damages, liabilities,
costs, and expenses (including reasonable attorneys' fees and legal expenses)
directly or indirectly arising out of or attributable to the use, generation,
manufacture, reproduction, storage, release, threatened release, spill,
discharge, disposal or presence of a Hazardous Material, including the costs of
any required or necessary repair, cleanup or other remedial work with respect to
any property of Borrowers and the preparation and implementation of any closure,
remedial or other required plans. All representations, warranties, covenants and
indemnifications in this Section 9.3 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
9.4 Payment of Taxes and Claims. Borrowers shall duly pay and discharge
all taxes, assessments, contributions and governmental charges upon or against
them or their properties or assets, except for taxes the validity of which are
being contested in good faith by appropriate proceedings diligently pursued and
available to Borrowers and with respect to which adequate reserves have been set
aside on its books. Borrowers shall be liable for any tax or penalties imposed
on Lender as a result of the financing arrangements provided for herein and
Borrowers agree to indemnify and hold Lender harmless with respect to the
foregoing, and to repay to Lender on demand the amount thereof, and until paid
by Borrowers such amount shall be added and deemed part of the Loans, provided,
that, nothing contained herein shall be construed to require Borrowers to pay
any income or franchise taxes attributable to the income of Lender from any
amounts charged or paid hereunder to Lender. The foregoing indemnity shall
survive the payment of the Obligations and the termination or non-renewal of
this Agreement.
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9.5 Insurance. Borrowers shall, at all times, maintain with financially
sound and reputable insurers insurance with respect to the Collateral against
loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by corporations of established reputation
engaged in the same or similar businesses and similarly situated. Said policies
of insurance shall be satisfactory to Lender as to form, amount and insurer.
Borrowers shall furnish certificates, policies or endorsements to Lender as
Lender shall require as proof of such insurance, and, if Borrowers fail to do
so, Lender is authorized, but not required, to obtain such insurance at the
expense of Borrowers. All policies shall provide for at least thirty (30) days
prior written notice to Lender of any cancellation or reduction of coverage and
that Lender may act as attorney for Borrowers in obtaining, and at any time an
Event of Default exists or has occurred and is continuing, adjusting, settling,
amending and canceling such insurance. Borrowers shall cause Lender to be named
as a loss payee and an additional insured (but without any liability for any
premiums) under such insurance policies and Borrowers shall obtain
non-contributory lender's loss payable endorsements to all insurance policies in
form and substance satisfactory to Lender. Such lender's loss payable
endorsements shall specify that the proceeds of such insurance shall be payable
to Lender as its interests may appear and further specify that Lender shall be
paid regardless of any act or omission by Borrowers or any of its affiliates.
Except as otherwise provided in the Mortgages with respect to the Real Property,
at its option, Lender may apply any insurance proceeds received by Lender at any
time to the cost of repairs or replacement of Collateral and/or to payment of
the Obligations, whether or not then due, in any order and in such manner as
Lender may determine or, if an Event of Default has occurred and is continuing
hold such proceeds as cash collateral for the Obligations.
9.6 Financial Statements and Other Information.
(a) Borrowers shall keep proper books and records in which
true and complete entries shall be made of all dealings or transactions of or in
relation to the Collateral and the business of Borrowers and their subsidiaries
in accordance with GAAP and Borrowers shall furnish or cause to be furnished to
Lender: (i) within thirty (30) days after the end of each fiscal month, monthly
unaudited consolidated financial statements, and unaudited consolidating
financial statements (including in each case balance sheets, statements of
income and loss, statements of cash flow, and statements of shareholders'
equity), all in reasonable detail, fairly presenting the financial position and
the results of the operations of Borrowers and their subsidiaries as of the end
of and through such fiscal month and (ii) within ninety (90) days after the end
of each fiscal year, audited consolidated financial statements and unaudited
management prepared consolidating financial statements of Borrower and their
subsidiaries (including in each case balance sheets, statements of income and
loss, statements of cash flow and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrowers and their
subsidiaries as of the end of and for such fiscal year, together with the
unqualified opinion of independent certified public accountants, which
accountants shall be an independent accounting firm selected by Borrowers and
reasonably acceptable to Lender, that such financial statements have been
prepared in accordance with GAAP, and present fairly the results of operations
and financial condition of Borrowers and their subsidiaries as of the end of and
for the fiscal year then ended.
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(b) Borrowers shall promptly notify Lender in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to the Collateral or any other property which is security for the
Obligations or which would result in any material adverse change in any
Borrower's business, properties, assets, goodwill or condition, financial or
otherwise and (ii) the occurrence of any Event of Default or event which, with
the passage of time or giving of notice or both, would constitute an Event of
Default.
(c) Borrowers shall promptly after the sending or filing
thereof furnish or cause to be furnished to Lender copies of all reports which
Borrowers sends to their stockholders generally and copies of all reports and
registration statements which any Borrower files with the Securities and
Exchange Commission, any national securities exchange or the National
Association of Securities Dealers, Inc.
(d) Borrowers shall furnish or cause to be furnished to Lender
such budgets, forecasts, projections and other information respecting the
Collateral and the business of Borrowers, as Lender may, from time to time,
reasonably request. Lender is hereby authorized to deliver a copy of any
financial statement or any other information relating to the business of
Borrowers to any court or other government agency or to any participant or
assignee or prospective participant or assignee. Each Borrower hereby
irrevocably authorizes and directs all accountants or auditors to deliver to
Lender, at Borrowers' expense, copies of the financial statements of Borrowers
and any reports or management letters prepared by such accountants or auditors
on behalf of Borrowers and to disclose to Lender such information as they may
have regarding the business of Borrowers. Any documents, schedules, invoices or
other papers delivered to Lender may be destroyed or otherwise disposed of by
Lender one (1) year after the same are delivered to Lender, except as otherwise
designated by Borrowers to Lender in writing.
