Exhibit 10.7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made and dated as of the 25th
day of November, 1997, by and among Quality Products, Inc., a Delaware
corporation ("Quality"), QPI Multipress, Inc., an Ohio corporation and
wholly-owned subsidiary of Quality ("Multipress"), (Quality and Multipress are
referred to collectively, as the "Borrower") and Eastlake Securities, Inc., a
New York corporation, for itself and as agent for the holders of beneficial
interests in the Note (as hereinafter defined) pursuant to a certain
Subscription Agreement and Participation Agreement dated as of September 22,
1997 among Quality, such holders of beneficial interests ("Holders") and
Eastlake Securities, Inc. (the "Agent").
RECITALS
A. The Borrower has requested the Agent to extend credit to
the Borrower, and the Agent has agreed to do so.
B. The Borrower and the Agent desire to set forth herein the
mutually agreed upon terms and conditions of such credit
extension.
NOW, THEREFORE, in consideration of the above Recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. Term Loan Facility
(a) Term Loan. On the terms and subject to the
conditions set forth herein, the Agent shall,
contemporaneously herewith, advance a loan (the
"Term Loan") to the Borrower in the amount of
$1,500,000, in one disbursement, and the
Borrower agrees to borrow such sum from the
Agent.
(b) Calculation of Interest. The Borrower shall pay
interest on the outstanding principal balance of
the Term Loan from the date disbursed to but not
including the date of payment at a rate per
annum equal to six percent (6%).
(c) Payment of Interest. Interest accruing on the
Term Loan shall be payable quarterly on the last
business day of each calendar quarter,
commencing December 31, 1997, and a final
payment on the Final Maturity Date in the amount
of the interest then accrued but unpaid.
(d) Repayment of Principal. The principal of the
Term Loan shall be payable in twelve (12)
consecutive equal installments of $50,000, each
such installment payable on the last Business
Day of each calendar quarter, commencing on
December 31, 1997, and one final installment in
the full remaining outstanding principal balance
of the Term Loan on the Final Maturity Date.
2. Miscellaneous Provisions
(a) Use of Proceeds. The proceeds of the Term Loan
shall be utilized by the Borrower for payment of
all indebtedness owed to:
(i) The Provident Bank;
(ii) the $235,000 outstanding principal
balance, plus interest (6%) accrued,
with respect to $250,000 lent
($15,000 having been repaid) by the
Agent in August and October 1997
which Borrower used to settle certain
claims. The balance, if any, may be
utilized by Borrower for working
capital.
(b) Note. The obligation of the Borrower to repay
the Term Loan shall be evidenced by one note
payable to the order of the Agent, as agent for
the Holders, in the form of that attached hereto
as Exhibit A (the "Note").
(c) Nature and Place of Payments. All payments made
on account of the Obligations shall be made by
the Borrower, without setoff or counterclaim, in
lawful money of the United States in immediately
available funds, free and clear of and without
deduction for any taxes, fees, or other charges
of any nature whatsoever imposed by any taxing
authority and must be received by the Agen by
3:00 P.M., Eastern time, on the day of payment,
it being expressly agreed and understood that if
a payment is received after 3:00 P.M., Eastern
time, by the Agent, such payment will be
considered to have been made by the Borrower on
the next succeeding Business Day and interest
thereon shall be payable by the Borrower at the
rate of twelve percent (12%)during such
extension. All payments on account of the
Obligations shall be
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made to the Agent at its office located at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(d) Postmaturity Interest. Any Obligations not paid
when due (whether at stated maturity, upon
acceleration or otherwise) shall bear interest
from the date due until paid in full at a per
annum rate equal to twelve percent (12%).
(e) Computations. All computations of interest and
fees payable hereunder shall be based upon a
year deemed to consist of 360 days for the
actual number of days elapsed.
(f) Prepayments.
(i) The Borrower may prepay the Term
Loan, in whole at any time or in part
from time to time, upon not less than
one Business Day's prior written
notice to the Agent. Principal
amounts prepaid shall be applied to
installments on the Term Loan in
inverse order of maturity.
(ii) The Borrower shall pay in connection
with any prepayment hereunder all
interest accrued but unpaid on the
Term Loan concurrently with payment
to the Agent of any principal
amounts.
(g) Collateral Security; Additional Documents. A
collateral security for the Obligations, the
Borrower shall execute and deliver to the Agent,
(i) a security agreement in the form of that
attached hereto as Exhibit B (the "Security
Agreement"),pursuant to which the Borrower shall
pledge, assign, and grant to the Agent a first
priority security interest in and lien upon the
Collateral and (ii) such UCC-1 financing
statements as the Agent may require. The
Borrower further agrees to execute and deliver
or to cause to be executed and Delivered to the
Agent from time to time such confirmatory and
supplementary security agreements, financing
statements, consents of and notices to third
parties and such other documents, instruments
and agreements as the Agent may reasonably
request that are in the Agent's judgment
necessary or desirable (the Security Agreement,
the UCC-1 financing statements referred to in
subparagraph (ii) above, and such additional
documents, instruments, and agreements being
referred to herein as the "Security Documents").
3. Conditions to Making Term Loan
As conditions precedent to the obligations of the Agent to
make the Term Loan:
(a) Delivery of Documents. The Borrower shall have
delivered or shall have had delivered to the
Agent, in form and substance satisfactory to the
Agent and its counsel, each of the following:
(i) A duly executed copy ofthis Agreement
(ii) Duly executed copies of each of the
other Loan Documents;
(iii) Such credit applications, financial
statements, authorizations, and such
information concerning the Borrower
and its business, operations and
condition (financial and otherwise)
as the Agent may reasonably request;
(iv) Certified copies of resolutions of
the Board of Directors of the
Borrower approving the execution and
delivery of the Loan Documents;
(v) A certificate of the Secretary or an
Assistant Secretary of the Borrower
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certifying the names and true
signatures of the officers of the
Borrower authorized to sign the Loan
Documents;
(vi) A copy of the Certificate or Articles
of Incorporation of each Borrower,
certified by the Secretary of State
of its respective state of
incorporation as of a recent date;
(vii) A copy of the Bylaws or Code of
Regulations of each Borrower,
certified by the Secretary or an
Assistant Secretary of the Borrower
as of the date of this Agreement as
being accurate and complete;
(viii) A certificate of good standing or
status of each Borrower from the
Secretary of State of its respective
state of incorporation as of a recent
date;
(ix) Certificates of authority and good
standing of the Borrower for each
state in which the Borrower is
qualified to do business; and
(x) Acknowledgment copies of all UCC-1
financing statements filed with
respect to the Collateral accompanied
by a search report showing such
financing statements as duly filed
and evidencing that the security
interest of the Agent in the
Collateral will be prior to all other
security interests of record.
