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EXHIBIT 10.23(i)
SECOND AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED BUSINESS LOAN AGREEMENT ("Agreement") is made
and entered into as of __________, 1999, by and between UPRIGHT, INC., a
California corporation ("Borrower") and UNION BANK OF CALIFORNIA, N.A. ("Bank").
RECITALS
A. Borrower is currently obligated to Bank pursuant to the terms of that
certain Amended and Restated Business Loan Agreement dated as of May 3, 1999 (as
amended, supplemented, extended, restated, or renewed from time to time, "Loan
Agreement").
B. Bank and Borrower mutually desire to amend and restate the Loan
Agreement in its entirety as set forth in this Agreement.
SECTION 1. THE LOAN
1.1 REVOLVING LOAN/WORKING CAPITAL. Bank will loan to Borrower an amount not
to exceed (a) from the Closing Date (defined below) through January 30,
2000,TWENTY FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00); and (b) from
January 31, 2000 through the Termination Date/Working Capital (defined below)
TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00), outstanding in the aggregate
at any one time for Borrower's general working capital requirements ("Revolving
Loan/Working Capital"). Borrower may borrow, repay and reborrow all or part of
the Revolving Loan/Working Capital in accordance with the terms of the Revolving
Note/Working Capital. The Revolving Loan/Working Capital shall be evidenced by a
promissory note ("Revolving Note/Working Capital") on the standard form used by
Bank for commercial loans. All borrowings of the Revolving Loan/Working Capital
must be made before October 15, 2000 ("Termination Date/Working Capital"), at
which time all unpaid principal and interest and other amounts due under the
Revolving Loan/Working Capital shall be due and payable.
1.2 REVOLVING LOAN/EQUIPMENT. Bank will loan to Borrower an amount not to
exceed TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), outstanding in the
aggregate at any one time to finance the acquisition of Borrower's Eligible
Equipment (defined below) ("Revolving Loan/Equipment "). Borrower may borrow,
repay and reborrow all or part of the Revolving Loan/Equipment in amounts of not
less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) in accordance
with the terms of the Revolving Note/Equipment. The Revolving Loan/Equipment
shall be evidenced by a promissory note ("Revolving Note/Equipment") on the
standard form used by Bank for commercial loans. All borrowings of the Revolving
Loan/Equipment must be made before June 30, 2000 ("Termination Date/Equipment"),
at which time all unpaid principal and interest and other amounts due under the
Revolving Loan/Equipment shall be due and payable.
1.3 REVOLVING LOAN/CONSTRUCTION. Bank will loan to Borrower an amount not to
exceed FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), outstanding in the
aggregate at any one time to provide interim funding for improvements to
Borrower's real property commonly known as (a) the UpRight Facility, Madera
California ("Madera Facility"); and (b) the UpRight Facility, Selma, California
("Selma Facility") ("Revolving Loan/Construction"). Borrower may borrow, repay
and reborrow all or part of the Revolving Loan/Construction in amounts of not
less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) in accordance
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with the terms of the Revolving Note/Construction. The Revolving
Loan/Construction shall be evidenced by a promissory note (the "Revolving
Note/Construction") on the standard form used by Bank for commercial loans. All
borrowings of the Revolving Loan/Construction must be made before June 30, 2000
("Termination Date/Construction"), at which time all unpaid principal and
interest and other amounts due under the Revolving Loan/Construction shall be
due and payable.
1.4 FUTURE TERM LOANS. Construction of the Madera Facility and the Selma
Facility may be done in one or more phases to be completed on or before the
Termination Date/Construction. Upon earlier of the completion of one or more
phases of the Madera Facility, the Selma Facility or the Termination
Date/Construction; provided that Borrower is in compliance with all terms and
conditions of the Loan Documents and no Event of Default has occurred and is
continuing, upon request of Borrower, Bank agrees to convert principal of the
Revolving Note/Construction in an amount equal to the sum of eighty percent
(80%) of the appraised value of the completed improvements and the associated
real property which constitute one of more phases of construction to a term loan
(together with the Existing Term Loans, each a "Term Loan" and collectively, the
"Term Loans"). The proceeds of the Term Loan shall be used first to repay all
obligations of Borrower to Bank under the Revolving Note/Construction on or
before the Termination Date/Construction. If the proceeds of the Term Loan is
not sufficient, for any reason, to satisfy such obligations in full, Borrower
shall, without further demand from Bank or additional documentation, satisfy all
obligations to Borrower to Bank under the Revolving Loan/Construction no later
than the Termination Date/Construction. Each Term Loan shall be evidenced and
secured by any and all documents necessary or appropriate in Bank's sole
discretion to effectuate this Agreement and the grant, perfection and priority
of such documents and Bank's lien position, including without limitation all
environmental, real property appraisal, and flood documentation required by law,
regulation and Bank policy. Borrower shall reimburse Bank for all costs incurred
in connection therewith. Each Term Loan shall also be evidenced by and repayable
in accordance with the terms of a promissory note, in form and substance
satisfactory to Bank (together with the Existing Term Notes, each a "Term Note"
and collectively, the "Term Notes").