(e) Borrowers shall furnish or cause to be furnished to Lender
no later than thirty (30) days prior to the end of each fiscal year of
Borrowers, forecasted consolidated and consolidating balance sheets, profit and
loss statements (including showing pretax profits), cash flow statements, Excess
Availability statements and capitalization statements, all prepared on a
consistent basis with Borrowers' historical financial statements (collectively,
the "Annual Plan"), together with all appropriate supporting details and
underlying assumptions, for the forthcoming fiscal year, month by month.
9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. No
Borrower shall, directly or indirectly, (a) merge into or with or consolidate
with any other Person or permit any other Person to merge into or with or
consolidate with it, or (b) sell, assign, lease, transfer, abandon or otherwise
dispose of any stock or indebtedness to any other Person or any of its assets to
any other Person or suffer to occur any taking thereof, by eminent domain,
condemnation or otherwise (except for (i) sales of Inventory in the ordinary
course of business and (ii) the disposition of worn-out or obsolete Equipment or
Equipment or Real Property no longer used in the business of Borrower so long as
(A) any proceeds are paid to Lender and (B) such sales do not involve Equipment
or Real Property having an aggregate fair market value in excess of $150,000 for
all such Equipment and Real Property disposed of in any fiscal year of
Borrowers), or (c) form or acquire any subsidiaries, or (d) wind up, liquidate
or dissolve or (e) agree to do any of the foregoing. Lender acknowledges that
the Borrowers intend for an Obligor, Xxxxx Heat
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Transfer Products, Inc. ("Xxxxx Heat") to be merged into GDI and Lender agrees
that such merger will be permitted subject the review by Lender of the
documentation relating thereto, which documentation must be reasonably
satisfactory to Lender.
9.8 Encumbrances. Borrowers shall not create, incur, assume or suffer
to exist any security interest, mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of its assets or properties,
including the Collateral, except: (a) liens and security interests of Lender;
(b) liens securing the payment of taxes, either not yet overdue or the validity
of which are being contested in good faith by appropriate proceedings diligently
pursued and available to Borrowers and with respect to which adequate reserves
have been set aside on their books; (c) non-consensual statutory liens (other
than liens securing the payment of taxes) arising in the ordinary course of
Borrowers' business to the extent: (i) such liens secure indebtedness which is
not overdue or (ii) such liens secure indebtedness relating to claims or
liabilities which are fully insured and being defended at the sole cost and
expense and at the sole risk of the insurer or being contested in good faith by
appropriate proceedings diligently pursued and available to Borrowers, in each
case prior to the commencement of foreclosure or other similar proceedings and
with respect to which adequate reserves have been set aside on its books; (d)
zoning restrictions, easements, licenses, covenants and other restrictions
affecting the use of real property which do not interfere in any material
respect with the use of such real property or ordinary conduct of the business
of Borrowers as presently conducted thereon or materially impair the value of
the real property which may be subject thereto; (e) purchase money security
interests in Equipment (including capital leases) and purchase money mortgages
on real estate not to exceed $1,000,000.00 in the aggregate at any time
outstanding so long as such security interests and mortgages do not apply to any
property of Borrowers other than the Equipment or real estate so acquired, and
the indebtedness secured thereby does not exceed the cost of the Equipment or
real estate so acquired, as the case may be; and (f) the security interests and
liens set forth on Schedule 8.4 hereto.
9.9 Indebtedness. Borrowers shall not incur, create, assume, become or
be liable in any manner with respect to, or permit to exist, any obligations or
indebtedness, except: (a) the Obligations; (b) trade obligations and normal
accruals in the ordinary course of business not yet due and payable, or with
respect to which Borrowers are contesting in good faith the amount or validity
thereof by appropriate proceedings diligently pursued and available to
Borrowers, and with respect to which adequate reserves have been set aside on
its books; (c) purchase money indebtedness (including capital leases) to the
extent not incurred or secured by liens (including capital leases) in violation
of any other provision of this Agreement; and (d) the indebtedness set forth on
Schedule 9.9 hereto; provided, that, (i) Borrowers may only make regularly
scheduled payments of principal and interest in respect of such indebtedness in
accordance with the terms of the agreement or instrument evidencing or giving
rise to such indebtedness as in effect on the date hereof, (ii) Borrowers shall
not, directly or indirectly, (A) amend, modify, alter or change the terms of
such indebtedness or any agreement, document or instrument related thereto as in
effect on the date hereof, or (B) redeem, retire, defease, purchase or otherwise
acquire such indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and (iii) Borrowers shall furnish to Lender all notices or
demands in connection with such indebtedness either received by any Borrower or
on its behalf, promptly after the receipt thereof, or sent by any Borrower or on
its behalf, concurrently with the sending thereof, as the case may be.
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9.10 Loans, Investments, Guarantees, Etc. Borrowers shall not, directly
or indirectly, make any loans or advance money or property to any person, or
invest in (by capital contribution, dividend or otherwise) or purchase or
repurchase the stock or indebtedness or all or a substantial part of the assets
or property of any person, or guarantee, assume, endorse, or otherwise become
responsible for (directly or indirectly) the indebtedness, performance,
obligations or dividends of any Person or agree to do any of the foregoing,
except: (a) the endorsement of instruments for collection or deposit in the
ordinary course of business; (b) investments in: (i) short-term direct
obligations of the United States Government, (ii) negotiable certificates of
deposit issued by any bank satisfactory to Lender, payable to the order of a
Borrower or to bearer and delivered to Lender, and (iii) commercial paper rated
A1 or P1; provided, that, as to any of the foregoing, unless waived in writing
by Lender, Borrowers shall take such actions as are deemed necessary by Lender
to perfect the security interest of Lender in such investments and (c) the
loans, advances and guarantees set forth on Schedule 9.10 hereto; provided,
that, as to such loans, advances and guarantees, (i) Borrowers shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
loans, advances or guarantees or any agreement, document or instrument related
thereto, or (B) as to such guarantees, redeem, retire, defease, purchase or
otherwise acquire the obligations arising pursuant to such guarantees, or set
aside or otherwise deposit or invest any sums for such purpose, and (ii)
Borrowers shall furnish to Lender all notices or demands in connection with such
loans, advances or guarantees or other indebtedness subject to such guarantees
either received by Borrowers or on their behalf, promptly after the receipt
thereof, or sent by Borrowers or on behalf, concurrently with the sending
thereof, as the case may be. In addition to and without limitation of the
foregoing, Borrowers shall not make any investment in or advance any funds or
assets to the Inactive Subsidiaries or conduct or cause to be conducted any
business through or in the Inactive Subsidiaries.
