METLIFE CAPITAL
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT entered into as of the 30th day of July 1993 by
and between MetLife Capital Corporation, a Delaware corporation, whose address
is 10900 XX 0xx Xxxxxx, Xxxxx 000, X.X. Xxx X-00000, Xxxxxxxx, XX 00000
("Lender") and Hampshire Hosiery, Inc., a Delaware Corporation whose address is
000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000 ("Borrower").
WHEREAS, Lender has agreed to make a commercial loan or loans to Borrower; and
WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Borrower and Lender agree as follows:
1. Creation of Security Interest. As security for the due and punctual payment
of any and all of the present and future obligations of the Borrower to Lender,
whether direct or contingent or joint or several, Borrower hereby conveys,
assigns and grants to Lender a continuing security interest in all of Borrower's
rights, title and interest in and to the equipment described in the Supplemental
Security Agreement(s) entered into pursuant to this Loan and Security Agreement
from time to time ("Equipment") including all present and future additions,
attachments and accessories thereto, all substitutions therefor and replacements
thereof and all proceeds thereof, including all proceeds of insurance (such
Equipment and property hereinafter called "Collateral").
2. The Loans. (a) Subject to the terms and conditions of this Loan and Security
Agreement, Lender agrees to make a loan or loans to Borrower. The maximum
principal amount of any loan or loans to be made by Lender to Borrower shall be
within Lender's discretion, subject to the exercise of Lender's reasonable
business judgment, and shall be as stated in the loan commitment letter issued
by Lender to Borrower, or in the event a commitment letter is not issued by
Lender, in Lender's internal credit approval (each such loan or loans shall be
referred to as "the Loan Amount").
(b) The Loan Amount shall be repaid by Borrower as a term loan or term
loans ("Term Loan"). The Term Loan shall be evidenced by a promissory note
or notes in the form attached hereto as Exhibit "A" ("Term Note"). The
payment provisions of each Term Note shall be stated therein.
(c) If requested by borrower, and in accordance with the terms and
conditions of Section 3 hereof. Lender shall make interim funding to
Borrower of a Term Loan as partial advances of the Loan Amount ("Interim
Loans"). The Interim Loans shall either be for the payment of the
acquisition cost of any items of Equipment delivered and accepted by
borrower prior to the expiration date of Lender's loan commitment to
Borrower ("Commitment Expiration Date") or to fund progress payments to the
vendor or manufacturer of the Equipment, if the making of progress payments
was agreed to by Lender in its commitment or approval to make the loan or
loans to Borrower. The Interim Loans shall be evidenced by promissory notes
in the form attached hereto as Exhibit "B" ("Interim Note"). Interest on
all Interim Loans shall be payable as provided therein. The principal
amount due under the Interim Loans shall be due as provided in the Interim
Notes, at which time, provided no Event of Default hereunder has occurred
and is continuing or event which with the passing of time or giving of
notice or both would become an Event of Default hereunder has occurred and
is continuing. Lender shall consolidate all Interim Loans and convert them
to a Term Loan evidenced by a Term Note or Notes. Whether or not a Term
Loan is evidenced by one or more Term notes shall be as agreed between
Lender and Borrower, or in the absence of such an agreement, as decided by
Lender, in the exercise of its reasonable business judgment.
(d) In the event that the amount loaned pursuant to the Interim Loans
is less than the Loan Amount, subject to Borrower's compliance with the
terms and conditions of this Loan and Security Agreement (including the
satisfaction of the conditions of borrowing set forth in Section 7 of this
Loan and Security Agreement, including but not limited to providing Lender
with a description of the items of Equipment). Lender shall disburse to
Borrower the balance of the Loan Amount on the same date that the Interim
Loans are converted into a term loan.
3. Method for Borrowing On Interim Loan. Borrower shall give Lender at least
five (5) business days written notice of a request for the disbursement of an
Interim Loan ("Request"), specifying the date on which the Interim Loan is to be
disbursed. Such Request shall be in the form attached hereto as Exhibit "C".
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan. Such Request shall constitute a representation
and warranty by the Borrower that (i) as of the date of the Request no Event of
Default or event which with the passing of time or the giving of notice or both
would constitute an Event of Default hereunder has occurred and is continuing
and (ii) in the event items of Equipment have been delivered to the Borrower,
Borrower has unconditionally accepted the Equipment from the Lender thereof.
Subject to the conditions of this Loan and Security Agreement, Lender shall
disburse the Interim Loan to the invoicing party, or if Borrower shall have paid
the amount of such invoice. Lender shall reimburse Borrower, upon receipt of
proof of payment from Borrower.
