Exhibit 10.2
SECOM GENERAL CORPORATION
UNIFLOW CORPORATION
MICANOL, INC.
L&H DIE, INC.
FORM FLOW, INC.
$4,000,000 Committed Facility
$2,000,000 Uncommitted Facility
and $775,000 Term Loan
AMENDED AND RESTATED
REVOLVING CREDIT AND LOAN AGREEMENT
Dated as of June 30, 1996
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NBD BANK
TABLE OF CONTENTS
PAGE
INTRODUCTION....................................................... 1
ARTICLE I. DEFINITIONS............................................. 1
1.1 Certain Definitions...................................... 1
1.2 Certain Rules of Construction............................ 11
1.3 Acknowledgment and Restatement of Credit................. 12
ARTICLE II. THE CREDIT FACILITIES.................................. 12
2.1 Revolving Loans.......................................... 12
2.2 Termination and Reduction of the Commitment.............. 14
2.3 Letters of Credit........................................ 14
2.4 Term Loan ............................................... 16
2.5 NBD Records and Determinations .......................... 16
ARTICLE III. THE LOANS ............................................ 16
3.1 Types of Loans .......................................... 16
3.2 Requests for Loans ...................................... 16
3.3 Conversion of Loans; Procedures.......................... 17
3.4 Procedures at End of Loan Period......................... 17
3.5 Requests for Negotiated Rate Loans ...................... 18
3.6 Conditions for Initial Loans............................. 18
3.7 Further Conditions for Disbursement ..................... 20
ARTICLE IV. PAYMENTS AND PREPAYMENTS OF LOANS...................... 21
4.1 Principal Payments....................................... 21
4.2 Interest Payments........................................ 21
4.3 Payment Method and Related Matters....................... 22
4.4 No Setoff or Deduction................................... 22
4.5 Payment on Non-Business Day; Payment Computations........ 22
4.6 Additional Costs ........................................ 23
4.7 Illegality and Impossibility ............................ 24
4.8 Indemnity................................................ 24
ARTICLE V. REPRESENTATIONS AND WARRANTIES.......................... 25
5.1 Corporate Existence and Power............................ 25
5.2 Corporate Authority...................................... 25
5.3 Binding Effect .......................................... 25
5.4 Subsidiaries ............................................ 25
5.5 Litigation .............................................. 25
5.6 Financial Condition ..................................... 25
5.7 Use of Loans ............................................ 26
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PAGE
5.8 Consents, Etc............................................ 26
5.9 Taxes ................................................... 26
5.10 Title to Properties...................................... 26
5.11 Compliance with Governmental Regulations ................ 26
5.12 ERISA ................................................... 26
5.13 Environmental Matters.................................... 27
5.14 Investment Company Act................................... 27
5.15 Disclosure .............................................. 27
ARTICLE VI. COVENANTS.............................................. 28
6.1 Affirmative Covenants.................................... 28
6.2 Negative Covenants....................................... 31
ARTICLE VII. DEFAULT............................................... 33
7.1 Events of Default........................................ 33
7.2 Remedies ................................................ 35
ARTICLE VIII. MISCELLANEOUS ....................................... 36
8.1 Amendments............................................... 36
8.2 Notices ................................................. 36
8.3 No Waiver By Conduct; Remedies Cumulative ............... 37
8.4 Reliance on and Survival of Various Provisions .......... 37
8.5 Expenses; Indemnification ............................... 37
8.6 Successors and Assigns .................................. 38
8.7 Participations .......................................... 38
8.9 Counterparts ............................................ 38
8.10 Governing Law ........................................... 38
8.11 Table of Contents and Headings........................... 39
8.12 Construction of Certain Provisions ...................... 39
8.13 Integration and Severability............................. 39
8.14 Independence of Covenants................................ 39
8.16 Interest Rate Limitation ................................ 39
8.17 Limitation of Liability ................................. 40
8.18 Waiver of Jury Trial..................................... 40
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EXHIBITS
Exhibit 2.1(a) Revolving Credit Note
Exhibit 2.1(b) Line of Credit note
Exhibit 2.4 Term Note
Exhibit 3.2 Request for Revolving Loan
Exhibit 3.5 Request for Negotiated Rate Loan
Exhibit 3.6(e) Guaranty Agreement
Exhibit 3.6(f) Security Agreement
SCHEDULES
Schedule 5.4 Subsidiaries
Schedule 5.5 Litigation
Schedule 5.6 Financial Statements
Schedule 5.13 Environmental Matters
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REVOLVING CREDIT AND LOAN AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AND LOAN AGREEMENT (this
"Agreement"), dated as of June 30, 1996, is by and between Secom General
Corporation, Inc., a Delaware corporation (the "Company") whose address is
00000 Xxxxx Xxxxx Xxxxxx, Xxxx, XX 00000, Uniflow Corporation, a Michigan
corporation ("Uniflow"), whose address is 00000 Xxxx Xxxxx, Xxxx, Xxxxxxxx
00000; Micanol, Inc., a Michigan corporation ("Micanol") whose address is X.X.
Xxx 000, 00000 Xxxxx Xxxxx, Xxxx, Xxxxxxxx 00000; L&H Die, Inc., a Michigan
corporation ("L&H"), whose address is 00000 Xxxxxx Xxxx, Xxxxxxx, Xxxxxxxx
00000; and Form Flow, Inc., a Michigan corporation ("Form Flow"), whose
address is 6901 Cogswell, Xxxxxxx, Xxxxxxxx 00000, as borrowers, and NBD Bank,
a Michigan banking corporation ("NBD"), formerly NBD Bank, N.A. The Company,
Uniflow, Micanol, L&H and Form Flow are collectively referred to as the
"Borrowers" and individually as a "Borrower."
INTRODUCTION
WHEREAS, Uniflow, Micanol, L&H and Form Flow are wholly owned
Subsidiaries of the Company and receive substantial benefit from the Company
and each other, including without limitation, accounting and administrative
services, research and development, marketing and sales assistance.
WHEREAS, NBD has provided a discretionary authorization of up to
$5,000,000 to the Borrowers under the terms of an Amended and Restated Credit
Agreement dated December 15, 1993, as amended by (i) the First Amendment to
Amended and Restated Credit Agreement dated July 19, 1994, (ii) the letter
dated August 19, 1994 from NBD to Secom, (iii) the Third Amendment to Amended
and Restated Loan Agreement dated December 28, 1994, (iv) the Fourth Amendment
to Amended and Restated Loan Agreement dated February 17, 1995, (v) the Fifth
Amendment to Amended and Restated Loan Agreement dated December 1, 1995 and
(vi) the Sixth Amendment to Amended and Restated Loan Agreement dated December
27, 1995 ("Existing Loan Agreement"), and has provided various other financial
accommodations to the Company and its Subsidiaries, including a term loan
secured by certain real estate and various equipment leases and letters of
credit.
WHEREAS, the Borrowers desire to obtain (i) a revolving credit facility
in the aggregate principal amount of up to $4,000,000 and (ii) a discretionary
$2,000,000 authorization, including a subfacility of up to $ 1,000,000 for the
issuance of letters of credit, issued by NBD, in order to provide funds for
the working capital and other corporate purposes of the Borrowers and NBD is
willing to establish such credit facilities in favor of the Borrowers on the
terms and conditions herein set forth.
Therefore, the parties agree as follows:
ARTICLE I. DEFINITIONS
1.1 Certain Definitions. In addition to the terms defined elsewhere in
this Agreement, as used in this Agreement, the following terms shall have the
following meanings:
"Adjusted LIBO Rate" means, for any Loan Period and the applicable LIBOR
Loan, the per annum rate of interest equal to the sum of (a) 2.15% plus (b) the
per annum rate (rounded upwards, if necessary, to the nearest one-hundredth of
one percent (1/100%)) determined by dividing (i) the LIBO Rate for such Loan
Period, by (ii) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements (including any basic,
marginal, emergency, supplemental, special or other reserves) that is
specified from time to time during a Loan Period by the Board of Governors of
the Federal Reserve System (or any successor agency), for determining the
maximum reserve requirement with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such System, without benefit or credit for
prorations, exemptions or offsets which might otherwise be available to NBD
from time to time under Regulation D.
"Affiliate", when used with respect to any person, means any other
person which, directly or indirectly, controls or is controlled by or is under
common control with such person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the ownership of
voting securities or by contract or otherwise.
"Applicable Rate" means, with respect to Revolving Loans, the Floating
Rate, the Adjusted LIBO Rate or the Negotiated Rate, as applicable.
"Authorization Amount" means the amount available to the Borrowers, in
NBD's sole discretion, under Section 2.1(b), which shall not in any event
exceed $2,000,000.
"Borrowing Base" means the sum of the following:
(a) 80% of the book value of Eligible Accounts Receivable as
reflected on the most recent Borrowing Base Certificate delivered
pursuant to Section 6.1(d)(iv); and
(b) 25% of the lower of cost or market value of Eligible
Inventory, as reflected on the most recent Borrowing Base Certificate
delivered pursuant to Section 6.1(d)(iv).
"Business Day" means a day other than a Saturday, Sunday or other day on
which NBD is not open to the public for carrying on substantially all of its
banking functions; provided, however, that, for purposes of determining the
LIBO Rate or an applicable Loan Period, references to Business Day shall
include only those days on which dealings in Dollar deposits are carried out
by U.S. financing institutions in the London interbank market.
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"Capital Expenditures" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the Loan
Parties for such period, as the same are or should be set forth on the
Combined financial statements of the Loan Parties in accordance with GAAP.
"Capital Lease" of any person means any lease which, in accordance with
GAAP, is or should be capitalized on the books of such person.
"Cash Equivalents" means, as to any person, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than 12
months from the date of acquisition, (b) time deposits and certificates of
deposit of any commercial bank with a long term unsecured debt rating of a
least A or its equivalent from Standard & Poor's Rating Group or at least A-2
or its equivalent from Xxxxx'x Investors Service, Inc. with maturities of not
more than six months from the date of acquisition by such person, (c)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered into with any
bank meeting the qualifications specified in clause (b) above, (d) commercial
paper issued by any person incorporated in the United States, which commercial
paper is rated at least A1 or the equivalent thereof by Standard & Poor's
Ratings Group or at least P1 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. or at least F1 or the equivalent thereof by Fitch Investor
Services, Inc. and in each case maturing not more than 180 days after the date
of issuance by such person, and (e) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (a) through (d) above.
"Cash Flow Coverage Ratio" means the relationship, expressed as a
numerical ratio, which (i) Net Cash Flow of the Loan Parties, determined on a
Combined basis bears to (ii) Fixed Charges of the Loan Parties, determined on
a Combined basis, to be calculated as of the end of each fiscal quarter of the
Company for the four consecutive fiscal quarters then ending.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations thereunder.
"Combined" or "combined" means, when used with reference to any
financial term in this Agreement, the aggregate for the Loan Parties of the
amounts signified by such term for all such persons determined on a combined
basis in accordance with GAAP.
"Commitment" means the commitment of NBD to make Revolving Loans
pursuant to Section 2.1 (a) in the initial amount of $4,000,000, as such
amount may be reduced from time to time pursuant to Section 2.2.
"Contingent Liabilities" of any person means, as of any date, all
obligations of such person or of others for which such person is contingently
liable, as obligor, guarantor, surety or in any other capacity, or in respect
of which obligations such person assures a creditor against loss or
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agrees to take any action to prevent any such loss (other than endorsements of
negotiable instruments for collection in the ordinary course of business),
including all reimbursement obligations of such person in respect of any
letters of credit, surety bonds or similar obligations and all obligations of
such person to advance funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other person.
"Current Ratio" means the relationship, expressed as a numerical ratio,
which (i) the amount of current assets of the Loan Parties, determined on a
Combined basis, which would be properly classified as a current asset under
GAAP, bears to (ii) the amount of current liabilities of the Loan Parties,
determined on a Combined basis, which would be properly classified as a
current liability under GAAP.
"Default" means any of the events or conditions described in Section
7.1 which might become an Event of Default with notice or lapse of time or
both.
"Default Rate" means the rate per annum which is two percent (2%) per
annum in excess of the Applicable Rate.
"Dollars" and "$" means the lawful money of the United States of America.
"Effective Date" means June 30, 1996.
"Eligible Accounts Receivable" means each account, or portion of an
account, owing to any of the Loan Parties which meets the following
specifications:
(a) it arose from a bona fide sale of goods, or performance of
services, in the ordinary course of business, such goods having been
delivered or shipped to, or such services have been provided to, the
account debtor and the appropriate Loan Party has genuine contracts,
purchase orders, invoices and shipping documents or receipts, and the
goods have not been returned;
(b) has been outstanding for no more than 90 days from the date
of shipment, delivery, or performance;
(c) it is owned by the appropriate Loan Party, free and clear of
any Lien, other than the Lien created in favor of the Bank;
(d) it is enforceable against the account debtor for the amount
included in the Borrowing Base; it is in compliance with applicable
laws and regulations; the portion included in the Borrowing Base is not
subject to any set-off, credit allowance or adjustment (except
discounts for prompt payment reflected in the computation thereof); and
the account debtor has not returned the goods or disputed liability
with respect to such account;
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(e) no Loan Party has notice or knowledge of any fact or
occurrence which could reasonably be expected to impair the credit
worthiness of the account debtor;
(f) the account debtor is not an Affiliate of any of the Loan
Parties, nor is it the United States of America, or any agency thereof;
(g) the account debtor is organized under the laws of and has its
principal place of business in the United States or any state thereof;
and
(h) the Bank has not notified the Loan Parties that the Bank
believes, in its sole discretion, that such account does not have
realizable value.
"Eligible Inventory" means finished goods, work-in-progress or raw
material inventory of any of the Loan Parties which meets the following
specifications:
(a) it is owned by the appropriate Loan Party free and clear of
any Lien other than the Lien created in favor of the Bank;
(b) it is in good and saleable condition and does not consist of
damaged, obsolete or slow-moving inventory; and
(c) the Bank has not notified the Loan Party that the Bank
believes, in its sole discretion, that such inventory does not have
realizable value.
"Environmental Laws" means any and all Governmental Regulations
concerning the protection of, or regulating the discharge of substances into,
the environment, including the Governmental Regulations specified in the
definition of Hazardous Materials.
"ERISA" means the Employee Retirement Income Securities Act of 1974, as
amended from time to time, and the regulations thereunder.
"ERISA Affiliate" means, with respect to any person, any trade or
business (whether or not incorporated) which, together with such person or any
Subsidiary of such person, would be treated as a single employer under Section
414 of the Code.
"Event of Default" means any of the events or conditions described in
Section 7.1.
"Existing Loan Documents" means the Existing Loan Agreements, Existing
Notes and the Continuing Security Agreements executed by the respective
Borrowers prior to the date hereof.
"Existing Notes" means the Fourth Amended and Restated Master Demand
Business Loan Note, dated as of December 27, 1995, from the Borrowers and the
Inactive Affiliates to NBD, in the original principal amount of $4,500,000, and
the Existing Term Note, described in Section 2.4.
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"Event of Default" means any of the events or conditions described in
Section 7.1.
"Fixed Charges" means principal, interest and capital lease payments of
the Loan Parties on a combined basis.
"Fixed Rate Loan" means any LIBOR Loan or Negotiated Rate Loan.
"Floating Rate" means the per annum rate equal to the Prime Rate in
effect from time to time.
"Floating Rate Loan" means any Revolving Loan which bears interest at or
by reference to the Floating Rate.
"Funding Date" means any Business Day designated by the Company as a day
on which (a) a new Revolving Loan is to be made, (b) a Floating Rate Loan is
to be converted to a Fixed Rate Loan, or (c) a Loan Period is to be renewed or
extended, each in accordance with the terms and conditions of this Agreement.
"GAAP" means generally accepted accounting principles applied on a basis
consistent with those reflected in the financial statements listed in Schedule
5.6.
"Governmental Regulations" means any and all laws, statutes, ordinances,
rules, regulations, judgments, writs, injunctions, decrees, orders, awards and
standards, or any similar requirement, of the government of the United States,
the government of the United Kingdom or any foreign government or any state,
province, municipality or other political subdivision thereof or therein or
any court, agency, instrumentality, regulatory authority or commission of any
of the foregoing.
"Hazardous Materials" means asbestos-containing materials, mono- or
polychlorinated biphenyls, urea formaldehyde products, radon, radioactive
materials and any "hazardous substance", "hazardous waste", "pollutant",
"toxic pollutant", "oil" or "contaminant" as used in, or defined pursuant to,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 USC ss.ss.9601 et seq., and 40 CFR ss.ss.302.1 et seq.;
the Federal Clean Air Act, as amended, 42 USC ss.ss.7401 et seq., and
regulations thereunder; the Resource Conservation and Recovery Act, 42 USC
ss.ss.6901 et seq., as amended, and regulations thereunder; the Federal Water
Pollution Control Act, 33 USC ss.ss.1251 et seq., as amended, and regulations
thereunder; 40 CFR ss.ss.116.1 et seq. and ss.ss.129.1 et seq.; and any other
substance, waste, pollutant, contaminant or material, including petroleum
products and derivatives, the use, transport, disposal, storage, treatment,
recycling, handling, release, threatened release, or emission of which is
regulated or governed by any Environmental Laws.
6
"Inactive Affiliates" means Triple Technologies, Inc. (formerly known as
Triple Tool, Inc.), a Michigan corporation, Tri-Tec Plastics Corporation, a
Michigan corporation, and Secom Information Products Company.
"Indebtedness" of any person means (a) all obligations of such person
for borrowed money, (b) all obligations of such person as lessee under any
Capital Lease, (c) all obligations which are secured by any Lien existing on
any asset or property of such person whether or not the obligation secured
thereby shall have been assumed by such person, (d) the unpaid purchase price
for goods, property or services acquired by such person, except for trade
accounts payable arising in the ordinary course of business that are not past
due, (e) all obligations of such person to purchase goods, property or
services where payment therefor is required regardless of whether delivery of
such goods or property or the performance of such services is ever made or
tendered (generally referred to as "take or pay contracts"), (f) all
liabilities of such person in respect of unfunded benefit liabilities
(determined in accordance with Section 4001 (a)(18) of ERISA) under any Plan
of such person or of any ERISA Affiliate, (g) all obligations of such person
in respect of any interest rate or currency swap, rate cap or other similar
transaction (valued in an amount equal to the highest termination payment, if
any, that would be payable by such person upon termination for any reason on
the date of determination), and (h) all Contingent Liabilities of such person.
