EXHIBIT 2
LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of February 12, 2003, between SILVER MAPLE
(2001), INC., a Nevada corporation (the "Borrower"), and [Commercial Bank] (the
"Lender").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender make available to
it a term loan credit of up to $7,000,000 in the aggregate upon the terms, and
subject to the conditions, set forth herein to partially finance the purchase by
Pledgor of up to 1,036,650 shares of the common stock of Equity One, Inc.; and
WHEREAS, the Lender is willing to provide such financing to the
Borrower only upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1. Certain General Definitions. For all purposes of this
Agreement and the other Loan Documents, unless the context
otherwise requires:
"Agreement" means this Loan Agreement, as the same may be
amended or otherwise modified from time to time, and the terms
"herein," "hereof," "hereunder" and like terms shall be taken as
referring to this Agreement in its entirety and shall not be limited to
any particular section or provision thereof.
"Affiliate" means as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either
to (a) vote 5% or more of the securities having ordinary voting power
for the election of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by
contract or otherwise.
"Agreement and Plan of Merger" means that certain Agreement
and Plan of Merger dated October 28, 2002, between IRT and EOI, as
amended, supplemented and modified from time to time.
"Business Day" means a day on which (i) dealings in Dollar
deposits are carried on in the London Interbank Eurodollar market and
(if payment is required to be made on such day) on which banks are open
for business in London and in New York, and (ii) the Lender shall be
open for ordinary business in New York. In the Lender's discretion, its
office in New York may be closed on any Saturday, Sunday, legal holiday
or other day on which it is lawfully permitted to close.
"Calculation Date" shall have the meaning provided therefor in
Section 5.7(a).
"Change in Control" means (i) an event whereby any "person" or
"group" (as such terms are used in Sections 12(d) and 13(d) of the
Exchange Act, other than the Parent Shareholder of the Borrower on the
Closing Date, shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly
or indirectly, of more than 20% of the outstanding common stock of the
Borrower; (ii) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors; (iii) an event whereby
any "person" or "group" (as such terms are used in Sections 12(d) and
13(d) of the Exchange Act, other than the shareholders of the Parent
Shareholder on the Closing Date, shall become, or obtain rights
(whether by means or warrants, options or otherwise) to become, the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act), directly or indirectly, of more than 20% of the
outstanding common stock of the Parent Shareholder, or (ii) the board
of directors of each Parent Shareholder shall cease to consist of a
majority of Continuing Directors.
"Closing Date" means the date on which all of the conditions
specified in Section 4.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means the Pledged Collateral (as defined in the
Pledge and Security Agreement).
"Collateral Account" shall have the meaning provided therefor
in the Pledge and Security Agreement.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Continuing Directors" means the directors of the Borrower or
each Parent Shareholder, as the case may be, on the Closing Date, and
each other director, if, in each case, such other director's nomination
for election to the board of directors of the Borrower or such Parent
Shareholder, as the case may be, is recommended by a majority of the
then Continuing Directors or by a nominations committee thereof.
"Control" means the power to direct or cause the direction of
the management and policies of a Person, either alone or in conjunction
with others and whether through the ownership of voting securities, by
contract or otherwise.
"Debt" means, as to any Person, the aggregate of such Person's
liabilities as reflected in such Person's most recent financial
statements, but not including subordinated debt.
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"Default" means any condition, event or act which, with notice
or lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the
United States.
"EOI" means Equity One, Inc., a Maryland corporation.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including the rules and regulations
promulgated thereunder.
"Equity One, Inc. Common Stock Purchase Agreement": means that
certain Equity One, Inc. Common Stock Purchase Agreement dated as of
October 28, 2002, between EOI and each of the purchasers party thereto
(including, without limitation, Pledgor), as amended, supplemented or
modified from time to time.
"Event of Default" means any of the events specified in
Section 7.1, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without
limitation, the Federal Deposit Insurance Corporation, any central bank
or any comparable authority.
"Indebtedness" of any Person means indebtedness incurred by
that Person to banks or financial institutions.
"Initial Funding Loan(s)" means, if expressly requested and
designated by the Borrower in its Notice of Borrowing delivered to the
Lender, the initial Loan made to the Borrower hereunder on the Closing
Date, and each subsequent Loan, if any, made to the Borrower hereunder
on the Business Day immediately preceding each "Subsequent Closing" (as
such term is defined in the Equity One, Inc. Common Stock Purchase
Agreement so requested and designated by the Borrower in its Notice of
Borrowing delivered to the Lender in connection therewith.
"Insolvency" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Interest Payment Date" means the last day of each Interest
Period.
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"Interest Period" means,
(i) with respect to any Loan (other than an Initial Funding
Loan) bearing interest at the Libor Rate, (A) initially, the period
commencing on the date of borrowing (or date of interest rate
conversion) and ending three (3) months thereafter, and (B) thereafter,
each period commencing on the last day of the preceding Interest Period
and ending three (3) months thereafter; provided, however, that (aa) if
any Interest Period would otherwise end on a day which is not a
Business Day, the termination thereof shall be postponed to the next
succeeding Business Day, unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the
immediately preceding day which is a Business Day, (bb) if any Interest
Period that 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 Interest Period), then such Interest
Period shall end on the last Business Day of a calendar month, (cc) any
Interest Period that would otherwise extend beyond the Maturity Date
shall end on the Maturity Date, and (dd) the initial Interest Period
with respect to the Loan made on the Closing Date shall commence on the
Closing Date and end on March 31, 2003;
(ii) with respect to an Initial Funding Loan bearing interest
at the Libor Rate, the period commencing on the date of borrowing and
ending one (1) Business Day thereafter, and
(iii) with respect to any Loan bearing interest at the
Reference Rate, (A) initially, the period commencing on the date of
borrowing (or date of interest rate conversion) and ending on the last
Business Day of the next succeeding calendar quarter of March, June,
September or December, as the case may be, and (B) thereafter, each
period commencing on the last day of the preceding Interest Period and
ending on the last Business Day of the next succeeding calendar quarter
of March, June, September or December, as the case may; provided,
however, any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
"IRT" means IRT Property Company, a Georgia corporation.
"Libor Base Rate" means, relative to any Interest Period for
any Loan (i) the rate quoted by the British Bankers Association in
London as its "LIBOR" rate for U.S. dollar deposits at or about 11:00
a.m., London time, on the second Business Day prior to the commencement
of the Interest Period; provided, however, that if the Lender adopts
generally in its business a different rate quoting system or service
for obtaining the rate of interest commonly known as "LIBOR" for U.S.
dollar deposits, then upon giving prompt notice to the Borrower such
alternative rate quoting system or service shall be utilized for
determining "LIBOR" in lieu of the rate quoted by the British Bankers
Association, and (ii) if the rate may not be determined by the Lender
as provided in the preceding clause (i) for any reason, as determined
by the Lender in its reasonable judgment, then the rate equal to the
rate of interest per annum at which U.S. dollar deposits in the
approximate amount of the amount of the Loan to be made or continued
hereunder by the Lender and having a maturity comparable to such
Interest Period would be offered to the Lender in
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the London Interbank market at its request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such
Interest Period.
"Libor Reserve Percentage" means, relative to any Interest
Period for loans hereunder, the percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day
(whether or not applicable to the Lender) under regulations issued from
time to time by the Federal Reserve System Board for determining the
maximum reserve requirement (including any emergency, supplemental or
other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Federal Reserve System Board).