4. Cross Collateral/Cross Default. All Collateral shall secure the payment and
performance of all of Borrower's liabilities and obligations to Lender hereunder
and under any of the loan documents relating hereto including, but not limited
to, all Interim Notes and all Term Notes (the Loan and Security Agreement, the
Interim Notes, the Term Notes, the Supplemental Security Agreement(s) and all
other loan documents may be referred to herein collectively as the "Loan
Document"). Lender's security interest in the Collateral shall not be terminated
until and unless all of Borrower's obligations to Lender under any of the Loan
Documents are fully paid and performed. The occurrence of an event of default
under any other of the Loan Documents shall be deemed to be an Event of Default
hereunder and an Event of Default hereunder shall be deemed to be an event of
default under any other of the Loan Documents.
5. Representations and Warranties. Borrower hereby represents and warrants as
follows:
(a) Power and Authorization. Borrower has the full power and
(corporate) authority to execute, deliver and perform Borrower's
obligations under the Loan Documents. The execution and delivery of the
Loan Documents have been authorized by all requisite corporate (or
partnership) action on the part of Borrower. The execution, delivery and
performance of the Loan Documents have not constituted and will not
constitute a breach, default, or violation of or under Borrower's articles
of incorporation, by-laws (partnership agreement), or any other agreement,
indenture, contract, lease, law, order, decree, judgment, or injunction to
which Borrower is a party or may be bound and have not resulted and will
not result in the creation of any lien upon the Equipment pursuant to any
agreement, indenture, lease, contract or other instrument to which Borrower
is a party, except the lien created by this Loan and Security Agreement.
(b) Existence. If Borrower is a corporation, Borrower (i) is duly
incorporated, validly existing and in good standing under the laws of its
state of incorporation, (ii) has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on it
business as now conducted, and (iii) is duly qualified to transact business
as a foreign corporation in each jurisdiction where the Equipment will be
located and in the jurisdiction where is principal place of business is
located. If borrower is a partnership, Borrower (i) has been duly formed as
a (limited or general) partnership under the laws of the state of its
organization. (ii) is comprised of the general partner(s) listed on the
Schedule of Partners attached to this Loan and Security Agreement, and
(iii) is in good standing under the laws of the state of its formation.
(c) Binding Effect. This Loan and Security Agreement constitutes the
valid and binding agreement of the Borrower; the Interim Notes and the Term
Notes, when executed and delivered, will constitute the valid and binding
obligations of the Borrower; and the Loan Documents are enforceable in
accordance with their terms except as (i) the enforceability thereof may be
limited by the bankruptcy laws, and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
or general applicability.
(d) Litigation. There is no action, suite or proceeding pending
against, or to the knowledge of the Borrower, threatened against or
affecting the Borrower, before any court or arbitrator or any governmental
body, agency or official which has not been previously disclosed to the
Lender in writing and in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the business,
financial condition or results of operations of the Borrower or which would
in any manner draw into question the validity of any of the Loan Documents.
(e) Filing of Tax Returns. The borrower has filed all tax returns
required to have been filed and has paid all taxes shown to be due and
payable on such returns, including interest and penalties, and all other
taxes which are payable by it, to the extent the same have become due and
payable. the Borrower knows of no proposed tax assessment against it and
all tax liabilities of the Borrower are adequately provided for.
(f) Title. The borrower has or shall have at the time it executes the
Term Note good and indefeasible title to the Collateral fee and clear of
all liens other than the Lender's lien.
(g) Compliance with Law. The business and operations of the Borrower
have been and are being conducted in accordance with all applicable laws,
rules and regulations, other than violations which could not (either
individually or collectively) have a material adverse effect on the
financial condition or operations of the Borrower.
(h) Full Disclosure. All documents, records, instruments,
certificates, statements (including, but not by way of limitation,
financial statements of Borrower) and information provided to Lender by
Borrower in connection with this Loan and Security Agreement are true and
accurate in all material respects and do not contain any untrue statement,
or fail to contain any statement of a material fact necessary to make the
statements contained herein or therein not misleading. There is no fact
known to the borrower that Borrower has not disclosed in writing which
could materially and adversely affect the financial condition or operations
of Borrower.
(i) Security Interest. The security interest granted to Lender
hereunder is a valid, first priority security interest in the collateral
and has been or promptly after the execution of the Supplemental Security
Agreement describing the Collateral will be, perfected in accordance with
the requirements of all states in which any item of the Collateral is
located.
(j) Personal Property. Under the laws of the state(s) in which the
Collateral is to be located, the Collateral is deemed to consist solely of
personal property.
(k) Pollution and Environmental Control. Borrower has obtained all
permits, licenses and other authorizations which are required under, and is
in material compliance with, all federal, state, and local laws and
regulations relating to pollution, reclamation or protection of the
environment, including laws relating to emissions, discharges, release or
threatened releases of pollutants, contaminants or hazardous or toxic
materials or wastes into air, water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials or wastes. Borrower shall maintain all such permits, licenses,
and authorizations current.
6. Covenants. Borrower hereby agrees and covenants as follows:
(a) Payment. Borrower shall pay the indebtedness secured hereby as
provided herein and in the Interim Notes and Term Notes.