9.11 Dividends and Redemptions. Borrowers shall not, directly or
indirectly, declare or pay any dividends on account of any shares of class of
capital stock of Borrowers now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of capital stock
(or set aside or otherwise deposit or invest any sums for such purpose) for any
consideration other than common stock or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or agree to do any of the foregoing; provided, however, that TransPro may
pay up to $337,500 per year in dividends on its Series B convertible preferred
stock if and to the extent that such dividends are permitted and required to be
paid under the Certificate of Incorporation of TransPro and the Agreement and
Plan of Merger dated July 23, 1998 relating to the acquisition of Evap.
9.12 Transactions with Affiliates. Borrowers shall not, directly or
indirectly, (a) purchase, acquire or lease any property from, or sell, transfer
or lease any property to, any officer, director, agent or other person
affiliated with any Borrower, except in the ordinary course of and pursuant to
the reasonable requirements of Borrowers' business and upon fair and reasonable
terms no less favorable to the Borrowers than Borrowers would obtain in a
comparable arm's length transaction with an unaffiliated person or (b) make any
payments of management, consulting or other fees for management or similar
services, or of any indebtedness owing to any officer, employee, shareholder,
director or other person affiliated with Borrowers
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except reasonable compensation to officers, employees and directors for services
rendered to Borrowers in the ordinary course of business.
9.13 Additional Bank Accounts. Borrowers shall not, directly or
indirectly, open, establish or maintain any deposit account, investment account
or any other account with any bank or other financial institution, other than
the Blocked Accounts and the accounts set forth in Schedule 8.8 hereto, except:
(a) as to any new or additional Blocked Accounts and other such new or
additional accounts which contain any Collateral or proceeds thereof, with the
prior written consent of Lender and subject to such conditions thereto as Lender
may establish and (b) as to any accounts used by Borrowers to make payments of
payroll, taxes or other obligations to third parties, after prior written notice
to Lender.
9.14 Working Capital. TransPro shall, at all times, maintain Working
Capital of not less than $74,000,000.00.
9.15 Adjusted Net Worth. TransPro shall, at all times, maintain
Adjusted Net Worth of not less than $67,500,000.00.
9.16 Costs and Expenses. Borrowers shall pay to Lender within five (5)
days of demand (or, if an Event of Default exists, upon demand) all costs,
expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, Lender's
rights in the Collateral, this Agreement, the other Financing Agreements and all
other documents related hereto or thereto, including any amendments, supplements
or consents which may hereafter be contemplated (whether or not executed) or
entered into in respect hereof and thereof, including: (a) all costs and
expenses of filing or recording (including Uniform Commercial Code financing
statement filing taxes and fees, documentary taxes, intangibles taxes and
mortgage recording taxes and fees, if applicable); (b) costs and expenses and
fees for insurance premiums, environmental audits, surveys, assessments,
engineering reports and inspections, appraisal fees and search fees; (c) costs
and expenses of remitting loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the Blocked Accounts, together with
Lender's customary charges and fees with respect thereto; (d) charges, fees or
expenses charged by any bank or issuer in connection with the Letter of Credit
Accommodations; (e) costs and expenses of preserving and protecting the
Collateral; (f) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of
Lender, selling or otherwise realizing upon the Collateral, and otherwise
enforcing the provisions of this Agreement and the other Financing Agreements or
defending any claims made or threatened against Lender arising out of the
transactions contemplated hereby and thereby (including preparations for and
consultations concerning any such matters); (g) all out-of-pocket expenses and
costs heretofore and from time to time hereafter incurred by Lender during the
course of periodic field examinations of the Collateral and Borrowers'
operations, plus a per diem charge at the rate of $750.00 per person per day for
Lender's examiners in the field and office; and (h) the reasonable fees and
disbursements of counsel (including legal assistants) to Lender in connection
with any of the foregoing.
9.17 Compliance with ERISA.
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(a) Borrowers shall not with respect to any "employee benefit
plans" maintained by any Borrower or any of its ERISA Affiliates: (i) terminate
any of such employee benefit plans so as to incur any liability to the Pension
Benefit Guaranty Corporation established pursuant to ERISA, (ii) allow or suffer
to exist any prohibited transaction involving any of such employee benefit plans
or any trust created thereunder which would subject Borrowers or such ERISA
Affiliate to a tax or penalty or other liability on prohibited transactions
imposed under Section 4975 of the Code or ERISA, (iii) fail to pay to any such
employee benefit plan any contribution which it is obligated to pay under
Section 302 of ERISA, Section 412 of the Code or the terms of such plan, (iv)
allow or suffer to exist any accumulated funding deficiency, whether or not
waived, with respect to any such employee benefit plan, (v) allow or suffer to
exist any occurrence of a reportable event or any other event or condition which
presents a material risk of termination by the Pension Benefit Guaranty
Corporation of any such employee benefit plan that is a single employer plan,
which termination could result in any liability to the Pension Benefit Guaranty
Corporation or (vi) incur any withdrawal liability with respect to any
multiemployer pension plan.