(b) Approvals, etc. All acts and conditions
(including, without limitation, the obtaining of
any necessary regulatory approvals and the
making of any
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required filings, recordings, or registrations)
required to be done and performed and to have
happened precedent to the execution, delivery,
and performance of the Loan Documents and to
constitute the same legal, valid, and binding
obligations, enforceable in accordance with
their respective terms, shall have been done and
performed and shall have happened in due and
strict compliance with all applicable laws.
(c) Documentation Acceptable. All documentation,
including, without limitation, documentation for
corporate and legal proceedings in connection
with the transactions contemplated by the Loan
Documents shall be satisfactory in form and
substance to the Agent and its counsel.
(d) Representations and Warranties. The
representations and warranties of the Borrower
contained in the Loan Documents shall be
accurate and complete in all respects as if made
on and as of the proposed funding date for the
Term Loan.
(e) Existence of Defaults. There shall not have
occurred an Event of Default or Potential
Default that is continuing unwaived.
4. Representations and Warranties of the Borrower
As an inducement to the Agent to enter into this Agreement
and to make the Term Loan as provided herein, the Borrower represents and
warrants to the Agent (and each Holder) that:
(a) Financial Condition. The financial statements,
dated the Statement Date and the Interim Date,
copies of which have heretofore been furnished
to each Agent and the Agent, are complete and
correct and present fairly in accordance with
GAAP the financial condition of the Borrower and
its consolidated Subsidiaries at such dates and
the consolidated and consolidating results of
their operations and changes in financial
position for the fiscal periods then ended.
(b) No Change. Since the Statement Date there has
been no material adverse change in the business,
operations, assets, or financial or other
condition of the Borrower or the Borrower and
its consolidated Subsidiaries taken as a whole.
Since the Statement Date, the Borrower has not
entered into, incurred, or assumed any long-term
debt, mortgages, material leases or oral or
written commitments, nor commenced any
significant project, nor made any purchase or
acquisition of any significant property.
(c) Corporate Existence; Compliance with Law. Each
Borrower (i)is duly organized, validly existing,
and in good standing as a corporation under the
laws of its respective state of incorporation
and is qualified to do business in
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each jurisdiction where its ownership of
property or conduct of business requires such
qualification and where failure to qualify would
have a material adverse effect on the Borrower
or its property and/or business or on the
ability of the Borrower to pay or perform the
Obligations; (ii) has the corporate power and
authority and the legal right to own and operate
its property and to conduct business in the
manner in which it does and proposes so to do;
and (iii) is in compliance with all Requirements
of Law and Contractual Obligations.
(d) Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate
power and authority and the legal right to
execute, deliver, and perform the Loan Documents
to which it is a party and has taken all
necessary corporate action to authorize the
execution, delivery, and performance of the Loan
Documents. The Loan Documents have been duly
executed and delivered on behalf of the Borrower
and constitute legal, valid, and binding
obligations of the Borrower enforceable against
the Borrower in accordance with their respective
terms, subject to the effect of applicable
bankruptcy and other similar laws affecting the
rights of creditors generally and the effect of
equitable principles whether applied in an
action at law or a suit in equity.
(e) No Legal Bar. The execution, delivery, and
performance of the Loan Documents, the borrowing
hereunder and the use of the proceeds thereof,
will not violate any Requirement of Law or any
Contractual Obligation of the Borrower or create
or result in the creation of any Lien on any
assets of the Borrower.
(f) No Material Litigation. Except as disclosed on
Exhibit C hereto, no litigation, investigation,
or proceeding (including, without limitation,
Hazardous Materials Claims) of or before any
arbitrator or Governmental Authority is pending
or, to the knowledge of the Borrower, threatened
by or against the Borrower or any of its
Subsidiaries or against any of such parties'
properties or revenues which is likely to be
adversely determined and which, if adversely
determined, is likely to have a material adverse
effect on the business, operations, property, or
financial or other condition of the Borrower
or any of its Subsidiaries.
(g) Taxes. The Borrower and each of its Subsidiaries
have filed or caused to be filed all tax returns
that are required to be filed and have paid all
taxes shown to be due and payable on said
returns or on any assessments made against them
or any of their property other than taxes that
are being contested in good faith by appropriate
proceedings and as to which the Borrower or
applicable Subsidiary has established adequate
reserves in conformity with GAAP.
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(h) Investment Company Act. The Borrower is not an
"investment company" or a company "controlled"
by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(i) Subsidiaries. Attached hereto as Exhibit D is an
accurate and complete list of all presently
existing Subsidiaries of the Borrower, their
respective jurisdictions of incorporation and
qualification and the percentage of their
capital stock owned by the Borrower or other
Subsidiaries. All of the issued and outstanding
shares of capital stock of such Subsidiaries
have been duly authorized and issued and are
fully paid and nonassessable.
(j) Federal Reserve Board Regulations. Neither the
Borrower nor any of its Subsidiaries is engaged
or will engage, principally or as one of its
important activities, in the business of
extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the
respective meanings of such terms under
Regulation U. No part of the proceeds of the
Term Loan issued hereunder will be used for
"purchasing" or "carrying" "margin stock" as so
defined or for any purpose that violates, o
that would be inconsistent with, the provisions
of the Regulations of the Board of Governors of
the Federal Reserve System.