(b) Location of Collateral. Borrower will keep the Collateral located
at the location or locations stated on the Supplemental Security
Agreements, provided, however, that borrower may change the location of the
collateral with Lender's prior written consent.
(c) No Liens. Except for the security interest granted hereby or under
any other agreement under which Lender is the secured party, whether as
mortgagee, beneficiary or otherwise, borrower shall keep the Collateral
free and clear of any security interest, lien or encumbrance of any kind
and borrower shall not sell, assign (by operation of law or otherwise)
exchange or otherwise dispose of any of the Collateral.
(d) Insurance. Borrower shall procure and continuously maintain and
pay for (a) all risk physical damage and property insurance covering loss
or damage to the equipment for not less than the full replacement value
thereof naming Lender as loss payee and (b) bodily injury and property
damage combined single limit liability insurance, all in such amounts and
against such risks and hazards as are reasonably required by Lender with
insurance companies and pursuant to contracts or policies and with
deductibles satisfactory to Lender. All contracts and policies shall
include provisions for the protection of Lender notwithstanding any act or
neglect of or breach or default by Borrower, shall provide for payment of
insurance proceeds to Lender shall provide that they may not be modified,
terminated or canceled unless Lender is given at least thirty (30) days'
advance written notice thereof, and shall provide that the coverage is
"primary coverage" for the protection of Borrower or Lender notwithstanding
any other coverage carried by Lender protecting against similar risks.
Borrower shall promptly notify any appropriate insurer and Lender of each
and every occurrence, which may become the basis of a claim or cause of
action against the insured and provide Lender with all data pertinent to
such occurrence, Borrower shall furnish Lender with certificates of such
insurance or copies of policies upon request and shall furnish Lender with
renewal certificates not less than thirty (30) days prior to the renewal
date. Proceeds of all insurance are payable first to Lender to the extent
of its interest.
(e) Financing Statements. At the request of Lender, Borrower will join
Lender in executing one or more financing statements pursuant to the
Uniform Commercial Code and other documents deemed necessary by Lender
under applicable law to record or perfect its security interest in the
collateral, including continuation statements, in form satisfactory to
lender and will pay the cost of filing the same in all public officer
wherever filing is deemed by Lender to be necessary or desirable. Borrower
hereby authorizes Lender, in such jurisdictions where such action is
authorized by law, to effect any such recordation or filing of financing
statements or other documents without Borrower's signature thereto.
(f) Change of Name or Address. Borrower will immediately notify Lender
in writing of any change in its place of business or the adoption or change
of any trade name or fictitious business name, and will upon request of
Lender, execute any additional financing statements or other similar
documents necessary to perfect or maintain its security interest.
(g) Use of Equipment, Maintenance. Borrower will cause the Equipment
to be used in a careful and proper manner, will comply with and conform to
all governmental laws, rules and regulations relating thereto, and will
cause the Equipment to be operated in accordance with the manufacturer's or
supplier's instructions or manuals and only by competent and duly qualified
personnel. Borrower will cause the Equipment to be kept and maintained in
good repair, condition and working order and will furnish all parts,
replacements, mechanisms, devices and servicing required therefor so that
the value, condition and operating efficiency thereof will at all times be
maintained and preserved, normal wear and tear excepted. All such repairs,
parts, mechanisms, devices and replacements shall immediately, without
further act, become part of the Equipment and subject to the security
interest created by this Loan and Security Agreement. Borrower will not
make any improvement, change, addition or alteration to the Equipment if
such improvement, change, addition or alteration will impair the originally
intended function or use of the Equipment or impair the value of the
Equipment as it existed immediately prior to such improvement, change,
addition or alteration. Any part added to the Equipment in connection with
any improvement, change, addition or alteration shall immediately, without
further act, become part of the Equipment and subject to the security
interest created by this Loan and Security Agreement.
(h) Inspection. Lender may at any reasonable time or times inspect the
Equipment and may at any reasonable time or times inspect the books and
records of Borrower.
(i) Taxes. Borrower shall promptly pay, when due, all charges, fees,
assessments and taxes (excluding all taxes measured by Lender's income)
which may now or hereafter be imposed upon the ownership, leasing,
possession, sale or use of the collateral.
(j) Performance by Lender. If borrower fails to perform any agreement
or obligation contained herein, Lender may itself perform, or cause the
performance of such agreement or obligation. Borrower will pay, or
reimburse Lender, on demand, for any and all fees, including attorneys'
fees, costs and expenses of whatever kind or nature incurred by Lender in
connection with (i) the creation, preservation and protection of Lender's
security interest in the collateral, including, without limitations, all
fees and taxes in connection with he recording or filing of instruments and
documents in public offices, (ii) payments or discharge of any taxes or
liens upon or in respect of the Collateral, (iii) premiums for insurance
with respect to the Equipment and (iv) this Loan and Security Agreement and
with protecting, maintaining or preserving the Collateral and Lender's
interests therein, whether through judicial proceedings or otherwise, or in
connection with defending or prosecuting any actions, suits, or proceedings
arising out of or related to the Loan and Security Agreement and the Loan
Documents or in connection with any debt restructuring, loan workout
negotiations or bankruptcy or insolvency case or proceedings. All such
amounts shall constitute obligations of Borrower secured by the Collateral
in the event that borrower fails to perform any of its agreements contained
herein, Borrower will, on demand, reimburse Lender for all such
expenditures, together with interest thereon from the date of such
expenditure until fully reimbursed at the rate of two percent (2%) per
month on the outstanding balance of such expenditures or the highest rate
permitted by law, whichever is less.