1.5 EXISTING TERM LOAN A. Borrower is further obligated to Bank pursuant to
the terms of that certain Commercial Promissory Note Secured by Deed of Trust
dated as of April 22, 1999, in the original principal amount of $5,800,000.00
("Existing Term Note A"), executed by Borrower to the order of Bank, the
proceeds of which were used to fund the first phase of construction costs for
Borrower's Madera Facility. Borrower hereby acknowledges that as of the Closing
Date, the outstanding principal indebtedness under Existing Term Note A is
$5,741,408.31, and that Existing Term Note A shall continue to evidence Existing
Term Loan A.
1.6 EXISTING TERM LOAN B. Borrower is further obligated to Bank pursuant to
the terms of that certain Term Note B dated as of May 3, 1999, in the original
principal amount of $800,000.00 ("Existing Term Note B", together with Existing
Term Note A, each an "Existing Term Note and collectively, the "Existing Term
Notes"), executed by Borrower to the order of Bank, the proceeds of which were
used to fund the first phase of construction costs for Borrower's Selma
Facility. Borrower hereby acknowledges that as of the Closing Date, the
outstanding principal indebtedness under Existing Term Note B is $792,600.36,
and that Existing Term Note B shall continue to evidence Existing Term Loan B
(together with Term Loan A, each an "Existing Term Loan" and collectively, the
"Existing Term Loans").
1.7 TERMINOLOGY. The definitions appearing in this Agreement or any
supplement or addendum to this Agreement, shall be applicable to both the
singular and plural forms of the defined terms:
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(a) "Closing Date" means the date of this Agreement.
(b) "GAAP" means generally accepted accounting principles and
practices consistent with those principles and practices promulgated or
adopted by the Financial Accounting Standards Board and the Board of the
American Institute of Certified Public Accountants, their respective
predecessors and successors. Each accounting term used but not otherwise
expressly defined herein shall have the meaning given it by GAAP.
(c) "Loan" shall mean, individually and collectively, all the credit
facilities described above.
(d) "Loan Documents" shall mean all documents executed in connection
with this Agreement.
(e) "Note" shall mean, individually and collectively, all the
promissory notes described herein.
1.8 PURPOSE OF LOAN. The proceeds of the Loans shall be used only for
purposes set forth in Section 1. of this Agreement; and not directly or
indirectly to purchase or carry any margin stock, as defined from time to time
by the Board of Governors of the Federal Reserve System in Federal Regulation U.
1.9 INTEREST. The unpaid principal balance of the Loans shall bear interest
at the rate or rates provided in each Note.
1.10 BALANCES. Borrower shall maintain its major depository accounts with
Bank until the Note and all sums payable pursuant to this Agreement have been
paid in full.
1.11 DISBURSEMENT/BANK RECORDS. Upon execution hereof, Bank shall disburse
the proceeds of the Loan as provided in Bank's standard form of authorization
executed by Borrower. Bank shall enter each amount borrowed and repaid in Bank's
records and such entries shall be deemed to be the amount of the Revolving Loan
outstanding. Omission of Bank to make any such entries shall not discharge
Borrower of its obligation to repay in full with interest all amounts borrowed.
1.12 SECURITY. Prior to any disbursement of the Loan, Borrower shall have
executed a security agreement, on Bank's standard form, and a financing
statement, suitable for filing in the office of the Secretary of State of the
State of California and any other state designated by Bank, granting to Bank a
first priority security interest in such of Borrower's property as is described
in said security agreement. At Bank's request, Borrower will also obtain
executed landlord's and mortgagee's waivers on Bank's form covering all of
Borrower's property located on leased or encumbered real property.