(b) As used in this Section 9.17, the terms "employee benefit
plans", "accumulated funding deficiency" and "reportable event" shall have the
respective meanings assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in Section 4975 of the Code
and ERISA.
9.18 Bond Financing Covenants. Borrowers shall comply with all the
terms and provisions of the Bond Financing Documents. Borrowers shall
immediately notify Lender of any breach, default or event of default under the
Bond Financing Documents. Borrowers shall not amend, modify, terminate or
otherwise change any of the terms and provisions of the Bond Financing Documents
or exercise any right or option with respect thereto including, without
limitation, make any election to change the mode of the Bonds without the prior
consent of the Lender.
9.19 Further Assurances. At the written request of Lender at any time
and from time to time, Borrowers shall, at its expense, duly execute and
deliver, or cause to be duly executed and delivered, such further agreements,
documents and instruments, and do or cause to be done such further acts as may
be necessary or proper to evidence, perfect, maintain and enforce the security
interests and the priority thereof in the Collateral and to otherwise effectuate
the provisions or purposes of this Agreement or any of the other Financing
Agreements. Lender may at any time and from time to time request a certificate
from an officer of Borrower representing that all conditions precedent to the
making of Loans and providing Letter of Credit Accommodations contained herein
are satisfied. In the event of such request by Lender, Lender may, at its
option, cease to make any further Loans or provide any further Letter of Credit
Accommodations until Lender has received such certificate and, in addition,
Lender has determined that such conditions are satisfied. Where permitted by
law, Borrowers hereby authorize Lender to execute and file one or more UCC
financing statements signed only by Lender.
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10. EVENTS OF DEFAULT AND REMEDIES
10.1 Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":
(a) (i) Borrowers fail to pay when due any of the Obligations
or (ii) Borrowers fail to perform any of the covenants contained in Sections
9.2, 9.6, 9.12, 9.13 and 9.16 of this Agreement and such failure shall continue
for ten (10) days; provided, that, such ten (10) day period shall not apply in
the case of: (A) any failure to observe any such covenant which is not capable
of being cured at all or within such ten (10) day period or which has been the
subject of a prior failure within a six (6) month period or (B) an intentional
breach of any Borrower or any Obligor of any such covenant or (iii) Borrowers
fail to perform any of the terms, covenants, conditions or provisions contained
in this Agreement or any of the other Financing Agreements (subject to
applicable cure periods, if any) other than those described in Sections
10.1(a)(i) and 10.1(a)(ii) above;
(b) any representation, warranty or statement of fact made by
any Borrower to Lender in this Agreement, the other Financing Agreements or any
other agreement, schedule, confirmatory assignment or otherwise shall when made
or deemed made be false or misleading in any material respect;
(c) any Obligor revokes, terminates or fails to perform
(subject to any applicable cure period) any of the terms, covenants, conditions
or provisions of any guarantee, endorsement or other agreement of such party in
favor of Lender;
(d) any judgment for the payment of money is rendered against
any Borrower or any Obligor in excess of $100,000.00 in any one case or in
excess of $250,000.00 in the aggregate and shall remain undischarged or
unvacated for a period in excess of thirty (30) days or execution shall at any
time not be effectively stayed, or any judgment other than for the payment of
money, or injunction, attachment, garnishment or execution is rendered against
any Borrower or any Obligor or any of their assets;
(e) any (except as may be expressly permitted under this
Agreement or any of the Financing Agreements) Borrower or any Obligor dissolves
or suspends or discontinues doing business;
(f) any Borrower or any Obligor becomes insolvent (however
defined or evidenced), makes an assignment for the benefit of creditors, makes
or sends notice of a bulk transfer or calls a meeting of its creditors or
principal creditors;
(g) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at law or
in equity) is filed against any Borrower or any Obligor or all or any part of
its properties and such petition or application is not dismissed within thirty
(30) days after
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the date of its filing or any Borrower or any Obligor shall file any answer
admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner;
(h) a case or proceeding under the bankruptcy laws of the
United States of America now or hereafter in effect or under any insolvency,
reorganization, receivership, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction now or hereafter in effect (whether at a law
or equity) is filed by any Borrower or any Obligor or for all or any part of its
property; or
(i) any default by any Borrower or any Obligor under any
agreement, document or instrument relating to any indebtedness for borrowed
money owing to any person other than Lender, or any capitalized lease
obligations, contingent indebtedness in connection with any guarantee, letter of
credit, indemnity or similar type of instrument in favor of any person other
than Lender, in any case in an amount in excess of $100,000, which default
continues for more than the applicable cure period, if any, with respect
thereto, or any default by any Borrower or any Obligor under any material
contract, lease, license or other obligation to any person other than Lender,
which default continues for more than the applicable cure period, if any, with
respect thereto;
(j) any Change in Control of TransPro or any change in the
ownership of any other Borrower or Obligor (other than as a result of the merger
of Xxxxx Heat and AHTP as provided in Section 9.7 hereof);
(k) the indictment or threatened (in writing) indictment of
any Borrower or any Obligor under any criminal statute, or commencement or
threatened commencement of criminal or civil proceedings against any Borrower or
any Obligor, pursuant to which statute or proceedings the penalties or remedies
sought or available include forfeiture of any of the material property of any
Borrower or such Obligor;
(l) there shall be a material adverse change in the business,
assets or prospects of the Borrowers and Obligors taken as a whole after the
date hereof; or
(m) there shall be an event of default under any of the other
Financing Agreements.