(k) ERISA.(i) No Prohibited Transactions Accumulated
Funding Deficiencies, withdrawals from
Multiemployer Plans, or Reportable Events have
occurred with respect to any Plans or
Multiemployer Plans that,in the aggregate, could
subject the Borrower to any tax, penalty, or
other liability where such tax, penalty, or
liability is not covered in full for the benefit
of the Borrower, by insurance; (ii) no notice of
intent to terminate a Plan has been filed, nor
has any Plan been terminated under Section 4041
of ERISA,nor has the PBGC instituted proceeding
to terminate,or appoint a trustee to administer,
a Plan, vent has occurred or condition exists
that might constitute grounds under Section 4042
of ERISA for the termination of, or the
appointment of a trustee to administer,any Plan
(iii) the present value of all benefit
liabilities (as defined in Section 4001(a)(16 o
ERISA) under all Plans (based on the actuarial
assumptions used to fund the Plans) does not
exceed the assets of the Plans; and (iv) the
execution, delivery, and performance by the
Borrower of this Agreement and the Term Loan
hereunder and the use of the proceeds thereof
will not involve any Prohibited Transactions.
(l) Assets. The Borrower and each of its
Subsidiaries has good and marketable title to
all property and assets reflected in the
financial statements referred to in paragraph
4(a) previously, except property and assets sold
or otherwise disposed of in the ordinary course
of business subsequent to the respective dates
thereof. Neither the Borrower nor any of its
Subsidiaries has outstanding Liens on any of its
properties or assets nor are there any security
agreements
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to which the Borrower or any of its Subsidiaries
is a party, or title retention agreements,
whether in the form of leases or otherwise, of
any personal property, except as reflected in
the financial statements referred to previously
in paragraph 4(a) or as permitted under
paragraph 6(a) below.
(m) Securities Acts. The Borrower is not violating
any rule, regulation or requirement under the
Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended,
and is not required to qualify an indenture
under the Trust Indenture Act of 1939, as
amended, in connection with its execution and
delivery of the Note.
(n) Consents, etc. No consent, approval,
authorization of, or registration, declaration
or filing with any governmental authority is
required on the part of the Borrower in
connection with the execution and delivery of
the Loan Documents (other than filings to
perfect the Lien granted by it to the Agent) or
the performance of or compliance with the terms,
provisions, and conditions hereof or thereof.
(o) Hazardous Materials. Neither the Borrower nor,
to the best knowledge of the Borrower, any other
Person has (i) caused or permitted any Hazardous
Materials to be placed, held, located, or
disposed of in, on, under, or about the Property
or any part thereof, and neither the Property,
nor any part thereof,has ever been used (whether
by the Borrower or, to the best knowledge of the
Borrower, by any other Person) for activities
involving, directly or indirectly, the use,
generation, treatment, storage, or disposal of
any Hazardous Materials;(ii) caused or permitted
to be incorporated into or utilized in the
construction of any improvements located on the
Property any chemical, material, or substance to
which exposure is prohibited, limited, or
regulated by any Hazardous Materials Laws or
that, even if not so regulated, is known to pos
a hazard (either in its present form or if
disturbed or removed) to the health and safety
of the occupants of the Property or of property
adjacent to the Property; or (iii) discovered
any occurrence or condition on the Property
or any property adjacent to or in the vicinity
of the Property that could cause the Property or
any part thereof to be subject to any
restrictions on the ownership, occupancy,
transferability, or use of the Property under
any Hazardous Materials Laws.
5. Affirmative Covenants
The Borrower hereby covenants and agrees with the Agen
that, as long as any Obligations remain unpaid, the
Borrower shall:
(a) Financial Statements. Furnish or cause to be
furnished to the Agent:
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(i) Within ninety (90) days after the
last day of each fiscal year of the
Borrower, consolidated and
consolidating statements of income
and statements of cash flow for such
year and balance sheets as of the
end of such year presented fairly in
accordance with GAAP and accompanied
by an unqualified report of a firm o
independent certified public
accountants acceptable to the Agent
and including therewith a copy of the
management letter from such certified
public accountants; and
(ii) Within forty-five (45) days after the
last day of each fiscal quarter,
consolidated and consolidating
statements of income and cash flow
for such fiscal quarter and balance
sheets as of the end of such fiscal
quarter of the Borrower and its
Subsidiaries, accompanied in each
case by a certificate of the chief
financial officer of the Borrower
stating that such financial
statements are presented fairly in
accordance with GAAP.
(b) Certificates; Reports; Other Information.Furnish
or cause to be furnished to the Agent:
(i) Promptly after sending, filing, or
publishing the same, copies of all
proxy statements, financial
statements, and reports that the
Borrower sends to its public
stockholders and copies of all
regular and periodic reports and all
registration statements that the
Borrower files with the Securities
and Exchange Commission and copies of
all press releases issued by
Borrower;
(ii) Upon Agent's request, a certificate
of the chief financial officer or
treasurer of the Borrower stating he
has no knowledge that an Event of
Default or Potential Default has
occurred and is continuing or, if an
Event of Default or Potential Default
has occurred and is continuing, a
statement as to the nature thereof
and the action that the Borrower
proposes to take with respect
thereto; and
(iii) Promptly, such additional financial
and other information, including,
without limitation, financial
statements of the Borrower or any
Affiliate as the Agent may from time
to time reasonably request,
including, without limitation, such
information as is necessary for the
Agent to sell, assign, or otherwise
transfer all or portions of, and
participations in, the Note.
(c) Payment of Indebtedness. Pay, discharge, or
otherwise satisfy at or before maturity or
before it becomes delinquent, defaulted, or
accelerated, as the case may be, all its
Indebtedness (including taxes), except
Indebtedness being
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contested in good faith and for which provision
is made to the satisfaction of the Agent for the
payment thereof in the event the Borrower is
found to be obligated to pay such Indebtedness
and which Indebtedness is thereupon promptly
paid by the Borrower.
(d) Maintenance of Existence and Properties;
Compliance. Maintain its corporate existence and
maintain all rights, privileges, licenses,
approvals, franchises, properties, and assets
necessary or desirable in the normal conduct of
its business, and comply with all Contractual
Obligations and Requirements of Law.