"Investment" means (a) any transfer or delivery of cash, stock or other
property or value by such Person in exchange for Indebtedness, stock or any
other security of another Person; (b) any loan, advance or capital
contribution to or in any other Person; (c) any guaranty, creation or
assumption of any liability or obligation of any other Person; and (d) any
investment in any fixed property or fixed assets other than fixed properties
and fixed assets acquired and used in the ordinary course of the business of
that Person.
"L/C Documents" means the L/C and all applications and other documents
which NBD may require in connection with any issuance of an L/C by NBD
hereunder, as originally executed or as they may from time to time be
supplemented, modified, amended renewed or extended.
"L/Cs" means the letters of credit issued by NBD on behalf of any Loan
Party pursuant to Section 2.3, and any amendments, restatements, replacements,
extensions or renewals thereof.
"L/C Sublimit" means the maximum amount of L/Cs which may be outstanding
at any time, which amount shall initially be $1,000,000, as such amount may be
reduced from time to time pursuant to Section 2.2.
"LIBO Rate" means, for any LIBOR Loan and the related Loan Period, the
per annum rate of interest quoted by NBD as the rate at which deposits in U.S.
Dollars for the applicable Loan Period commencing on the first day of such
Loan Period (a "Rate Setting Date") and in an aggregate amount comparable to
the principal amount of such LIBOR Loan, were being offered by first class
banks in the London interbank market, at approximately 11:00 a.m., London
time, on the Rate Setting Date.
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"LIBOR Loan" means any Revolving Loan which bears interest at or by
reference to the Adjusted LIBO Rate.
"Lien" means any pledge, assignment, hypothecation, mortgage, security
interest, deposit arrangement, option, conditional sale or title retaining
contract, sale and leaseback transaction, financing statement filing, lessor's
or lessee's interest under any lease, subordination of any claim or right, or
any other type of lien, charge, encumbrance, preferential arrangement or other
claim or right.
"Loan Documents" means this Agreement, the Note, the Guaranty
Agreements, the L/C Documents, the Mortgage, the Security Agreements and all
other agreements, documents or instruments now or hereafter executed by or on
behalf of any of the Loan Parties and delivered to NBD in connection with this
Agreement.
"Loan Parties" means the Borrowers and any Affiliate of a Borrower that
has executed and delivered to the Bank an unlimited continuing guaranty of the
Borrowers' obligations to the Bank and a Security Agreement, substantially
similar to Exhibits 3.6(e) and 3.6(f).
"Loan Period" means, (i) with respect to each Negotiated Rate Loan, the
period commencing on the Funding Date for such Negotiated Rate Loan and ending
1, 2, 3, 6 or 12 months thereafter, as specified by the Borrowers in the
related notice under Section 3.2, and (ii) with respect to each LIBOR Loan,
the period commencing on the Funding Date for such LIBOR Loan and ending 1, 2,
3, 6 or 12 months thereafter, as specified by the Borrowers in the related
notice under Section 3.2; provided, however, that with respect to LIBOR Loans:
(a) any Loan Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case such
Loan Period shall end on the next preceding Business Day;
(b) any Loan Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Loan Period) shall, subject to
clause (c) below, end on the last Business Day of a calendar month; and
(c) any Loan Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Loans" means (i) the Revolving Loans made by NBD to the Borrowers
pursuant to Section 2.1, in each case evidenced by the Revolving Notes, and
(ii) the Term Loan made by NBD to the Company as described in Section 2.4.
8
"Material Adverse Event" means any event, occurrence or state of facts
which has or could have a material adverse effect on the business, properties,
assets, operations, condition (financial or otherwise) or prospects of any
Loan Party.
"Mortgage" means that certain Amended and Restated Mortgage, dated as of
December 6, 1995, between the Company and NBD, recorded at Liber 28485, Page
10 of the Register of Deeds Office for Xxxxx County, Michigan, as the same may
be amended and restated from time to time.
"Multiemployer Plan" means any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NBD Collateral" means the assets, rights, revenues, or property, real,
personal or mixed of any Loan Party in which NBD has at the time of
determination been granted a security interest or mortgage, whether now owned
or hereafter acquired.
"Negotiated Rate" means a per annum interest rate established by NBD
upon request by the Borrowers for a Negotiated Rate Loan.
"Negotiated Rate Loan" means any Revolving Loan which bears interest at
a Negotiated Rate.
"Net Cash Flow" means income before federal income taxes, plus
amortization, depreciation and interest, on a combined basis for all Loan
Parties.
"Notes" means the Revolving Notes and Term Note, together with any
amendments, restatements, replacements or renewals thereof.
"Obligations" means the principal of and interest on the Loans, the
aggregate amount of outstanding L/Cs and all other indebtedness, obligations
and liabilities of any of the Loan Parties to NBD, including those under,
arising out of or in connection with this Agreement or any other Loan Document
(including indemnities, fees and expenses), whether now existing or hereafter
incurred, direct or indirect, absolute or contingent, matured or unmatured,
joint or several, whether for principal, interest, reimbursement obligations,
fees, expenses or otherwise, and the due performance and compliance with the
terms and conditions of this Agreement and the other Loan Documents by any
Loan Party.
"Payment Date" means the first Business Day of each month, commencing
August 1, 1996.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means the Liens permitted by Section 6.2(e).
9
"Person" or "person" includes an individual, a corporation, an
association, a partnership, a trust or estate, a joint stock company, an
unincorporated organization, a joint venture, a trade or business (whether or
not incorporated), a government (foreign or domestic) and any agency or
political subdivision thereof, or any other entity.
"Plan" means, with respect to any person, any pension plan (other than a
Multiemployer Plan) subject to Title IV of ERISA or to the minimum funding
standards of Section 412 of the Code which has been established or maintained
by such person, any Subsidiary of such person or any ERISA Affiliate, or by
any other person if such person, any Subsidiary of such person or any ERISA
Affiliate could have liability with respect to such pension plan.
"Prime Rate" means the prime rate of interest as announced by NBD at its
principal office at Detroit, Michigan, as in effect from time to time, which
rate may not be the lowest rate charged by NBD to any of its customers, which
Prime Rate shall change simultaneously with any change in such announced rate.
"Prohibited Transaction" means any transaction involving any Plan which
is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Property" means any real or personal property in which any Loan Party
has an interest or right of possession.
"Purchase Money Liens" means Liens securing purchase money Indebtedness
incurred in connection with the acquisition of capital assets by any Loan
Party in the ordinary course of business; provided that (a) such Liens do not
extend to or cover assets or properties other than those purchased in
connection with the purchase in which such Indebtedness was incurred and (b)
the obligation secured by any such Lien so created shall not exceed 100% of
the cost of the property including transportation and installation costs,
covered thereby.
"Reportable Event" means a reportable event as described in Section
4043(b) of ERISA including those events as to which the 30-day notice period
is waived under Part 2615 of the regulations promulgated by the PBGC under
ERISA.
"Restricted Payments" means any dividend (other than dividends payable
solely in capital stock of such person) or returns of capital to any
shareholder of such person, or any other distribution, payment or delivery of
property or cash to any of such person's shareholder's or any redemption,
retirement, purchase or other acquisition of capital stock of such person.
"Revolving Loan" means a loan made by NBD to the Borrowers pursuant to
Section 2.1.
"Revolving Notes" means the Revolving Credit Note and Line of Credit
Note of the Borrowers evidencing the Revolving Loans, in substantially the
form of Exhibit 2.1(a) and Exhibit 2.1(b), together with any amendments,
restatements, replacements or renewals thereof.
10
"Subordinated Debt" means indebtedness of a Borrower owing to
Manubusiness Opportunities, Inc. or Xxxxx XxXxxxxx, and any other debt to
which NBD has consented to in writing and for which NBD has received a
subordination agreement on terms and conditions acceptable to NBD.
"Subsidiary" of any person means any other person (whether now existing
or hereafter organized or acquired) in which (other than directors' qualifying
shares required by law) at least a majority of the securities or other
ownership interests of each class having ordinary voting power or analogous
right (other than securities or other ownership interests which at the time as
of which any determination is being made, are owned, have such power or right
only by reason of the happening of a contingency), beneficially and of record,
by such person or by one or more of the other Subsidiaries of such person or
by any combination thereof.
"Tangible Capital Funds" means Tangible Net Worth plus deferred tax
liabilities and Subordinated Debt.
"Tangible Net Worth" means:
(i) the amount of all assets which, under GAAP, would appear
on the combined balance sheet of the Loan Parties, but excluding
intangible items such as deferred tax assets, goodwill, treasury shares,
patents, trademarks, research and development expenses and the like;
less,
(ii) the amount of all liabilities (excluding deferred tax
liabilities) which, under GAAP, would appear on the combined balance
sheet of the Loan Parties.
"Termination Date" means the earlier to occur of (a) the third
anniversary of the Effective Date, and (b) the date on which NBD's obligations
shall be terminated pursuant to Section 7.2.
"Term Note" means the Amended and Restated Term Note of the Company
evidencing the term loan described in Section 2.4, in substantially the form
of Exhibit 2.4, together with any amendments, restatements, replacements or
renewals thereof.
"Total Liabilities" means the total of all liabilities of the Loan
Parties which would appear as liabilities on a Combined balance sheet of the
Loan Parties, determined in accordance with GAAP.
"Total Liabilities to Tangible Capital Funds Ratio" means the
relationship, expressed as a numerical ratio, which (i) Total Liabilities
bears to (ii) Tangible Capital Funds, determined for the Loan Parties on a
Combined basis.
"Type of Loan" has the meaning set forth in Section 3.1.
11
1.2 Certain Rules of Construction. For purposes of this Agreement:
(a) Certain References. The words "herein," "hereof" and
"hereunder," and words of similar import, refer to this Agreement as a whole
and not to any particular provision of this Agreement, and references to
Articles, Sections, Exhibits or Schedules, and similar references, are to
Articles or Sections of, or Exhibits or Schedules to, this Agreement unless
otherwise specified.
(b) General Rules. Unless the context otherwise requires: (i) the
singular includes the plural, and vice versa; (ii) all definitions and
references to an agreement, instrument or document shall mean such agreement,
instrument or document together with all exhibits and schedules thereto and
any and all amendments, supplements or modifications thereto as the same may
be in effect at the time such definition or reference is applicable for any
purpose; (iii) all references to any party shall include such party's
successors and permitted assigns; (iv) the term "including" means including,
without limitation; and (v) reasonable attorneys' fees shall include allocated
costs of in-house counsel.
(c) Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement shall have the meanings given to them
in accordance with GAAP, all computations made pursuant to this Agreement
shall be made in accordance with GAAP, and all financial statements shall be
prepared in accordance with GAAP.
1.3 Acknowledgment and Restatement of Credit.
(a) Acknowledgment. By executing this Agreement, NBD and the
Borrowers acknowledge and agree that as of June 30, 1996, the Indebtedness
owed to NBD under the Existing Loan Agreement by the Borrowers is in the
aggregate principal sum of $2,278,572.87 plus four outstanding letters of
credit in the aggregate face amount of $728,282 (the "Existing Indebtedness").
All borrowing on June 30, 1996 shall be deemed to be advanced under this
Agreement as Floating Rate Loans. The Borrowers further acknowledge and agree
that, as of the Effective Date, all Existing Indebtedness is and shall be owed
to NBD without offset, deduction, counterclaim or any other defense or claim
whatsoever.
(b) Effect of Restatement. The parties acknowledge and agree that
this Agreement and the other Loan Agreement amend, modify and restate the
Existing Indebtedness to NBD under the Existing Loan Documents and the
execution and delivery of this Agreement or any of the Loan Documents shall
not constitute (i) a novation or (ii) a waiver or release of any Default or
Event of Default based on any facts or events occurring or existing prior to
the date hereof and unknown to NBD prior to the date hereof. Upon the
Effective Date, all Existing Indebtedness shall constitute Obligations
hereunder and all outstanding loans under a line of credit advanced under the
Existing Loan Agreement shall be deemed Floating Rate Loans under Section 2.
1(a) of this Agreement.
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ARTICLE II. THE CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions of this Agreement, NBD agrees to make Revolving Loans to the
Borrowers, jointly and severally, on a revolving basis from the Effective Date
and before the Termination Date as the Borrowers may from time to time request
from NBD; provided, however, that the aggregate principal amount of all
Revolving Loans which NBD shall be committed to make at any time shall not,
when added to the principal balance of the Revolving Loans outstanding at such
time plus the aggregate face amount of all outstanding L/Cs, exceed (i) the
Borrowing Base at such time; or (ii) the Commitment at such time. The
Revolving Loans shall be evidenced by a Revolving Note of the Borrowers in
substantially the form of Exhibit 2.1(a). The Revolving Note advanced under
this Section 2.1(a) shall be dated the Effective Date and stated to mature on
the Termination Date. Interest shall accrue on the unpaid principal balance of
the Revolving Loans from time to time outstanding under this Section 2.1(a)
at the Applicable Rate(s) and shall be payable in accordance with Section 4.2.
Within the limits of the Commitment and subject to the other terms and
conditions of this Agreement, the Revolving Loans may be borrowed, repaid and
reborrowed prior to the Termination Date. Although the Revolving Note shall be
expressed to be payable in the maximum amount of the Commitment, the Borrowers
shall be obligated to pay only the unpaid balance of the Revolving Loans
together with interest thereon and other amounts due in connection therewith
as provided herein and in the Revolving Note. The proceeds of Revolving Loans
shall be used by the Borrowers for working capital or other general corporate
purposes of the Loan Parties.
(b) Revolving Loan Authorization. Subject to the terms and
conditions of this Agreement, NBD may, in its sole discretion make Revolving
Loans to the Borrowers, jointly and severally, on a revolving basis from the
Effective Date and before the Termination Date as the Borrowers may from time
to time request from NBD; provided, however, that the aggregate principal
amount of all Revolving Loans which NBD outstanding hereunder shall not at any
time exceed the Authorization Amount; provided, further, that the aggregate
principal amount of all Revolving Loans which NBD shall make pursuant to
Section 2.1(a) and Section 2.1(b) at any time shall not, when added to the
principal balance of the Revolving Loans outstanding at such time plus the
aggregate face amount of all outstanding L/Cs, exceed (i) the Borrowing Base
at such time; or (ii) the Commitment plus the Authorization Amount at such
time. The Revolving Loans advanced under this Section 2.1(b) shall be
evidenced by a Line of Credit Note of the Company in substantially the form of
Exhibit 2.1(b). The Line of Credit Note shall be dated the Effective Date and
stated to mature on the Termination Date. Interest shall accrue on the unpaid
principal balance of the Revolving Loans from time to time outstanding under
this Section 2.1(b) at the Applicable Rate(s) and shall be payable in
accordance with Section 4.2. Subject to the other terms and conditions of this
Agreement, and subject to NBD's sole discretion, the Revolving Loans may be
borrowed, repaid and reborrowed prior to the Termination Date. Although the
Line of Credit Note shall be expressed to be payable in the maximum amount of
$2,000,000, the Borrowers shall be obligated to pay only the unpaid balance of
the Revolving
13
Loans together with interest thereon and other amounts due in connection
therewith as provided herein and in the Line of Credit Note. The proceeds of
Revolving Loans shall be used by the Borrowers for working capital or other
general corporate purposes of the Loan Parties.
(c) Commitment Fee. The Borrowers agree to pay to NBD a commitment fee
computed at the rate of 1/4% per annum on the average daily unused portion of
the Commitment. Such commitment fee shall accrue from and after the Effective
Date, shall be calculated on a daily basis during the applicable period and
shall be due and payable quarterly in arrears, beginning on September 30, 1996
and on each December 31, March 31, June 30 and September 30 thereafter through
the Termination Date with any accrued but unpaid commitment fee due on the
Termination Date. All outstanding standby L/Cs will be considered usage under
Section 2.1(a). Revolving Loans shall first be deemed to be outstanding under
Section 2.1(a) and any remaining Revolving Loan in excess of the Commitment
minus the face amount of outstanding standby L/Cs will be deemed to be
outstanding under Section 2.1(b).
2.2 Termination and Reduction of the Commitment. The Borrowers will have
the right to terminate or reduce the Commitment at any time and from time to
time, in which case the Commitment will be terminated or permanently reduced
by the amount so specified, as the case may be; provided, however, that (a)
the Borrowers shall give notice of such termination or reduction to NBD at
least five Business Days in advance thereof, specifying the amount and
effective date thereof, (b) each partial reduction of the Commitment shall be
in a minimum amount of $1,000,000 and in an integral multiple of $100,000, (c)
no such termination or reduction shall be permitted with respect to any
portion of the Commitment as to which a request for a Revolving Loan or a L/C
is then pending, (d) the entire Commitment may not be terminated if any
Revolving Loans are then outstanding and may not be reduced below the sum of
the principal amount of Revolving Loans then outstanding plus the aggregate
amount of all then outstanding L/Cs. The Commitment or any portion thereof so
terminated or reduced pursuant to this Section 2.2 may not be reinstated.
2.3 Letters of Credit.
(a) Issuance of L/Cs. Provided there is sufficient availability
under Commitment and if requested by the Borrowers (with no less than three
Business Days prior written application in such form as requested by NBD), NBD
shall issue for the account of any Borrower standby or commercial letters of
credit, upon the following conditions:
(i) Total Amount. The total face amount of L/Cs outstanding
at any time shall not exceed an amount equal to the lesser, at such
time, of (A) the L/C Sublimit or (B) $4,000,000 minus the sum of (1)
aggregate principal balance of all Revolving Loans then outstanding
under Section 2.1(a) and (2) the aggregate face of all outstanding
L/Cs.
(ii) Expiry. The expiry date of any L/C shall not exceed a
maximum of 12 months from the date of issuance, provided, however, that
any L/Cs outstanding on
14
the Termination Date will be (A) secured by cash or other collateral
satisfactory to NBD, or (B) replaced as of the Termination Date under
conditions which cause such outstanding L/Cs to be canceled.
(iii) Fees. The Borrowers will be charged a $150 issuance fee
for each standby L/C issued pursuant to this Section 2.3. Any
outstanding standby will accrue a commission at a per annum rate of
1.00% of the face amount of such L/C, payable quarterly in advance at
time of issuance.
(iv) Documentation. The Borrowers shall execute standard
documentation as requested by NBD with respect to the issuance of each
L/C.