10.2 Remedies.
(a) At any time an Event of Default exists or has occurred and
is continuing, Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice
to or consent by any Borrower or any Obligor, except as such notice or consent
is expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Lender hereunder, under any of the other
Financing Agreements, the Uniform Commercial Code or other applicable law, are
cumulative, not exclusive and enforceable, in Lender's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an
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injunction to restrain a breach or threatened breach by any Borrower of this
Agreement or any of the other Financing Agreements. Lender may, at any time or
times, proceed directly against any Borrower or any Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of
Default exists or has occurred and is continuing, Lender may, in its discretion
and without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Lender (provided, that, upon the occurrence of any
Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations
shall automatically become immediately due and payable), (ii) with or without
judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the
Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (iii) require Borrowers, at Borrowers' expense, to
assemble and make available to Lender any part or all of the Collateral at any
place and time designated by Lender, (iv) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (v) remove any or
all of the Collateral from any premises on or in which the same may be located
for the purpose of effecting the sale, foreclosure or other disposition thereof
or for any other purpose, (vi) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including entering into contracts
with respect thereto, public or private sales at any exchange, broker's board,
at any office of Lender or elsewhere) at such prices or terms as Lender may deem
reasonable, for cash, upon credit or for future delivery, with the Lender having
the right to purchase the whole or any part of the Collateral at any such public
sale, all of the foregoing being free from any right or equity of redemption of
Borrowers, which right or equity of redemption is hereby expressly waived and
released by Borrowers and/or (vii) terminate this Agreement. If any of the
Collateral is sold or leased by Lender upon credit terms or for future delivery,
the Obligations shall not be reduced as a result thereof until payment therefor
is finally collected by Lender. If notice of disposition of Collateral is
required by law, five (5) days prior notice by Lender to Borrowers designating
the time and place of any public sale or the time after which any private sale
or other intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrowers waive any other notice. In the event
Lender institutes an action to recover any Collateral or seeks recovery of any
Collateral by way of prejudgment remedy, Borrowers waive the posting of any bond
which might otherwise be required.
(c) Lender may apply the cash proceeds of Collateral actually
received by Lender from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in such order
as Lender may elect, whether or not then due. Borrowers shall remain liable to
Lender for the payment of any deficiency with interest at the highest rate
provided for herein and all costs and expenses of collection or enforcement,
including attorneys' fees and legal expenses.
(d) Without limiting the foregoing, upon the occurrence of an
Event of Default or an event which with notice or passage of time or both would
constitute an Event of Default, Lender may, at its option, without notice, (i)
cease making Loans or arranging for Letter of Credit Accommodations or reduce
the lending formulas or amounts of Revolving Loans and Letter of Credit
Accommodations available to Borrowers and/or (ii) terminate any provision of
this
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Agreement providing for any future Loans or Letter of Credit Accommodations to
be made by Lender to Borrowers.
(e) Each Borrower acknowledges and agrees that each and every
Event of Default described above shall be of equal weight and significance, and
equally and fully shall allow Lender to exercise its rights and remedies
hereunder. Each Borrower acknowledges and agrees that each such Event of Default
has been a material inducement for Lender to enter into this Agreement and that
Lender would be irreparably harmed if Lender, in any way, were unable to
exercise its rights and remedies on the basis that certain Events of Default
(for example, Events of Default not relating to payment) were of less weight or
significance than certain other Events of Default (for example, Events of
Default relating to payment).
11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this
Agreement and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the Commonwealth of
Massachusetts (without giving effect to principles of conflicts of law).
(b) Each Borrower and Lender irrevocably consent and submit to
the non-exclusive jurisdiction of the Superior Court of Suffolk County of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts and waive any objection based on venue or forum non
conveniens with respect to any action instituted therein arising under this
Agreement or any of the other Financing Agreements or in any way connected with
or related or incidental to the dealings of the parties hereto in respect of
this Agreement or any of the other Financing Agreements or the transactions
related hereto or thereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity or otherwise, and agree that any
dispute with respect to any such matters shall be heard only in the courts
described above (except that Lender shall have the right to bring any action or
proceeding against any Borrower or its property in the courts of any other
jurisdiction which Lender deems necessary or appropriate in order to realize on
the Collateral or to otherwise enforce its rights against any Borrower or its
property).
(c) Each Borrower hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Lender's option, by service upon Borrowers in any other manner provided under
the rules of any such courts. Within thirty (30) days after such service,
Borrower shall appear in answer to such process, failing which Borrowers shall
be deemed in default and judgment may be entered by Lender against Borrowers for
the amount of the claim and other relief requested.
(d) EACH BORROWER AND LENDER HEREBY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i)
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ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR
THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH
BORROWER AND LENDER HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT ANY BORROWER OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) Lender shall not have any liability to any Borrower
(whether in tort, contract, equity or otherwise) for losses suffered by any
Borrower in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Lender, that the
losses were the result of acts or omissions constituting gross negligence or
willful misconduct. In any such litigation, Lender shall be entitled to the
benefit of the rebuttable presumption that it acted in good faith and with the
exercise of ordinary care in the performance by it of the terms of this
Agreement.
11.2 Waiver of Notices. Each Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Borrowers which Lender may elect to give shall entitle Borrowers
to any other or further notice or demand in the same, similar or other
circumstances.