"Libor Rate" means, relative to any Loan to be made or
continued hereunder for any Interest Period, the rate of interest per
annum (rounded upwards to the next 1/32nd of 1%) determined by the
Lender as follows:
Libor Base Rate
Libor Rate = ---------------------------------
1.00 - Libor Reserve Percentage
"Lien" means any floating or fixed charge, lien, mortgage,
pledge, security interest or other encumbrance of any nature whatsoever
upon, of or in property or other assets of a Person, whether absolute
or conditional, voluntary or involuntary, whether created pursuant to
agreement, arising by force of statute, by judicial proceedings or
otherwise.
"Loan" shall have the meaning provided therefor in Section
2.1.
"Loan Documents" means this Agreement and the Pledge and
Security Agreement.
"Margin" means 2.2 % per annum.
"Material Adverse Effect" means (X) a material adverse effect
on (a) the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower, (b) the validity or
enforceability of this Agreement or any other Loan Document in any
manner that prevents the practical realization by Lender of the
benefits intended by this Agreement and/or any other Loan Document, or
(c) the rights or remedies of Lender hereunder or under any other Loan
Document in any manner that prevents the practical realization of the
benefits purported to be provided by such rights and remedies with
respect to Lender's ability to realize upon the principal benefits or
security intended to be provided by this Agreement and/or any other
Loan Document, (Y) any impairment to the validity, perfection or
priority of the security interest of Lender in the Collateral in any
manner whatsoever, and/or (Z) an Event of Default.
"Maturity Date" means, with respect to a Loan other than an
Initial Funding Loan, March 31, 2006, and with respect to an Initial
Funding Loan, the day which is one (1) Business Day after the date such
Initial Funding Loan is made.
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"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes" shall have the meaning provided therefor
in Section 2.13(a).
"Non-U.S. Lender" shall have the meaning provided therefor in
Section 2.13(b).
"100% Participant" means any Participant who has acquired a
100% participating interest in any Loan.
"Parent Shareholder" means, each and all shareholders of the
Borrower's direct parent company shareholder on the Closing Date.
"Participant" shall have the meaning therefor in Section 8.15.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" means any individual, partnership, limited liability
company, joint venture, corporation (including, without limitation, the
Borrower), trust, estate, unincorporated organization or association or
Governmental Authority. If any Person is a corporation, unless
otherwise provided, the use of the term "Person" to refer to that
corporation means that corporation as a single entity and not as
consolidated with its Subsidiaries.
"Plan" means at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
as defined in Section 3(5) of ERISA.
"Pledge and Security Agreement" means the Pledge and Security
Agreement dated as of the date of this Agreement between the Borrower
and the Lender, as the same may be amended, supplemented or otherwise
modified from time to time.
"Pledged Shares" shall have the meaning provided therefor in
the Pledge and Security Agreement.
"Reference Rate" means the rate of interest designated by the
Lender, and in effect from time to time, as the Lender's "Reference
Rate" on a particular day for commercial loans; such rate is not
necessarily intended to be the lowest rate of interest charged by the
Lender in connection with loans and other extensions of credit. Each
change in the Reference Rate shall be effective on the date such change
is determined by the Lender.
"Registration Rights Agreement" means that certain
Registration Rights Agreement dated as of October 28, 2002, among EOI
and the purchasers party thereto,
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including, without limitation, Pledgor, as may be amended, supplemented
or modified from time to time.
"Reorganization" means with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
thirty day notice period is waived under subsections .22, .25, .27 or
.28 of PBGC Reg. Section 4043.
"Requirement of Law" means as to any Person, the certificate
of incorporation, certificate of formation, limited liability company
agreement, and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator 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.
"Shareholders' Loans" shall have the meaning provided therefor
in Section 6.3.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Subsidiary" means, when used with reference to any
corporation, any corporation of which at least a majority of the
outstanding stock, having by the terms thereof ordinary voting power to
elect a majority of the Board of Directors of such corporation, is at
the time directly or indirectly owned by such first-mentioned
corporation.
"Tangible Equity" means, with respect to the Borrower, the
share capital, undistributed profits, funds and reserves, shareholders'
loans which have been subordinated in favor of the Lender; less
deferred expenses, intangible assets such as goodwill, patents trade
marks, business names copyrights and the like, treasury shares, debts
owed by interested parties, subsidiaries or Affiliates; and less
guarantees given by the Borrower to secure the debts of interested
parties, subsidiaries or Affiliates; as the same appear in the
quarterly and annual financial reports of the Borrower.
"Term Loan Commitment Period" means the period from and
including the Closing Date to, and including, April 15, 2004 or the
next Business Day thereafter if such day is not a Business Day.
"Total Outstanding Credit" shall have the meaning provided
therefor in Section 5.7(a).
"Transaction" means the purchase by the Borrower of up to
1,036,650 shares of the common stock, par value $0.01 per share, of EOI
pursuant to the terms and conditions of the Equity One, Inc. Common
Stock Purchase Agreement.
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"Transferee" means any Participant or any assignee of the
interests of the Lender under this Agreement or any other Loan
Documents.
"Uniform Commercial Code" means the Uniform Commercial Code in
effect from time to time in any state to the extent the same is
applicable by law to any portion of the Collateral.
1.2. Use of Accounting Terms. Accounting terms used herein shall be
construed, calculations hereunder shall be made and financial
data required hereunder shall be prepared, both as to
classification of items and as to amounts, in accordance with
GAAP as of the date thereof consistently applied, which
principles shall be consistent with those used in the
preparation of the most recent reviewed financial statements
of such Person delivered to the Lender. All statements
relating to earnings and expenses shall set forth separately
or otherwise identify all extraordinary and nonrecurring
items.
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENT
2.1. Term Loan Commitment. The Lender agrees, subject to and upon
the terms and conditions herein set forth, to make one or more
term loans (each a "Loan") immediately available to the
Borrower from time to time during the Term Loan Commitment
Period in an aggregate principal amount not to exceed Seven
Million Dollars ($7,000,000), or such lesser amount as is in
effect from time to time pursuant to Section 2.7 (the "Term
Loan Commitment"). Loans (other than Initial Funding Loans)
borrowed under this Section 2.1 and repaid or prepaid may not
be reborrowed. Each Initial Funding Loan may be repaid and
reborrowed once, in whole or in part, in order to consummate
the Transaction, provided that amount of such reborrowing,
together with the aggregate principal amount of all other
Loans then outstanding, does not exceed the outstanding Term
Loan Commitment.
2.2. Procedure for Borrowing.
(a) The Borrower may borrow under the Term Loan
Commitment during the Term Loan Commitment Period on
any Business Day, provided that, unless the Lender
otherwise agrees, the Borrower shall deliver to the
Lender irrevocable written notice of borrowing in
form and substance acceptable to the Lender (each a
"Notice of Borrowing") not later than 10:00 a.m., New
York, New York time, two (2) Business Days prior to
the requested borrowing date. Unless the Borrower and
the Lender (and any 100% Participant) otherwise
mutually agree, the Lender will make each Loan
(including any Initial Funding Loan) to the Borrower
by automatically crediting the loan proceeds thereof
to the Collateral Account. Thereafter, and subject to
the other terms and conditions of this Agreement, the
Lender will disburse the proceeds of each Loan (other
than an Initial Funding Loan) credited to the
Collateral Account in accordance with the wiring
instructions specified in the Borrower's Notice of
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Borrowing. The Borrower must expressly specify in its
Notice of Borrowing if the requested borrowing is to
be made as an Initial Funding Loan.