(k) Power of Attorney. borrower hereby irrevocably appoints Lender
Borrower's attorney-in-fact with full authority in the place and stead of
Borrower and in the name of Borrower or otherwise, from time to time in the
Lender's discretion, to take any action and to execute any instrument which
Lender may deem necessary or advisable to accomplish the purposes of this
Loan and Security Agreement, including, without limitation: (i) to obtain,
compromise and adjust insurance required to be paid to Lender; (ii) to ask,
demand, collect, xxx for, recover, receive and give acquittance and
receipts for moneys due and to become due under or in respect to any of the
collateral; (iii) to receive, endorses, and collect any drafts or other
instruments, documents, and chattel paper in connection with clause (i) or
(ii) above: and (iv) to file any claims or take any action or institute any
proceedings which Lender may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of Lender with
respect to any of the Collateral.
(l) No duties. The powers conferred on Lender hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon
it to exercise any such powers. Except for the safe custody of any
collateral in its possession and the accounting for moneys actually
received by it hereunder. Lender shall have no duty as to any collateral or
as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any collateral.
(m) Financial Data. Borrower will furnish to Lender and will cause any
guarantor of Borrower's obligations to furnish to Lender on request (i)
annual balance sheet and profit and loss statements prepared in accordance
with generally accepted accounting principles and practices consistently
applied and, if Lender so requires, accompanied by the annual audit report
of an independent certified public accountant reasonably acceptable to
Lender, and (ii) all other financial information and reports that Lender
may from time to time reasonably request, including, if Lender so requires,
income tax returns of Borrower and any guarantor of Borrower's obligations
hereunder.
7. Conditions of Borrowing. Lender shall not be obligated to make any loan
hereunder unless:
(a) the Interim Notes or Term Notes evidencing such loan shall have
been duly executed and delivered to lender;
(b) Borrower shall have executed and delivered to Lender the
supplemental Security Agreement describing the collateral and stating,
except with respect to progress payment funding, the location thereof;
(c) Except with respect to progress payment funding, Lender shall have
received evidence (as described in Section 6d hereof) that insurance has
been obtained in accordance with the provisions of this Loan and Security
Agreement;
(d) Lender shall have received any and all third party consents,
waivers or releases deemed necessary or desirable by it in connection with
the loan and the collateral being financed, including, without limitation.
Uniform Commercial Code lien releases and the consent and waiver, in form
and substance satisfactory to Lender, of each and every realty owner,
landlord and mortgagee holding an interest in or encumbrance on the real
property where any of the collateral is to be located;
(e) All filings, recordings and other actions deemed necessary or
desirable by Lender in order to establish, protect, preserve and perfect
its security interest in the collateral by being financed by such loan as a
valid perfected first priority security interest shall have been duly
effected, including, without limitation, the filing of financing statements
and the recordation of landlord (owners) and/or mortgagee waivers or
disclaimers, all in form and substance satisfactory to Lender, and all
fees, taxes and other charges relating to such filings and recordings shall
have been paid by Borrower.
(f) The representations and warranties contained in this Loan and
Security Agreement shall be true and correct in all respects on and as of
the date of the making of any loan hereunder with the same effect as if
made on and as of such date;
(g) In the sole judgment of Lender, there shall have been no material
adverse change in the financial condition, business or operations of
Borrower from the earliest date of any financial statement, credit report,
business report or similar document submitted to Lender for its review.
(h) All Loan Documents shall be satisfactory to Lender's attorneys;
and
(i) Lender shall have received, in form and substance satisfactory to
lender, such other documents as Lender shall require including, but not
limited to a request, proof of payment, vendor invoices and certificates of
authority and incumbency.