SECTION 2. CONDITIONS PRECEDENT
Bank shall not be obligated to disburse all or any portion of the proceeds of
the Loan unless at or prior to the time for the making of such disbursement, the
following conditions have been fulfilled to Bank's satisfaction:
2.1 COMPLIANCE. Borrower shall have performed and complied with all terms
and conditions required by this Agreement to be performed or complied with by it
prior to or at the date of the
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making of such disbursement and shall have executed and delivered to Bank the
Note and other documents deemed necessary by Bank.
2.2 SUBORDINATION. Certain other obligations of Borrower are and shall be
during the term of the Loan subordinated to the repayment of the Loan and all
other obligations of Borrower to Bank, pursuant to one or more subordination
agreement(s) in favor of Bank executed and delivered by X. X. Xxxxxxxxx North
America, Inc., a Delaware corporation ("Parent").
2.3 AMENDMENTS TO OFFER TO EXCHANGE ITS 10-5/8% SENIOR SUBORDINATED NOTES
DUE 2007. Borrower shall have provided Bank with exact copies of all amendments
to the Parent's Senior Subordinated Notes, defined in Section 6.7 of this
Agreement.
2.4 CONTINUING COMPLIANCE. At the time any disbursement is to be made, there
shall not exist any event, condition or act which constitutes an event of
default under Section 6 hereof or any event, condition or act which with notice,
lapse of time or both would constitute such event of default; nor shall there be
any such event, condition, or act immediately after the disbursement were it to
be made.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
3.1 BUSINESS ACTIVITY. The principal business of Borrower is the
manufacturing of portable work platforms.
3.2 AFFILIATES AND SUBSIDIARIES. Borrower is not a majority owner of or in a
control relationship with any other business entity.
3.3 AUTHORITY TO BORROW. The execution, delivery and performance of this
Agreement, the Note and all other agreements and instruments required by Bank in
connection with the Loan are not in contravention of any of the terms of any
indenture, agreement or undertaking to which Borrower is a party or by which it
or any of its property is bound or affected.
3.4 FINANCIAL STATEMENTS. The financial statements of Borrower, prepared and
attested by a responsible financial officer of Borrower as being complete and
correct and fairly presenting Borrowers financial condition and the results of
Borrower's operations, including both a balance sheet at June 27, 1999, together
with supporting schedules, and an income statement for the twelve (12) months
then ended, have heretofore been furnished to Bank, and are true and complete
and fairly represent the financial condition of Borrower during the period
covered thereby, and since that date, there has been no material adverse change
in the financial condition or operations of Borrower.
3.5 TITLE. Except for assets which may have been disposed of in the ordinary
course of business, Borrower has good and marketable title to all of the
property reflected in its financial statements delivered to Bank and to all
property acquired by Borrower since the date of said financial statements, free
and clear of all liens, encumbrances, security interests and adverse claims
except those specifically referred to in said financial statements.
3.6 LITIGATION. There is no litigation or proceeding pending or threatened
against Borrower or any of its property which is reasonably likely to affect the
financial condition, property or business of Borrower in a materially adverse
manner or result in liability in excess of Borrower's insurance coverage.
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3.7 DEFAULT. Borrower is not now in default in the payment of any of its
material obligations, and there exists no event, condition or act which
constitutes an event of default under Section 6 hereof and no condition, event
or act which with notice or lapse of time, or both, would constitute an event of
default.
3.8 ORGANIZATION. Borrower is duly organized and existing under the laws of
the state of its organization, and has the power and authority to carry on the
business in which it is engaged and/or proposes to engage.
3.9 POWER. Borrower has the power and authority to enter into this Agreement
and to execute and deliver the Note and all of the other Loan Documents.
3.10 AUTHORIZATION. This Agreement and all things required by this Agreement
have been duly authorized by all requisite action of Borrower.
3.11 QUALIFICATION. Borrower is duly qualified and in good standing in any
jurisdiction where such qualification is required.
3.12 COMPLIANCE WITH LAWS. Borrower is not in violation with respect to any
applicable laws, rules, ordinances or regulations which materially affect the
operations or financial condition of Borrower.
3.13 ERISA. Any defined benefit pension plans as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), of Borrower meet,
as of the date hereof, the minimum funding standards of Section 302 of ERISA,
and no Reportable Event or Prohibited Transaction as defined in ERISA has
occurred with respect to any such plan.