(v) Conditions Met. On the date of issuance, all of the
conditions precedent specified in Sections 3.6 and 3.7 have been
satisfied.
(b) Obligations Unconditional. The obligation of the Borrowers to
pay to NBD the amount of any L/C shall be absolute, unconditional and
irrevocable and shall remain in full force and effect until all Obligations of
the Borrowers shall have been satisfied, and the Obligations with respect to
each L/C shall not be affected, modified or impaired upon the happening of any
event, including, without limitation, any of the following, whether or not
with notice to, or the consent of, the Borrowers:
(i) Any lack of validity or enforceability of any L/C or
any other L/C Document or to any transaction related in any way to such
L/C;
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to any of the L/C Documents;
(iii) The existence of any claim, cutoff, defense or other
right which any Loan Party may have at any time against any beneficiary
or any transferee of any L/C (or any persons for whom any such
beneficiary or any such transferee may be acting), NBD or any other
person or entity, whether in connection with any of the L/C Documents,
the transactions contemplated herein or therein or any unrelated
transactions;
(iv) Any draft or other statement or document presented
under any L/C proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in
any respect;
(v) Payment by NBD to the beneficiary under any L/C against
presentation of documents which do not strictly comply with the terms of
the L/C, including failure of any documents to bear any reference or
adequate reference to such L/C;
15
(vi) Any failure, omission, delay or lack on the part of NBD
or any party to any of the L/C Documents to enforce, assert or exercise
any right, power or remedy conferred upon NBD or any such party under
this Agreement or any of the L/C Documents, or any other acts or
omissions on the part of NBD or any such party; and
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or discharge by operation
of law or otherwise of the Loan Parties from the performance or
observance of any obligation, covenant or agreement contained in this
Section 2.3.
(c) Repayment. The Borrowers agree, jointly and severally, to pay
to NBD, on the day on which any L/C shall come due, the face amount of such
L/C and all expenses paid or incurred by NBD relative thereto. Unless the
Borrowers shall have made such payment to NBD on such day (including by
borrowing the amount thereof with the proceeds of a Fixed Rate Loan), NBD
shall be deemed to have disbursed to the Borrowers and the Borrowers shall be
deemed to have elected to satisfy its repayment obligation by a Floating Rate
Loan in an amount equal to the amount due with respect to such L/C. Such
Floating Rate Loan shall be disbursed notwithstanding any failure to satisfy
any conditions for disbursement of any Loan set forth in Section 3.7 and, to
the extent of such Loan, the repayment obligation of the Borrowers with
respect to such L/C under this subsection shall be deemed satisfied.
2.4 Term Loan. Simultaneously with the execution of this Agreement, the
Bank will amend and restate the obligations of the Company to the Bank under
the Amended and Restated Installment Business Loan Note, dated on or about
December 6, 1995, in the original principal amount of $800,000 (the "Existing
Term Note") pursuant to the terms of the Amended and Restated Term Note given
by the Company in substantially the form of Exhibit 2.4, dated the Effective
Date. The Term Note amends and restates, but does not repay, the indebtedness
outstanding under the Existing Term Note.
2.5 NBD Records and Determinations. NBD is hereby authorized by the
Borrowers to note on NBD's books and records, the date, amount and Applicable
Rate of each Revolving Loan, the amount of each payment or prepayment thereon
and such other information as appropriate, which books and records shall
constitute prima facie evidence of the information so noted. Notwithstanding
the foregoing, the failure of NBD to record, or any error in recording, any
such information shall not relieve the Borrowers of their obligation to repay
the outstanding principal amount of the Loans, the L/Cs, all accrued interest
thereon and other amounts payable with respect thereto in accordance with the
terms of the Note, the L/C Documents, and this Agreement. NBD's determinations
of the Applicable Rates, the Default Rate, the fees any indemnity payment or
other amounts payable under this Agreement shall be presumed correct.
16
ARTICLE III. THE LOANS
3.1 Types of Loans. Each Revolving Loan may be an LIBOR Loan, a
Negotiated Rate Loan or a Floating Rate Loan (each being herein called a "Type
of Loan"), as established pursuant to Sections 3.2, 3.3 or 3.4. The principal
amount of each Negotiated Rate Loan shall be at least $500,000 or a higher
integral multiple of $100,000. The principal amount of each LIBOR Loan shall
be at least $1,000,000, or a higher integral multiple of $100,000. Except for
Loans which exhaust the entire remaining amount of the Commitment and
Authorized Amount, the principal amount of each Floating Rate Loan shall be at
least $25,000 or a higher integral multiple of $25,000.
3.2 Requests for Loans. The Borrowers shall give NBD notice of each
proposed Loan: (a) in the case of a Floating Rate Loan, not later than 3:00
p.m., Detroit time, on the proposed Funding Date of such Floating Rate Loan;
(b) in the case of a Negotiated Rate Loan, not later than 3:00 p.m., Detroit
time on the proposed Funding Date of such Negotiated Rate Loan; and (c) in the
case of a LIBOR Loan, not later than 11:00 a.m., Detroit time, on the day
which is three Business Days in advance of the proposed Funding Date of such
LIBOR Loan. Each of the Borrowers hereby authorizes the Company to request
loans and to otherwise give and receive notices regarding the Loans and this
Agreement on each Borrower's behalf. Any notice received after the hour
specified above, shall be deemed to be notice given prior to such hour, on the
next succeeding Business Day. Each such request shall be effective upon
receipt by NBD, shall be in writing or by telephone to be promptly confirmed
in writing (in either case, to be in the form of Exhibit 3.2 for Floating Rate
Loans, and LIBOR Loans, and in the form of Exhibit 3.5 for Negotiated Rate
Loans), shall specify whether the request is for a new Revolving Loan, the
Applicable Rate of the requested Loan, the Funding Date and amount of the Loan
for each Type of Loan and, for any LIBOR Loan or Negotiated Rate Loan, the
Loan Period thereof. Subject to the terms and conditions of this Agreement,
the proceeds of each Revolving Loan shall be made available to the Borrowers
by depositing the proceeds thereof, in immediately available funds, in an
account to be designated by the Borrowers from time to time.
3.3 Conversion of Loans; Procedures. So long as no Default or Event of
Default exists and is continuing, the Borrowers may convert all or any part of
any outstanding Loan from one Type of Loan to another Type of Loan, if
available, by giving notice to NBD of such conversion not later than the time
required in Section 3.2 for such new Type of Loan. Each such notice shall be
effective upon receipt by NBD, shall be in writing or by telephone to be
promptly confirmed in writing (in either case, to be in the form of Exhibit
3.2), shall specify the date and amount of such conversion, the total amount
of Loans to be so converted and the Loan Period therefor. Each conversion
shall be on a Business Day, and in an amount as provided in Section 3.1.
17
3.4 Procedures at End of Loan Period.
(a) Automatic Conversion. Unless the Borrowers request a new
Negotiated Rate Loan or LIBOR Loan in accordance with subsection (b) below or
repay the applicable Loan, NBD shall automatically and without request by the
Borrowers, on the last day of the applicable Loan Period, convert each
Negotiated Rate Loan and each LIBOR Loan to a Floating Rate Loan.
(b) Extension. So long as no Default or Event of Default exists
and is continuing, and subject to the limitations set forth in Section 2.1,
the Borrowers may cause all or any part of any outstanding Negotiated Rate
Loan or LIBOR Loan to continue to bear interest at a Negotiated Rate or an
Adjusted LIBO Rate, as the case may be, if available, at the end of the
then-applicable Loan Period, by (i) with respect to Negotiated Rate Loans,
notifying NBD not later than 3:00 p.m., Detroit time, the first day of the new
Loan Period or the last Business Day prior to the new Loan Period if it does
not begin on a Business Day, and (ii) with respect to LIBOR Loans, notifying
NBD not later than 11:00 a.m., Detroit time, on a day which three Business
Days prior to the first day of the new Loan Period. Each such notice shall be
effective upon receipt by NBD and shall be in writing or by telephone to be
promptly confirmed in writing (in either case to be in the form of Exhibit
3.2), and shall specify the first day of the applicable Loan Period, the
amount of the new Fixed Rate Loans and the Loan Period therefor. Each new Loan
Period for LIBOR Loans shall begin on a Business Day and the aggregate amount
of the Loans bearing the new Negotiated Rate or the new Adjusted LIBO Rate
shall be in an amount as provided in Section 3.1
3.5 Requests for Negotiated Rate Loans. Subject to the terms and
conditions of this Agreement, the Borrowers may request from NBD, from time to
time, Negotiated Rate Loans pursuant to Section 3.2. All Negotiated Rate Loans
requested by the Borrowers shall be subject to the following additional terms
and conditions:
(a) NBD shall have sole and absolute discretion to
determine the Negotiated Rate for a Negotiated Rate Loan.
(b) The Borrowers may request a maturity date for each
Negotiated Rate Loan of 1, 2, 3, 6 or 12 months from the Funding Date of
such Negotiated Rate Loan and, in any event, not later than the
Termination Date. The Borrowers will forward to NBD a written
confirmation of any Negotiated Rate Loan substantially in the form of
the attached Exhibit 3.5, including confirmation of the date, maturity
and amount of, and the Negotiated Rate applicable to, such Negotiated
Rate Loan.
(c) Each Negotiated Rate Loan shall be repayable upon the
stated maturity date requested by the Borrowers at the time of making
such loan and shall bear interest at the Negotiated Rate established by
NBD on the date of the making of such loan.
18
(d) Interest on each Negotiated Rate Loan shall be payable
upon the stated maturity of such Negotiated Rate Loan.
(e) Each Negotiated Rate Loan or repayment thereof shall be
in the minimum amount of $500,000 or a higher integral multiple of
$100,000 and shall be made in immediately available funds at the
principal office of NBD.
(f) It is understood and agreed that any Negotiated Rate
for a Negotiated Rate Loan offered under this Agreement may be below or
above the Prime Rate and will not necessarily by the lowest rate charged
by NBD to any of its customers.
3.6 Conditions for Initial Loans. The obligation of NBD to make the
first Revolving Loans or to issue the first L/C hereunder is subject to
receipt by NBD of the following documents and completion of the following
matters on or prior to the Effective Date, in form and substance satisfactory
to NBD:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the jurisdiction of incorporation of each
of the Borrowers listing all charter documents of such Person on file in that
office and certifying as to the good standing and corporate existence of the
such Person, together with copies of such charter documents of the Borrowers
certified as of a recent date by such authority or official, and certified as
true and correct as of the Effective Date by a duly authorized officer of the
such Person.
(b) By-Laws and Corporate Authorizations. Copies of the by-laws
of each Borrower together with all authorizing resolutions and evidence of
other corporate action taken by the each Borrower to authorize the execution,
delivery and performance by such Person of this Agreement and the other Loan
Documents to which it is a party and the consummation by the such Person of
the transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of such Person.
(c) Incumbency Certificate. Certificates of incumbency of the
Borrowers containing, and attesting to the genuineness of, the signatures of
those officers authorized to act on behalf of the Borrowers in connection with
this Agreement and the other Loan Documents to which the Borrowers is a party
and the consummation by the Borrowers of the transactions contemplated hereby,
certified as true and correct as of the Effective Date by a duly authorized
officer of such Borrower.
(d) Note. The Notes appropriately completed and duly executed on
behalf of the Borrowers.
(e) Guaranty Agreement. The Guaranty Agreement, in the form of
the attached Exhibit 3.6(e), duly executed on behalf of each Borrower.
19
(f) Security Agreements. The Amended and Restated Security
Agreements, in the form attached as Exhibit 3.6(f), duly executed on behalf of
each Borrower, together with appropriate UCC financing statements as requested
by NBD.
(g) Legal Opinion. The favorable written opinion of counsel for
the Borrowers, with respect to each of the matters set forth in Sections 5.1,
5.2, 5.3 and 5.8, and as to such other matters as NBD may reasonably request.
(h) Copies of Other Indebtedness. Full copies of the
documentation of the company's indebtedness to KeyCorp Leasing Ltd., GE
Capital Public Finance Inc., and Metro Life Capital Financial Corporation.
(i) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations,
registrations or filings, if any, required on the part of the Borrowers in
connection with the execution, delivery and performance of this Agreement and
the other Loan Documents or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this Agreement or the
other Loan Documents, certified as true and correct and in full force and
effect as of the Effective Date by a duly authorized officer of the
appropriate Borrower.
(j) Satisfaction of Legal Counsel. Satisfaction of legal counsel
to NBD with all documents and instruments delivered hereunder or under any
other Loan Document and all proceedings related to the consummation of the
transactions contemplated by this Agreement and the other Loan Documents, and
delivery to NBD and such legal counsel of copies (executed or certified as may
be appropriate) of all legal documents or proceedings which NBD or such legal
counsel may reasonably request in connection with the consummation of such
transactions.
3.7 Further Conditions for Disbursement. The obligation of NBD to make
any Loan (including the first Revolving Loan or any extension or conversion of
any Revolving Loan, other than an automatic conversion of a Negotiated Rate
Loan or a LIBOR Loan to a Floating Rate Loan) or to issue any L/C (including
any renewal or extension of any L/C) is further subject to the satisfaction of
the following conditions precedent:
(a) Representations True. The representations and warranties
contained in Article V shall be true and correct on and as of the date such
Loan is made or such L/C is issued (both before and after such Loan is made or
such L/C is issued as if such representations and warranties were made on and
as of such date.
(b) No Default. No Default or Event of Default shall exist or
shall have occurred and be continuing on the date such Loan is made or such
L/C is issued (whether before or after such Loan is made or such L/C issued).
(c) No Material Adverse Event. Nothing shall have occurred since
the Effective Date which NBD shall determine either (i) constitutes a Material
Adverse Event or (ii)
20
has, or may have, an adverse effect on the rights or remedies of NBD under
this Agreement or any other Loan Document.
(d) Request for Loans. In the case of the making of any Revolving
Loan, NBD shall have timely received the request for Revolving Loan, or in the
case of an extension or conversion of any Revolving Loan the applicable notice
of extension or conversion, in accordance with this Agreement, in form and
substance reasonably satisfactory to NBD.
(e) L/Cs. In the case of the issuance of any L/Cs, the Borrowers
shall have delivered the L/C Documents, as appropriate, and any other related
documentation requested by and acceptable to NBD, appropriately completed and
duly executed on behalf of the Borrowers
(f) Reaffirmation. The Borrowers shall be deemed to have made a
representation and warranty to NBD at the time of the making of each Loan or
the issuance of each L/C to the effect set forth in clauses (a) and (b) of
this Section 3.7. For purposes of this Section 3.7, the representations and
warranties contained in Section 5.6 shall be deemed made with respect to both
the financial statements referred to therein and the most recent financial
statements delivered pursuant to Section 6.1(d).
ARTICLE IV. PAYMENTS AND PREPAYMENTS OF LOANS
4.1 Principal Payments.
(a) Mandatory Prepayment. If the principal balance outstanding
under Section 2.1 plus the face amount of all outstanding L/Cs exceeds the
lesser of (i) the Commitment plus the Authorization Amount or (ii) the
Borrowing Base at any time, the Borrowers shall immediately prepay the amount
of such excess to the Bank.
(b) Optional Prepayment. The Company may at any time and from
time to time prepay all or a portion of the Revolving Loans, without premium
or penalty; provided, however, that each prepayment of a Floating Rate Loan
shall be in a minimum amount of $25,000 and in an integral multiple of
$25,000; and provided further that any prepayment of a LIBOR Loan which is
made on a day other than the last day of a Loan Period or, with respect to a
Negotiated Rate Loan, which is made on a day other than the maturity date
thereof, shall be accompanied by the indemnity payment set forth in Section
4.8 below.
(c) Final Payment of Loans. Unless earlier payment is required
under this Agreement, the Borrowers shall pay to NBD on the Termination Date
the outstanding principal amount of the Loans and provide cash collateral for,
or obtain the cancellation of, all outstanding L/Cs.
(d) Application of Prepayments; Interest. Except as otherwise
provided in Section 4.1(c) or 4.3(a), the Revolving Loans to which any
prepayments are to be applied shall
21
be selected by NBD in its sole discretion. The Company shall also pay to NBD,
together with such amounts, all accrued interest to the date of payment on any
Loans so prepaid and, with respect to any Fixed Rate Loan prepaid prior to the
end of the applicable Loan Period or maturity date, the indemnity payment set
forth in Section 4.8 below.
4.2 Interest Payments.
(a) Regular Payments. The Borrowers will pay interest to NBD at
the Applicable Rate on the unpaid principal amount of each Loan as follows:
(i) Floating Rate Loans. Accrued and unpaid interest on
Floating Rate Loans shall be payable: (A) on each Payment Date; (B) as
to any portion of a Floating Rate Loan which is converted to a LIBOR
Loan, on the date of such conversion; and (C) on the Termination Date.
(ii) Fixed Rate Loans. Accrued and unpaid interest on Fixed
Rate Loans shall be payable on the last day of each Loan Period, and, if
the Loan Period is greater than three months, then also on each three
month anniversary of the Funding Date.
(b) Interest on Overdue Amounts. Notwithstanding the foregoing
Section 4.2(a) or Section 3.5, the Loan Parties shall pay interest on demand
at the Default Rate or the maximum rate permitted by law, whichever is lower,
on the outstanding principal amount of any Loan and any other amount payable
by the Loan Parties (other than interest) which is not paid in full when due
(whether upon demand, at stated maturity, by acceleration or otherwise) for
the period commencing on the due date thereof until the same is paid in full.
In addition to the foregoing, during the period that any other Event of
Default has occurred and shall be continuing, the Loan Parties shall pay on
demand, at the election of NBD, interest at the Default Rate or the maximum
rate permitted by law, whichever is lower, on the outstanding principal amount
of all the Obligations which are outstanding during such period from and after
the date of any such demand.
4.3 Payment Method and Related Matters.
(a) Payments by the Borrowers . All payments to be made by the
Borrowers hereunder will be made in Dollars and in immediately available funds
to NBD at NBD's address set forth opposite its name on the first page of this
Agreement, not later than 3:00 p.m., Detroit time, on the date on which such
payment shall become due. Payments received after the hour specified above
shall be deemed to be payments made prior to such hour on the next succeeding
Business Day. At the time of making each such payment, the Borrowers shall
specify to NBD the obligation of the Borrowers hereunder to which such payment
is to be applied, or, in the event that the Borrowers fails to so specify or
if an Event of Default shall have occurred and be continuing, NBD may apply
such payments as it may determine in its sole discretion.