(b) Unless otherwise agreed by the Lender (and any 100%
Participant), all borrowings shall be in minimum
amounts of $1,000,000 or a whole multiple of $20,000
in excess thereof, or, the remaining amount under the
Term Loan Commitment, if such amount is less than
$1,000,000, provided that, the Loan or the Initial
Funding Loan made to the Borrower on the Closing Date
shall each be in an amount not less than $1,750,000.
2.3. Use of Proceeds of Loans. The proceeds of the Loans shall be
utilized by the Borrower in accordance with Section 3.12.
2.4. Repayment of the Loans; Evidence of Debt. The aggregate unpaid
principal amount of the Loans shall be repaid to the Lender as
follows:
(a) The Borrower shall repay the first $1,750,000 of
Loans made to the Borrower hereunder (other than any
Initial Funding Loan made to the Borrower on the
Closing Date, which Initial Funding Loan shall be
repaid on the Maturity Date thereof) in twelve
consecutive equal quarterly installments on the last
day of each March, June, September and December (or,
if such day is not a Business Day, then on the
immediately preceding Business Day), commencing on
June 30, 2003.
(b) The Borrower shall repay to the Lender the
outstanding balance of all Loans, together with all
accrued interest thereon and any unpaid fees and
other amounts due to the Lender under this Agreement,
on the Maturity Date; it being understood that the
Borrower hereby authorizes the Lender to repay each
Initial Funding Loan, if any, on its Maturity Date by
debiting the Collateral Account for all such sums
then due and payable.
(c) The Lender shall maintain on its books and records in
accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower
under this Agreement resulting from each Loan made
from time to time, including (i) the amount of each
Loan made hereunder, (ii) the amount of any principal
or interest due and payable or to become due and
payable from the Borrower to the Lender hereunder,
and (iii) the amount of any sum received by the
Lender hereunder from the Borrower.
(d) The entries recorded by the Lender in its books and
records shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein
recorded; provided, however, the failure of the
Lender to record any entry, or any error in any
record, shall not in any manner affect the obligation
of the Borrower to repay (with applicable interest)
the Loans made to the Borrower by the Lender in
accordance with the terms of this Agreement.
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(e) The Borrower agrees that, upon the request of the
Lender, the Borrower will execute and deliver to the
Lender a promissory note of the Borrower evidencing
the Loans, in form and substance satisfactory to the
Lender.
2.5. Fees.
(a) The Borrower agrees to pay to the Lender a
non-refundable up-front fee of $7,000.00 on the
Closing Date.
(b) The Borrower agrees to pay to the Lender a commitment
fee of 0.125% per annum (based on a 360-day year) of
the average daily unused portion of the Term Loan
Commitment, payable monthly in arrears on the last
Business Day of each month and on the Maturity Date
(other than the Maturity Date of an Initial Funding
Loan) or such earlier date as the Term Loan
Commitment shall terminate, commencing on the first
such date to occur after the date hereof.
(c) The Borrower agrees to pay the Lender any other usual
and standard fees customarily charged by the Lender
for services relating to the making of Loans, the
establishment and maintenance of the Collateral
Account (as defined in the Pledge and Security
Agreement), and the administration of the Loans, the
Term Loan Commitment and the Collateral.
2.6. Optional Prepayment of Loans.
(a) The Borrower may at any time and from time to time
prepay a Loan, in whole or in part, without premium
or penalty, except as expressly set forth in this
Agreement upon at least five (5) Business Days'
irrevocable notice to the Lender (which notice must
be received by the Lender prior to 10:00 a.m., New
York time, on the date upon which such notice is
due), specifying the date and amount of prepayment.
If any such notice is given, the amount specified in
such notice shall be due and payable on the date
specified therein, together with any amounts payable
pursuant to Section 2.14 and accrued interest to such
date on the amount prepaid. If any prepayment of a
Loan shall be made other than on the last day of an
Interest Period thereof, the Borrower shall also pay
to the Lender any amount required to compensate the
Lender for any losses, costs or expenses that it may
reasonably incur as a result of such prepayment. Each
partial prepayment shall be in an aggregate principal
amount of $1,000,000, or a whole multiple of $100,000
in excess thereof.
(b) Any repayment of a Loan made pursuant to Section
2.6(a) shall be applied first, to any accrued
interest, and second, to the then outstanding
principal installments thereof in the inverse order
of maturity.
2.7. Optional and Mandatory Termination or Reduction of Term Loan
Commitment
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(a) The Borrower shall have the right, upon not less than
five (5) Business Days' notice to the Lender, to
terminate the Term Loan Commitment or, from time to
time, to reduce the amount of the Term Loan
Commitment. Any such reduction shall be in an amount
equal to $1,000,000, or a whole multiple of $100,000
in excess thereof, and shall reduce permanently the
Term Loan Commitment then in effect. If any such
commitment termination or reduction involves the
repayment of Loans, and if such repayment is made
other than on the last day of an Interest Period
thereof, the Borrower shall also pay to the Lender
any amount required to compensate the Lender for any
losses, costs or expenses that it may reasonably
incur as a result of such prepayment.
(b) Each principal installment repayment pursuant to
Section 2.4(a) shall reduce permanently the Term Loan
Commitment then in effect by the amount of each such
principal installment repayment.
2.8. Interest.
(a) Each Loan shall bear interest for each day during
each Interest Period with respect thereto at a rate
per annum equal to the Libor Rate determined for such
day plus the Margin.
(b) If all or a portion of (i) any principal of any Loan,
(ii) any interest payable thereon, or (iii) any fee
or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by
acceleration or otherwise), then the principal of
such Loan and any such overdue interest, fee or other
amount shall bear interest at a rate per annum which
is (x) in the case of principal, the rate that would
otherwise be applicable thereto pursuant to Section
2.8(a) plus 2%, or (y) in the case of any such
overdue interest, fee or other amount, the rate
described in paragraph (a) of this subsection plus
2%, in each case from the date of such non-payment
until such overdue principal, interest, fee or other
amount is paid in full (as well before or after
judgment).
(c) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing
pursuant to paragraph (b) of this Section shall be
payable from time to time on demand.
(d) Notwithstanding anything to the contrary contained
herein, in no event shall the Borrower be obligated
to pay interest in excess of the maximum amount which
is chargeable under applicable law.
2.9. Computation of Interest and Fees.
(a) Interest and commitment fees shall be calculated on
the basis of a 360-day year for the actual days
elapsed.
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(b) Each determination of the Libor Rate by the Lender
pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower in the absence
of manifest error.
2.10. Inability to Determine Libor Rate. If prior to the first day
of any Interest Period:
(a) the Lender shall have determined (which determination
shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not
exist for ascertaining the Libor Rate for such
Interest Period, or
(b) the Lender shall have determined that the Libor Rate
determined (which determination shall be conclusive
and binding upon the Borrower) for such Interest
Period will not adequately and fairly reflect the
cost to the Lender of making or maintaining its
affected Loans during such Interest Period,
then the Lender shall give telecopy or telephonic notice
thereof to the Borrower as soon as practicable thereafter. If
such notice is given and until such notice has been withdrawn
by the Lender, (X) any Loan requested to be made on the first
day of such Interest Period shall bear interest at the
Reference Rate, and (Y) all outstanding Loans will bear
interest at the Reference Rate, commencing on the first day of
next Interest Period applicable thereto.