3.14 CONTINUING REPRESENTATIONS. These representations shall be considered to
have been made again at and as of the date of each disbursement of the Loan and
shall be true and correct as of such date or dates.
SECTION 4. AFFIRMATIVE COVENANTS
During the term of this Agreement and until its performance of all obligations
to Bank, Borrower will, unless Bank otherwise consents in writing:
4.1 USE OF PROCEEDS. Use the proceeds of the Loan only as provided in
Section 1. above.
4.2 PAYMENT OF OBLIGATIONS. Pay and discharge promptly all taxes,
assessments and other governmental charges and claims levied or imposed upon it
or its property, or any part thereof, provided, however, that Borrower shall
have the right in good faith to contest any such taxes, assessments, charges or
claims and, pending the outcome of such contest, to delay or refuse payment
thereof provided that adequately funded reserves are established by it to pay
and discharge any such taxes, assessments, charges and claims.
4.3 MAINTENANCE OF EXISTENCE. Maintain and preserve its existence and assets
and all rights, franchises, licenses and other authority necessary for the
conduct of its business and will maintain and preserve its property, equipment
and facilities in good order, condition and repair. Bank may, at reasonable
times, visit and inspect any of the properties of Borrower.
4.4 RECORDS. Keep and maintain full and accurate accounts and records of its
operations according to generally accepted accounting principles and will permit
Bank to have access
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thereto, to make examination and photocopies thereof, and to make audits during
regular business hours. Costs for such audits shall be paid by Borrower.
4.5 INFORMATION FURNISHED. Furnish to Bank, in form and substance
satisfactory to Bank:
(a) Within forty-five (45) days after the close of each fiscal
quarter of each fiscal year, its unaudited balance sheet as of the close
of such fiscal quarter, its unaudited income and expense statement with
supportive schedules and statement of retained earnings for that fiscal
quarter, prepared in accordance with GAAP.
(b) Within one hundred twenty (120) days after the close of each
fiscal year, a copy of its statement of financial condition including at
least its balance sheet as of the close of such fiscal year, its income
and expense statement and retained earnings statement for such fiscal
year, examined and prepared on an audited basis by independent certified
public accountants selected by Borrower and satisfactory to Bank, in
accordance with GAAP.
(c) Within forty-five (45) days after the close of each fiscal
quarter of each fiscal year, and, if requested by Bank more often, at
the time so requested, a statement executed by Borrower showing the
aging and reconciliation of Borrower's accounts receivable and
collections as of the end of such period, or as of the date requested.
(d) Within forty-five (45) days after the close of each fiscal
quarter of each fiscal year, and, if requested by Bank more often, at
the time so requested, a statement executed by Borrower showing the
aging of Borrower's accounts payable as of the last day of such period,
or as of the date requested.
(e) Within fifteen (15) days after the close of each month, a
statement showing the individual dollar amount of Borrower's accounts
receivable related to each Consolidator. "Consolidator" one of
Borrower's clients receiving extended terms and price concessions, whose
accounts receivable may be sold to factors whose agreements are approved
by Bank under Section 5.2 of this Agreement ("Designated Factors").
(f) Within fifteen (15) days after the close of each month, a
statement showing the terms and dollar amount of accounts receivable of
Borrower's accounts receivable sold to Designated Factors.
(g) Promptly, but no later than forty-five (45) days after the close
of each fiscal quarter, a statement executed by Borrower showing
Borrower's inventory, including work in process, raw materials, finished
goods and back log of contracts (and upon request by Bank which shall
identify each contract, include original contract amount, amounts billed
to date, retainage and other relevant information as of the close of
such period) as of the close of such period.
(h) Within one hundred twenty (120) days after the close of each
fiscal year, Borrower shall deliver or cause to be delivered to Bank a
complete copy of Parent's annual financial statement.
(i) As soon as available, copies of such financial statements as
Borrower may file with any state or federal agency, and within 30 days
after filing, copies of all federal income tax returns.
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(j) Such other financial statements and information as Bank may
reasonably request from time to time.
(k) In connection with each financial statement provided hereunder,
a statement executed by the president, chief financial officer or
general manager of Borrower, certifying that no default has occurred and
after due inquiry and consultation with counsel, to the best of
Borrower's knowledge, no event exists which with notice or the lapse of
time, or both, would result in a default hereunder.