(e) Inspection of Property; Books and Records;
Discussions. Keep proper books of record and
account in which full, true, and correct entrie
in conformity with GAAP and all Requirements of
Law shall be made of all dealings and
transactions in relation to its business and
activities, and permit representatives of the
Agent (at no cost or expense to the Borrower
unless there shall have occurred and be
continuing an Event of Default) to visit and
inspect any of its properties and examine and
make abstracts from and copies of any of its
books and records at any reasonable time and as
often as may easonably be desired by the Agent,
and to discuss the business, operations,
properties, and financial and other condition of
the Borrower and any of its Subsidiaries with
officers and employees of such parties, and with
their independent certified public accountants.
(f) Notices. Promptly give written notice to the
Agent of:
(i) The occurrence of any Potential
Default or Event of Default;
(ii) Any litigation or proceeding
affecting the Borrower or any of its
Subsidiaries that could have a
material adverse effect on the
business, operations, property, or
financial or other condition of the
Borrower or any of its Subsidiaries;
and
(iii) A material adverse change in the
business, operations, property, or
financial or other condition of the
Borrower or any of its Subsidiaries.
(g) Expenses. Pay all reasonable out-of-pocket
expenses (including fees and disbursements of
counsel): (i) of the Agent incident to the
preparation and negotiation of the Loan
Documents, closing of the Loan and related
transactions and due diligence in connection
therewith (not to exceed 0.67% of the principal
amount of the Note plus disbursements), (ii) of
the Agent incident to the administration of the
Loan Documents and the protection of the rights
of the Holders and the Agent under the Loan
Documents, and (iii)
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of the Agent incident to the enforcement of
payment of the Obligations, whether by judicial
proceedings or otherwise, and before as well as
after judgment including, without limitation, in
connection with bankruptcy, insolvency,
liquidation, reorganization, moratorium, or
other similar proceedings involving the Borrower
or a "workout" of the Obligations. The
obligations of the Borrower under this paragraph
5(g) shall be effective and enforceable whether
or not the Term Loan is made hereunder and shall
survive payment of all other Obligations.
(h) Loan Documents.Comply with and observe all term
and conditions of the Loan Documents.
(i) Insurance. Obtain and maintain insurance with
responsible companies in such amounts and
against such risks as are usually carried by
corporations engaged in similar businesses
similarly situated, and furnish the Agent on
request full information as to all such
insurance.
(j) Hazardous Materials
(i) Keep and maintain the Property in
compliance with, and not cause or
permit the Property to be in
violation of, any Hazardous Materials
Laws or any federal, state, or local
laws, ordinances, or regulations
relating to industrial hygiene or to
the environmental conditions on,
under, or about the Property,
including, but not limited to, soil
and ground water conditions.
(ii) Not cause or permit the discharge,
release, or disposal of any Hazardous
Materials in, on, under, or about the
Property, nor shall the Borrower use,
generate, manufacture, or store, or
permit to be used, generated,
manufactured, or stored in, on,
under, or about the Property, or
transport to or from or permit to be
transported to or from the Property,
any Hazardous Materials.
(iii) Immediately advise the Agent in
writing of (A) any threatened or
actual Hazardous Materials Claims;
(B) the Borrower's receipt of any
notice of any violation of Hazardous
Materials Laws(and the Borrower shal
immediately provide the Agent with a
copy of such notice of violation);an
(C) the Borrower's discovery of any
occurrence or condition on the
Property or any property adjacent to
or in the vicinity of the Property
that could cause the Property or any
part thereof to be in violation of
any Hazardous Materials Laws or to
be subject to any restrictions on the
ownership, occupancy, transferability
or use of the Property under any
Hazardous Materials Laws. The Agent
shall have the right to join and
participate in, as a
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party if it so elects, any legal
proceedings or actions initiated in
connection with any Hazardous
Materials Claims and to have its
reasonable attorney fees and
disbursements in connection therewith
paid by the Borrower.
(iv) In the event (a "Hazardous Materials
Event") of a Hazardous Materials
Claim, the receipt of a notice of
violation as described in the
preceding Paragraph 5(j)(iii)(B), or
the discovery of an occurrence or
condition as described in the
preceding Paragraph 5(j)(iii)(C):
A. Retain, at the Borrower's
own cost, a reputable and
experienced environmental
consultant reasonably
acceptable to the Agent;
B. Cause such environmental
consultant to perform a
thorough investigation of
the Property and the
circumstances that gave
rise to the Hazardous
Materials Event, and to
produce a complete report
of such investigation with
recommendations as to any
further action to be taken
on account of such
Hazardous Materials Event,
a copy of which report
shall be provided to the
Agent;
C. If the report of such
environmental consultant so
recommends, or if otherwise
required pursuant to any
Hazardous Materials Laws,
cause such environmental
consultant to prepare a
remediation program
pursuant to which the
circumstances that have
given rise to the Hazardous
Materials Event are to be
fully remedied, which
program shall be prepared
in coordination with the
Borrower and all relevant
Governmental Authorities,
and approved by all
relevant Governmental
Authorities;
D. Cause such remediation
program to be carried out
SS with diligence and at all
times in compliance with
all Hazardous Materials
Laws and with the approval
of all relevant
Governmental Authorities;
E. Upon completion of such
remediation program, cause
all final approvals from
relevant Governmental
Authorities to be obtained,
and provide evidence to the
Agent that the program has
been completed and all
approvals obtained; and
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F. In the course of carrying
out the covenants in
paragraphs 5(j)(iv)(A)
through 5(j)(iv)(E) above,
(y) provide the Agent
with such periodic
information and notices
regarding the Hazardous
Materials Event, the
environmental consultant's
investigation, and the
preparation, approval, and
carrying out of any
remediation program as the
Agent shall require, nd (z)
allow the Agent to enter
and inspect the Property at
any time, provided that an
such entry and inspection
Shall deemed to impose any
liability or responsibility
on the Agent with respect
to any Hazardous Materials
Event or any remediation
thereof, nor constitute an
representation Or warranty
by the Agent with respect
to any condition, action or
activity on or affecting
the Property.