22
(b) Authorization of Payments. If the Borrowers shall not
otherwise have made payment of any of the Obligations as provided in this
Agreement, NBD is expressly authorized to charge any such Obligations, when
due, to any of the Borrower's demand deposit accounts maintained with NBD or,
if such accounts shall not control sufficient funds, to any other account
maintained by any Borrower with NBD.
4.4 No Setoff or Deduction. All payments of principal of and interest on
the Loans and other Obligations shall be paid by the Borrowers without setoff
or counterclaim, and free and clear of, and without deduction or withholding
for, or on account of, any present or future taxes, levies, imposts, duties,
fees, assessments, or other charges of whatever nature, imposed by any
governmental authority, or by any department, agency or other political
subdivision or taxing authority or other person.
4.5 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement, whenever any installment of principal
of, or interest on, any Loan or any other Obligation becomes due and payable
on a day which is not a Business Day, the maturity thereof shall be extended
to the next succeeding Business Day and, in the case of any installment of
principal, interest shall be payable thereon at the then Applicable Rate
during such extension. Computations of interest and other amounts due under
this Agreement shall be made on the basis of a year of 360 days, for the
actual number of days elapsed, including the first day but excluding the last
day of the relevant period.
4.6 Additional Costs.
(a) Increased Costs. In the event that any Governmental
Regulation now or hereafter in effect and whether or not presently applicable
to NBD, or any interpretation or administration thereof by any governmental
authority (including without limitation the Board of Governors of the Federal
Reserve System) charged with the interpretation or administration thereof, or
compliance by NBD with any guideline, request or directive of any such
authority (whether or not having the force of law), shall (i) affect the basis
of taxation of payments to NBD of any amounts payable by the Borrowers under
this Agreement or any other Loan Documents (other than taxes imposed on the
overall net income of NBD, by the jurisdiction, or by any political
subdivision or taxing authority of any such jurisdiction, in which NBD has its
principal office), or (ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of deposits with or for
the account of, or credit extended by NBD, or (iii) impose any other condition
with respect to this agreement, the Commitment, the Note, the Loans or any
other Obligation, and the result of any of the foregoing is to increase the
cost to NBD of providing its Commitment or making, funding or maintaining any
Loan or to reduce the amount of any sum receivable by NBD under this
Agreement, then the Borrowers shall pay to NBD, from time to time, upon
request by NBD, additional amounts sufficient to compensate NBD for such
interested cost or reduced sum receivable. A Statement as to the amount of
such increased cost or reduce sum receivable, prepared promptly, in good faith
and in reasonable detail by NBD and submitted by NBD to the Borrowers, shall
be presumed correct.
23
(b) Capital Requirements. In the event that any Governmental
Regulation now or hereafter in effect and whether or not presently applicable
to NBD, or any interpretation or administration thereof by any governmental
authority (including without limitation the Board of Governors of the Federal
Reserve System) charged with the interpretation or administration thereof, or
compliance by NBD with any guideline, request or directive of any such
authority (whether or not having the force of law), including any risk-based
capital guidelines, affects or would affect the amount of capital required or
expected to be maintained by NBD (or any corporation controlling NBD) and NBD
determines that the amount of such capital is increased by or based upon the
existence of NBD's obligations hereunder and such increase has the effect of
reducing the rate of return on NBD's (or such controlling corporation's)
capital as a consequence of such obligations hereunder to a level below that
which NBD (or such controlling corporation) could have achieved but for such
circumstances (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by NBD to be material, then the Borrowers shall
pay to NBD, from time to time, upon request by NBD, additional amounts
sufficient to compensate NBD (or such controlling corporation) for any
increase in the amount of capital and reduced rate of return which NBD
reasonably determines to be allocable to the existence of NBD's obligations
hereunder. A statement as to the amount of such compensation, prepared
promptly, in good faith and in reasonable detail by NBD and submitted by NBD
to the Borrowers, shall be presumed correct.
4.7 Illegality and Impossibility.
(a) Repayment. In the event that any Governmental Regulation now
or hereafter in effect and whether or not presently applicable to NBD, or any
interpretation or administration thereof by any governmental authority
(including the Board of Governors Reserve System) charged with the
interpretation or administration thereof, or compliance by NBD with any
request or directive of such authority (whether or not having the force of
law), including exchange controls, shall make it unlawful or impossible for
NBD to maintain any LIBOR Loan at the Adjusted LIBOR Rate under this
Agreement, the Borrowers shall, upon receipt of notice thereof from NBD, repay
in full to NBD the then outstanding principal amount of such LIBOR Loan,
together with all accrued interest thereon to the date of payment and all
amounts due to NBD under Section 4.8, (i) on the last day of the then current
Loan Period applicable to the Loan if NBD may lawfully continue to maintain
such Loan at the Adjusted LIBOR Rate to such day, or (ii) immediately if NBD
may not continue to maintain such Loan at the Adjusted LIBOR Rate to such day.
(b) Conversion of LIBOR Loans to Floating Rate Loans.
Notwithstanding Section 4.7(a), if such Section would otherwise be applicable,
but NBD could lawfully maintain the LIBOR Loans at the Floating Rate then,
during such period as NBD cannot maintain the LIBOR Loans at the Adjusted LIBO
Rate, the LIBOR Loans shall bear interest at a per annum rate equal to the
Floating Rate in effect from time to time. If all events or conditions making
it unlawful or impossible for NBD to maintain the LIBOR Loans at the Adjusted
LIBO Rate cease to exist, then the LIBOR Loans shall again bear interest at
the Adjusted LIBO Rate,
24
commencing on the first day of the next Loan Period immediately following the
date all such events and conditions so cease to exist.
4.8 Indemnity. If the Borrowers fail to make any payment of principal or
interest in respect of any Fixed Rate Loan when due or makes any payment or
prepayment of the principal of any Fixed Rate Loan, for any reason, on any due
other than the last day of the Loan Period applicable thereto or, with respect
to any Negotiated Rate Loan, the maturity date thereof, or if the rate of
interest with respect to any LIBOR Loan shall be converted from the Adjusted
LIBO Rate, pursuant to Section 4.7(b), on a date other than the last day of
the Loan Period applicable thereto, or if the Borrowers fail to borrow any
LIBOR Loan after requesting the same in accordance with this Agreement, the
Borrowers shall reimburse NBD on demand for any resulting loss or expense
incurred by NBD, including any loss incurred in obtaining, liquidating or
employing deposits from third parties. A statement as to the amount of such
loss or expense, prepared promptly, in good faith and in reasonable detail and
submitted by NBD to the Borrowers, shall be presumed correct. Calculation of
all amounts payable to NBD under this Section 4.8 with regard to LIBOR Loans
shall be made as though NBD shall have funded or committed to fund such
through the purchase of an underlying deposit in an amount equal to such Loans
and having a maturity comparable to such Loans; provided, however, that NBD
may fund the Fixed Rate Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the purpose of calculation of amounts
payable under this Section 4.8.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to NBD as follows, on the Effective
Date and on each Funding Date:
5.1 Corporate Existence and Power. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and is duly qualified to do business, and
is in good standing, in all additional jurisdictions where such qualification
is necessary under applicable law. Each Loan Party has all requisite corporate
power to own or lease the properties used in its business and to carry on its
business as now being conducted and as proposed to be conducted, and to
execute and deliver this Agreement and the other Loan Documents to be executed
by such Loan Party and to engage in the transactions contemplated by this
Agreement.
5.2 Corporate Authority. The execution, delivery and performance by each
Loan Party of this Agreement and the other Loan Documents have been duly
authorized by all necessary corporate action and are not in contravention of
any Governmental Regulation, or of the terms of the respective Loan Party's
charter or by-laws, or of any contract or undertaking to which any Loan Party
is a party or by which such Loan Party or its property may be bound or
affected and do not result in the imposition of any Lien, except for the Liens
granted to NBD.
25
5.3 Binding Effect. This Agreement is, and each of the Loan Documents
when delivered hereunder will be, legal, valid and binding obligations of each
Loan Party, which is a party to such agreement, enforceable against each Loan
Party in accordance with their respective terms.
5.4 Subsidiaries. All of the Subsidiaries of the Company (and any of the
other Loan Parties) are listed on Schedule 5.4, together with the percentage
of ownership thereof.
5.5 Litigation. Except as set forth in Schedule 5.5, there is no action,
suit or proceeding pending or, to the best of the Loan Parties' knowledge,
threatened against or affecting any Loan Party before or by any court,
governmental authority or arbitrator, which if adversely decided might result,
either individually or collectively, in any Material Adverse Event or in any
adverse effect on the legality, validity or enforceability of this Agreement
or any other Loan Document and, to the best of the Loan Parties' knowledge,
there is no basis for any such action, suit or proceeding.
5.6 Financial Condition. The financial statements listed in Schedule
5.6, copies of which have been furnished to NBD, fairly present, and the
financial statements delivered pursuant to Section 6.1(d) will fairly present,
the financial position of the Loan Parties as at the respective dates thereof,
and the results of operations of the Loan Parties for the respective periods
indicated, all on a Combined basis in accordance with GAAP (subject, in the
case of interim statements, to normal, immaterial year-end audit adjustments).
There has been no Material Adverse Event since March 31, 1996. There is no
material Contingent Liability of any Loan Party that is not reflected in such
Combined statements or in the notes thereto.
5.7 Use of Loans. The Borrowers will use the proceeds of the Loans for
working capital and other general corporate purposes of the Loan Parties. The
Loan Parties do not extend or maintain, in the ordinary course of business,
credit for the purpose, whether immediate, incidental, or ultimate, of buying
or carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan will be used for the purpose, whether immediate, incidental, or ultimate,
of buying or carrying any such margin stock or maintaining or extending credit
to others for such purpose.
5.8 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Loan Parties pursuant
to Section 3.6(h), if any, each of which is in full force and effect, no
consent, approval or authorization of or declaration, registration or filing
with any governmental authority or any nongovernmental person, including any
creditor, lessor or shareholder of any Loan Party, is required on the part of
any Loan Party in connection with the execution, delivery and performance of
this Agreement and the other Loan Documents or the transactions contemplated
hereby or as a condition to the legality, validity or enforceability of this
Agreement and the other Loan Documents.
5.9 Taxes. Each of the Loan Parties has filed all tax returns (federal,
state and local) required to be filed and have paid all taxes shown thereon to
be due, including interest and
26
penalties, or has established adequate financial reserves on its books and
records for payment thereof. The Loan Parties do not know of any actual or
proposed tax assessment or any basis therefor, and no extension of time for
the assessment of deficiencies in any federal or state tax has been granted to
any of the Loan Parties.
5.10 Title to Properties. Except as otherwise disclosed in the latest
Combined balance sheet delivered pursuant to Section 5.6 or 6.1(d), the Loan
Parties have a valid and indefeasible ownership interest in all of the
properties and assets reflected in the Combined balance sheet of the Loan
Parties or subsequently acquired by any Loan Parties. All NBD Collateral is
free and clear of any Lien, except for Permitted Liens.
5.11 Compliance with Governmental Regulations. Each of the Loan Parties
is in compliance in all material respects with all Governmental Regulations
(including Environmental Laws) applicable to such person or its business or
properties. Without limiting the generality of the foregoing, all licenses,
permits, orders or approvals which are required under any Governmental
Regulation in connection with any of the businesses or properties of any Loan
Party ("Permits") are in full force and effect, no notice of any violation has
been received in respect of any such Permits and no proceeding is pending or,
to the knowledge of the Loan Parties, threatened to terminate, revoke or limit
any such Permits.
5.12 ERISA. The Loan Parties, their ERISA Affiliates and their
respective Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
Respect to any such Plan. None of the Loan Parties or any of their ERISA
Affiliates is an employer with respect to any Multiemployer Plan. The Loan
Parties, and each of their ERISA Affiliates have met the minimum funding
requirements under ERISA and the Code with respect to each of their respective
Plans, if any, and have not incurred any liability to the PBGC or any Plan.
There is no material unfunded benefit liability, determined in accordance with
Section 4001(a)(18) of ERISA, with respect to any Plan of the Loan Party's or
their ERISA Affiliates.
5.13 Environmental Matters. Except as disclosed in Schedule 5.13 and
without limiting the generality of Section 5.11:
(a) No written demand, claim, notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether brought by any
governmental authority, private person or otherwise, arising under, relating
to or in connection with any Environmental Laws is pending or, to the best of
the Loan Parties' knowledge, threatened against any Loan Party, any Property
or any past or present operation of any Loan Party which could result in a
Material Adverse Event.
(b) The Loan Parties do not have any knowledge that any other
person has ever received any notice, claim or allegation of any violation, and
the Loan Parties are not aware of any existing violation, of Environmental
Laws at or about any Property, and the Loan Parties do
27
not have any knowledge of any actions commenced or threatened by any party for
or related to or arising out of non-compliance with Environmental Laws which
apply to any Property, activities at any Property or Hazardous Materials at,
from or affecting any Property.
(c) None of the Property appears on the National Priority List
(as defined under federal law) or any state listing which identifies sites for
remedial clean-up or investigatory actions. To the best of the Loan Parties'
knowledge, none of the Property has been contaminated with substances which
give rise to a clean-up obligation under any Environmental Law or common law.
5.14 Investment Company Act. No Loan Party is an "investment company" or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.15 Disclosure. No report or other information furnished in writing by
or on behalf of any Loan Party to NBD in connection with the negotiation or
administration of this Agreement contains any material misstatement of fact or
omits to state any material fact or any fact necessary to make the statements
contained therein not misleading. Neither this Agreement, the other Loan
Documents, nor any other document, certificate, or report or statement or
other information furnished to the NBD by or on behalf of any Loan Party in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact in order to
make the statements contained herein and therein not misleading. There is no
fact known to any Loan Party which materially and adversely affects, or which
in the future may (so far as the Loan Parties can now foresee) materially and
adversely affect, the business, properties, operations, condition, financial
or otherwise, or prospects of any Loan Party which has not been set forth in
this Agreement or in the other documents, certificates, statements, reports
and other information furnished in writing to NBD by or on behalf of any Loan
Party in connection with the transactions contemplated hereby.
ARTICLE VI. COVENANTS
6.1 Affirmative Covenants. Each Borrower covenants and agrees that,
until the Termination Date and thereafter until payment in full of the
principal of and accrued interest on the Notes and the payment or performance
of all other Obligations, unless NBD shall otherwise consent in writing, each
Borrower, and shall cause each other Loan Party to:
(a) Preservation of Corporate Existence; Etc. Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except to the extent permitted by Section 6.2(g), and its
qualification as a foreign corporation in good standing in each jurisdiction
in which such qualification is necessary under applicable law, and the rights,
licenses, permits (including those required under Environmental Laws),
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its businesses; and defend all
28
of the foregoing against all claims, actions, demands, suits or proceedings at
law or in equity or by or before any governmental instrumentality or other
agency or regulatory authority.
(b) Compliance with Laws; Etc. Comply with all Governmental
Regulations (including ERISA, the Code and Environmental Laws), in effect from
time to time; and pay and discharge promptly when due all taxes, assessments
and governmental charges or levies imposed upon it or upon its income,
revenues or property, before the same shall become delinquent or in default,
as well as all lawful claims for labor, materials and supplies or otherwise,
which, if unpaid, might give rise to any Lien upon such properties or any
portion thereof, except to the extent that payment of any of the foregoing is
then being contested in good faith by appropriate legal proceedings and with
respect to which adequate financial reserves have been established on the
books and records of such Loan Party.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of its business and keep
such property in good repair, working order and condition and from time to
time make, or cause to be made all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times in accordance with customary and prudent business practices for similar
businesses; and maintain in full force and effect insurance with responsible
and reputable insurance companies or associations in such amounts, on such
terms and covering such risks, including fire and other risks insured against
by extended coverage, as is usually carried by companies engaged in similar
businesses and owning similar properties similarly situated and maintain in
full force and effect public liability insurance, business interruption
insurance, insurance against claims for personal injury or death or property
damage occurring in connection with any of its activities or any of any
properties owned, occupied or controlled by it, in such amounts as it shall
reasonably deem necessary, and maintain such other insurance as may be
required by Governmental Regulations or as may be reasonably requested by NBD.
Upon request, the Loan Parties shall deliver to NBD copies of all or any of
such insurance policies or the related certificates of insurance.
(d) Reporting Requirements. Furnish to NBD the following:
(i) promptly and in any event within three calendar days
after becoming aware of the occurrence of (A) any Default or Event of
Default, (B) the commencement of any material litigation against, by or
affecting any Loan Party, and any material developments therein, or (C)
any development in the business or affairs of any Loan Party which has
resulted in or which is likely, in the reasonable judgment of the Loan
Parties, to result in a Material Adverse Event, a statement of the chief
financial officer of the Company setting forth details of such Event of
Default or such event or condition or such litigation and the action
which the affected person has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event within 45 days
after the end of each fiscal quarter of the Company (other than the
fourth fiscal quarter), (x) the
29
Combined balance sheet of the Loan Parties of the end of each such
quarter and Combined statements of income, surplus and cash flow of the
Loan Parties for each such quarter and for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter,
setting forth in each case in comparative form the corresponding figures
for the corresponding date or period of the preceding fiscal year, and
(y) the combining balance sheet and statements of income, surplus and
cash flows with respect to the Loan Parties for such periods (prepared in
a manner consistent with such Combined balance sheet and statements), all
in reasonable detail and duly certified (subject to normal, immaterial
year-end audit adjustments) by the chief financial officer or controller
of the Company as having been prepared in accordance with GAAP, together
with a certificate of the chief financial officer or controller of the
Company (A) stating that no Default or Event of Default has occurred and
is continuing or, if any Default or Event of Default has occurred and is
continuing, a statement setting forth the details thereof and the action
which the applicable person has taken and proposes to take with respect
thereto, and (B) setting forth a computation (which computation shall
accompany such certificate and shall be in reasonable detail) showing
compliance with Sections 6.2(a), (b), (c) and (d) in conformity with the
terms of this Agreement;
(iii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, a copy of the annual
audited Combined financial statements of the Loan Parties for such fiscal
year, with a customary audit report of such independent certified public
accountants selected by the Company and reasonably acceptable to NBD,
without qualifications unacceptable to NBD, together with the unaudited
combining annual financial statements of the Loan Parties (prepared in a
manner consistent with the Company's audited Combined annual financial
statements) and a certificate of the chief financial officer or
controller of the Company (A) stating that no Default or Event of
Default has occurred or is continuing or if any Default or Event of
Default has occurred and is continuing, a statement setting forth
the details thereof and the action which the applicable person has
taken and proposes to take with respect thereto, and (B) setting forth
a computation (which computation shall accompany such certificate and
shall be in reasonable detail) showing compliance with Sections 6.2(a),
(b), (c) and (d) in conformity with the terms of this Agreement;
(iv) as soon as available, and in any event within 15 days
after the end of each month, a Borrowing Base Certificate in a form and
detail reasonably acceptable to Bank, executed by the chief financial
officers of the Loan Parties and completed as of the end of the preceding
month;
(v) as soon as available and in any event within 30 days
after the end of each fiscal quarter of the Company, a report listing the
accounts receivable aging, accounts payable aging and inventory of all of
the Loan Parties, in a form and detail reasonably acceptable to Bank,
executed by the chief financial officers of the Loan Parties and
completed as of the end of the preceding quarter;
30
(vi) promptly after receipt thereof by any Loan Party, copies
of any audit or management reports submitted to it by independent
accountants in connection with any audit, interim audit or other report
submitted to the board of directors (or other governing body) of any Loan
Party;
(vii) promptly after the same are available, copies of each
annual report, proxy or financial statement or other communication sent
to a Loan Party's stockholders and copies of all annual, regular,
periodic and special reports and registration statements which the
Company may file or be required to file with the Securities and Exchange
Commission or with any securities exchange or the National Association of
Securities Dealers, Inc.; and
(viii) promptly, such other information respecting the
business, properties, operations or condition, financial or otherwise, of
any Loan Party as NBD may from time to time reasonably request upon
reasonable notice.