(l) In connection with each fiscal year-end statement required
hereunder, promptly upon request of Bank, any management letter of
Borrower's or Parent's certified public accountants.
(m) Within forty five (45) days after each fiscal quarter, a
certification of compliance with all covenants under this Agreement,
executed by Borrower's chief financial officer or other duly authorized
of Borrower.
(n) Prompt written notice to Bank of all events of default under any
of the terms or provisions of this Agreement or of any other agreement,
contract, document or instrument entered, or to be entered into with
Bank; and of any litigation which, if decided adversely to Borrower,
would have a material adverse effect on Borrower's financial condition;
and of any other matter which has resulted in, or is likely to result
in, a material adverse change in its financial condition or operations.
(o) Prior written notice to Bank of any changes in Borrower's
officers and other senior management; Borrower's name; and location of
Borrower's assets, principal place of business or chief executive
office.
(p) Within thirty (30) days after the effective date thereof, a copy
of all amendments to the Senior Subordinated Notes, as defined in
Section 6.7 of this Agreement.
(q) Within thirty (30) days after the effective date thereof, a copy
of (i) all contracts between Borrower and any designated factor, or (ii)
any amendment thereto.
4.6 FINANCIAL COVENANTS. At all times maintain:
(a) A ratio of current assets to current liabilities of at least (a)
1.1:1.0 through December 31, 1999; and (ii) thereafter 1.2:1.0. In the
calculation of compliance with this ratio, the principal amount
outstanding from time to time under the Revolving Loan/Equipment and
Revolving Loan/Construction shall not be deemed to be current
liabilities.
(b) A ratio of total liabilities to Tangible Net Worth of not
greater than 3.0:1.00. "Tangible Net Worth" means net worth increased by
indebtedness of Borrower subordinated to Bank and decreased by patents,
licenses, trademarks, trade names, goodwill and other similar intangible
assets, organizational expenses, and monies due from affiliates
(including officers, shareholders and directors) and excluding trade
account receivables from affiliates that are not paid by the affiliate
account debtor within ninety (90) days of its due date.
(c) A ratio of EBITDA to CPLTD of at least 1.20:1:0. "EBITDA" means
earnings before interest, taxes, depreciation and amortization. "CPLTD"
means the sum of that portion of term obligations (including lease
obligations) coming due during the 12 months
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preceding the date of calculation, plus interest and dividends. In the
calculation of compliance with this covenant EBITDA and interest and
dividends paid shall be measured for the previous four (4) rolling
quarters.
4.7 INTERCREDITOR AGREEMENTS. (a) Deliver to Bank exact copies of all
agreements with all factors and leasing companies doing business with Borrower,
and as approved by Bank under Section 5.2 of this Agreement ("Creditors") and
all amendments thereto; and (b) Deliver, acknowledge or execute, as required by
Bank, all intercreditor or subordination agreements with Creditors, in form and
substance satisfactory to Bank.
4.8 INSURANCE. Keep all of its insurable property, real, personal or mixed,
insured by companies and in amounts approved by Bank against fire and such other
risks, and in such amounts, as is customarily obtained by companies conducting
similar business with respect to like properties. Borrower will furnish to Bank
statements of its insurance coverage, will promptly furnish other or additional
insurance deemed necessary by and upon request of Bank to the extent that such
insurance may be available and hereby assigns to Bank, as security for
Borrower's obligations to Bank, the proceeds of any such insurance. Prior to any
disbursement of the Loan, Bank will be named loss payee on all policies insuring
collateral. Borrower will maintain adequate worker's compensation insurance and
adequate insurance against liability for damage to persons or property. All
policies shall require at least ten (10) days' written notice to Bank before any
policy may be altered or canceled.
4.9 ADDITIONAL REQUIREMENTS. Promptly, upon demand by Bank, take such
further action and execute all such additional documents and instruments in
connection with this Agreement as Bank in its reasonable discretion deems
necessary, and promptly supply Bank with such other information concerning its
affairs as Bank may request from time to time.