2.11. Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful
for the Lender to make or maintain Loans as contemplated by
this Agreement, (a) the commitment of the Lender hereunder to
make Loans or continue Loans shall forthwith be canceled, and
(b) the Loans then outstanding shall automatically bear
interest at the Reference Rate on the first day of the next
succeeding Interest Period applicable thereto, or at such
earlier time as required by law. If any such interest rate
conversion for a Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto,
then the Borrower shall pay to the Lender such amounts, if
any, as may be required pursuant to Section 2.14.
2.12. Requirements of Law.
(a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application
thereof or compliance by the Lender with any request
or directive (whether or not having the force of law)
from any central bank or other Governmental Authority
made subsequent to the date hereof:
(1) shall subject the Lender to any tax of any
kind whatsoever with respect to this
Agreement, or any Loan made by it, or change
the basis of taxation of payments to the
Lender in respect thereof
12
(except for Non-Excluded Taxes covered by
Section 2.13 and changes in the rate of net
income taxes or franchise taxes (imposed in
lieu of net income taxes) of the Lender);
(2) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or
similar requirement against assets held by,
deposits or other liabilities in or for the
account of, advances, loans or other
extensions of credit by, or any other
acquisition of funds by, any office of the
Lender which is not otherwise included in
the determination of the Libor Rate
hereunder; or
(3) shall impose on the Lender any other
condition;
and the result of any of the foregoing is to increase the cost
to the Lender, by an amount which the Lender deems to be
material, of making, continuing or maintaining Loans bearing
interest at the Libor Rate, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay the Lender such additional amount
or amounts as will compensate the Lender for such increased
cost or reduced amount receivable.
(b) If the Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or
application thereof or compliance by the Lender or
any corporation controlling the Lender with any
request or directive regarding capital adequacy
(whether or not having the force of law, if
compliance therewith is a customary banking practice)
from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the
rate of return on the Lender's or such corporation's
capital as a consequence of its obligations hereunder
to a level below that which such corporation would
have achieved but for such adoption, change or
compliance by the Lender or such corporation (taking
into consideration the Lender's or such corporation's
policies with respect to capital adequacy) by an
amount deemed by the Lender to be material, then from
time to time, the Borrower shall promptly pay to the
Lender such additional amount or amounts as will
compensate the Lender for such reduction.
(c) If the Lender becomes entitled to claim any
additional amounts pursuant to this Section 2.12, it
shall promptly notify the Borrower of the event by
reason of which it has become so entitled. In
determining such amounts, the Lender may use any
reasonable averaging and attribution methods, applied
in a non-discriminatory manner with respect to the
Borrower. A certificate as to any additional amounts
payable pursuant to this Section 2.12 submitted by
the Lender to the Borrower, together with the
calculations used by the Lender in determining such
additional amounts, shall be conclusive in the
absence of manifest error. The agreements in
13
this Section 2.12 shall survive the termination of
this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.13. Taxes.
(a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and
without deduction or withholding for or on account
of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income
taxes) imposed on the Lender as a result of a present
or former connection between the Lender and the
jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing
authority thereof or therein (other than any such
connection arising solely from the Lender having
executed, delivered or performed its obligations or
received a payment under, or enforced, this
Agreement). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Lender
hereunder or under any Note, the amounts so payable
to the Lender shall be increased to the extent
necessary to yield to the Lender (after payment of
all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the
amounts specified in this Agreement. Whenever any
Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall
send to the Lender for its own account, a certified
copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the
Lender the required receipts or other required
documentary evidence, the Borrower shall indemnify
the Lender for any incremental taxes, interest or
penalties that may become payable by the Lender as a
result of any such failure.
(b) Each Transferee that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code of 1986,
as amended (a "Non-U.S. Lender") shall deliver to the
Borrower (or, in the case of a Participant, to the
Lender) two duly completed copies of U.S. Internal
Revenue Service Form W-8BEN or Form W-8ECI, or
applicable successor forms as the case may be,
properly completed and duly executed by such Non-U.S.
Lender claiming complete exemption from U.S. federal
withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. Such
forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the
related participation). In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S.
Lender shall promptly notify the
14
Borrower at any time it determines that it is no
longer in a position to provide any previously
delivered certificate to the Borrower (or any other
form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender
shall not be required to deliver any form pursuant to
this paragraph that such Non-U.S. Lender is not
legally able to deliver.
2.14. Indemnity. The Borrower agrees to indemnify the Lender and to
hold the Lender harmless from any loss or expense which the
Lender may sustain or incur as a consequence of (a) default by
the Borrower in making a borrowing of a Loan after the
Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the
Borrower in making any prepayment or payment after the
Borrower has given a notice thereof in accordance with the
provisions of this Agreement, or (c) the making of a
prepayment or payment of a Loans bearing interest at the Libor
Rate on a day which is not the last day of an Interest Period
with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so prepaid, or
not so borrowed, for the period from the date of such
prepayment or of such failure to borrow to the last day of
such Interest Period (or in the case of the failure to borrow,
the Interest Period that would have commenced on the date of
such failure) in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the
Margin included therein, if any) over (ii) the amount of
interest (as reasonably determined by the Lender) which would
have accrued to the Lender on such amount by placing such
amount on deposit for a comparable period with leading banks
in the interbank eurodollar market. This covenant shall
survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.15. Security for the Loans. The Loans and other indebtedness of
the Borrower owing to the Lender under this Agreement and the
other Loan Documents shall be secured by a first priority Lien
on the Collateral pursuant to the Pledge and Security
Agreement.
2.16. Manner and Place of Payment. All payments hereunder shall be
made without set-off, counterclaim or deduction and shall be
made in lawful money of the United States in immediately
available funds by the Borrower to the Lender, prior to 2:00
p.m., New York time, at its offices at ___________________
_____________________, or at such other place as may be
designated by the Lender to the Borrower in writing. Any
payment received after 2:00 p.m., New York time, shall be
deemed received on the next Business Day. If any payment of
principal of or interest on the Loans or any other amount
under this Agreement or any other Loan Document falls due on a
day that is not a Business Day, it shall be payable on the
next succeeding Business Day (unless such day would be a day
in the next calendar month, and in such case payment shall be
due on the immediately preceding Business Day), and the
resulting additional or decreased time (if any) shall be
included in or deducted from the computation of interest.
15
SECTION 3. REPRESENTATIONS AND WARRANTIES.
To induce the Lender to enter into this Agreement and to make the Loans
hereunder, the Borrower represents, warrants and covenants to the Lender that:
3.1. Corporate Existence. The Borrower is a duly organized and
validly existing corporation in good standing under the laws
of the jurisdiction of its formation and has the corporate
power and authority to own its properties and other assets and
to transact the business in which it is now engaged or
proposes to engage. The Borrower is duly qualified to do
business and is in good standing in each jurisdiction in which
the failure to qualify could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
3.2. Control and Holdings. All of the capital stock of the Borrower
is beneficially owned by the Parent Shareholder. The Borrower
has no Subsidiaries.