(e) Accounting; Access to Records, Books, Etc. Maintain a system
of accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
GAAP and to comply with the requirements of this Agreement and, at any
reasonable time and from time to time, (i) permit NBD or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, such person and
to discuss the affairs, finances and accounts of such person with their
respective directors, officers, employees and independent auditors, and by
this provision each Loan Party does hereby authorize the same, and (ii) permit
NBD or any of its agents or representatives to conduct a comprehensive field
audit of its books, records, properties and assets.
(f) New Affiliates. Cause any Subsidiary of a Loan Party acquired
or formed after June 30, 1996 to promptly deliver the agreements required to
become a Loan Party hereunder.
(g) Further Assurances. Execute and deliver promptly after
request therefor by NBD, all further instruments and documents and take all
further action that may be necessary or desirable, or that NBD may request, in
order to give effect to, and to aid in the exercise and enforcement of the
rights and remedies of NBD under, this Agreement and the other Loan Documents.
6.2 Negative Covenants. Each Borrower covenants and agrees that, until
the Termination Date and thereafter until payment in full of the principal of
and accrued interest on the Note and the payment and performance of all other
Obligations, unless NBD shall otherwise consent in writing, each Borrower
shall not, and shall cause each other Loan Party not to:
(a) Tangible Capital Funds. Tangible Capital Funds of the Loan
Parties to be less than $10,000,000 at any time after the Effective Date.
31
(b) Current Ratio. Permit or suffer the Current Ratio to be less
than 1.25 to 1.0 at any time after the Effective Date.
(c) Total Liabilities to Tangible Capital Funds Ratio. Permit or
suffer the Total Liabilities to Tangible Capital Funds Ratio to exceed 3.0 to
1.0 at any time after the Effective Date.
(d) Cash Flow Coverage Ratio. Permit or suffer the Cash Flow
Coverage Ratio to be less than (i) 1.10 to 1.0 from the Effective Date until
December 31,1996, and (ii) 1.20 to 1.0 at any time from January 1,1997 and
thereafter.
(e) Liens. Create, incur or suffer to exist any Lien on any of
the NBD Collateral, except:
(i) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and as to which
adequate financial reserves have been established on its books and
records;
(ii) Liens (other than any Lien imposed by ERISA) created
and maintained in the ordinary course of business which are not material
in the aggregate, and which would not constitute or result in a Material
Adverse Event, and which constitute (A) pledges or deposits under
worker's compensation laws, unemployment insurance laws or similar
legislation, (B) good faith deposits in connection with bids, tenders,
contracts or leases to which a Loan Party is a party for a purpose other
than borrowing money or obtaining credit, including rent security
deposits, (C) Liens imposed by law, such as those of carriers,
warehousemen and mechanics, if payment of the obligation secured thereby
is not yet due, (D) Liens securing taxes, assessments or other
governmental charges or levies not yet subject to penalties for
nonpayment, and (E) pledges or deposits to secure public or statutory
obligations of a Loan Party, or surety, customs or appeal bonds to which
a Loan Party is a party;
(iii) Liens affecting real property which constitute minor
survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of
such real property; provided, however, that all of the foregoing, in the
aggregate, do not at any time materially detract from the value of said
properties or materially impair their use in the operation of the
businesses of any Loan Party, as the case may be; and
(iv) Liens in favor of NBD.
(f) Merger; Partnerships. Merge or consolidate or amalgamate
with any other person, nor acquire (in a transaction analogous in purpose or
effect to a consolidation or merger) all or substantially all the assets of
any other person, unless (i) a Loan Party (and if the Company
32
is involved, the Company) is the survivor of such merger or consolidation, and
(ii) NBD provides its prior written consent thereto; nor enter into any
partnership or similar arrangement with any other person, without the prior
written consent of NBD.
(g) Disposition of Assets; Etc. Sell, lease, license, transfer,
assign or otherwise dispose of a substantial portion of the business, assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
of a Loan Party, whether in one or a series of transactions, without the prior
written consent of NBD.
(h) Restricted Payments. Make or commit to make any Restricted
Payment at any time after the Effective Date, provided that so long as no
Default or Event of Default exists both before and after the declaring and
payment of a dividend, the other Loan Parties may pay cash dividends to the
Company.
(i) Nature of Business. Make any substantial change in the nature
of its business from that engaged in on the Effective Date or engage in any
other businesses other than manufacture, distribution and repair of plastic
and metal components.
(j) Transactions with Affiliates. Enter into, or permit or suffer
to exist, any transaction or arrangement with any Affiliate, except, with
respect to transactions with other Loan Parties, on terms which are no less
favorable to such Loan Party than could be obtained from persons who are not
Affiliates.
(k) Inactive Affiliates. Permit any Inactive Affiliate to
actively conduct business or own more assets than those owned as of June 30,
1996.
ARTICLE VII. DEFAULT
7.1 Events of Default. The occurrence of any one of the following events
or conditions shall be deemed an "Event of Default" hereunder unless waived by
NBD pursuant to Section 8.1:
(a) Nonpayment. The Borrowers shall fail to pay (i) when due
(whether by mandatory prepayment or otherwise) any principal of the Note or
the amount due under any L/C Document or (ii) more than five days after the
due date thereof, any interest on the Note or any fees or any other
Obligations payable hereunder.
(b) Other NBD Debt. Any default, event of default or event of
acceleration under any other agreement between any Loan Party, on one hand,
and NBD or any Affiliate of NBD, on the other hand, which has not been waived
in writing by NBD.
(c) Misrepresentation. Any representation or warranty made by any
Loan Party in Article V or in any certificate, report, financial statement
other document furnished by or on
33
behalf of any Loan Party in connection with this Agreement, shall prove to
have been incorrect in any material respect when made or deemed made.
(d) Certain Covenants. Any term, covenant or agreement contained
in Section 6.2 shall be breached.
(e) Other Defaults. Any term, covenant or agreement contained in
this Agreement or any other Loan Document (other than Section 6.2 or with
regard to payments) shall be breached, and such breach shall remain unremedied
for 10 calendar days after written notice is sent by NBD to any Loan Party.
(f) Cross Default. Any Loan Party shall fail to pay any part of
the principal of, the premium, if any, or the interest on, or any other
payment of money due under, any of its Indebtedness (other than Indebtedness
under this Agreement), beyond any period of grace provided with respect
thereto, which individually or together with other such Indebtedness as to
which any such failure exists has an aggregate outstanding principal amount in
excess of $100,000; or any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any agreement, document or
instrument evidencing or securing any Indebtedness in an aggregate outstanding
principal amount in excess of $100,000, or under which any such Indebtedness
was issued or created, beyond any period of grace, if any, if the effect of
such failure is to cause, or permit the holders of such Indebtedness (or a
trustee on behalf of such holders) to cause, any payment in respect of such
Indebtedness to become due prior to its due date.
(g) Judgments. One or more judgments or orders for the payment of
money in an aggregate amount of $250,000 or more shall be rendered against any
of the Loan Parties or any other judgment or order (whether or not for the
payment of money) shall be rendered against or shall affect any Loan Party
which causes or could cause a Material Adverse Event or which does or could
have an adverse effect on the legality, validity or enforceability of this
Agreement or any other Loan Document and either (i) such judgment or order
shall have remained unsatisfied and such Loan Party shall not have taken
action necessary to stay enforcement thereof by reason of pending appeal or
otherwise, prior to the expiration of the applicable period of limitations for
taking such action or, if such action shall have been taken, a final order
denying such stay shall have been rendered, or (ii) enforcement proceedings
shall have been commenced by any creditor upon any such judgment or order;
provided that no final judgment shall be included in the calculation under
this subsection to the extent that the claim underlying such judgment is
covered by insurance and defense of such claim has been tendered to and
accepted by the insurer without reservation.
(h) ERISA. The occurrence of a Reportable Event that results in
or could result in liability of any Loan Party, or their respective ERISA
Affiliates to the PBGC or to any Plan in excess of $50,000 and such Reportable
Event is not corrected within thirty (30) days after the occurrence thereof;
or the occurrence of any Reportable Event which could constitute grounds for
termination of any Plan of the Company, any other Loan Party or their
respective ERISA
34
Affiliates by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer any such Plan and such Reportable
Event is not corrected within thirty (30) days after the occurrence thereof;
or the filing by the Company, any other Loan Party or any of their respective
ERISA Affiliates of a notice of intent to terminate a Plan or the institution
of other proceedings to terminate a Plan; or the Company, any other Loan Party
or any of their respective ERISA Affiliates shall fail to pay when due any
liability to the PBGC or to a Plan in excess of $50,000; or the PBGC shall
have instituted proceedings to terminate, or to cause a trustee to be
appointed to administer, any Plan of the Company, any other Loan Party or
their respective ERISA Affiliates; or any person engages in a Prohibited
Transaction with respect to any Plan which results in or could result in
liability of any Loan Party, any of their respective ERISA Affiliates, any
Plan of any Loan Party or their respective ERISA Affiliates or any fiduciary
of any such Plan in excess of $50,000; or failure by any Loan Party or any of
their respective ERISA Affiliates to make a required installment or other
payment to any Plan within the meaning of Section 302(f) of ERISA or Section
412(n) of the Code that results in or could result in liability of any Loan
Party or any of their respective ERISA Affiliates to the PBGC or any Plan in
excess of $50,000; or the withdrawal of any Loan Party or any of their
respective ERISA Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; or any Loan
Party or any of their respective ERISA Affiliates becomes an employer with
respect to any Multiemployer Plan without the prior written consent of NBD.
(i) Insolvency, Etc. Any Loan Party: shall be dissolved or
liquidated (or any judgment, order or decree therefor shall be entered); or
shall generally not pay its debts as they become due; or shall admit in
writing its inability to pay its debts generally; or shall make a general
assignment for the benefit of creditors; or shall institute, or there shall be
instituted against any Loan Party, any proceeding or case seeking to
adjudicate it a bankrupt or insolvent or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief or protection of debtors or seeking the entry of an
order for relief, or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its assets,
rights, revenues or property, and, if such proceeding is instituted against
any Loan Party and is being contested by such Loan Party in good faith by
appropriate proceedings, such proceeding shall remain undismissed or unstayed
for a period of 60 days; or shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection.
35
(j) Change of Control. The Company shall cease to own 100% of
each class of the outstanding voting stock of each of the other Borrowers.
(k) Enforceability of Loan Documents. This Agreement or any of
the other Loan Documents shall, at any time after their respective execution
and delivery, and for any reason, cease to be in full force and effect or
shall be declared null and void, or be revoked or terminated, or the validity
or enforceability thereof or hereof shall be contested by any Loan Party, or
any stockholder of any Loan Party, or any Loan Party shall deny that it has
any or further liability or obligation thereunder or hereunder, as the case
may be.
7.2 Remedies.
(a) Termination of Commitment; Acceleration. Upon the occurrence
and during the continuance of any Event of Default, NBD shall by notice to
Borrowers terminate the Commitment or declare the outstanding principal of,
and accrued interest on, the Note and all other Obligations to be immediately
due and payable, or both, whereupon the Commitment shall terminate forthwith
and all such amounts shall become immediately due and payable, or both;
provided, however, that, in the case of any event or condition described in
Section 7.1(i) with respect to any Borrower, the Commitment shall
automatically terminate forthwith and all such amounts shall automatically
become immediately due and payable without notice; in all cases without
demand, presentment, protest, diligence, notice of dishonor or other
formality, all of which are hereby expressly waived.
(b) Other Remedies. Upon the occurrence and during the
continuance of an Event of Default, Borrowers must post cash collateral with
NBD in an amount equal to the aggregate outstanding face amount of the L/Cs
and NBD may exercise and enforce any and all other rights and remedies
available to it, whether arising under this Agreement or any other Loan
Document or under applicable law, in any manner deemed appropriate by it,
including suit in equity, action at law, or other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Agreement or in any other Loan
Document or in aid of the exercise of any power granted in this Agreement or
any other Loan Document or under applicable law.
(c) Set off. Upon the occurrence and during the continuance of
any Event of Default, NBD may at any time and from time to time, without
notice to the Borrowers (any requirement for such notice being expressly
waived by the Borrowers) set off and apply against any and all of the
Obligations any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by NBD to or for the credit or the account of any Borrower and any
property of any Borrower from time to time in possession of NBD, irrespective
of whether or not NBD shall have made any demand hereunder and although such
obligations may be contingent and unmatured. The Borrowers hereby grant to NBD
a Lien on all such deposits, indebtedness and property as collateral security
for the payment and performance of the Obligations. The rights of NBD under
this
36
Section 7.2(c) are in addition to other rights and remedies (including other
rights of setoff) which NBD may otherwise have.
ARTICLE VIII. MISCELLANEOUS
8.1 Amendments. No provision of this Agreement or any other Loan
Document may be modified, waived, or amended except by an instrument or
instruments signed by the Company and NBD.
8.2 Notices.
(a) General. Except as otherwise provided in Section 8.2(c), all
notices, requests, consents and other communications hereunder shall be in
writing and shall be delivered, telecopied or sent to the Borrowers or NBD at
the address set forth in the introductory paragraph hereof; or to such other
address as may be designated by the Borrowers or NBD by written notice to each
other. All notices, requests, consents and other communications shall be
deemed to have been given when received if hand delivered, if mailed by
certified or registered mail, postage prepaid, on the third (3rd) day after
such mailing, or if deposited with an expedited courier service such as
"Federal Express" or "Purolator", on the Business Day following such deposit,
or if telecopied, on the Business Day on which such telecopy is confirmed as
having been received, in all cases, addressed to the respective address set
forth on the first page hereof or as may otherwise be designated in accordance
herewith.
(b) Notices of Termination or Prepayment. Notices by the
Borrowers to NBD with respect to terminations or reductions of the Commitment
or the L/C Sublimit pursuant to Section 2.2, and notices of prepayment
pursuant to Section 4.1 shall be irrevocable and binding on the Borrowers.
(c) Telephonic Notices. Any notice to be given by the Borrowers
to NBD pursuant to Section 3.1, 3.2, 3.3 or 3.4 and any notice to be given by
NBD hereunder, may be given by telephone, to be confirmed in writing in the
manner provided in Section 8.2(a). Any such notice given by telephone shall be
deemed effective upon receipt thereof by the party to whom such notice is
given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of dealing on
the part of NBD, nor any delay or failure on the part of NBD in exercising any
right, power or privilege hereunder or under any other Loan Document shall
operate as a waiver of such right, power or privilege or otherwise prejudice
NBD's rights and remedies hereunder or under any other Loan Document; nor
shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to NBD under this Agreement or under any
other Loan Document is intended to be exclusive of any other right or remedy,
and every right and remedy shall be cumulative and in addition to every other
right or remedy granted thereunder or now or hereafter existing under any
37
applicable law. Every right and remedy granted by this Agreement or under any
other Loan Document or by applicable law to NBD may be exercised from time to
time and as often as may be deemed expedient by NBD and, unless contrary to
the express provisions of this Agreement or the other Loan Documents,
irrespective of the occurrence or continuance of any Default or Event of
Default.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Borrowers made
herein or in any certificate, report, financial statement or other document
furnished by or on behalf of the Borrowers in connection with this Agreement
or any other Loan Document shall be deemed to be material and to have been
relied upon by NBD, notwithstanding any investigation heretofore or hereafter
made by NBD, and those covenants and agreements of the Borrowers set forth in
Article IV and Section 8.5 shall survive the repayment in full of the
Obligations and the termination of this Agreement and the Commitments.
8.5 Expenses; Indemnification. The Borrowers agree, jointly and
severally, to pay, or reimburse NBD for the payment of, on demand, (a) the
reasonable fees and expenses of counsel to NBD, including the fees and
expenses of Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx in connection with the
preparation, execution, delivery and administration of this Agreement and the
consummation of the transactions contemplated hereby, and in connection with
advising NBD as to its rights and responsibilities with respect thereto, and
in connection with any amendments, waivers or consents in connection
therewith, and (b) all stamp and other taxes and fees payable or determined to
be payable in connection with the execution, delivery, filing or recording of
this Agreement, the Note and the other Loan Documents and the consummation of
the transactions contemplated hereby, and any and all liabilities with respect
to or resulting from any delay in paying or omitting to pay such taxes or
fees, and (c) all reasonable costs and expenses of NBD (including reasonable
fees and expenses of counsel and whether incurred through negotiations, legal
proceedings or otherwise) in connection with any Default or Event of Default
or the enforcement of, or the exercise or preservation of any rights under,
this Agreement or any other Loan Document or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement. The Borrowers, jointly and severally, further agree to indemnify
NBD for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever (including reasonable attorneys' fees) which may be imposed
on, incurred by or asserted against NBD in any way relating to or arising out
of its duties under this Agreement or any other Loan Documents or the
transactions contemplated hereby (excluding, unless a Default or an Event of
Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its duties hereunder); provided,
however, that the Borrowers shall not be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of NBD.