8. Default. The occurrence of any of the following events, following the giving
of any required notice and/or the expiration of any applicable period of grace,
shall constitute an event of default ("Event of Default") hereunder:
(a) Borrower's default in payment of any installment of the principal
of or interest on any Interim Note or Term Note when and after the same
shall become due and payable, whether at the due date thereof or by
acceleration or otherwise, which default shall continue unremedied for ten
(10) days; or
(b) The failure by Borrower to make payment of any other amount
payable hereunder or under any Interim Note, and the continuance of such
failure for more than ten (10) days after written notice thereof by Lender
to Borrower; or
(c) The failure by borrower to perform or observe any covenant,
condition, obligation or agreement to be performed or observed by it
hereunder, which failure shall continue unremedied for thirty (30) days
after written notice thereof by Lender to Borrower; or 4
(d) The occurrence of a default described in Section X hereof; or
(e) Any warranty, representation or statement made or furnished with
respect to the Borrower or the Collateral to Lender by or on behalf of
Borrower, in connection with this Loan and Security Agreement, or the
indebtedness secured hereby, shall prove to have been false in any adverse,
material respect when made or furnished; or
(f) Borrower shall become insolvent or bankrupt or make an assignment
for the benefit of creditors or consent to the appointment of a trustee or
receiver; or a trustee or a receiver shall be appointed for Borrower or for
a substantial part of its property without its consent and shall not be
dismissed for a period of sixty (60) days; or bankruptcy, reorganization,
liquidation, insolvency or dissolution proceedings shall be instituted by
or against borrower and, if instituted against Borrower, shall be consented
to or be pending and not dismissed for a period of sixty (60) days; or any
execution or writ of process shall be issued under any action or proceeding
against Borrower in such capacity whereby any of the collateral may be
taken or restrained; Borrower shall cease doing business as a going
concern; or, without the prior written consent of lender, borrower shall
sell, transfer or dispose of all or substantially all of its assets or
property; or
(g) The liquidation, merger, consolidation, reorganization, conversion
to an "S" status or dissolution. If borrower is a corporation or
partnership of Borrower, if in Lender's reasonable opinion, such act shall
materially and adversely affect Borrower's ability to perform under any of
the Loan documents; or
(h) Any item of collateral is seized or levied on under legal or
governmental process or for any reason Lender deems itself insecure. Lender
shall be entitled to deem itself insecure when some event occurs, fails to
occur or is threatened or some objective condition exists or is threatened
which significantly impairs the prospects that any of borrower's
obligations to Lender will be paid when due, which significantly impairs
the value of the collateral to Lender or which significantly affects the
financial or business condition of borrower.
The occurrence of an Event of Default shall terminate any commitment or
obligation by Lender to make any of the loans contemplated by this Loan and
Security Agreement.
9. Remedies Upon Default. Upon the occurrence of an Event of default hereunder,
Lender may, at its option, do any one or more of the following:
(a) Declare all obligations of Borrower to Lender to be immediately
due and payable, whereupon all unpaid principal of and interest on said
indebtedness and other amounts declared due and payable shall be an become
immediately due and payable;
(b) Take possession of all or any of the collateral and exclude
therefrom Borrower and all others claiming under Borrower, and thereafter
hold, store, use, operate, manage, maintain and control, make repairs,
replacements, alterations, additions and improvements to and exercise all
rights and powers of Borrower in respect to the Collateral or any part
thereof. In the event Lender demands, or attempts to take possession of the
collateral in the exercise of any rights under this Loan and Security
Agreement, Borrower promises and agrees to promptly turn over and deliver
complete possession thereof to Lender;
(c) Require Borrower to assemble the Collateral, or any portion
thereof, at a place designated by Lender and reasonably convenient to both
parties, and promptly to deliver such collateral to Lender, or an agent or
representative designated by it;
(d) Sell, lease or otherwise dispose of the Collateral at public or
private sale, without having the Collateral at the place of sale, and upon
terms and in such manner as Lender may determine ( and Lender may be a
purchaser at any sale); and
(e) Exercises any remedies of a secured party under the Uniform
commercial Code as adopted in the state where the Collateral is located or
any other applicable law.
Except as to portions of the Collateral which are perishable or threaten to
decline speedily in value or are of a type customarily sold on a recognized
market. Lender shall give borrower at least ten (10) days' prior written notice
of the time and place of any public or private sale of the collateral or other
intended disposition thereof to be made. such notice may be mailed to Borrower
at the address et forth in the first paragraph of this Loan and Security
Agreement. Borrower hereby specifically agrees (to the extent that applicable
law and public policy allows it to effectively do so) that any public or private
sale held in accordance with the terms of this Loan and Security Agreement
shall, for the purpose of the uniform Commercial Code as adopted in the state
where the Collateral is located and for all other purposes, be deemed to have
been conducted in a commercially reasonable manner and in good faith.
The proceeds of any sale under Section 9(d) shall be applied as follows:
(i) To the repayment of the costs and expense of retaking,
holding and preparing for the sale and the selling of the Collateral
(including legal expenses and attorneys' fees) and the discharge of
all assessments, encumbrances, charges or liens, if any, on the
Collateral prior to the lien hereof (except any taxes, assessments,
encumbrances, charges or liens subject to which such sale shall have
been made);
(ii) To the payment of the whole amount then due and unpaid of
the indebtedness of Borrower to Lender;
(iii) To the payment of other amounts then secured hereunder; and
(iv) The surplus, if any shall be paid to the Borrower or to
whomsoever may be lawfully entitled to receive the same. Lender shall
have the right to enforce one or more remedies hereunder, successively
or concurrently, and such action shall not operate to estop or prevent
Lender from pursuing any further remedy which it may have, and any
repossession or retaking or sale of the Collateral pursuant to the
terms hereof shall not operate to release Borrower until full payment
of any deficiency has been made in cash.