3.3. Authorization and Execution. The Borrower has the corporate
power and authority to execute, deliver and carry out the
terms and provisions of the Transaction and the Loan
Documents. The execution, delivery and performance by the
Borrower of the Transaction and the Loan Documents and the
borrowing hereunder have been duly authorized by all requisite
corporate action. This Agreement and the Pledge and Security
Agreement, when executed and delivered by the Borrower
pursuant hereto, will be legal, valid and binding obligations
of the Borrower, enforceable against the Borrower, in
accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and
by the application by a court of equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
3.4. Compliance with Other Instruments. The Borrower is not in
default in the performance, observance or fulfillment of any
of the material obligations, covenants or conditions contained
in any evidence of Indebtedness of the Borrower, or contained
in any material instrument under or pursuant to which any such
evidence of Indebtedness has been issued or made and
delivered. Neither the execution and delivery of the Loan
Documents, nor the consummation of the transactions herein
contemplated, including but not limited to the use of the
proceeds of the Loan for the purposes set forth herein, will
conflict with or result in a breach of any of the terms,
conditions or provisions of the certificate of incorporation
or by-laws or other organizational charter and instruments of
the Borrower, or of any material agreement or instrument to
which the Borrower is now a party or otherwise bound or to
which the Borrower's properties or other assets are subject,
or of any law, statute, rule or regulation or any order or
decree of any court or governmental instrumentality, or of any
arbitration award, franchise or permit, or constitute a
default thereunder, or if any action was required under such
instrumentality, award, franchise or permit, it could not
reasonably be expected to have a Material Adverse Effect, or
result in the creation
16
or imposition of any Lien upon any of the properties or other
assets of the Borrower, except as herein contemplated.
3.5. Consents. No consent or approval of, or exemption by, any
Person, and no waiver of any right by any Person is required
to authorize or permit, or is otherwise required in connection
with, the execution, delivery and performance of the Loan
Documents, or with respect to the required use by the Borrower
of the proceeds of the Loan, except those which shall have
been obtained on or prior to the date hereof.
3.6. Financial Statements.
(a) The Borrower has heretofore furnished to the Lender
copies of the unqualified audited financial
statements of the Borrower as of December 31, 2001
and for the year then ended and such financial
statement presents fairly the financial position of
the Borrower on the date of the balance sheet
included therein and the results of the operations of
the Borrower for the period involved, and have been
prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved
(subject to, in the case of the interim financial
statements, normal year-end audit adjustments not
material in amount).
(b) No Material Changes. There has been no material
adverse change in the business, properties or other
assets or in the condition, financial or otherwise,
of the Borrower since the date of the Borrower's most
recent balance sheet delivered to the Lender.
3.7. Litigation. There are no actions, suits, investigations or
proceedings pending or, to the knowledge of the Borrower
threatened in writing against the Borrower at law or in equity
or before or by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind, which could reasonably
be expected to have a Material Adverse Effect, except as has
been disclosed in writing to the Lender prior to the date
hereof.
3.8. Compliance with Law. The Borrower is in compliance, in all
material respects, with all applicable Requirements of Law,
the noncompliance with which could reasonably be expected to
have a Material Adverse Effect.
3.9. Investment Company. 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, or
the regulations under such act.
3.10. Regulation U. None of the proceeds of the Loans will be used,
directly or indirectly, for any purpose that will violate, or
cause the Lender to be in violation of, Regulation U (12 CFR,
Part 221) of the Board of Governors of the Federal Reserve
System. Neither the Borrower nor any agent acting on its
behalf has taken or will take (or has omitted or will omit to
take) any action which might
17
cause this Agreement, the Note, any borrowing, the making of
any Loan, or the application of the proceeds of any Loan to
violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the
Exchange Act, in each case as in effect on the date or dates
of such borrowing and use of proceeds. At the time of the
making of each Loan, the amount of such Loan will not exceed
fifty percent (50%) of the aggregate current market value of
the Pledged Shares then pledged to the Lender pursuant to the
Pledge and Security Agreement.
3.11. ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or
Section 302 of ERISA) has occurred during the five-year period
prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has
complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC
or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to
the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such
accrued benefits. Neither Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under
ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of
the valuation date most closely preceding the date on which
this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of
the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as
defined in Section 3(l) of ERISA) does not, in the aggregate,
exceed the assets under all such Plans allocable to such
benefits by an amount in excess of $100,000.
3.12. Use of Proceeds. The proceeds of the Loans shall be utilized
by the Borrower to partially finance the Transaction, or in
the case of an Initial Funding Loan, proceeds of such Initial
Funding Loan held in the Collateral Account may be used to
repay such Initial Funding Loan on the Maturity Date thereof.
SECTION 4. CONDITIONS PRECEDENT TO THE LOANS.
4.1. Conditions to Initial Funding Loan. The obligation of the
Lender to make the first Initial Funding Loan to the Borrower
hereunder is subject to the satisfaction, on or before the
making of such Initial Funding Loan, of each of the following
conditions precedent which are solely for the benefit of the
Lender:
18
(a) Loan Documents. The Lender shall have received (i)
this Agreement and the Pledge and Security Agreement,
executed and delivered by a duly authorized officer
of the Borrower.
(b) Closing Certificate of Borrower. The Lender shall
have received a certificate of an officer of the
Borrower, dated the Closing Date; (i) attaching the
certified certificate of incorporation and by-laws of
the Borrower; (ii) attaching the resolutions of the
Board of Directors of the Borrower with respect to
the transactions contemplated hereby; (iii)
certifying that such resolutions have not been
amended, modified, revoked or rescinded as of the
date of such certificate; and (iv) certifying as to
the incumbency and signature of the officers of the
Borrower executing any Loan Document; such
certificate (and the attachments thereto) shall be in
form and substance satisfactory to the Lender.
(c) Collateral Account. The Collateral Account shall have
been established by the Borrower with the Lender
pursuant to the Pledge and Security Agreement, and
all account documentation related thereto shall have
been executed and delivered by the Borrower and shall
be in form and substance satisfactory to the Lender.
(d) Legal Opinion. The Lender shall have received an
executed legal opinion of Xxxx X. Xxxxxx, Esq.,
special New York counsel to the Borrower, in form and
substance satisfactory to the Lender.
(e) Lien Searches. The Lender shall have received the
results of a recent search by a Person reasonably
satisfactory to the Lender, of the Uniform Commercial
Code, judgment and tax lien filings which may have
been filed with respect to personal property of the
Borrower and the results of such search shall be
reasonably satisfactory to the Lender.
(f) Actions to Perfect Liens. The Lender shall have
received evidence in form and substance reasonably
satisfactory to it that all filings, recordings,
registrations and other actions, including, without
limitation, the filing of duly executed financing
statements on form UCC-1, necessary or, in the
reasonable opinion of the Lender, desirable to
perfect the Liens created by the Pledge and Security
Agreement.
(g) Notice of Borrowing. The Lender shall have received a
Notice of Borrowing in form and substance
satisfactory to the Lender.
(h) Fees. The Lender shall have received payment of all
accrued fees due and payable from the Borrower on the
Closing Date pursuant to this Agreement.
(i) Miscellaneous. The Lender shall have received such
other opinions, agreements or documents, in form and
substance satisfactory to the Lender, as the Lender
reasonably requests.
19
4.2. Conditions to Each Loan (Other than Initial Funding Loans).
The obligation of the Lender to make a Loan (other than
Initial Funding Loans) to the Borrower hereunder is subject to
the satisfaction to the Lender of the following conditions:
(a) Regulation U Compliance. The Lender shall have
received a signed and completed Form U-1 from the
Borrower dated as of the date of the "Initial
Closing" or "Subsequent Closing" (as such terms are
defined in the Equity One, Inc. Common Stock Purchase
Agreement), in form and substance satisfactory to the
Lender.