(k) ERISA. Furnish to the Agent:
(i) Promptly and in any event within 10
days after the Borrower knows
or has reason to know of the
occurrence of a Reportable Event with
respect to a Plan with regard to
which notice must be provided to the
PBGC, a copy of such materials
required to be filed with the PBGC
with respect to such Reportable Event
and in each such case a statement o
the chief financial officer of the
Borrower setting forth details as to
such Reportable Event and the action
that the Borrower proposes to take
with respect thereto;
(ii) Promptly and in any event within 10
days after the Borrower knows or has
reason to know of any condition
existing with respect to a Plan that
presents a material risk of
termination of the Plan, imposition
of an excise tax, requirement to
provide security to the Plan or
incurrence of other liability by the
Borrower or any ERISA Affiliate, a
statement of the chief financial
officer of the Borrower describing
such condition;
(iii) At least ten (10) days prior to the
filing by any plan administrator of a
Plan of a notice of intent to
terminate such Plan, a copy of such
notice;
(iv) Promptly and in no event more than
ten (10) days after the filing
thereof with the Secretary of the
Treasury, a copy of any application
by the Borrower or an ERISA Affiliate
for a waiver of the minimum funding
standard under Section 412 of the
Code;
(v) Promptly and in no event more than
ten (10) days after the filing
thereof with the Internal Revenue
Service, copies of each annual
13
report that is filed on Form 5500,
together with certified financial
statements for the Plan (if any) as
of the end of such year and actuarial
statements on Schedule B to such Form
5500;
(vi) Promptly and in any event within ten
(10) days after it knows or has
reason to know of any event or
condition that might constitute
grounds under Section 4042 of ERISA
for the termination of, or the
appointment of a trustee to
administer, any Plan, a statement of
the chief financial officer of the
Borrower describing such event or
condition;
(vii) Promptly and in no event more than
ten (10) days after receipt thereof
by the Borrower or any ERISA
Affiliate, a copy of each notice
received by the Borrower or an ERISA
Affiliate concerning the imposition
of any withdrawal liability under
Section 4202 of ERISA; and
(viii) Promptly after receipt thereof a copy
of any notice the Borrower or any
ERISA Affiliate may receive from the
PBGC or the Internal Revenue Service
with respect to any Plan or
Multiemployer Plan; provided,
however, that this subparagraph
(viii) shall not apply to notices of
general application promulgated by
the PBGC or the Internal Revenue
Service.
6. Negative Covenants
The Borrower hereby agrees that, as long as any Obligations
remain unpaid, the Borrower shall not, directly or
indirectly, without the consent of the Agent:
(a) Liens. Create, incur, assume or suffer to exist,
any Lien upon the Collateral except as
contemplated by the Security Agreement or
create, incur, assume or suffer to exist, any
Lien upon any of its property and assets except:
(i) Liens or charges for current taxes,
assessments, or other governmental
charges that are not delinquent or
that remain payable without penalty,
or the validity of which are
contested in good faith by
appropriate proceedings upon stay of
execution of the enforcement thereof,
provided the Borrower shall have set
aside on its books and shall maintain
adequate reserves for the payment of
same in conformity with GAAP;
(ii) Liens, deposits, or pledges made to
secure statutory obligations, surety,
or appeal bonds, or bonds for the
release of attachments or for stay of
execution, or to secure the
performance of bids, tenders,
14
contracts (other than for the payment
of borrowed money), leases, or for
purposes of like general nature in
the ordinary course of the Borrower's
business;
(iii) Purchase money security interests for
property hereafter acquired,
conditional sale agreements, or other
title retention agreements, with
respect to property hereafter
acquired; provided, however, that no
such security interest or agreement
shall extend to any property other
than the property acquired; and
(iv) Liens securing Permitted Secured Debt
(Exhibit E hereto).
(v) Liens securing Senior Debt.
(b) Indebtedness. Create, incur, assume, or suffer
to exist, or otherwise become or be liable, or
cause any Subsidiary to create, incur, assume,
or suffer to exist, or otherwise become or be
liable, in respect of any Indebtedness except:
(i) The Obligations;
(ii) Indebtedness reflected in the
financial statements referred to in
previous paragraph 4(a);
(iii) Trade debt incurred in the ordinary
course of business and outstanding
less than sixty (60) days after the
same has become due and payable or
which is being contested in good
faith, provided provision is made to
the satisfaction of the Agent for the
eventual payment thereof in the event
it is found that such contested trade
debt is payable by the Borrower;
(iv) Indebtedness secured by Liens
permitted under previous paragraph
6(a); and
(v) Permitted Other Debt.
(c) Consolidation and Merger. Liquidate or dissolve
or enter into any consolidation, merger,
partnership, joint venture, syndicate, or other
combination, except that the Borrower may be
consolidated with or merged with any
corporation, provided that in any such merger or
consolidation, the Borrower shall be the
surviving or resulting corporation and
immediately after the effectiveness of such
merger or consolidation, there shall have
occurred and be continuing no Event of Default
or Potential Default.
15
(d) Acquisitions. Purchase or acquire or incur
liability for the purchase or acquisition of any
or all of the assets or business of any person,
firm, or corporation, other than in the normal
course of business as presently conducted.
(e) Payment of Dividends. Declare or pay any
dividends upon its shares of stock now or
hereafter outstanding or make any distribution
of assets to its stockholders as such, whether
in cash, property, or securities, except
dividends payable in shares of capital stock and
cash in lieu of fractional shares or in options,
warrants, or other rights to purchase shares of
capital stock.
(f) Purchase or Retirement of Stock. Acquire,
purchase, redeem, or retire any shares of its
capital stock now or hereafter outstanding.
(g) Investments; Advances. Make or commit to make
any advance, loan, or extension of credit or
capital contribution to, or purchase any stock,
bonds, notes, debentures, or other securities
of, or make any other investment in, any Person.