8.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the Borrowers may not, without the prior
consent of NBD, assign its rights or obligations
38
hereunder or under the Note and NBD shall not be obligated to make any Loan or
issue any L/C hereunder to or for the account of any person other than the
Borrowers.
8.7 Participation. NBD may grant participation in all or any part of its
Loans, Notes and Commitment to any bank or other institutional investor
(including any Affiliate of NBD), without the consent of the Borrowers. The
Borrowers hereby acknowledge and agree that any participant described in this
Section 8.7 shall be considered to have the same rights and remedies as NBD
hereunder (including for purposes of Section 7.2(c)) and may rely on, and
possess all rights under, any opinions, certificates, or other instruments or
documents delivered under or in connection with this Agreement or any Loan
Document.
8.8 Disclosure of Information. The Borrowers authorize NBD to disclose
to any permitted participant or assignee of NBD or to any successor of NBD
(each, a "Transferee") and any prospective Transferee any and all financial
and other information in NBD's possession concerning the Loan Parties which
has been delivered to NBD by the Loan Parties pursuant to this Agreement or
the other Loan Documents or which has been received by NBD in connection with
its credit evaluation of the Borrowers prior to entering into this Agreement.
8.9 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.10 Governing Law.
(a) General. This Agreement is a contract made under, and shall
be governed by and construed in accordance with, the laws of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. The
Company further agrees that any legal action or proceeding with respect to
this Agreement or any other Loan Document or the transactions contemplated
hereby may be brought in any court of the State of Michigan, or in any court
of the United States of America sitting in the Eastern District of Michigan
and the Borrowers hereby submit to and accept generally and unconditionally
the jurisdiction of those courts with respect to their respective persons and
properties.
(b) Suit in Other Jurisdictions. Nothing in Section 8.10(a)
shall affect the right of NBD to serve legal process in any other manner
permitted by law or affect the right of NBD to bring any action or proceeding
against the Borrowers or their respective property in the courts of any other
jurisdictions.
(c) Immunity. To the extent that such Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from any service of
process (whether from service or notice, or otherwise) with respect to itself
or its property, such Borrower hereby irrevocably waives such immunity in
respect of its obligations under this Agreement, the Note and the other Loan
Documents.
39
8.11 Table of Contents and Headings. The table of contents and the
headings of the various Articles, Sections and paragraphs hereof are for the
convenience of reference only and shall in no way modify any of the terms or
provisions hereof.
8.12 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not
expressly specified in such provision.
8.13 Integration and Severability. This Agreement and the other Loan
Documents embody the entire agreement and understanding between the Borrowers
and NBD with respect to the revolving credit granted by NBD to the Borrowers,
and supersede all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations, of any of the
Borrowers under this Agreement or any other Loan Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining obligations of the Borrowers shall not in any
way be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality
nor enforceability of the obligations of the Borrowers under this Agreement or
any other Loan Document in any other jurisdiction.
8.14 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or an Event of Default or
any event or condition which with notice or lapse of time, or both, could
become such a Default or an Event of Default if such action is taken or such
condition exists.
8.15 Joint and Several Liability. All liabilities of the Borrowers under
this Agreement and the Notes shall be joint and several.
8.16 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement or any other Loan Document, in no event shall the amount of interest
paid or agreed to be paid by the Borrowers exceed an amount computed at the
highest rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Agreement or
any other Loan Document at the time performance of such provision shall be
due, shall involve exceeding the interest rate limitation validly prescribed
by law which a court of competent jurisdiction may deem applicable hereto,
then, ipso facto, the obligations to be fulfilled shall be reduced to an
amount computed at the highest rate of interest permissible under applicable
law, and if for any reason whatsoever NBD shall ever receive as interest an
amount which would be deemed unlawful under such applicable law such interest
shall be automatically applied to the payment of principal of the Loans
outstanding hereunder (whether or not then due and payable) and not to the
payment of interest, or shall be refunded to the Borrowers if such principal
and all other Obligations of the Borrowers to NBD have been paid in full.
40
8.17 Limitation of Liability. Neither NBD nor any of its Affiliates,
directors, officers, agents, attorneys or employees shall be liable to the
Borrowers or any of the Borrower's Affiliates for any action taken, or omitted
to be taken, by it or them or any of them under this Agreement or any other
Loan Document or in connection herewith or therewith, except that no person
shall be relieved of any liability imposed by law for gross negligence or
willful misconduct. No claim may be made by the Borrowers or any of the
Borrowers' Affiliates against NBD, or any of its Affiliates, directors,
officers, agents, attorneys or employees, for any special, indirect,
consequential or punitive damages in respect of any breach or wrongful conduct
(whether the claim is based on contract or tort or duty imposed by law)
arising out of or related to this Agreement or any other Loan Document, or the
transactions contemplated hereby or thereby, or any act, omission or event
occurring in connection herewith or therewith. The Borrowers, on their own
behalf and on behalf of their Affiliates, hereby waive, release and agree not
to xxx upon any claim for any such damages, whether or not accrued, and
whether or not known or suspected to exist in its favor.
8.18 WAIVER OF JURY TRIAL. NBD AND EACH BORROWER, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR
ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY OF THEM. NEITHER NBD NOR THE ANY OF THE BORROWERS SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN
MODIFIED IN ANY RESPECT OR RELINQUISHED BY NBD OR THE BORROWERS EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed this 9th day of August, 1996, to be effective as of June
30,1996.
SECOM GENERAL CORPORATION
By: /s/ Xxxxx Xxxxxxx
----------------------
Xxxxx Xxxxxxx
Its: Secretary
(Signatures continue on next page)
41
UNIFLOW CORPORATION
By: /s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
MICANOL, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
L & H DIE, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
FORM FLOW, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
NBD BANK
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Its: Vice President
42
EXHIBIT 2.1(b)
LINE OF CREDIT NOTE
Amount: $2,000,000 Dated: as of June 30, 1996
Made at Detroit, Michigan.
FOR VALUE RECEIVED, the undersigned, jointly and severally, promise to
pay to the order of NBD BANK ("Bank"), at its offices in Detroit, Michigan or
at such other place as the holder of this note may from time to time designate
in writing, the principal sum of Two Million and 00/100 Dollars ($2,000,000),
plus all accrued but unpaid interest on the Termination Date as may be agreed
to under the Credit Agreement (defined below) as amended from time to time,
together with interest on the outstanding balance thereof as provided in the
Credit Agreement. Interest is payable as follows: monthly payments of accrued
interest commencing on August 1, 1996, and continuing on the 1st day of each
consecutive month thereafter until maturity.
The indebtedness under this Note outstanding from time to time prior to
maturity (whether by acceleration or otherwise) or the occurrence of an Event
of Default shall bear interest on the basis of a year of 360 days for the
actual number of days elapsed in each month, at the rates set forth in the
Amended and Restated Revolving Credit and Loan Agreement dated as of the date
hereof (as so amended, the "Credit Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings given them in the Credit
Agreement.
After maturity, or from and after an Event of Default, the outstanding
principal balance under this Note shall bear additional interest from and
after such maturity date or the occurrence of the Event of Default, at a rate
of three (3%) percentage points per annum above the Applicable Rate until the
Note is fully paid or the Event of Default is fully cured (the "Default
Rate").
Principal of and interest on this Note shall be payable in lawful money
of the United States of America. The undersigned agrees to pay all costs of
collection and enforcement of this Note, including reasonable attorneys' fees
and court costs.
The indebtedness under this Note may be prepaid in whole or in part at
any time. In addition to the principal payments described above, additional
payments on this Note may be due and payable pursuant to the terms of the
Credit Agreement.
Bank is hereby authorized by Borrowers to record on its books and
records, the date and amount of each Revolving Loan, the Loan Period, the
applicable interest rate (including any changes therein), the amount of each
payment of principal thereon and such other information as appropriate, which
books and records shall constitute rebuttable presumptive evidence of the
information so recorded, provided, however, that any failure by Bank to record
any such information shall not relieve Borrowers of their obligation to repay
the outstanding principal amount of all Revolving Loans made by Bank, all
accrued interest thereon and any amount payable with respect thereto in
accordance with the terms of this Note and the Credit Agreement.
This Note is given pursuant to the terms and conditions of the Credit
Agreement. This Note is secured by, among other collateral, the collateral
granted to Lender under the terms of the Credit Agreement and the Loan
Documents. The occurrence of any default under the Credit Agreement or any of
the Loan Documents (as such documents may have been amended by the Credit
Agreement), or any document or instrument referred to or incorporated into any
of the foregoing shall be deemed a default under this Note and shall entitle
the holder of this Note to accelerate the maturity of the debt evidenced by
this Note and to have all rights and remedies afforded by law or available
under the Credit Agreement, the Loan Documents and under all other agreements
referred to or executed in connection with any of the foregoing.
The undersigned, and all endorses and guarantors, hereby severally waive
valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or such endorses or guarantors.
This Note, made and executed in the State of Michigan, shall be governed
and construed according to the internal laws of the State of Michigan.
SECOM GENERAL CORPORATION,
a Delaware corporation
By:
-----------------------
Name: Xxxxx Xxxxxxx
Its: Secretary and Chief Financial
Officer
00000 Xxxxx Xxxxx Xxx.
Xxxx, Xxxxxxxx 00000
UNIFLOW CORPORATION
By:
-----------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
00000 Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
(Signature continue on next page)
2
MICANOL, INC.
By:
-----------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
X.X. Xxx 000
00000 Xxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
L&H DIE, INC.
By:
-----------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
FORM FLOW, INC.
By:
-----------------------
Xxxxx Xxxxxxx
Its: Secretary-Treasurer
6901 Cogswell
Xxxxxxx, Xxxxxxxx 00000
3
EXHIBIT 2.4
AMENDED AND RESTATED
TERM NOTE
Amount: $775,000 Dated: as of June 30, 1996
Due Date: December 6, 2000 Made at Detroit, Michigan.
FOR VALUE RECEIVED, the undersigned promise to pay to the order of NBD
BANK ("Bank"), at its offices in Detroit, Michigan or at such other place as
the holder of this Note may from time to time designate in writing, the
principal sum of Seven Hundred Seventy Five Thousand and 00/100 Dollars
($775,000), together with interest on the outstanding balance thereof at the
Bank's Prime Rate, payable as follows: 53 monthly installments of principal in
the amount of $5,000 plus accrued interest commencing on July 6, 1996, and
continuing on the 6th day of each consecutive month thereafter followed by a
balloon payment of all remaining principal and interest on December 6, 2000.
As used herein, the "Prime Rate" shall be the per annum rate of interest from
time to time announced by the Bank (or any successor thereto) as its prime
rate, which prime rate may not be the lowest rate of interest charged by the
Bank to any of its customers. Any change in the Prime Rate shall immediately
effect a change in the rate of interest payable hereunder.
After maturity, or from and after an Event of Default, described
below, the outstanding principal balance under this Note shall bear additional
interest from and after such maturity date or the occurrence of the Event of
Default, at a rate of three (3%) percentage points per annum above the Prime
Rate until the Note is fully paid or the Event of Default is fully cured (the
"Default Rate").
The indebtedness under this Note outstanding from time to time shall
bear interest on the basis of a year of 360 days for the actual number of days
elapsed in each month. Principal of and interest on this Note shall be payable
in lawful money of the United States of America. The undersigned agrees to pay
all costs of collection and enforcement of this Note, including reasonable
attorneys' fees and court costs.
The indebtedness under this Note may be prepaid in whole or in part at
any time.
This Note is given pursuant to the terms and conditions of the Amended
and Restated Revolving Credit and Loan Agreement dated as of the date hereof
(as amended from time to time, the "Credit Agreement"). Capitalized terms not
otherwise defined herein shall have the meanings given them in the Credit
Agreement. This Note is secured by, among other collateral, the collateral
granted to Lender under the terms of the Credit Agreement and the Loan
Documents. The occurrence of any Event of Default under the Credit Agreement
or any default under any of the Loan Documents or any document or instrument
referred to or incorporated into any of the foregoing shall be deemed an Event
of Default under this Note and shall entitle the holder of this Note to
accelerate the maturity of the debt evidenced by this Note and to have all
rights and remedies afforded by law or available under the Credit Agreement,
the Loan
Documents and under all other agreements referred to or executed in connection
with any of the foregoing.
This Amended and Restated Term Note, among other things, amends,
restates and consolidates (but does not discharge) the indebtedness
outstanding under that certain Amended and Restored Installment Business Loan
Note dated as of December 6, 1995, in the original principal amount of
$800,000, that certain Installment Business Loan Note dated December 28, 1994,
in the original amount of $446,006.78, and that certain Installment Business
Loan Note, dated March 23, 1993, in the original principal amount of
$500,582.78. Any reference in any other document or instrument to the
foregoing notes shall constitute a reference to this Amended and Restated Term
Note.
The undersigned, and all endorses and guarantors, hereby severally waive
valuation and appraisement, presentment, protest and demand, notice of
protest, demand and dishonor and nonpayment of this Note, and expressly agree
that the maturity of this Note, or any payment due under this Note, may be
extended from time to time without in any way affecting the liability of the
undersigned or such endorses or guarantors.
This Note, made and executed in the State of Michigan, shall be governed
and construed according to the internal laws of the State of Michigan.
SECOM GENERAL CORPORATION,
a Delaware corporation
By:
------------------------
Name:
------------------
Title:
-----------
00000 Xxxxx Xxxxx Xxx.
Xxxx, Xxxxxxxx 00000
2
EXHIBIT 3.2
Request Under Revolving Credit Agreement
(Floating or LIBOR)
The undersigned, Secom General Corporation, on behalf of itself and the
other Borrowers, hereby certifies as set forth below pursuant to the Amended
and Restated Revolving Credit and Loan Agreement, dated as of June 30, 1996,
among the Borrowers and NBD Bank (such agreement, as amended, modified or
supplemented from time to time, is referred to herein as the "Credit
Agreement"). Reference is made to the Credit Agreement for definitions of
capitalized terms not otherwise defined herein and for additional terms and
conditions for Revolving Loans.
Check applicable number(s) and complete request as appropriate.
_______1. NEW ADVANCE. Borrowers hereby request a new Revolving Loan in the
amount of $________________, with such terms as described in Section 3 below.
_______2. CONVERSION OR EXTENSIONS. Borrowers hereby request that the
following Revolving Loans be converted or extended with such new terms as
described in Section 3 below:
a. Type of Loan being converted or extended:__________________
b. Amount of such Loan: __________________
c. Due date of such Loan: __________________
3. TERMS. Terms of new, extended or converted Loan, as
applicable:
a. Type of Advance:___________________________________
(specify Floating or LIBOR)
b. Loan Period Requested:_____________________________________
(LIBOR - 1, 2, 3, 6 or 12 month only)
c. Funding Date (same as for nor due date for conversion):__________
4. CERTIFICATION. Borrowers certify that: (a) representations and
warranties in the Credit Agreement are true in all material respects as of the
date hereof (both before and after giving effect to the making of the Loan
requested herein); (b) the aggregate amount of all outstanding Revolving Loans
and Loans to be outstanding upon the making of the Loan requested herein
together with the face amount of all outstanding L/Cs and will not exceed the
Borrowing Base; and (c) no Default or Event of Default has occurred and is
continuing as of the date hereof.
5. TRANSFER REQUEST. Borrowers hereby request that, any new Loan be
credited to Acct. No.__________________ of______________ at NBD Bank.
This Request Under Revolving Credit Agreement is executed and delivered
to NBD by the undersigned authorized representative of the Borrowers on_______,
199_.
SECOM GENERAL CORPORATION
By:
----------------------
Its:
----------------
EXHIBIT 3.5
Request Under Revolving Credit Agreement
(Negotiated Rate Loan)
The undersigned, Secom General Corporation, on behalf of itself and the
other Borrowers, hereby certifies as set forth below pursuant to the Amended
and Restated Revolving Credit and Loan Agreement, dated as of June 30, 1996,
among the Borrowers and NBD Bank (such agreement, as amended, modified or
supplemented from time to time, is referred to herein as the "Credit
Agreement"). Reference is made to the Credit Agreement for definitions of
capitalized terms not otherwise defined herein and for additional terms and
conditions for Negotiated Rate Loans.
Check applicable number(s) and complete request as appropriate:
_______1. RATE QUOTATION. Borrowers hereby request a quotation for a
Negotiated Rate Loan in the amount of $_______,with such terms as described in
Section 3 below.
(This sentence to be completed and returned by NBD): NBD hereby offers
to make such a Negotiated Rate Loan with such terms as described in Section 3
below and with an interest rate of___________ percent.
_______Borrowers' authorized representative to initial this sentence and
return this Request to NBD to request a Negotiated Rate Loan on the terms set
forth in this Section 1 and in Section 3 below. If Section 2 is also completed
this will be treated as a request for a conversion, otherwise it will be
deemed to be a request for a new Revolving Loan.
_______2. CONVERSION OR EXTENSIONS. Borrowers hereby request that the
following Revolving Loan be converted or extended as a Negotiated Rate Loan
with such new terms as described in Section 3 below:
a. Type of Loan being converted or extended:______________________
b. Amount of such Loan: $_____________________
c. Due date of such Loan: ______________________
3. TERMS. Terms of new, extended or converted Negotiated
Rate Loan, as applicable:
a. Advance Period Requested:_______________(1, 2, 3, 6 or 12 months)
b. Funding Date (same as former due date for conversions):__________
4. CERTIFICATION. Borrowers certify that: (a) representations and
warranties in the Credit Agreement are true in all material respects as of the
date hereof (both before and after giving effect to the making of the Loan
requested herein); (b) the aggregate amount of all outstanding Revolving Loans
and Loans to be outstanding upon the making of the Loan requested herein
together with the face amount of all outstanding L/Cs will not exceed the
Borrowing Base; and (c) no Default or Event of Default has occurred and is
continuing as of the date hereof.
5. TRANSFER REQUEST. Borrowers hereby request that, any new Loan be
credited to Acct. No._________________ of_____________ at NBD Bank.