10. Limitation on Interest: It is the intent of the parties to this Loan and
Security Agreement to contract in strict compliance with applicable usury laws
from time to time in effect. In furtherance thereof, the parties stipulate and
agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money at a rate in excess of the maximum interest rate permitted to
be charged by applicable law from time to time in effect.
11. Personal Property/Tags. No item of Equipment will be attached or affixed to
realty or any building without Lender's prior knowledge and written consent and
waiver of the landlord and the mortgagee, if any, of the real property. If so
requested by Lender, Borrower will affix tags supplied by Lender, reflecting
Lender's security interest in the Equipment.
12. Loss and Damage. Borrower shall bear the risk of damage, loss, theft, or
destruction, partial or complete of the Equipment, whether or not such loss or
damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction. In the event of any damage, loss, theft, or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment to good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the prorata portion of the outstanding
principal balance due under the Interim Note or Term Note, as the case may be,
and all other amounts relating to that item of Equipment then due and owing
hereunder, and upon payment of that amount, Lender's lien shall be terminated
with respect to that item of Equipment only, and Lender will release its
interest in that item of Equipment.
13. Assignment. Borrower may not assign or transfer any rights under this Loan
and Security Agreement or to the Collateral without Lender's prior written
consent.
14. Indemnification. Borrower shall indemnify and hold harmless Lender from and
against any and all claims, losses, liabilities, causes of action, costs and
expenses (including the fees of Lender's attorneys) ("Claims") in any way
relating to or arising out of this Loan and Security Agreement, the other Loan
Documents or the collateral, except for any Claims resulting solely and directly
from Lender's gross negligence or willful misconduct.
15. Notices. Whenever Borrower or Lender shall desire to give or serve any
notice, demand, requests or other communication with respect to this Loan and
Security Agreement, each such notice, demand, request or communication shall be
in writing and shall be effective only if the same is physically delivered or is
by certified mail, postage prepaid, return receipt requested, or by overnight
courier, postage prepaid, mailed to the parties at the addresses set forth in
the first paragraph of this Loan and Security Agreement, with a copy to Lender's
Vice President of Credit. Any party hereto may change its address for such
notices by delivering or mailing to the other parties hereto, as aforesaid, a
notice of such change.
16. No Waiver by Lender. By exercising or failing to exercise any of its rights,
options or election hereunder, Lender shall not be deemed to have waived any
breach or default on the part of Borrower or to have released Borrower from any
of the obligations secured hereby, unless such waiver or release is in writing
and is signed by Lender. In addition, the waiver by Lender of any breach hereof
for default in payment of an indebtedness secured hereby shall not be deemed to
constitute a waiver of any succeeding breach or default.
17. Further Agreements. From time to time, Borrower will execute such further
instruments as Lender may reasonably require, in order to protect, preserve, and
maintain the security interest granted hereby.
18. Binding upon Successors. All agreement, covenants, conditions and provisions
of this Loan and Security Agreement shall apply to and bind the successors and
assigns of all parties hereto.
19. Governing Laws. This Loan and Security Agreement shall be governed by the
laws of the State of Washington.
20. Amendment. This Loan and Security Agreement can be modified or rescinded
only by a writing expressly referring to this Loan and Security Agreement,
signed by both of the parties hereto.
21. Invalidity of Provisions. Every provision of this Loan and Security
Agreement is intended to be severable. In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.
22. Security Substitution. If, during the term of the loan, any part of the
security becomes obsolete, Borrower shall have the right to substitute new
security of equal or greater value. Borrower agrees to pay for all costs
associated with a substitution.
Lender: METLIFE CAPITAL CORPORATION
By:
-----------------------------------------
(Print Name):
Title: Vice President
Borrower: HAMPSHIRE HOSIERY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
(Print Name): Xxxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
Social Security Number:
(if borrower is an individual)
Federal Tax Identification Number: 00-0000000
TERM PROMISSORY NOTE NO. ONE
METLIFE CAPITAL
No. 5027993
$3,500,000.00
July 30, 1993
FOR VALUE RECEIVED, the undersigned, HAMPSHIRE HOSIERY, INC. ("Maker") promise
to pay to the order of METLIFE CAPITAL CORPORATION ("Payee"), at its office at
10900 X.X. 0xx Xx., Xxxxx 000, Xxx X-00000, Xxxxxxxx, Xxxxxxxxxx 00000, the
principal sum of Three Million Five Hundred Thousand ($3,500,000.00) Dollars
together with interest on unpaid principal from the date of disbursement of such
principal amount until payment in full at a rate of Seven and Fifty Nine
Hundredths percent (7.59%) per annum ("Rate") computed on the basis of a 360 day
year of twelve consecutive thirty day months. Interest hereunder shall be paid
on the unpaid principal, together with principal, in Sixty (60) installments of
Fifty Three Thousand Eight Hundred Thirty Nine and fifty-six cents ($56,839.56)
with an amortization of the loan over Eight-Four (84) months, or Seven (7) years
commencing on August 30, 1993 and Monthly thereafter until July 30, 1998 on
which date the entire balance of $1,249,197.92, including principal and interest
unpaid shall be due and payable. It is agreed that each installment, when paid,
shall be applied by the holder hereof, first so much as shall be required to the
payment of interest accrued as specified hereto, and the balance thereof to the
repayment of the principal sum.