(h) Sale of Assets. Sell, lease, assign, transfer,
or otherwise dispose of any of its assets (other
than obsolete or worn out property), whether now
owned or hereafter acquired, other than in the
ordinary course of business as presently
conducted and at fair market value.
(i) ERISA
(i) Terminate or withdraw from any Plan
so as to result in any material
liability to the PBGC;
(ii) Engage in or permit any person to
engage in any Prohibited Transaction
involving any Plan that would subject
the Borrower to any material tax,
penalty, or other liability;
(iii) Incur or suffer to exist any material
Accumulated Funding Deficiency,
whether or not waived, involving any
Plan;
(iv) Allow or suffer to exist any event or
condition that presents a risk of
incurring a material liability to the
PBGC;
(v) Amend any Plan so as to require the
posting of security under Section
401(a)(29) of the Code; or
16
(vi) Fail to make payments required under
Section 412(m) of the Code and
Section 302(e) of ERISA that would
subject the Borrower to any material
tax, penalty, or other liability.
7. Events of Default
Upon the occurrence of any of the following events (an
"Event of Default"):
(a) The Borrower shall fail to pay any principal or
interest on the Term Loan on the date when due
or fail to pay within five business days of the
date when due any other Obligation under the
Loan Documents;
(b) Any representation or warranty made by the
Borrower in any Loan Document or in connection
with any Loan Document shall be inaccurate or
incomplete in any material respect on or as of
the date made;
(c) The Borrower shall fail to maintain its
corporate existence or shall default in the
observance or performance of any covenant or
agreement contained in previous paragraphs 5(j)
or 6;
(d) The Borrower shall fail to observe or perform
any other term or provision contained in the
Loan Documents and such failure shall continue
for thirty (30) days;
(e) The Borrower shall default in any payment of
principal of or interest on any Indebtedness
(other than the Obligations) or any other event
shall occur, the effect of which is to permit
such Indebtedness to be declared or otherwise to
become due prior to its stated maturity;
(f) (i) The Borrower or any of its Subsidiaries,
shall commence any case, proceeding or other
action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization, or
relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution,
composition, or other relief with respect to i
or its debts, or (B)seeking appointment of a
receiver, trustee, custodian, or other similar
official for it or for all or any substantial
part of its assets, or the Borrower or any of
its Subsidiaries shall make a general assignment
for the benefit of its creditors;
or (ii) there shall be commenced against the
Borrower or any of its Subsidiaries, any case,
proceeding or other action of a nature referred
to previously in clause (i) that (A) results in
the entry of an order for relief or any such
adjudication or appointment; (B) remains
undismissed, undischarged, or unbonded for a
period of sixty (60) days; (iii) there shall be
commenced against the Borrower or any of its
Subsidiaries,
17
any case, proceeding or other action seeking
issuance of a warrant of attachment, execution,
distraint, or similar process against all or
substantially all of its assets that results in
the entry of an order for any such relief that
shall not have been vacated, discharged, stayed,
satisfied, or bonded pending appeal within sixty
(60) days from the entry thereof; (iv) the
Borrower or any of its Subsidiaries, shall take
any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in
(other than in connection with a final
settlement), any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower
or any of its Subsidiaries, shall generally not,
or shall be unable to, or shall admit in writing
its inability to pay its debts as they become
due;
(g) (i) Any Reportable Event or a Prohibited
Transaction shall occur with respect to any Pla
(ii) a notice of intent to terminate a Plan
under Section 4041 of ERISA shall be filed;(iii)
a notice shall be received by the plan
administrator of a Plan that the PBGC has
instituted proceedings to terminate a Plan or
appoint a trustee to administer a Plan; (iv) any
other event or condition shall exist that might,
in the opinion of the Agent, constitute grounds
under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to
administer, any Plan; or (v) the Borrower or any
ERISA Affiliate shall withdraw from a
Multiemployer Plan under circumstances that the
Agent, determines could have a material adverse
effect on the financial condition of the
Borrower;
(h) One or more judgments or decrees shall be
entered against the Borrower or any of its
Subsidiaries for $50,000 or more individually,
or in the aggregate for $100,000 or more, and
all such judgments or decrees shall not have
been vacated, discharged, stayed, satisfied, or
bonded pending appeal within ninety (90) days
from the entry thereof or in any event later
than five days prior to the date of any proposed
sale thereunder; or
(i) The Borrower shall voluntarily suspend the
transaction of business for more than five
business days in any calendar year;
THEN:
(i) Automatically upon the occurrence of
an Event of Default under paragraph
7(f); and
(ii) In all other cases, at the option of
the Agent,
the principal balance of the Term Loan and
interest accrued but unpaid thereon and all
other Obligations shall become immediately due
and payable,
18
without demand upon or presentment to the
Borrower, which are expressly waived by the
Borrower, and the Agent and the Agent may
immediately exercise all rights, powers, and
remedies available to them at law, in equity or
otherwise.
8. Successor Agent. The Agent may resign as Agent under the
Loan Documents upon thirty 30 days'notice to the Borrower.
If the Agent shall resign, then the Agent shall appoint a
successor Agent (which successor agent shall, in either
case and assuming that there does not exist a Potentia
Default or Event of Default, be reasonably acceptable to
the Borrower),whereupon such successor Agent shall succeed
to the rights, powers, and duties of the Agent, and the
term "Agent" shall mean such successor agent effective
upon its appointment, and the former Agent's rights,
powers, and duties as Agent shall be terminated, without
any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or
any of the Loan Documents or successors thereto.
9. Miscellaneous Provisions
(a) No Assignment. The Borrower may not assign its
rights or obligations under this Agreement
without the prior written consent of the Agent.
Subject to the foregoing, all provisions
contained in this Agreement or any document or
agreement referred to herein or relating hereto
shall inure to the benefit of the Agent (on its
own behalf and as agent to the Holders), its
successors and assigns, and shall be binding
upon the Borrower, its successors and assigns.