This Request Under Revolving Credit Agreement is executed and delivered
to NBD by the undersigned authorized representative of the Borrowers on_____ ,
199_.
SECOM GENERAL CORPORATION
By:______________________
Its:_____________________
AMENDED AND RESTATED
EXHIBIT 3.6(e) CONTINUING GUARANTY
NBD
GUARANTY: To induce NBD Bank (the "Bank"), of 000 Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000 at its option, to make loans, extend or continue credit or
some other benefit, including letters of credit and foreign exchange
contracts, present or future, direct or indirect, and whether several, joint
or joint and several (referred to collectively as "Liabilities"),
to_____________________________________________ ,
(Name of Borrower)
and its successors (the "borrower"), and because the undersigned (the
"Guarantor") has determined that executing this Guaranty is in its interest
and to its financial benefit, the Guarantor absolutely and unconditionally
guaranties to the Bank, as primary obligor and not merely a surety, that the
Liabilities will be paid when due, whether by acceleration or otherwise. The
Guarantor will not only pay the Liabilities, but will also reimburse the Bank
for accrued and unpaid interest, and any expenses, including reasonable
attorneys' fees, that the Bank may pay in collecting from the Borrower or the
Guarantor, and for liquidating any collateral.
LIMITATION: The Guarantor's obligation under this Guaranty is UNLIMITED.
CONTINUED RELIANCE: The Bank may continue to make loans or extend credit to
the Borrower based on this Guaranty until it receives written notice of
termination from the Guarantor. That notice shall be effective at the opening
of the Bank for business on the day after receipt of the notice. If
terminated, the Guarantor will continue to be liable to the Bank for any
Liabilities created, assumed or committed to at the time the termination
becomes effective, and all subsequent renewals, extensions, modifications and
amendments of the Liabilities.
SECURITY: As security for the Guaranty, the Guarantor pledges and grants to
the Bank a continuing security interest in the following described property
and all of its additions, substitutions, increments, proceeds and products,
whether now owned or later acquired ("Collateral"):
1. All securities and other property of the Guarantor in the custody,
possession or control of the Bank (other than property held by the Bank
solely in a fiduciary capacity);
2. All property or securities declared or acknowledged to constitute security
for any past, present or future liability, direct or indirect of the
Guarantor to the Bank;
3. All balances of deposit accounts of the Guaranty with the Bank;
4. The following additional property of the Guarantor: accounts, inventory,
contract rights and other property as described in the security agreements
executed in connection with the Amended and Restated Revolving Credit and
Loan Agreement, dated as of June 1, 1996 among NBD, the Borrower and the
Guarantor.
The Bank shall have the right at any time to apply its own debt or liability
to the Guarantor in whole or partial payment of this Guaranty or other present
or future liabilities, direct or indirect, without any requirement for mutual
maturity.
If the Guarantor fails to pay any amount owing under this Guaranty, the Bank
shall have all of the rights and remedies provided by law or under any other
agreement to liquidize or foreclose on and sell the Collateral, including but
not limited to the rights and remedies of a secured party under the Uniform
Commercial Code. These rights and remedies shall be cumulative and not
exclusive. If the Guarantor is entitled to notice, that requirement will be
met if the Bank sends notice at least seven (7) days prior to the date of
sale, disposition or other event which requires notice. The proceeds of any
sale shall be applied first to costs, then toward payment of the amount owing
under this Guaranty. The Bank is authorized to cause all or any part of the
Collateral to be transferred to or registered in its name or in the name of
any other person, firms or corporation, with or without designation of the
capacity of such nominee.
For purpose of the following paragraphs, "any collateral" shall include
the Guarantor's Collateral and any other collateral securing the
Liabilities.
ACTION REGARDING BORROWER: If any monies become available that the Bank can
apply to the Liabilities, the Bank may apply them in any manner it chooses,
including but not limited to applying them against liabilities which are not
covered by this Guaranty. The Bank may take any action against the Borrower,
any collateral, or any other person liable for any of the Liabilities. The
Bank may release the Borrower or anyone else from the Liabilities, either in
whole or in part, or release any collateral, and need not perfect a security
interest in any collateral. The Bank does not have to exercise any rights that
it has against the Borrower or anyone else, or make any effort to realize on
any collateral or right of set-off. If the Borrower requests more credit or
any other benefit, the Bank may grant it and the Bank may grant renewals,
extensions, modifications and amendments of the Liabilities and otherwise deal
with the Borrower or any other person as the Bank sees fit and as if this
Guaranty were not in effect. The Guarantor's obligations under this Guaranty
shall not be released or affected by (a) any act or omission of the Bank, (b)
the voluntary or involuntary liquidation, sale or other disposition of all or
substantially all of the assets of the Borrower, or any receivership,
insolvency, bankruptcy, reorganization, or other similar proceedings affecting
the Borrower or any of its assets or (c) any change in the composition or
structure of the Borrower or Guarantor, including a merger or consolidation
with any other person or entity.
NATURE OF GUARANTY: This Guaranty is a guaranty of payment and not of
collection. Therefore, the Bank may insist that the Guarantor pay immediately,
and the Bank is not required to attempt to collect first from the Borrower,
any collateral, or any other person liable for the
Liabilities. The obligation of the Guarsntor shall be subject to no conditions
of any kind, and shall be absolute, regardless of the unenforceability of any
provisions of any agreement between the Borrower and the Bank, or the
existence of any defense, setoff or counterclaim which the Borrower may
assert.
OTHER GUARANTORS: If there is more than one Guarantor, the obligations under
this Guaranty shall be joint and several. In addition each Guarantor shall be
jointly and severally liable with any other guarantor of the Liabilities. If
the Bank elects to enforce its rights against less than all guarantors of the
Liabilities, that election shall not release Guarantor from its obligations
under this Guaranty. The compromise or release of any of the obligations of
any of the other guarantors or the Borrower shall not serve to waive, alter or
release the Guarantor's obligations. This Guaranty is not conditioned on
anyone else executing this or any other guaranty.
WAIVER OF SUBROGATION: The Guarantor expressly waives any and all rights of
subrogation, contribution, reimbursement, indemnity, exoneration, implied
contract, recourse to security or any other claim (including any claim, as
that term is defined in the federal Bankruptcy Code, and any amendments) which
the Guarantor may now have or later acquire against the Borrower, any other
entity directly or contingently liable for the Liabilities or against the
Collateral, arising from the existence or performance of the Guarantor's
obligations under this Guaranty.
The Guarantor further agrees that should any payments to the Bank on the
Liabilities be in whole or in part, invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy act or code, state or federal law, common
law or equitable doctrine, this Guaranty and any Collateral shall remain in
full force and effect (or be reinstated as the case may be) until payment in
full of any such amounts, which payment shall be due on demand.
WAIVERS: The Guarantor waives any right it may have to receive notice of the
following matters before the Bank enforces any of its rights: (a) the Bank's
acceptance of this Guaranty, (b) any credit that the Bank extends to the
Borrower, (c) the Borrower's default, (d) any demand, or (e) any action that
the Bank takes regarding the Borrower, anyone else, any collateral, or any
Liability, which it might be entitled to by law or under any other agreement.
Any waiver shall affect only the specific terms and time period stated in the
waiver. The Bank may waive or delay enforcing any of its rights without losing
them. No modification or waiver of this Guaranty shall be effective unless it
is in writing and signed by the party against whom it is being enforced.
SETOFF: The Bank may at any time and from time to time, without notice to
Guarantor (any requirement for such notice being expressly waived by the
Guarantor) setoff and apply against any and all Liabilities any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by the Bank to or for the
credit or the account of any Guarantor and any property of any Guarantor from
time to time in possession of the Bank, irrespective of whether or not the
Bank shall have made any demand hereunder and although such obligations may be
contingent and unmatured. The Guarantor hereby grants to the Bank a lien on
all such deposits, indebtedness and property as collateral security for the
payment and performance of the Liabilities. The rights of the Bank under this
provision are in addition to other rights and remedies which the Bank may
otherwise have.
REPRESENTATIONS BY GUARANTOR: The Guarantor represents that it is a
corporation duly organized, existing and in good standing under the laws of
its state in incorporation, and that the execution and delivery of this
Guaranty and the performance of the obligations it imposes are within its
corporate powers, have been duly authorized by all necessary action of its
board of directors, and do not contravene the terms of its articles of
incorporation or by-laws. Each Guarantor represents that the execution and
delivery of this Guaranty and the performance of the obligations it imposes do
not violate any law, do not conflict with any agreement by which it is bound,
do not require the consent or approval of any governmental authority or any
third party, and that this Guaranty is a valid and binding agreement,
enforceable according to its terms. Each Guarantor further represents that all
balance sheets, profit and loss statements, and other information, if any,
furnished to the Bank are accurate and fairly reflect the financial condition
of the organizations and persons to which they apply on their effect dates,
including contingent liabilities of every type, which financial condition has
not changed material and adversely since those dates.
NOTICES: Notice from one party to another relating to this Guaranty shall be
deemed effective if made in writing (including telecommunications) and
delivered to the recipient's address, telex number or telecopier number set
forth under its name by any of the following means: (a) hand delivery, (b)
registered or certified mail, postage prepaid, with return receipt requested,
(c) first class or express mail, postage prepaid, (d) Federal Express,
Purolator Courier or like overnight courier service or (e) telecopy, telex or
other wire transmission with request for assurance of receipt in a manner
typical with respect to communications of that type. Notice made in accordance
with this section shall be deemed delivered on receipt if delivered by hand or
wire transmission, on the third business day after mailing if mailed by first
class, registered or certified mail, or on the next business day after mailing
or deposit with an overnight courier service if delivered by express mail or
overnight courier. Notwithstanding the foregoing, notice of termination of
this Guaranty shall be deemed received only upon the receipt of actual written
notice by the Bank in accordance with the paragraph above labeled "Continued
Reliance."
LAW AND JUDICIAL FORUM THAT APPLY: This agreement is governed by Michigan law.
The Guarantor agrees that any legal action or proceeding against it with
respect to any of its obligations under this Guaranty may be brought in any
state or federal court located in the State of Michigan, as the Bank in its
sole discretion may elect. By the execution and delivery of this Guaranty, the
Guarantor submits to and accepts, with regard to any such action or
proceeding, for itself and in respect of its property, generally and
unconditionally, the jurisdiction of those courts. The Guarantor waives any
claim that the State of Michigan is not a convenient forum or the proper venue
for any such suit, action or proceeding.
2
MISCELLANEOUS: The Guarantor's liability under this Guaranty is independent of
its liability under any other guaranty previously or subsequently executed by
the Guarantor or any one of them, singularly or together with others, as to
all or any part of the Liability, and may be enforced for the full amount of
this Guaranty regardless of the Guarantor's liability under any other
guaranty. This Guaranty is binding on Guarantor's heirs, successors and
assigns, and will operate to the benefit of the Bank and its successors and
assigns. The use of headings shall not limit the provisions of this Guaranty.
All discussions and documents arising between this Guaranty and the last
guaranty signed by the Guarantor as to the Borrower are merged into this
Guaranty.
WAIVER OF JURY TRIAL: The Bank and the Guarantor, after consulting or having
had the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in
any litigation based upon or arising out of this Guaranty or any related
instrument or agreement, or any of the transactions contemplated by this
Guaranty, or any course of conduct, dealing, statement (whether oral or
written), or actions of either of them. Neither the Bank nor the Guarantor
shall seek to consolidate, by counterclaim or otherwise, any action in which a
jury trial has been waived with any other action in which a jury trial cannot
be or has not been waived. These provisions shall not be deemed to have been
modified in any respect or relinquished by either the Bank or the Guarantor
except by a written instrument executed by both of them.
Dated:_________________________1996
GUARANTOR:
Address: _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
3
EXHIBIT 3.6(f)
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT ("Agreement"), dated as of June
30, 1996, is made by__________________ , a________________ corporation
("Debtor"), in favor of NBD Bank, a Michigan banking corporation ("NBD").
Recitals:
A. Secom General Corporation, Uniflow Corporation, Micanol, Inc., L&H
Die, Inc., and Form Flow, Inc. (collectively, the "Borrowers") have obtained
various term loans and revolving loans from NBD.
B. The Borrowers have requested that NBD amend and consolidate the
existing credit facilities pursuant to an Amended and Restated Revolving
Credit and Loan Agreement dated as of June 30, 1996 (such agreement, as
amended, modified, restated, replaced or supplemented from time to time, is
referred to herein as the "Loan Agreement").
C. Debtor has granted NBD a security interest in its assets pursuant to
various Continuing Security Agreements and this Agreement amends and restates
that grant of security and continues, but does not replace, such prior
security interests only in the collateral specified herein.
D. It is a condition to the obligations of NBD in the Loan Agreement
that Debtor shall enter into this Agreement.
THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor hereby agrees with NBD as follows:
1. Defined Terms. In addition to those terms defined elsewhere in this
Agreement, terms defined in the Loan Agreement shall have their defined
meanings when used herein (unless otherwise defined herein) and the following
terms shall have the following meanings, unless the context otherwise
requires:
"Accounts" shall mean any "account" or "chattel paper", as such terms
are defined in Sections 9-106 and 9-105, respectively, of the Code, now
or hereafter owned by Debtor, and shall also mean and include (i) all
accounts receivable, contract rights, book debts, notes, drafts,
instruments, documents, acceptances, payments under leases and other
forms of obligations, now owned or hereafter received or acquired by or
belonging or owing to Debtor whether arising out of goods sold or leased
or services rendered by it or from any other transaction, whether or not
the same involves the sale of goods or services by Debtor
(including,without limitation, any such obligation which might be
characterized
as an account, contract right, general intangible or chattel paper under
the Uniform Commercial Code in effect in any jurisdiction); (ii) all of
Debtor's rights in, to and under all purchase orders now owned or
hereafter received or acquired by it for goods or services, and all of
Debtor's rights to any goods represented by any of the foregoing
(including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and stopping in transit); (iii) all
monies due to or to become due to Debtor under all contracts for the sale
or lease of goods or the performance of services by it (whether or not
yet earned by performance on the part of Debtor) now in existence or
hereafter arising, including, without limitation, the right to receive
the proceeds of such purchase orders and contracts and all collateral
security and guarantees of any kind given by any person with respect to
any of the foregoing; and (iv) all monies due or to become due to Debtor
as a result of the repayment of any loans or extensions of credit by it,
or the realization upon any security granted to Debtor with respect to
such loans or extensions of credit.
"Code" shall mean the Uniform Commercial Code as in effect on the
date hereof in the State of Michigan.
"Collateral" shall have the meaning provided in Section 3.
"Collected Proceeds" shall have the meaning provided in Section 13.
"Contract Rights" shall mean all rights of Debtor (including, without
limitation, all rights to payment) under each Contract.
"Contracts" shall mean, collectively, all contracts, instruments,
undertakings, documents or other agreements in or under which Debtor may
now or hereafter have any right, title or interest and which pertain to
the manufacture, lease, sale or other disposition by Debtor of any
Inventory, or the providing of services, as any of the same may from time
to time be amended, supplemented or otherwise modified.
"Inventory" shall mean any "inventory", as such term is defined in
Section 9-109(4) of the Code, wherever located, now owned or hereafter
acquired by Debtor or in which Debtor now has or hereafter may acquire
any right, title or interest including, without limitation, all goods and
other personal property now or hereafter owned by Debtor which are leased
or are held for sale or lease or are furnished or are to be furnished
under a contract of service or which constitute raw materials, work in
process or materials used or consumed or to be used or consumed in
Debtor's business, or in the processing, packaging or shipping of the
same, and all finished goods.
"Lien Termination Date" shall have the meaning provided in
Section 20.
"Proceeds" shall have the meaning provided it under the Code and, in
any event, shall include, but not be limited to, (i) any and all proceeds
of any insurance, indemnity,
2
warranty or guaranty payable to Debtor from time to time with respect to
any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to Debtor from time to time in connection with
any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Collateral by any governmental body, authority, bureau
or agency (or any person acting under color of governmental authority)
and (iii) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Requirement of Law" shall mean, as to any person, the charter and
By-Laws or other organizational or governing documents of such person,
and any material law, treaty, rule or regulation or determination of
arbitration or a court or other governmental authority, in each case
applicable to or binding upon such person or any of its property or to
which such person or any of its property is subject.
2. Benefit of Agreement. This Agreement is for the benefit of NBD to
secure the payment of the Obligations (as defined in the Loan Agreement), and
to secure the performance of the Debtor and the other Loan Parties of their
respective obligations to NBD under any guaranty, promissory note or other
agreement, whether now existing or arising in the future (the "Other
Obligations").
3. Grant of Security Interest.
(a) General. As collateral security for the prompt and complete
payment and performance of Debtor's obligations to NBD, whether under the Loan
Agreement or other agreement or promissory note, whether now existing or
arising in the future, the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations, and the Other Obligations and in order to induce NBD to enter
into the Loan Agreement, Debtor hereby grants in favor of NBD, a continuing
security interest (the "Security Interest") in all of the following property
now owned, or at any time hereafter acquired, by Debtor or in which Debtor now
has or at any time in the future may acquire any right, title or interest (all
of which is hereinafter collectively referred to as the "Collateral"):
(i) all existing and future Contracts (including, without
limitation, instruments and documents);
(ii) all existing and future Accounts, Contract Rights
(including, without limitation, (a) all money due and to become due
under any Contract, (b) any damages arising out of or for breach or
default in respect of any Contract or Account, (c) all other amounts
from time to time paid or payable under or in connection with any
Contract or Account, and (d) the right of Debtor to terminate any
Contract or to perform or exercise all remedies thereunder);
(iii) all existing and future Inventory; and
3
(iv) to the extent not otherwise included, all Proceeds and
products of any or all of the foregoing.
(b) Business Records. In addition to the grant of the Security
Interest under Section 3(a), Debtor hereby grants for the benefit of NBD, a
lease and first Security Interest in all of Debtor's books and records
pertaining to the Collateral, including without limitation, all books of
accounts, ledgers, computer software, computer printouts and other
computerized records in which there are reflected or maintained the Collateral
in which NBD has a Security Interest, or which relate to any other Collateral
NBD may hold from Debtor and all supporting evidence and documents relating to
such security in the form of written applications, credit information, account
cards, payment records, correspondence, delivery and installation
certificates, invoice copies, delivery receipts, notes and other evidences of
indebtedness, insurance certificates and the like. For convenience, these
books, records and documents are called "Business Records". The Business
Records, presently included in this Agreement, are described as follows:
accounts receivable subsidiary ledger (including unpaid invoice file),
cash receipts journal, cash disbursements journal and filing cabinets
containing customer orders, correspondence, paid invoice files and any
other books and records, filing cabinets, or places of storage of data
and information, including all computer storage facilities, records and
software usually located at Debtor's places of business identified on
Schedule I or elsewhere.