11.3 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender, and as to amendments, as also signed by an authorized officer of any
Borrower. Lender shall not, by any act, delay, omission or otherwise be deemed
to have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of
Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
11.4 Waiver of Counterclaims. Each Borrower waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
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11.5 Indemnification. Each Borrower shall indemnify and hold Lender,
and its directors, agents, employees and counsel, harmless from and against any
and all losses, claims, damages, liabilities, costs or expenses imposed on,
incurred by or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including amounts paid in settlement, court costs, and the fees and expenses of
counsel. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in this Section may be unenforceable because it violates any law or
public policy, Borrowers shall pay the maximum portion which they are permitted
to pay under applicable law to Lender in satisfaction of indemnified matters
under this Section. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
11.6 WAIVER OF RIGHT TO PREJUDGMENT REMEDY NOTICE AND HEARING. EACH
BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART IS
A COMMERCIAL TRANSACTION. EACH BORROWER FURTHER HEREBY VOLUNTARILY AND KNOWINGLY
WAIVES SUCH RIGHTS AS IT MAY HAVE TO NOTICE AND/OR HEARING UNDER ANY APPLICABLE
FEDERAL OR STATE LAWS (INCLUDING, WITHOUT LIMITATION, UNDER CHAPTER 903A OF THE
CONNECTICUT GENERAL STATUTE) PERTAINING TO THE EXERCISE BY LENDER OF SUCH RIGHTS
AS THE LENDER MAY HAVE REGARDING THE RIGHT TO SEEK PREJUDGMENT REMEDIES AND/OR
DEPRIVE BORROWERS OF OR AFFECT THE USE OF OR POSSESSION OR ENJOYMENT OF
BORROWERS' PROPERTY PRIOR TO THE RENDITION OF A FINAL JUDGMENT AGAINST ANY
BORROWER. EACH BORROWER FURTHER WAIVES ANY RIGHT IT MAY HAVE TO REQUIRE LENDER
TO PROVIDE A BOND OR OTHER SECURITY AS A PRECONDITION TO OR IN CONNECTION WITH
ANY PREJUDGMENT REMEDY SOUGHT BY LENDER, AND WAIVES ANY OBJECTION TO THE
ISSUANCE OF SUCH PREJUDGMENT REMEDY BASED ON ANY OFFSETS, CLAIMS, DEFENSES OR
COUNTERCLAIMS TO ANY ACTION BROUGHT BY THE LENDER.
12. TERM OF AGREEMENT; MISCELLANEOUS
12.1 Term.
(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on the date three (3) years
from the date hereof (the "Renewal Date"), and from year to year thereafter,
unless sooner terminated pursuant to the terms hereof; provided, that, Lender
may, at its option, extend the Renewal Date to the date four (4) years from the
date hereof by giving Borrower notice at least sixty (60) days prior to the
third anniversary of this Agreement. Lender or Borrowers (subject to Lender's
right to extend the Renewal Date as provided above) may terminate this Agreement
and the other Financing Agreements effective on the Renewal Date
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or on the anniversary of the Renewal Date in any year by giving to the other
party at least sixty (60) days prior written notice; provided, that, this
Agreement and all other Financing Agreements must be terminated simultaneously.
Upon the effective date of termination or non-renewal of the Financing
Agreements, Borrowers shall pay to Lender, in full, all outstanding and unpaid
Obligations and shall furnish cash collateral to Lender in such amounts as
Lender determines are reasonably necessary to secure Lender from loss, cost,
damage or expense, including attorneys' fees and legal expenses, in connection
with any contingent Obligations, including issued and outstanding Letter of
Credit Accommodations and checks or other payments provisionally credited to the
Obligations and/or as to which Lender has not yet received final and
indefeasible payment. Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to such bank
account of Lender, as Lender may, in its discretion, designate in writing to
Borrowers for such purpose. Interest shall be due until and including the next
business day, if the amounts so paid by Borrowers to the bank account designated
by Lender are received in such bank account later than 12:00 noon, Boston,
Massachusetts time.
(b) No termination of this Agreement or the other Financing
Agreements shall relieve or discharge any Borrower of its respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all Obligations have been fully and finally discharged and paid, and
Lender's continuing security interest in the Collateral and the rights and
remedies of Lender hereunder, under the other Financing Agreements and
applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid.
(c) If for any reason this Agreement is terminated prior to
the end of the then current term or renewal term of this Agreement, in view of
the impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Lender's lost
profits as a result thereof and as a result of Lender's deferral of payment of
fees that would be payable at the inception and during the term of this
Agreement, Borrowers agree to pay to Lender, upon the effective date of such
termination, an early termination fee in the amount set forth below if such
termination is effective in the period indicated:
Amount Period
(i) 3% of Maximum Credit from the date hereof to and including the
first anniversary of the date of this
Agreement;
(ii) 2% of Maximum Credit from day after the first anniversary of the
date of this Agreement to and including the
second anniversary of the date of this
Agreement; and
(iii) 1% of Maximum Credit from day after the second anniversary of the
date of this Agreement to and including the
third anniversary of the date of this
Agreement or, if the term of
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this Agreement is extended for an additional
year as provided above, then to and
including the fourth anniversary of the date
of this Agreement.
Such early termination fee shall be presumed to be the amount of damages
sustained by Lender as a result of such early termination and each Borrower
agrees that it is reasonable under the circumstances currently existing. In
addition, Lender shall be entitled to such early termination fee upon the
occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h)
hereof, even if Lender does not exercise its right to terminate this Agreement,
but elects, at its option, to provide financing to Borrowers or permit the use
of cash collateral under the United States Bankruptcy Code. Lender agrees that
if Borrowers refinance all of the Obligations with First Union National Bank,
the ultimate parent of the Lender, at a time when no Event of Default has
occurred and is continuing, the foregoing termination fee shall not be required
to be paid. The early termination fee provided for in this Section 12.1 shall be
deemed included in the Obligations.
12.2 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth below and to Borrowers
at their chief executive office set forth below, or to such other address as
either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing.
12.3 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
12.4 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Lender, Borrowers and their respective
successors and assigns, except that Borrower may not assign its rights under
this Agreement, the other Financing Agreements and any other document referred
to herein or therein without the prior written consent of Lender. Lender may,
after notice to Borrowers, assign its rights and delegate its obligations under
this Agreement and the other Financing Agreements and further may assign, or
sell participations in, all or any part of the Loans, the Letter of Credit
Accommodations or any other interest herein to another financial institution or
other person, in which event, the assignee or participant shall have, to the
extent of such assignment or participation, the same rights and benefits as it
would have if it were the Lender hereunder, except as otherwise provided by the
terms of such assignment or participation.