(b) Amend; No Waiver. This Agreement may not be
amended or terms or provisions hereof waived
unless such amendment or waiver is in writing
and signed by the Agent, and the Borrower. It is
expressly agreed and understood that the failure
by the Agent to elect to accelerate amounts
outstanding hereunder shall not constitute an
amendment or waiver of any term or provision of
this Agreement. No delay or failure by the Agent
to exercise any right, power, or remedy shall
constitute a waiver thereof by the Agent, and no
single or partial exercise by the Agent of any
right, power, or remedy shall preclude other or
further exercise thereof or any exercise of any
other rights, powers, or remedies.
(c) Cumulative Rights. The rights, powers, and
remedies of the Agent hereunder are cumulative
and in addition to all rights, powers, and
remedies provided under any and all agreements
between the Borrower, the Agent, and any Holder
relating hereto, at law, in equity or otherwise.
(d) Entire Agreement. This Agreement and the
documents and agreements referred to herein
embody the entire agreement and understanding
between the parties hereto and supersede all
prior agreements and understandings relating
to the subject matter hereof and thereof.
19
(e) Survival. All representations, warranties,
covenants, and agreements herein contained on
the part of the Borrower shall survive the
termination of this Agreement and shall be
effective until the Obligations are paid and
performed in full or longer as expressly
provided herein.
(f) Notices. All notices, consents, requests, and
demands to or upon the respective parties hereto
shall be in writing, and shall be deemed to have
been given or made when delivered in person to
those Persons listed on the signature pages
hereof or when deposited in the U.S. mail,
postage prepaid, or, in the case of overnight
courier service, when delivered to the overnight
courier service, or in the case of telex or
telecopy notice, when sent, verification
received, in each case addressed as set forth on
the signature pages hereof, or such other
address as either party may designate by notice
to the other in accordance with the terms of
this paragraph.
(g) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of
Ohio, without giving effect to principles of
conflict of law.
(h) Counterparts. This Agreement and the other Loan
Documents may be executed in any number of
counterparts, all of which together shall
constitute one agreement.
(i) Accounting Terms. All accounting terms not
otherwise defined herein are used with the
meanings given such terms under GAAP.
(j) Warranty of Attorney. The undersigned, who if
two or more in number, jointly and severally,
hereby irrevocably authorizes any attorney-at-
law to appear in any court of record in the
State of Ohio or in any other state or territory
of the United States (other than any court in
which utilization of this warrant of attorney
would be contrary to law) at any time after the
Note becomes due, whether by lapse of time,
acceleration or otherwise, to waive the issuanc
and service of process, to admit maturity and
nonpayment of the indebtedness evidenced by the
Note, and to confess judgment against the
undersigned (or any of them) in favor of Agent
for the amount then appearing due, together with
interest, expenses, the costs of suit and
reasonable counsel fees, and thereupon to
release and waive all errors, rights of appeal
and stays of execution. The foregoing warrant
of attorney shall survive the judgment. Should
any judgment be vacated for any reason, the
foregoing warrant of attorney nevertheless may
thereafter be utilized for obtaining additional
judgment or judgments. Such authority shall not
be exhausted by one exercise, but judgment may
be confessed from time to time as any sums
20
and/or costs, expenses, or reasonable counsel
fees shall be due, by filing an original or a
photostatic copy of the Note. The undersigned
hereby waives all relief from any and all
appraisement or exemption laws now in force or
hereafter enacted. The undersigned agrees that
Agent's attorney may confess judgment pursuant
to the foregoing warranty of attorney. The
undersigned further agrees that the attorney
confessing judgment pursuant to the foregoing
warrant of attorney may receive a legal fee or
other compensation from the Agent.
10. Definitions. For purposes of this Agreement, the terms
set forth below shall have the following
meanings:
"Accumulated Funding Deficiency" shall mean a funding
deficiency described in Section 302 of ERISA.
"Affiliate" shall mean, as to any corporation, any
other corporation directly or indirectly controlling,
controlled by or under direct or indirect common control
with, such corporation. "Control" as used herein means the
power to direct the management and policies of such
corporation.
"Agent" shall have the meaning given such term in the
introductory paragraph hereof and shall include any
successor to Eastlake Securities, Inc. as the initial
"Agent" hereunder.
"Agreement" shall mean this Agreement, as the same may
be amended, extended, or replaced from time to time.
"Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banks in New York
are authorized or obligated to close their regular banking
business.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations issued thereunder
as from time to time in effect.
"Collateral" shall mean the personal property (tangible
and intangible) and fixtures that are covered by the
Security Agreement.
"Commonly Controlled Entity" of a Person shall mean a
Person, whether or not incorporated, which is under common
control with such Person within the meaning of Section
414(c) of the Code.
21
"Contractual Obligation" as to any Person shall mean
any provision of any security issued by such Person or of
any agreement, instrument, or undertaking to which such
Person is a party or by which it or any of its property is
bound.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and the rules and
regulations issued thereunder as from time to time in
effect.
"ERISA Affiliate" shall mean each trade or business,
including the Borrower, whether or not incorporated, which
together with the Borrower would be treated as a single
employer under Section 4001 of ERISA.
"Event of Default" shall have the meaning given such
term in paragraph 7.
"Final Maturity Date" shall mean the earlier of: (a)
December 29, 2000 and (b) the date payment of the Term
Loan is accelerated pursuant to paragraph 7.
"GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from
time to time.
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision
thereof, or any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or
pertaining to government.
"Hazardous Materials" shall mean any flammable
materials (excluding wood products normally used in
construction), explosives, radioactive materials,
hazardous wastes, toxic substances, or related materials,
including, without limitation, any substances defined as
or included in the definitions of "hazardous substances,"
"hazardous wastes," "hazardous materials," "special
wastes," "solid wastes;" or "toxic substances" under any
applicable federal, state, county, regional, or local
laws, ordinances, regulations, or guidelines.
"Hazardous Materials Claims" shall mean any
enforcement, cleanup, removal, or other governmental or
regulatory action or order or any governmental claim for
damages or other compensation with respect to the
Property, made under or pursuant to any Hazardous
Materials Laws, and/or any claim asserted in writing by
any third party relating to damage, contribution, cost
recovery, compensation, loss, or injury resulting from any
Hazardous Materials.