4.10 LITIGATION AND ATTORNEYS' FEES. Pay promptly to Bank upon demand,
reasonable attorneys' fees (including but not limited to the reasonable estimate
of the allocated costs and expenses of in-house legal counsel and legal staff)
and all costs and other expenses paid or incurred by Bank in collecting,
modifying or compromising the Loan or in enforcing or exercising its rights or
remedies created by, connected with or provided for in this Agreement or any of
the Loan Documents, whether or not an arbitration, judicial action or other
proceeding is commenced. If such proceeding is commenced, only the prevailing
party shall be entitled to attorneys' fees and court costs.
4.11 BANK EXPENSES. Pay or reimburse Bank for all costs, expenses and fees
incurred by Bank in preparing and documenting this Agreement and the Loan, and
all amendments and modifications thereof, including but not limited to all
filing and recording fees, costs of appraisals, insurance and attorneys' fees,
including the reasonable estimate of the allocated costs and expenses of
in-house legal counsel and legal staff.
4.12 REPORTS UNDER PENSION PLANS. Furnish to Bank, as soon as possible and in
any event within 15 days after Borrower knows or has reason to know that any
event or condition with respect to any defined benefit pension plans of Borrower
described in Section 3 above has occurred, a statement of an authorized officer
of Borrower describing such event or condition and the action, if any, which
Borrower proposes to take with respect thereto.
SECTION 5. NEGATIVE COVENANTS
During the term of this Agreement and until the performance of all obligations
to Bank, Borrower will not, without the prior written consent of Bank:
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5.1 ENCUMBRANCES AND LIENS. Create, assume or suffer to exist any mortgage,
pledge, security interest, encumbrance, or lien (other than for taxes not
delinquent and for taxes and other items being contested in good faith) on
property of any kind, whether real, personal or mixed, now owned or hereafter
acquired, or upon the income or profits thereof, except to Bank and except for
minor encumbrances and easements on real property which do not affect its market
value, and except for existing liens on Borrower's personal property and future
purchase money security interests encumbering only the personal property
purchased.
5.2 BORROWINGS/TRANSFERS. Sell, discount our otherwise transfer any account
receivable or note, or draft or other evidence of indebtedness, except to Bank
or a Creditor under the terms of an agreement which is in form and substance
satisfactory to Bank. After the date of this Agreement, Borrower will not borrow
any money, become contingently liable to borrow money, nor enter into any
agreement to directly or indirectly obtain borrowed money, other than pursuant
to agreements made with Bank, except for indebtedness secured only by Borrower's
commercial real property, not to exceed FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) for the purpose of acquisition of or improvements to commercial
real property; and except for indebtedness secured only by Borrower's plant and
equipment, not to exceed FIFTEEN MILLION EIGHT HUNDRED THOUSAND AND NO/100
DOLLARS ($15,800,000.00) for the purpose of acquisition of gross fixed or
capital assets, in the aggregate at any time.
5.3 AMENDMENT(S) TO FACTOR AGREEMENT(S). Agree to or permit any amendment or
modification to any agreement with any Designated Factor which would affect the
monies to be paid to Bank in connection therewith without the prior written
consent of Bank.
5.4 SALE OF ASSETS, LIQUIDATION OR MERGER. Neither liquidate, dissolve,
enter into any consolidation, merger, partnership or other combination; nor
convey, sell or lease all or the greater part of its assets or business; nor
purchase or lease all or the greater part of the assets or business of another;
except in respect to acquisitions funded by the proceeds of bonds issued by
Borrower's Parent not to exceed the aggregate sum of $15,000,000.00, outstanding
at any one time.
5.5 LOANS, ADVANCES AND GUARANTIES. Except in the ordinary course of
business as currently conducted, make any loans or advances, become a guarantor
or surety, pledge its credit or properties in any manner or extend credit.
5.6 INVESTMENTS. Purchase the debt or equity of another person or entity
except for savings accounts and certificates of deposit of Bank, direct U.S.
Government obligations and commercial paper issued by corporations with the top
ratings of Moody's or Standard & Poor's, provided all such permitted investments
shall mature within one year of purchase.
5.7 RETIREMENT OF STOCK. Acquire or retire any share of its capital stock
for value.
5.8 PARENT AND SUBSIDIARY PROPERTY. Transfer any property to its parent or
any affiliate of its parent, except for value received in the normal course of
business as business would be conducted with an unrelated or unaffiliated
entity. In no event shall management fees or fees for services be paid by
Borrower to any such direct or indirect affiliate without Bank's prior written
approval.