12.5 Joint and Several Liability. All Loans made hereunder are made to
or for the benefit of each of the Borrowers. The Borrowers are jointly and
severally, directly and primarily,
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absolutely and unconditionally liable for the full and indefeasible payment when
due and performance of all Obligations and for the prompt and full payment and
performance of all of the promises, covenants, representations, and warranties
made or undertaken by each Borrower under the Financing Agreements and Borrowers
agree that such liability is not merely as surety but as a co-debtor and is
independent of the duties, obligations, and liabilities of each of the joint and
several Borrowers. In addition to and without limiting the effect of the
foregoing, each Borrower hereby unconditionally guarantees the full and
indefeasible payment when due and performance when required of all Obligations.
This joint and several liability and guarantee is a continuing obligation that
shall not be terminated while any of the Obligations are outstanding and shall
apply to all Obligations whenever incurred.
12.6 Suretyship Waivers and Consents.
(a) Each Borrower acknowledges that the obligations of such
Borrower undertaken herein might be construed to consist, at least in part, of
the guaranty of obligations of persons other than such Borrower (including the
other Borrowers) and, in full recognition of that fact, each Borrower consents
and agrees that Lender may, at any time and from time to time, without notice or
demand, (except as provided in and in accordance with the terms of this
Agreement), whether before or after any actual or purported termination,
repudiation or revocation of this Agreement by any Borrower, and without
affecting the enforceability or continuing effectiveness hereof as to each
Borrower: (i) increase, extend, or otherwise change the time for payment or the
terms of the Obligations or any part thereof; (ii) supplement, restate, modify,
amend, increase, decrease, or waive, or enter into or give any agreement,
approval or consent with respect to, the Obligations or any part thereof, or any
of the Financing Agreements or any additional security or guarantees, or any
condition, covenant, default, remedy, right, representation, or term thereof or
thereunder; (iii) accept new or additional instruments, documents, or agreements
in exchange for or relative to any of the Financing Agreements or the
Obligations or any part thereof; (iv) accept partial payments on the
Obligations; (v) receive and hold additional security or guarantees for the
Obligations or any part thereof; (vi) release, reconvey, terminate, waive,
abandon, fail to perfect, subordinate, exchange, substitute, transfer, or
enforce any Collateral, security or guarantees, and apply any Collateral or
security and direct the order or manner of sale thereof as Lender in its sole
and absolute discretion may determine; (vii) release any person from any
personal liability with respect to the Obligations or any part thereof; (viii)
settle, release on terms satisfactory to Lender or by operation of applicable
laws or otherwise liquidate or enforce any Obligations and any Collateral or
security therefor or guaranty thereof in any manner, consent to the transfer of
any Collateral or security and bid and purchase at any sale; or (ix) consent to
the merger, change, or any other restructuring or termination of the corporate
or partnership existence of any Borrower, and any corresponding restructuring of
the Obligations, and any such merger, change, restructuring, or termination
shall not affect the liability of any Borrower or the continuing effectiveness
hereof, or the enforceability hereof with respect to all or any part of the
Obligations.
(b) Lender may enforce this Agreement independently as to each
Borrower and independently of any other remedy or security Lender at any time
may have or hold in connection with the Obligations, and it shall not be
necessary for Lender to marshal assets in favor of any Borrower or any Obligor
or to proceed upon or against or exhaust any Collateral or security or
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remedy before proceeding to enforce this Agreement. Each Borrower expressly
waives any right to require Lender to marshal assets in favor of any Borrower or
any Obligor of the Obligations or to proceed against any other Borrower, and
agrees that Lender may proceed against any Borrower, any Obligor or any
Collateral in such order as Lender shall determine in its sole and absolute
discretion.
(c) Lender may file a separate action or actions against any
Borrower, whether such action is brought or prosecuted with respect to any
security or against any guarantor of the Obligations, or whether any other
person is joined in any such action or actions. Each Borrower agrees that Lender
and each Borrower and any affiliate of any Borrower may deal with each other in
connection with the Obligations or otherwise, or alter any contracts or
agreements now or hereafter existing between any of them, in any manner
whatsoever, all without in any way altering or affecting the continuing
enforceability of this Agreement. Each Borrower, as a joint and several Borrower
hereunder, expressly waives the benefit of any statute of limitations affecting
its joint and several liability hereunder (but not its primary liability) or the
enforcement of the Obligations or any rights of Lender created or granted
herein.
(d) Lender's rights hereunder shall be reinstated and revived,
and the enforceability of this Agreement shall continue, with respect to any
amount at any time paid on account of the Obligations which thereafter shall be
required to be restored or returned by Lender, all as though such amount had not
been paid. The rights of Lender created or granted herein and the enforceability
of this Agreement at all times shall remain effective to cover the full amount
of all the Obligations even though the Obligations, including any part thereof
or any Collateral, other security or guaranty therefor, may be or hereafter may
become invalid or otherwise unenforceable as against any Borrower and whether or
not any Borrower shall have any personal liability with respect thereto.