Except as may be otherwise expressly provided herein, this Note may not be
prepaid in whole or in part, except with the prior written consent of Payee,
Maker shall have the privilege of prepaying all (but not part) of the then
outstanding balance under this Note on July 30, 1995 or on any installment due
date thereafter, subject to giving thirty (30) days prior written notice to
Payee specifying the date of prepayment and further subject to payment of a
prepayment premium equal to the amount, if any, required to offset the adverse
impact to Payee of any decline in interest rates. The prepayment premium is
determined by (i) calculating the decrease, expressed in basis points (but no
less than zero) in the current weekly average yield for Three (3) year U.S.
Treasury Notes as published in Federal Reserve Statistical Release H. 15(519)
(the "Index") from the weekly average yield of 4.50% as of June 22, 1993 to the
Friday (or, if Friday is not a business day, the last business day) of the week
immediately preceding the prepayment date (ii) dividing the difference by 100,
(iii) multiplying the result by the applicable "Premium Factor" set forth below,
and (iv) multiplying the product by the principal to be prepaid. Any prepayment
shall be applied first to the prepayment premium, if any, next to accrued
interest and late charges (if any), and thereafter to the principal then
outstanding. The Premium Factor shall be the amount shown on the following chart
for the month in which payment occurs.
Number of Months Remaining (Years) Premium Factor
26 - 25 (3) .022
24 - 13 (2) .017
12 - 1 (1) .011
In the event the Federal Reserve Board ceases to publish Statistical Release H.
15(519), then the decrease in Three (3) - Year U.S. Treasury Notes will be
determined from another source designated by Payee.
If Maker shall have given to Payee notice of Maker's intention to so prepay,
Maker shall not then be entitled to withdraw such notice, and the indebtedness
proposed to be prepaid in such notice together with the aforesaid prepayment
fee, if applicable, shall be due and payable upon the date specified for such
prepayment in such notice. Upon the occurrence of an Event of Default and
acceleration of payment of indebtedness evidenced hereby during a period open to
prepayment, Maker shall pay to Payee, in addition to any and all other sums due
and payable hereunder, as liquidated damages for the loss of Payee's investment
and not as a penalty, an amount equal to the prepayment fee which would have
been payable hereunder on such date of acceleration in the event of a voluntary
prepayment. Maker and Payee agree that the foregoing amounts do not constitute
penalties but rather constitute reasonable calculations of the investment loss
that would be sustained by Payee in the event of such prepayment.
It is specifically understood and agreed by Maker that, in the event of a
default under this Note or under any instrument securing the Note, a tender of
payment of the unpaid principal and accrued interest then outstanding shall be
deemed a prepayment, and accordingly, said tender must include the premium
herein above required, or if said tender is made prior to the time this
privilege is operative, then said tender must include a premium equal to six (6)
months' interest at the Rate computed on the principal amount so tendered. It is
further understood and agreed by Maker that Payee shall not be obligated to
accept said tender, and said tender shall for all purposes be deemed ineffectual
and deficient, unless said tender shall include the premium herein above
required.
In the event that Payee does not receive any payment on the date due, Maker will
pay Payee a late charge of five percent (5%) of the payment outstanding together
with the payment and, provided said sum is received within ten (10) days of the
date due, Payee agrees not to demand immediate payment of the whole sum of
principal and interest as otherwise permitted herein.
If, from any circumstances whatsoever, payment of any obligation due under this
Note at the time such performance shall be due shall involve exceeding the
maximum amount currently prescribed by any applicable usury statue or any other
applicable law, then such obligation shall be reduced to such maximum amount, so
that in no even shall any payment be possible under this Note, or under any
other instrument evidencing or securing the indebtedness evidenced hereby, that
is in excess of such maximum amount.
In the event that an Event of Default shall occur under the Loan and Security
Agreement (as hereinafter defined) or other instrument now or hereafter securing
repayment hereof, following any required notice and/or the expiration of any
applicable period of grace, then, and in such event, the principal indebtedness
evidenced hereby, and any other sums advanced hereunder, together with all
unpaid interest accrued thereon, shall, at the option of Payee, at once become
due and payable and may be collected forthwith, regardless of the stipulated
date of maturity. TIME IS OF THE ESSENCE WITH RESPECT TO THIS NOTE. Interest
shall accrue on the outstanding principal for so long as such default continues,
regardless of whether or not there has been an acceleration of the indebtedness
evidenced hereby as set forth herein, at the rate equal to the lesser of fifteen
percent (15%) per annum or the maximum rate allowable under law. All such
interest shall be paid at the time of and as a condition precedent to the curing
of any such default should Payee, at its sole option, allow such default to be
cured. In the event this Note, or any part thereof, is collected by or through
an attorney-at-law. Maker agrees to pay all costs of collection including, but
not limited to, reasonable attorneys' fees, whether or not suit is filed.