5.9 LIMITATION OF CAPITAL EXPENDITURES/LEASES. Except as otherwise provided
in the Agreement, expend or be committed to expend any monies for the
acquisition of gross fixed or capital assets during any financial reporting
year; or for the lease or rental of real or personal property during any
financial reporting year.
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SECTION 6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default") shall
terminate any obligation on the part of Bank to make or continue the Loan and
automatically, unless otherwise provided under the Note, shall make all sums of
interest and principal and any other amounts owing under the Loan immediately
due and payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or any other notices or demands:
6.1 Borrower shall default in the due and punctual payment of the principal
of or the interest on any Note or any of the other Loan Documents.
6.2 Any default shall occur under any Note.
6.3 Borrower shall default in the due performance or observance of any
covenant or condition of the Loan Documents, or any agreement with any factor or
consolidator.
6.4 Any subordination agreement required hereunder is breached or becomes
ineffective, or any subordinating creditor, disavows or attempts to revoke or
terminate such subordination agreement.
6.5 There is a change in ownership or control of ten percent (10%) or more
of the issued and outstanding stock of Borrower.
6.6 Parent shall have failed to add TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) in cash or cash equivalents to Borrower's equity prior to
November 1, 1999.
6.7 Any Default or Event of Default shall occur under that certain Offer to
Exchange Parent's 10-5/8% Senior Subordinated Notes due 2007, dated October 27,
1997, as amended from time to time, an exact copy of which has been delivered to
Bank ("Senior Subordinated Notes").
SECTION 7. MISCELLANEOUS PROVISIONS
7.1 ADDITIONAL REMEDIES. The rights, powers and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other person, including but not limited to Bank's rights of setoff or banker's
lien.
7.2 NONWAIVER. Any forbearance or failure or delay by Bank in exercising any
right, power or remedy hereunder shall not be deemed a waiver thereof and any
single or partial exercise of any right, power or remedy shall not preclude the
further exercise thereof. No waiver shall be effective unless it is in writing
and signed by an officer of Bank.
7.3 INUREMENT. The benefits of this Agreement shall inure to the successors
and assigns of Bank and the permitted successors and assignees of Borrower, and
any assignment of Borrower without Bank's consent shall be null and void.
7.4 APPLICABLE LAW. This Agreement and all other agreements and instruments
required by Bank in connection therewith shall be governed by and construed
according to the laws of the State of California.
7.5 SEVERABILITY. Should any one or more provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective.
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7.6 CONSTRUCTION. The section and subsection headings herein are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
7.7 AMENDMENTS. This Agreement may be amended only in writing signed by all
parties hereto.
7.8 COUNTERPARTS. Borrower and Bank may execute one or more counterparts to
this Agreement, each of which shall be deemed an original.
7.9 NOTICES. Any notices or other communications provided for or allowed
hereunder shall be effective only when given by one of the following methods and
addressed to the respective party at its address given with the signatures at
the end of this Agreement and shall be considered to have been validly given:
(a) upon delivery, if delivered personally; (b) upon receipt, if mailed, first
class postage prepaid, with the United States Postal Service; (c) on the next
business day, if sent by overnight courier service of recognized standing; and
(d) upon telephoned confirmation of receipt, if telecopied.
7.10 The addresses to which notices or demands are to be given may be changed
from time to time by notice delivered as provided above.
7.11 INTEGRATION CLAUSE. Except for documents and instruments specifically
referenced herein, this Agreement constitutes the entire agreement between Bank
and Borrower regarding the Loan and all prior communications verbal or written
between Borrower and Bank shall be of no further effect or evidentiary value.
THIS AGREEMENT is executed on behalf of the parties by duly authorized officers
as of the date first above written.
INTENTIONALLY LEFT BLANK
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UPRIGHT, INC., a California corporation UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: V.P.
------------------------------
By: /s/ Xxxx Xxxxx
---------------------------------
Title: Vice President
------------------------------
Address for Notice to Borrower:
Address for Notice to Bank:
0000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxx 00000 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Attn:______________________________ Xxxxxx, Xxxxxxxxxx 00000
Telephone No. (___) _______________ Attn: Xxxx Xxxxx, Vice President
FAX No. (___) _____________________ Telephone No. (000) 000-0000
FAX No. (000) 000-0000
Acknowledged:
X. X. Xxxxxxxxx North America, Inc.
By:
---------------------------------
Title:
------------------------------
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