(b) IRT and EOI Merger Effective. The Lender shall have
received evidence satisfactory to it that the merger
of IRT into EOI has been effected in accordance with
the Agreement and Plan of Merger.
(c) Pledged Shares Purchase Price. The Lender shall have
received evidence satisfactory to it that the actual
purchase price of the Pledged Shares under the Equity
One, Inc. Common Stock Purchase Agreement does not
exceed $13.60 per share.
(d) Pledged Shares and Undated Stock Powers. The Lender
shall have received share certificates of EOI,
registered in the name of the Borrower, evidencing
shares purchase by the Borrower in consummation of
the Transaction and having a then current market
value of not less than two times the amount of such
Loan, together with undated stock powers covering
such shares executed by the Borrower, all in form and
substance satisfactory to the Lender.
(e) Irrevocable Proxy. The Lender shall have received an
Irrevocable Proxy, in the form of Exhibit A to the
Pledge and Security Agreement, duly executed by the
Borrower and dated as of the date of the "Initial
Closing" or "Subsequent Closing" (as such terms are
defined in the Equity One, Inc. Common Stock Purchase
Agreement.
(f) Acknowledgment of Pledge by EOI. The Lender shall
have received an acknowledgment duly executed by EOI
dated as of the date of the "Initial Closing" or
"Subsequent Closing" (as such terms are defined in
the Equity One, Inc. Common Stock Purchase
Agreement), acknowledging the pledge by the Borrower
of the Pledge Shares in favor of the Lender, in form
and substance satisfactory to the Lender.
(g) Irrevocable Instructions by Borrower to EOI. The
Lender shall have received an irrevocable letter of
instruction regarding the Pledged Shares, dated as of
the date of the "Initial Closing" or "Subsequent
Closing" (as such terms are defined in the Equity
One, Inc. Common Stock Purchase Agreement), executed
and delivered by a duly authorized officer of the
Borrower and EOI, all in form and substance
satisfactory to the Lender
20
(h) Officer's Certificate of EOI. The Lender shall have
received a certificate of an officer of EOI, dated as
of the date of the "Initial Closing" or "Subsequent
Closing" (as such terms are defined in the Equity
One, Inc. Common Stock Purchase Agreement); (i)
attaching the certified certificate of incorporation
and by-laws of EOI; and (ii) certifying as to the
incumbency and signature of the officers of the
Borrower executing its Acknowledgment; such
certificate (and the attachments thereto) shall be in
form and substance satisfactory to the Lender.
(i) Miscellaneous. The Lender shall have received such
other opinions, agreements or documents, in form and
substance satisfactory to the Lender, as the Lender
reasonably requests.
4.3. Conditions to Each Loan (Including Initial Funding Loans). The
obligation of the Lender to make a Loan (including Initial
Funding Loans) to the Borrower hereunder is subject to the
satisfaction to the Lender of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties made by the Borrower
in or pursuant to the Loan Documents shall be true
and correct in all material respects on and as of
such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after
giving effect to the Loan requested to be, or being,
made on such date.
(c) Each Loan borrowing by the Borrower hereunder shall
constitute a representation and warranty by the
Borrower as of the date thereof that the conditions
contained in this subsection 4.3 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrower hereby agrees that, so long as the Term Loan Commitment
remains in effect or any amount is owing to the Lender hereunder or under any
other Loan Document, the Borrower shall
5.1. Pay Principal and Interest. The Borrower will punctually pay
or cause to be paid the principal and interest to become due
in respect of the Loans according to the terms hereof.
5.2. Tangible Equity to Debt Ratio. The Borrower will maintain at
all times a Tangible Equity to Debt ratio in excess of .70 to
1.0 (excluding non-recourse loans and assets financed by
non-recourse loans).
5.3. Keep Books. The Borrower will keep proper books of record and
account in which true, correct and complete entries will be
made of the transactions of the Borrower in accordance with
GAAP.
21
5.4. Payment of Taxes; Corporate Existence; Maintenance of
Properties. The Borrower will:
(a) Pay and discharge promptly all taxes (including,
without limitation, all payroll withholdings),
assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon
any of its property, real, personal or mixed, or upon
any part thereof, before the same shall become in
default, as well as all claims for labor, materials
and supplies which, if unpaid, might by law become a
Lien upon its property; provided, however, that it
shall not be required to pay any such tax,
assessment, charge, levy or claim or discharge any
such Lien if the validity thereof shall be contested
in good faith by appropriate proceedings and if it
shall have set aside on its books such reserves, if
any, as may be required in accordance with GAAP with
respect to the tax, assessment, charge, levy or claim
so contested;
(b) Conduct its business according to good business
practices; keep in full force and effect its
corporate existence and material rights, licenses,
permits and franchises, and comply in all material
respects with all of the laws, rules and regulations
governing or applicable to it or its business,
including, without limitation, the Exchange Act, and
all "margin" and other rules and regulations under
Regulations T, U and X of the Board of Governors of
the Federal Reserve System; and make all such reports
and pay all such franchise and other taxes and
license fees and do all such other things as may be
lawfully required, to maintain the material rights,
licenses, powers and franchises of the Borrower under
the laws of the United States and of the States or
jurisdictions in which it is organized or does
business.
5.5. Financial Statements and Reports; Notices. The Borrower will
furnish to the Lender in duplicate:
(a) As soon as practicable and when available, and in any
event within 140 days after the end of each fiscal
year of the Borrower, annual unqualified financial
reports of the Borrower, on an individual basis and
on a consolidated basis with the Parent Shareholder,
including, inter alia, a balance sheet, a profit and
loss statement, and statement of cash flow for such
fiscal year, setting forth in comparative form the
corresponding figures for the preceding fiscal year,
audited by independent certified public accountants
or chartered accountants of recognized standing
selected by the Borrower and/or the Parent
Shareholder, as the case may be, and acceptable to
the Lender;
(b) As soon as practicable and when available, and in any
event within 60 days after the end of each fiscal
quarter of the Borrower (other than the 4th quarter),
a consolidated balance sheet, a profit and loss
statement, and statement of cash flow for such fiscal
quarter, of the Borrower and the
22
Parent Shareholder, showing its financial condition
as of the last day of such fiscal quarter and the
results of operations for such fiscal quarter,
reviewed by independent certified public accountants
or chartered accountant of recognized standing
selected by the Borrower and/or the Parent
Shareholder, as the case may be, and acceptable to
the Lender, and certified by the chief financial
officers of the Borrower or the Parent Shareholder,
as the case may be, as to (i) fair presentation of
its financial position and the results of operations,
and (ii) having been prepared in accordance with GAAP
consistently applied;
(c) Concurrently with the delivery of the financial
statements referred to in Sections 5.5(a) and (b), a
certificate of the chief financial officer of the
Borrower (i) stating that, to the best of such
officer's knowledge, during such period (A) no
Subsidiary has been formed or acquired, (B) the
Borrower has observed or performed all of its
material covenants and other agreements, and
satisfied every condition, contained in this
Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and (C) such
officer has obtained no knowledge of any Default or
Event of Default except as specified in such
certificate, and (ii) setting forth the computations
used by the Borrower in determining (as of the end of
such fiscal period) compliance with the covenants
contained in Sections 5.2 and 6.1;
(d) Not later than ten (10) days after the end of each
month, a certificate of the chief financial officer
of the Borrower setting forth the computations used
by the Borrower in determining (as of the end of such
preceding month) compliance with the covenants
contained in Section 5.7;
(e) Promptly following the occurrence thereof, notice of
any Default or Event of Default hereunder or of any
default under any other Loan Document;
(f) Such other information as to the financial condition,
operations, business, properties and other assets of
the Borrower and/or the Parent Shareholder as the
Lender may from time to time reasonably request;
(g) Promptly after the filing thereof, copies of any
permit, notice, report or other document that the
Borrower is obligated to file or provide with its
shareholders or any Governmental Authority;
(h) The Borrower shall cause all audited financial
statements required to be delivered to the Lender
pursuant to this Section 5.5 to be delivered to the
Lender by the independent certified public accountant
or chartered accountant who performed the audit; and
(i) If the Borrower shall receive from its shareholders
and/or any third party any demand for the payment of
any amount whatsoever on account of or in connection
with any Shareholders' Loan or dividends, the
Borrower
23
shall immediately notify the Lender of such
occurrence, and shall consult with the Lender with
regard to such demand.