4. Rights of NBD: Limitations on NBD's Obligations. It is expressly
agreed to by Debtor that, anything herein to the contrary notwithstanding,
nothing in this Agreement shall reduce Debtor's liability under each of the
Accounts and Contracts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to such Account and in accordance
with the terms and provisions of each such Contract. NBD shall not have any
obligation or liability under any Account (or agreement giving rise thereto)
or under any Contract by reason of or arising out of this Agreement or the
receipt by NBD of any payment relating to any Account or Contract pursuant
hereto, nor shall NBD be required or obligated in any manner to perform or
fulfill any of the obligations of Debtor under or pursuant to any Account (or
any agreement giving rise thereto) or under or pursuant to any Contract, to
make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party under any Account (or any agreement giving rise thereto) or under any
Contract, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
5. Representations and Warranties. Debtor hereby represents
and warrants that:
(a) Title; No Other Security Interests. Except for the Security
Interest granted hereunder for the benefit of NBD and Permitted Liens
under the Loan Agreement, Debtor owns each item of the Collateral free
and clear of any and all security interests or claims of others.
4
(b) Addresses. The Debtor's principal place of business and the
place where its records concerning the Accounts and other Collateral are kept
and the other addressees) of Debtor's business, if any, are set forth on
Schedule I hereto. The states in which Collateral is located, and Debtor's
principal place of business in each state, shall not be changed without prior
written notice to NBD, but the Collateral, wherever located, is covered by
this Agreement. Debtor shall immediately advise NBD in writing of any change
in its name, address or form of organization.
(c) Trade Names. Any and all trade names under which Debtor
transacts any part of its business, and all former names of Debtor, are those
which have been previously disclosed to NBD, as set forth on Schedule I
hereto.
(d) Accuracy of Information. All information, certificates or
statements given to NBD pursuant to this Agreement shall be true and complete
in all material respects, when given.
6. Covenants. Debtor covenants and agrees with NBD that, unless
otherwise consented to by NBD in writing, from and after the date of this
Agreement until the Obligations and Other Obligations are fully satisfied:
(a) Further Documentation. Pledge of Instruments. At any time and
from time to time, upon the written request of NBD, and at the sole expense of
Debtor, Debtor will promptly and duly execute and deliver any and all such
further instruments and documents and take such further action as NBD may
reasonably request for the purpose of obtaining the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the
Security Interests granted hereby. A carbon, photographic or other
reproduction of this agreement shall be sufficient as a financing statement
for filing in any jurisdiction.
(b) Maintenance of Records. If requested by NBD, Debtor will xxxx
the Business Records pertaining to the Collateral to evidence this Agreement
and the Security Interests granted hereby.
(c) Indemnification. Debtor agrees to pay, and to hold NBD
harmless from, any and all liabilities, costs and expenses (including, without
limitation, reasonable legal fees and expenses) (i) with respect to, or
resulting from, any delay in paying any and all excise, sales or other taxes
which may be payable or determined to be payable with respect to any of the
Collateral, (ii) with respect to, or resulting from, any delay in complying
with any Requirement of Law applicable to any of the Collateral or (iii) in
connection with any of the transactions contemplated by this Agreement.
(d) Payment of Obligations. Debtor will pay promptly when due,
all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge
5
need be paid if and to the extent not required to be paid pursuant to Section
6.1(b) or other provision of the Loan Agreement.
(e) Limitation on Security Interests on Collateral. Debtor will
not create, incur or permit to exist, and will defend the Collateral against,
and will take such other action as is necessary to remove, any Security
Interest or claim on or to the Collateral other than the Security Interests
created hereby, and other than Permitted Liens pursuant to the Loan Agreement,
and will defend the right, title and interest of NBD in and to any of the
Collateral against the claims and demands of all persons whomsoever. Debtor
will not sell or otherwise dispose of any type or item of Collateral except as
expressly permitted by this Agreement or as otherwise not prohibited by the
Loan Agreement.
(f) Limitations on Modifications of Contracts, Accounts; No
Waivers, Extensions. Debtor will not, other than in the ordinary course of
business, (i) amend, modify, terminate or waive any provision of any Contract
or any agreement giving rise to an Account in any manner which would
reasonably be expected to materially adversely affect the value of such
Contract or Account as Collateral, or (ii) fail to exercise promptly and
diligently each and every right which it may have under each Contract and each
agreement giving rise to an Account (other than any right of termination) in
any manner which would reasonably be expected to materially adversely affect
the value of such Contract.
(g) Limitations on Discounts, Compromises, Extension of Accounts.
Other than in the ordinary course of business, Debtor will not grant any
extension of the time of payment of any of the Accounts, compromise, compound
or settle the same for less than the full amount thereof, release, wholly or
partially, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon.
(h) Maintenance of Property and Insurance. Debtor will maintain,
preserve and protect all property that is material to the conduct of its
business and keep such property in good repair, working order and condition
and from time to time make, or cause to be made all needful and proper
repairs, renewals, additions, improvements and replacements thereto necessary
in order that the business carried on in connection therewith may be properly
conducted at all times in accordance with customary and prudent business
practices for similar businesses; and maintain in full force and effect
insurance with responsible and reputable insurance companies or associations
in such amounts, on such terms and covering such risks, including fire and
other risks insured against by extended coverage, as is usually carried by
companies engaged in similar businesses and owning similar properties
similarly situated and maintain in full force and effect public liability
insurance, business interruption insurance, insurance against claims for
personal injury or death or property damage occurring in connection with any
of its activities or any of any properties owned, occupied or controlled by
it, in such amounts as it shall reasonably deem necessary, and maintain such
other insurance as may be required by Governmental Regulations or as may be
reasonably requested by NBD. NBD shall be listed as a loss payee and
additional insured with respect to the Collateral and providing 30 days notice
to NBD prior to termination or cancellation, all in form and substance
6
reasonably satisfactory to NBD. Upon request, the Debtor shall deliver to NBD
copies of all or any of such insurance policies or the related certificates of
insurance.
(i) Right of Inspection. NBD shall have access to the books,
correspondence and records of Debtor during normal business hours. NBD and its
representatives shall at all times also have the right to enter into and upon
any premises where any of the records of Accounts or Inventory is located for
the purpose of inspecting the same, observing its use or otherwise protecting
its interests therein. NBD will take reasonable steps to maintain the
confidentiality of information obtained by it, except as required by law.
7. Sale and Collections.
(a) Sale of Inventory. So long as no Event of Default has
occurred and is continuing and NBD has not given written notice to Debtor
restricting such sales, Debtor may sell or otherwise dispose of Inventory in
the ordinary course of Debtor's business.
(b) Verification and Notification. If an Event of Default has
occurred and is continuing, NBD may verify Collateral in any reasonable manner
and Debtor shall assist NBD in so doing. Anything contained herein to the
contrary notwithstanding, NBD may at any time during the continuance of an
Event of Default, and Debtor shall, thereafter, upon request of NBD, notify
the account debtors on any Accounts to make payment directly to NBD, and NBD
may enforce collection of, settle, compromise, extend or renew the
indebtedness of, such account debtors. NBD may also, at any time during the
continuance of an Event of Default, notwithstanding any other provision of
this Agreement, notify the xxxxxx of any Inventory of its Security Interest
therein.
(c) Deposit With NBD. During the continuance of an Event of
Default, NBD shall have the right, at any time, to notify and direct any
person obligated to the Debtor (an "Account Debtor") to make all payments
whatever to NBD and NBD shall have the right, at any time, to hold all amounts
acquired from any Account Debtor and any proceeds as part of the Collateral.
Also during the continuance of an Event of Default, any payment received by
the Debtor shall be held by the Debtor in trust for NBD in the same medium in
which received, shall not be commingled with any assets of the Debtor and
shall, at the request of NBD, be turned over to NBD not later than the next
business day following the day of their receipt.
(d) License. NBD is hereby granted an irrevocable royalty-free
license and right to use, without charge, Debtor's labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks
and advertising matter, or any property of a similar nature, as it pertains to
the Collateral, in advertising for sale and selling any Collateral and
Debtor's rights under all licenses and all franchise agreements shall inure to
NBD's benefit, all of which may be exercised during an Event of Default.
7
8. NBD's Appointment as Attorney-in-Fact.
(a) General Appointment. During the continuance of an Event of
Default, Debtor hereby irrevocably constitutes and appoints NBD, with power of
substitution to appoint any person to act on its behalf where such appointment
is required by applicable law, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of Debtor and in
the name of Debtor or in its own name, from time to time in NBD's discretion,
for the purpose of carrying out the terms of this Agreement, on behalf of
Debtor, to do the following:
(i) to ask, demand, collect, receive and give acquittance
and receipts for any and all monies due and to become due under any
Contract or Account and, in the name of Debtor or its own name or
otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of monies
due under any Contract or Account and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise
deemed appropriate by NBD for the purpose of collecting any and all such
monies due under any Contract or Account whenever payable;
(ii) to pay or discharge taxes, Security Interests or other
encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the
costs thereof; and
(iii) (A) to direct any party liable for any payment under any
of the Collateral to make payment of any and all monies due and to become
due thereunder directly to NBD or as NBD shall direct; (B) to receive
payment of and give receipt for any and all monies, claims and other
amounts due and to become due at any time in respect of or arising out of
any Collateral; (C) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
Accounts and other documents relating to the Collateral; (D) to commence
and prosecute any suits, actions or proceedings at law or in equity in
any court of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any Collateral; (E)
to defend any suit, action or proceeding brought against Debtor with
respect to any Collateral; (F) to settle, compromise or adjust any suit,
action or proceeding described above and, in connection therewith, to
give such discharges or releases as NBD may deem appropriate; and (G) to
do, at NBD's option and Debtor's expense, at any time, or from time to
time, all acts and things which NBD deems necessary or desirable to
protect, preserve or realize upon the Collateral and NBD's Security
Interest therein, in order to effect the intent of this Agreement, all as
fully and effectively as Debtor might do.
This power of attorney is a power coupled with an interest and shall be
irrevocable until the Lien Termination Date.
8
(b) irrevocability The powers conferred on NBD hereunder are
solely to protect its interests in the Collateral and shall not impose any
duty upon it to exercise any such powers. NBD shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers
and neither it nor any of its officers, directors, employees or agents shall
be responsible to Debtor for any act or failure to act, except for its own
gross negligence or willful misconduct.
9. Performance by NBD of Debtor's Obligations. If Debtor fails to
perform or comply with any of its agreements contained herein or in the Loan
Agreement and NBD, at its sole option, shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the expenses
of NBD incurred in connection with such performance or compliance shall be
payable by Debtor to NBD on demand and shall constitute Obligations secured
hereby.
10. Proceeds as Collateral. During the continuance of an Event of
Default, any and all such Proceeds received by NBD (whether from Debtor or
otherwise) may, in the sole discretion of NBD, be held by NBD as collateral
security for, or then or at any time thereafter applied in whole or in part by
NBD, against all or any part of the Obligations in the manner provided in
Section 13. Any balance of such payments held by NBD and remaining after
payment in full of all the obligations secured hereby shall be paid over to
Debtor in the manner provided in Section 20.
11. Events of Default. The occurrence of (a) an Event of Default under
the Loan Agreement or (b) an event of default or event of acceleration under
any other agreement between Debtor and NBD or any Loan Party and NBD, shall be
deemed an Event of Default hereunder.
12. Remedies.
(a) General. If an Event of Default shall occur and be
continuing, NBD may exercise in addition to all other rights and remedies
granted to it in this Agreement, the Loan Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations or
the Other Obligations, all rights and remedies of a secured party under the
Code or other applicable law. Without limiting the generality of the
foregoing, Debtor expressly agrees that in any such event NBD may forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and may forthwith sell, lease, assign, or otherwise dispose of and
deliver such Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange or broker's board or at any of NBD's offices or elsewhere at such
prices as it may deem best for cash or on credit or for future delivery
without assumption of any credit risk. NBD shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of such Collateral so
sold, free of any right or equity of redemption in Debtor which right or
equity is hereby waived or released. Debtor further agrees that if an Event of
Default shall occur and be continuing, it will, at NBD's request, assemble the
Collateral and make it available to NBD at places which NBD shall reasonably
select, whether at Debtor's premises or elsewhere, at Debtor's sole cost and
expense. NBD shall keep the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale for application to the payment in
whole or in part of the Obligations and/or Other Obligations, as the case may
be, in the manner provided in Section 13, and only after
9
payment by NBD of any other amount required by any provision of law, including
Section 9-504(1)(c) of the Code, will NBD be required to account for the
surplus, if any, to Debtor. The Debtor agrees that NBD need not give more than
ten days' notice of the time and place of any public sale or of the time after
which a private sale may take place and that such notice is reasonable
notification of such matters. Debtor shall remain liable for any deficiency if
the proceeds of any sale or disposition of the Collateral are insufficient to
pay all amounts to which NBD is entitled, Debtor also being liable for the
fees of any attorneys employed by NBD to collect such deficiency.
(b) Costs. Debtor also agrees to pay all costs of NBD,
including, without limitation, reasonable attorneys' fees and legal expenses,
incurred with respect to the collection of any of the Obligations and/or Other
Obligations and the enforcement and administration by NBD of this Agreement
and any of its respective rights hereunder.
13. Application of Proceeds.
(a) Payment of Expenses. All monies collected by NBD upon any
sale or other disposition of the Collateral, together with all other monies
received by NBD hereunder (the "Collected Proceeds"), shall be applied by NBD
as required below.
(b) Payment of Obligations. Prior to the Lien Termination Date,
the Collected Proceeds shall be applied to satisfy the obligations secured
hereby in such order as NBD shall deem appropriate, in its sole discretion.
(c) Payment to Debtor. At the Lien Termination Date, any
Collected Proceeds of the Collateral not otherwise applied pursuant to this
Section 13, shall in each case be paid over (at NBD's discretion) to a court
for distribution to any claimants of the Collected Proceeds or to Debtor
pursuant to the terms of Section 20, except as otherwise required by law.
14. Limitation on Collateral NBD's Duty in Respect of Collateral. NBD's
sole duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Code or
otherwise, shall be to deal with it in the same manner as NBD deals with
similar property for its own account. Neither NBD, nor any of its respective
directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of Debtor or otherwise.
15. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
16. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10
17. Section Headings, etc. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof. All
references to Sections, Schedules and Exhibits are to Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified.
18. No Waiver; Cumulative Remedies. NBD shall not by any act (except a
written instrument pursuant to Section 19 hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any breach of the terms and
conditions hereof. A waiver by NBD of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which NBD
would otherwise have had on any future occasion. No failure to exercise nor
any delay in exercising on the part of NBD any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
future exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may
be exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by the Loan Agreement, any other Loan Documents or
applicable law.
19. Waivers and Amendments; Successors and Assigns; Governing Law. None
of the terms or provisions of this Agreement may be waived, altered, modified
or amended except by a written instrument, duly executed by Debtor and NBD.
This Agreement and all obligations of Debtor hereunder shall be binding upon
the successors and assigns of Debtor, and shall, together with the rights and
remedies of NBD hereunder, inure to the benefit of NBD and its respective
successors and assigns, provided that Debtor may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of NBD.
This Agreement shall be governed by, and be construed and interpreted in
accordance with, the internal laws (and not the laws of conflict) of the State
of Michigan.
20. Termination; Release. Upon the full and complete satisfaction of all
obligations secured hereby, including without limitation the Other
Obligations, this Agreement shall terminate, and NBD, at the request and
expense of Debtor, shall promptly execute and deliver to Debtor a proper
instrument or instruments acknowledging the satisfaction and termination of
this Agreement, and will duly assign, transfer and deliver to Debtor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of NBD and which has not theretofore been sold or
otherwise applied or released pursuant to this Agreement, together with any
monies at the time held by NBD hereunder (the "Lien Termination Date").
21. Notices. Etc. Any demand, notice or communication to be made or
given hereunder shall be in writing, except as otherwise expressly permitted
or required under this Agreement, and may be made or given by personal
delivery, by courier service by registered or certified mail or by transmittal
by telex or telecopy machine addressed to the respective parties as follows:
11
To Debtor: ________________________________
________________________________
________________________________
________________________________
Attention:______________________
Phone:__________________________
Fax:____________________________
To NBD: NBD Bank
00000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other mailing or telex or facsimile machine address as any party
may from time to time notify the others in accordance with this Section 21.
All notices, requests, consents and other communications shall be deemed to
have been given when received if hand delivered, if mailed by certified or
registered mail, postage prepaid, upon receipt of such mailing, or if
deposited with an expedited courier service such as Federal Express" or
"Purolator", upon receipt which will be presumed to be on the Business Day (as
defined in the Loan Agreement) following such deposit, or if telecopied, on
the Business Day on which such telecopy is confirmed as having been received,
in all cases, addressed to the respective address set forth on the signature
page attached hereto, or as may otherwise be designated in accordance
herewith.
22. Loan Agreement Controls. In the event of an express conflict between
the terms of this Agreement and the terms of the Loan Agreement, the terms of
the Loan Agreement shall govern and control.
23. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which together shall constitute one and the same instrument, and it shall not
be necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
24. Prior Security Agreements. All prior security agreements given to
NBD relating to Debtor's personal property are hereby amended and restated by
this Agreement and NBD's security interests in any assets of Debtor granted by
prior security agreements but not included in the definition of Collateral
hereunder are acknowledged to be terminated.
25. Waiver of Jury Trial. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT
TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED.
NBD AND DEBTOR EACH HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION, WAIVE
ALL RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES
12
ARISING OUT OF OR IN RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS
BETWEEN THE PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT
OF THIS WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN
INSTRUMENT SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.
IN WITNESS WHEREOF, Debtor and NBD have caused this Agreement to be
executed by their duly authorized officers on the date first set forth above.
NBD BANK,
a Michigan banking corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Xxxxxx X. Xxxxxxxx
Its: Vice President
_______________________________
a____________corporation
By:____________________________
Its:______________________
13