(e) Each Borrower expressly waives any and all defenses now or
hereafter arising or asserted by reason of (i) any disability or other defense
of any other Borrower with respect to the Obligations; (ii) the unenforceability
or invalidity of any security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of any security for
the Obligations; (iii) the cessation for any cause whatsoever of the liability
of any Borrower (other than by reason of the full payment and performance of all
Obligations); (iv) any failure of Lender to marshal assets in favor of any
Borrower; (v) any failure of Lender to give notice to such Borrower of sale or
other disposition of Collateral of any other Borrower or any defect in any
notice that may be given in connection with any such sale or disposition of
Collateral of any other Borrower; (vi) any failure of Lender to comply with
applicable law in connection with the sale or other disposition of any
Collateral or other security of any other Borrower, for any Obligation,
including any failure of Lender to conduct a commercially reasonable sale or
other disposition of any Collateral or other security of any other Borrower for
any Obligation; (vii) any act or omission of Lender or others that directly or
indirectly results in or aids the discharge or release of any Borrower or the
Obligations of any Borrower or any security or guaranty therefor by operation of
law or otherwise; (viii) any law which provides that the obligation of a surety
or guarantor must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's or guarantor's
obligation in proportion to the principal obligation; (ix) any failure of Lender
to file or enforce a claim in any bankruptcy or other
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proceeding with respect to any Borrower; (x) the avoidance of any lien or
security interest in assets of any Borrower in favor of Lender for any reason;
or (xi) any action taken by Lender that is authorized by this section or any
other provision of any Loan Document. Until such time, if any, as all of the
Obligations have been indefeasibly paid and performed in full and no portion of
any commitment of Lender to Borrowers under any Financing Agreement remains in
effect, each Borrowers' indebtedness, claims and rights of subrogation,
contribution, reimbursement, or indemnity against the other Borrowers shall be
fully and completely subordinated to the indefeasible repayment in full of the
Obligations, and each Borrower expressly waives until such indefeasible payment
any right to enforce any remedy that it now has or hereafter may have against
any other Person and waives the benefit of, or any right to participate in, any
Collateral now or hereafter held by Lender.
(f) To the fullest extent permitted by applicable law, each
Borrower expressly waives and agrees not to assert, any and all defenses in its
favor based upon an election of remedies by Lender which destroys, diminishes,
or affects such Borrower's subrogation rights against the other Borrowers, or
against any Obligor, and/or (except as explicitly provided for herein) any
rights to proceed against each other Borrower, or any other party liable to
Lender, for reimbursement, contribution, indemnity, or otherwise.
(g) Borrowers and each of them warrant and agree that each of
the waivers and consents set forth herein are made after consultation with legal
counsel and with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy, or otherwise adversely affect rights which Borrowers
otherwise may have against each other, Lender, or others, or against Collateral,
and that, under the circumstances, the waivers and consents herein given are
reasonable and not contrary to public policy or law. If any of the waivers or
consents herein are determined to be contrary to any applicable law or public
policy, such waivers and consents shall be effective to the maximum extent
permitted by law.
12.7 Contribution Agreement. As an inducement to Lender to enter into
the Financing Agreements and to make the loans and extend credit to the
Borrowers, each Borrower agrees to indemnify and hold the other harmless from
and each shall have a continuing right of contribution against the other
Borrowers, if and to the extent that a Borrower makes or is caused to make
disproportionate payments in excess of that Borrower's Proportionate Share (as
defined herein) of the Loans or contributions (from dispositions of its assets
or otherwise) to the repayment and satisfaction of the Obligations. These
indemnification and contribution obligations shall be unconditional and
continuing obligations of the Borrowers and shall not be waived, rescinded,
modified, limited or terminated in any way whatsoever without the prior written
consent of Lender, in its sole discretion. These indemnification and
contribution obligations are subordinated to the prior indefeasible payment in
full in cash of all Obligations. For purposes hereof, the Proportionate Share of
a Borrower shall be expressed as a fraction and shall be equal to the Adjusted
Net Worth of a Borrower on the date of this Agreement over the aggregate
Adjusted Net Worth of all the Borrowers on such date.
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12.8 Confidentiality.
(a) Lender shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by Borrowers pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by Borrowers to Lender, provided, that, nothing contained herein shall
limit the disclosure of any such information: (i) to the extent required by
statute, rule, regulation, subpoena or court order, (ii) to bank examiners and
other regulators, auditors and/or accountants, (iii) in connection with any
litigation to which Lender is a party, (iv) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) shall have first agreed in writing to treat
such information as confidential in accordance with this Section 12.8, or (v) to
counsel for Lender or any participant or assignee (or prospective participant or
assignee).
(b) In no event shall this Section 12.8 or any other provision
of this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by Borrowers or any
third party without breach of this Section 12.5 or otherwise become generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Lender on a non-confidential basis from a person other than
Borrowers, (iii) require Lender to return any materials furnished by Borrowers
to Lender or (iv) prevent Lender from responding to routine informational
requests in accordance with the Code of Ethics for the Exchange of Credit
Information promulgated by The Xxxxxx Xxxxxx Associates or other applicable
industry standards relating to the exchange of credit information. The
obligations of Lender under this Section 12.5 shall supersede and replace the
obligations of Lender under any confidentiality letter signed prior to the date
hereof.
12.9 Participant's Security Interest. If a Participant that is a
banking or lending institution shall at any time participate with Lender in the
Loans, Letter of Credit Accommodations or other Obligations, each Borrower
hereby grants to such Participant and such Participant shall have and is hereby
given, a continuing lien on and security interest in any money, securities and
other property of such Borrower in the custody or possession of the Participant,
including the right of setoff, to the extent of the Participant's participation
in the Obligations, and such Participant shall be deemed to have the same right
of setoff to the extent of its participation in the Obligations, as it would
have if it were a direct lender.
12.10 Entire Agreement. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represents the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
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[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, Lender and Borrowers have caused these presents to
be duly executed as of the day and year first above written.
LENDER BORROWER
CONGRESS FINANCIAL CORPORATION TRANSPRO, INC.
(NEW ENGLAND)
By: ___________________________________ By:
Name: _________________________________ Name:
Title:_________________________________ Title:
Address: Chief Executive Office:
One Post Office Square 000 Xxxxx Xxxxx
Xxxxx 0000 Xxx Xxxxx, XX 00000
Xxxxxx, XX 00000
EVAP, INC.
By:
Name:
Title:
Chief Executive Xxxxxx
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
GO/XXX INDUSTRIES, INC.
By:
Name:
Title:
Chief Executive Xxxxxx
000 Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
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