This Note is one of the notes referred to in and is secured by the Loan and
Security Agreement dated July 30, 1993 between Maker and Payee. The terms of the
Loan and Security Agreement are incorporated herein by reference
This Note consolidates the following interim Notes executed by Maker in favor of
Payee
Interim Note Number Date Principal Amount
REQUEST FOR ADVANCE OF DATED: July 27, 1993 $3,500,000.00
LOAN PROCEEDS NO. ONE
Maker waives any right of exemption and waives presentment, protest and demand
and notice of protest, demand and of dishonor and nonpayment of this Note, and
consents that any holder hereof shall have the right, without notice, to grant
any extension or extensions of time for payment of this Note or any part thereof
or any other indulgences or forbearances whatsoever, or may release any of the
security for this Note without in any way affecting the liability of any other
party for the payment of this Note.
The due payment and performance of Maker's obligations hereunder shall be
without regard to any counterclaim, right of offset, or any other counterclaim
whatsoever which Maker may have against Payee and without regard to any other
obligations of any nature whatsoever which Payee may have to Maker, and no such
counterclaim or offset shall be asserted by Maker in any action, suite or
proceeding instituted by Payee for Payment of Maker's obligations hereunder.
This Note and the Loan and Security Agreement shall be governed by and construed
in accordance with the laws of the State of Washington.
Maker acknowledges that there is no presumption that the value of the property
securing this note is equal to the face amount of the Note, and that a
deficiency judgment many be necessary in proceedings taken for enforcement
hereof.
No amendment to this Note shall be binding upon Payee unless it is in writing
and duly signed by Payee.
IN WITTINESS WHEREOF, the Maker has caused these presents to be duly signed and
the date first above written.
Borrower: HAMPSHIRE HOSIERY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Witness:/s/ Xxxxx X. Xxxx
(Print name): Xxxxxxx X. Xxxxxxx
Title: Vice President/Treasurer
METLIFE CAPITAL
SUPPLEMENTAL SECURITY AGREEMENT NO. ONE
This Supplemental Security Agreement is executed by HAMPSHIRE HOSIERY, INC.,
("Borrower") pursuant to the terms of a Loan and Security Agreement dated
_________ between Borrower and MetLife Capital Corporation ("Lender"). All
capitalized terms used herein that are not otherwise defined herein shall have
the respective meanings given to such terms in the Loan and Security Agreement.
In order to provide security for the payment and performance of Borrower's
obligations under the Loan Documents, Borrower has granted to Lender a first
priority security interest in the Collateral. In addition to said grant,
Borrower intends by this Supplemental Security Agreement to grant to Lender a
first priority security interest in the items of Equipment identified herein.
1. To further secure the payment and performance of all of Borrower's
obligations to lender under the Loan Documents, Borrower hereby grants to Lender
a first priority security interest in the items of Collateral described below,
including all present and future additions, attachments and accessories thereto,
all substitutions therefor and replacements thereof and all proceeds thereof,
including all proceeds of insurance: Cost or Qty. Model/Mfr. Description Serial
No. Appraised Value Equipment specified in the Equipment Appraisal as of 6/2/93
by Xxxxxxxxx Machinery, Inc. $3,500,000.00
2. Borrower hereby (a) affirms that the representations and warranties set forth
in Section 5 of the Loan and Security Agreement are true and correct as of the
date hereof; (b) represents and warrants that Lender has a first priority
security interest in the Collateral; and (c) represents and warrants that the
above described equipment will be maintained at the following locations(s):
000 Xxxxx Xxxxxx, Xxxxxxx 00X, Xxxxxx Xxxx, XX 00000
3. The Loan Amount for loans to be made pursuant to this Supplemental Security
Agreement is $3,500,000.00.
4. The Commitment Expiration Date for loans to be made pursuant to this
Supplemental Security Agreement is July 31, 1993.
5. The amount of liability insurance required to be maintained by Borrower
pursuant to Section 6(d) of the Loan and Security Agreement is $1,000,000.00.
6. All of the terms and provisions of the Loan and Security Agreement are hereby
incorporated in and made a part of this Supplemental Security Agreement to the
same extent as if fully set forth herein.
In witness whereof, Borrower has executed and delivered this supplemental
Security Agreement this 27th day of July, 1993.
Borrower: HAMPSHIRE HOSIERY, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
(Print name): Xxxxxxx X. Xxxxxxx
Title: Vice President/Treasurer