"Hazardous Materials Event" shall have the meaning
given such term in paragraph 5(j)(iv).
"Hazardous Materials Laws" shall mean any applicable
federal, state, county, regional, or municipal or local
laws, ordinances, or regulations relating to Hazardous
Materials.
22
"Indebtedness" of any Person shall mean all items of
indebtedness which, in accordance with GAAP and practices,
would be included in determining liabilities as shown on
the liability side of a statement of condition of such
Person as of the date as of which indebtedness is to be
determined, including, without limitation, all obligations
for money borrowed and capitalized lease obligations, and
shall also include all indebtedness and liabilities of
others assumed or guaranteed by such Person or in respect
of which such Person is secondarily or contingently liable
(other than by indorsement of instruments in the course of
collection) whether by reason of any agreement to acquire
such indebtedness or to supply or advance sums or
otherwise.
"Lien" shall mean any security interest, mortgage,
pledge, lien, claim on property, charge, or encumbrance
(including any conditional sale or other title retention
agreement), any lease in the nature thereof, and the
filing of or agreement to give any financial statement
under the Uniform Commercial Code of any jurisdiction.
"Loan Documents" shall mean this Agreement, the Notes
and each other document, instrument or agreement executed
by the Borrower in connection herewith or therewith, as
any of the same may be amended, extended, or replaced from
time to time.
"Multiemployer Plan" shall mean a Plan described in
Section 4001(a) (3) of ERISA to which the Borrower or any
ERISA Affiliate is required to contribute on behalf of any
of its employees.
"Note" shall mean, the note delivered by the Borrower
to Agent, in the form attached hereto as Exhibit A.
"Obligations" shall mean any and all debts,
obligations, and liabilities of the Borrower to the Agent
arising out of or related to the Loan Documents (whether
principal, interest, fees or otherwise, now existing or
hereafter arising, whether voluntary or involuntary,
whether or not jointly owed with others, whether direct or
indirect, absolute or contingent, contractual or tortious,
liquidated or unliquidated, arising by operation of law or
otherwise, whether or not from time to time decreased or
extinguished and later increased, created or incurred, and
whether or not extended, modified, rearranged,
restructured, refinanced, or replaced, including without
limitation modifications to interest rates or other
payment terms of such debts, obligations or liabilities).
"PBGC" shall mean the Pension Benefit Guaranty
Corporation established pursuant to subtitle A of Title IV
of ERISA and any successor thereto.
"Permitted Other Debt" shall mean that Indebtedness
described on Exhibit E attached hereto.
23
"Permitted Secured Debt" shall mean Permitted Other
Debt that is designated as "Permitted Secured Debt" on
Exhibit E attached hereto.
"Person" shall mean any corporation, natural person,
firm, joint venture, limited liability company,
partnership, trust, unincorporated organization,
government, or any department or agency of any government.
"Plan" shall mean any plan (other than a Multiemployer
Plan) subject to Title IV of ERISA maintained for
employees of the Borrower or any ERISA Affiliate (and any
such plan no longer maintained by the Borrower or any of
its ERISA Affiliates to which the Borrower or any of its
ERISA Affiliates has made or was required to make any
contributions during the five years preceding the date on
which such plan ceased to be maintained).
"Potential Default" shall mean an event that but for
the lapse of time or the giving of notice, or both, would
constitute an Event of Default.
"Property" shall mean, collectively and severally, any
and all real property, including all improvements and
fixtures thereon, owned or occupied by the Borrower.
"Reportable Event" shall mean any of the events set
forth in Section 4043(b) of ERISA or the regulations
thereunder, a withdrawal from a Plan described in Section
4063 of ERISA, a cessation of operations described in
Section 4068(f) of ERISA, an amendment to a Plan
necessitating the posting of security under Section
401(a)(29) of the Code, or a failure to make a payment
required by Section 412(m) of the Code and Section 302(e)
of ERISA when due.
"Requirements of Law" shall mean as to any Person the
Certificate or Articles of Incorporation and ByLaws or
Code of Regulations or other organizational or governing
documents of such Person, and any law, treaty, rule, or
regulation, or a final and binding determination of an
arbitrator or a determination of 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.
"Security Agreement" shall have the meaning given such
term in paragraph 2(g).
"Security Documents" shall have the meaning given such
term in paragraph 2(g).
24
"Senior Debt" shall mean debt incurred by the Borrower
or any Subsidiary in connection with the acquisition b
the Borrower or any subsidiary of any business, r
egardless of whether such acquisition is structured as
an acquisition of assets or stock,a merger or
consolidation or otherwise, but only if, and to the
extent that, the Agent, shall, in its sole discretion,
agree that such obligations constitute Senior Debt.
Senior
Debt also includes any refundings or refinancings of
Senior Debt. There are no limitations or restrictions on
the amount of Senior Debt which may be incurred.
"Subsidiary" shall mean any corporation more than fifty
percent (50%) of the stock of which having by the terms
thereof ordinary voting power to elect the board of
directors, managers, or trustees of the corporation
(irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or
might have voting power by reason of the happening of any
contingency) shall, at the time as of which any
determination is being made, be owned, either directly or
through Subsidiaries.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED
TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
Quality Products, Inc.
a Delaware corporation,
as the Borrower
/s/Xxxxx X. Xxxxxx
By:_______________________________
Xxxxx X. Xxxxxx
President
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
QPI Multipress, Inc.
an Ohio corporation,
as the Borrower
/s/ Xxxxx X. Xxxxxx
By:_______________________________
Xxxxx X. Xxxxxx
President
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000-0000
Eastlake Securities, Inc.
as Agent
/s/ Xxxxxx Xxxxxxxxx
By:_______________________________
Xxxxxx Xxxxxxxxx
President
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT
MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE
POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY
CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.
26
SCHEDULE OF EXHIBITS
EXHIBIT DOCUMENTS
A Form of Notes
B Form of Security Agreement
C Litigation Schedule
D Schedule of Subsidiaries
E Permitted Other Debt
27