5.6. EOI Cash Dividends. The Borrower undertakes and agrees that
all cash dividends and other cash proceeds attributable to the
Pledged Shares shall be deposited in the Collateral Account in
accordance with the terms of the Pledge and Security
Agreement.
5.7. Maintenance of Minimum Market Value of Pledged Shares.
(a) Subject to Section 3.10 of this Agreement, in the
event that on the last business day of any month (the
"Calculation Date"), the amount due to the Lender
from the Borrower in respect of the Loans and Loan
Documents, by way of principal, interest,
commissions, bank charges and/or expenses of any kind
whatsoever (the "Total Outstanding Credit") is
greater than 55% of the then aggregate current market
value of the Pledged Shares, the Borrower shall, as
soon as practicable but within no later than seven
(7) days of the Lender's first request, either (i)
grant additional collateral, to the satisfaction of
the Lender, in an amount equal to the difference on
the Calculation Date between 55% of the then
aggregate current market value of the Pledged Shares
and the Total Outstanding Credit or, at the
discretion of the Lender (ii) prepay part of the
Total Outstanding Credit so that the remaining Total
Outstanding Credit shall be equal to or less than 55%
of the aggregate current market value of the Pledged
Shares on the Calculation Date.
(b) In the event the aggregate current market value of
the Pledged Shares shall depreciate by a margin of
ten percent (10%) in the aggregate, over ten (10)
consecutive Business Days, the Borrower shall, as
soon as practicable but within no later than seven
(7) days of the Lender's first request, either (i)
grant additional collateral, to the satisfaction of
the Lender, in an amount equal to the difference
between the amount which is equal to 55% of the then
aggregate current market value of the Pledged Shares
and the Total Outstanding Credit at that time, or, at
the discretion of the Lender, (ii) prepay part of the
Total Outstanding Credit so that the remaining Total
Outstanding Credit at that time shall be equal to or
less than 55% of the then aggregate current market
value of the Pledged Shares.
(c) Unless otherwise agreed to in writing by the Lender,
a prepayment required by the Lender in accordance
with the terms of Section 5.7(a) or 5.7(b) above
shall be effected in accordance with one of the
following options at the discretion of the Borrower:
(1) forthwith upon, but in any event no later
than within seven (7) days of, the request
of the Lender and subject to any fine and
breakage cost as determined by the Lender;
or
24
(2) on the next Interest Payment Date following
the request of the Lender to prepay,
provided that an amount equal to the
difference between 55% of the then aggregate
current market value of the Pledged Shares
and the Total Outstanding Credit is
deposited with the Lender in a deposit in
the name of the Borrower which deposit shall
be pledged by the Borrower in favor of the
Lender.
5.8. ERISA Compliance. The Borrower will comply, in all material
respects, and cause each Commonly Controlled Entity, to
comply, in all material respects, with the provisions of
ERISA, if applicable, with respect to each of its or their
respective Plans and as soon as possible after the Borrower
knows or has reason to know that any Reportable Event with
respect to any Plan has occurred, furnish to the Lender a
statement signed by its chief executive officer or its chief
financial officer setting forth details as to such Reportable
Event and the action, if any, which the Borrower or such
Commonly Controlled Entity proposes to take with respect
thereto, together with a copy of the notice of such Reportable
Event furnished to PBGC.
SECTION 6. NEGATIVE COVENANTS.
The Borrower hereby agrees that, as long as the Term Loan Commitment
remains in effect or any amount is owing to the Lender hereunder or under any
other Loan Document, the Borrower shall not, directly or indirectly:
6.1. Tangible Equity. Permit its Tangible Equity at any time to be
less than (i) thirty-five percent (35%) of its total assets as
set forth in its balance sheet on a consolidated basis
(excluding non recourse loans and assets financed by non
recourse loans), or (ii) $30,000,000; as such figures shall
appear in the quarterly and annual financial reports of the
Borrower on a consolidated and/or individual basis.
6.2. Limitation on Dividends, Distributions and Redemptions.
Declare or pay any dividend on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of capital stock of
the Borrower or any warrants or options to purchase any such
stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of
the Borrower.
6.3. Limitation on Shareholders' Loans. Pay to its shareholders
and/or to any of their family members and/or to any companies
under the Control of its shareholders and/or to any third
party (who shall come in their place or on their behalf), in
any manner whatsoever, directly or indirectly, any amount
whatsoever from or on account or in connection with
Shareholders' Loans, including, but without derogation from
the generality of the foregoing, payments of principal,
interest, linkage differentials, indemnities, damages,
commissions and expenses (the amounts of the loans and all
amounts derived or arising therefrom as aforesaid are
25
hereinafter collectively called "Shareholders' Loans,"
provided that the foregoing term shall not apply to any of the
following: (i) related intracompany loans, management fees or
other fees up to an aggregate annual amount of $1,000,000,
(ii) any and all interest on intracompany loans, without
limitation as to the amount, (iii) principal repayment on
intracompany loans on or after September 30, 2001, based on a
25 year or greater amortization schedule, and (iv) any and all
unrelated third party fees and costs.
6.4. Limitation on Issuance of Bearer Securities. Issue any bearer
securities.
6.5. Use of Proceeds of Loan. Use any part of the proceeds of the
Loan for any purpose other than those specified in Section
3.12.
6.6. Disposal of Property. Wind up, liquidate or dissolve, sell,
exchange, lease, transfer or otherwise dispose of all or
substantially all of its properties or other assets (or agree
to do any of the foregoing).
6.7. Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, assign, transfer or otherwise dispose of
all or substantially all of its property, business or assets.
SECTION 7. DEFAULTS AND REMEDIES.
7.1. If any of the following events shall occur and be continuing:
(a) Any representation, warranty or statement made herein
or in any certificate or document hereafter signed
and delivered by the Borrower in favor of the Lender,
whether pursuant to this Agreement, any other Loan
Document or otherwise, shall prove to have been
false, incorrect or misleading in any material
respect when made or deemed made; or
(b) The Borrower shall fail to pay to the Lender any
principal, interest, fees or other amounts,
including, without limitation, any payment of
principal of or interest on the Loans, or any fee or
other amount under this Agreement or the other Loan
Documents, or under any other document, note or
agreement hereafter signed and delivered by the
Borrower in favor of the Lender, as and when the same
shall become due and payable, whether at the due date
thereof, by acceleration, mandatory prepayment or
otherwise; or
(c) Any default shall occur in the due observance or
performance by the Borrower of any other covenant,
agreement or condition to be performed by it herein
or in any other Loan Document, or in any other
document, note or agreement hereafter signed and
delivered by the Borrower in favor of the Lender; or
26
(d) The Borrower 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 it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial
part of its assets, or the Borrower shall make a
general assignment for the benefit of its creditors;
or
(e) There shall be commenced against the Borrower any
case, proceeding or other action of a nature referred
to in clause (d) above which (A) results in the entry
of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged
or unbonded for a period of sixty (60) days, or there
shall be commenced against the Borrower any case,
proceeding or other action seeking issuance of a
warrant of attachment, execution, distrait or similar
process against all or any substantial part of its
assets which results in the entry of an order for any
such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within
sixty (60) days from the entry thereof; or
(f) The Borrower shall take any action in furtherance of,
or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause
(d) or (e) above; or
(g) The Borrower shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay
its debts as they become due; or
(h) Any Loan Document shall become invalid or
unenforceable, or the Borrower so asserts; or (A) the
Pledge and Security Agreement shall cease for any
reason to be in full force and effect, or the
Borrower shall so assert, or (B) the Lien created by
the Pledge and Security Agreement in the Collateral
shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or
(i) Any default shall occur with respect to any
Indebtedness (other than the Indebtedness evidenced
by this Agreement) of the Borrower for or relating to
borrowed money, or under any agreement under which
any evidence of Indebtedness may be issued by the
Borrower, and such default shall continue for more
than the period of grace, if any, specified therein,
if the effect of such default is to accelerate the
maturity of such Indebtedness or to permit the holder
thereof, or any trustee, to cause the same to become
due prior to its stated maturity, or if any such
Indebtedness shall not be paid when due (after giving
effect to any grace period); or
27
(j) Final judgment for the payment of money in excess of
$100,000 (to the extent not covered by insurance or
bond) shall be rendered by a court of record against
the Borrower, and the Borrower shall not discharge
the same or provide for its discharge in accordance
with its terms, or procure a stay of execution
thereof within twenty-one (21) days from the date of
entry thereof and within such period of twenty-one
(21) days, or such longer period during which
execution of such judgment shall have been stayed,
appeal therefrom and cause the execution thereof to
be stayed during such appeal; or
(k) An attachment shall be levied on the assets of the
Borrower or any part thereof, or execution
proceedings shall be instituted against the Borrower
or its assets and such attachment or execution
proceedings shall not be discharged within twenty-one
(21) days after the commencement thereof; or
(l) In the Lender's opinion, the occurrence of any
Material Adverse Effect; or
(m) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii)
any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of
the Borrower or any Commonly Controlled Entity, (iii)
a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings
or appointment of a trustee is, in the reasonable
opinion of the Lender, likely to result in the
termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA, (v) the Borrower
or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Lender is likely to, incur
any liability in connection with a withdrawal from,
or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other adverse event or
condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all
other such events or conditions, if any, could
reasonably be expected to involve an aggregate amount
of liability to the Borrower in excess of $50,000; or
(n) Any Change in Control shall occur; or
(o) The Borrower shall become an "investment company" or
a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of
1940, or the regulations under such Act; or
28
(p) EOI shall declare and pay dividends on its common
shares of less than $0.24 per share on a quarterly
basis or $0.96 per share on an annual basis; or
(q) The cash dividends and other cash proceeds
attributable to the Pledged Shares are for any reason
not deposited into the Collateral Account pursuant to
the Pledge and Security Agreement;
then, and in any such event, (A) if such event is an Event of
Default specified in clause (e) above, the Term Loan
Commitment shall automatically and immediately terminate and
the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement shall immediately
become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may
be taken: (i) the Lender may by notice to the Borrower declare
the Term Loan Commitment to be terminated forthwith, whereupon
the Term Loan Commitment shall immediately terminate; and (ii)
the Lender may, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly
provided above in this Section 7.1, presentment, demand,
protest and all other notices of any kind are hereby expressly
waived.
7.2. Suits for Enforcement. If any one or more of such Events of
Default shall occur and be continuing, the Lender may proceed,
to the extent permitted by law, to protect and enforce its
rights either by suit in equity or by action at law, or both,
whether for the specific performance of any covenant,
condition or agreement contained in the Loan Documents or in
aid of the exercise of any power granted in the Loan
Documents, or proceed to enforce the payment of the Loans or
to enforce any other legal or equitable right of the Lender
under any Loan Document.
7.3. Remedies Cumulative. No right or remedy herein or in any other
agreement or instrument conferred upon the Lender is intended
to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and shall be in
addition to every other right and remedy given hereunder or
under any Loan Document or now or hereafter existing at law or
in equity or by statute or otherwise. Without limiting the
generality of the foregoing, if the Loans or any of the other
obligations of the Borrower to the Lender shall not be paid
when due, whether at the stated maturity thereof, by
acceleration or otherwise, the Lender shall not be required to
resort to any particular security, right or remedy or to
proceed in any particular order of priority, and the Lender
shall have the right at any time and from time to time, in any
manner and in any order, to enforce its security interests,
liens, rights and remedies, or any of them, as it deems
appropriate in the circumstances and apply the proceeds of its
collateral to such obligations of the Borrower as it
determines in its sole discretion.
29
SECTION 8. MISCELLANEOUS.
8.1. Amendments and Waivers.
(a) Neither this Agreement nor any other Loan Document,
nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with
the provisions of this Section 8.1. The Lender may,
from time to time, (i) enter into with the Borrower
written amendments, supplements or modifications
hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner
the rights of the Lender or of the Borrower hereunder
or thereunder, or (ii) waive, on such terms and
conditions as the Lender may specify in such
instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event
of Default and its consequences. Any such waiver and
any such amendment, supplement or modification shall
be binding upon the Borrower and the Lender and all
future holders of the Loans. In the case of any
waiver, the Borrower and the Lender shall be restored
to their former positions and rights hereunder and
under the other Loan Documents, and any Default or
Event of Default waived shall be deemed to be cured
and not continuing; no such waiver shall extend to
any subsequent or other Default or Event of Default
or impair any right consequent thereon.
(b) No modification or waiver of any provisions of this
Agreement or of any other agreement or instrument
made or issued pursuant hereto or contemplated
hereby, nor consent to any departure by the Borrower
therefrom, shall in any event be effective,
irrespective of any course of dealing between the
parties, unless the same shall be in a writing
executed by the Lender, and then such waiver or
consent shall be effective only in the specific
instance and for the purpose for which given. No
notice to or demand on the Borrower in any case shall
thereby entitle the Borrower to any other or further
notice or demand in the same, similar or other
circumstances. Any transaction or matter excepted
from the operation of any Section of this Agreement
shall nevertheless be subject to the prohibitions and
limitations contained elsewhere in this Agreement,
unless expressly stated otherwise.
8.2. Notices. Unless otherwise expressly provided herein, all
notices, approvals, requests, demands, consents and other
communications hereunder, including any notice of default, to
or upon the respective parties hereto to be effective shall be
in writing (including by facsimile transmission) and, unless
otherwise expressly provided herein, shall be deemed to have
been duly given or made (a) in the case of delivery by hand or
by overnight courier, when delivered, or (b) in the case of
delivery by facsimile transmission, when sent and receipt has
been confirmed,
30
addressed as follows in the case of the Borrower and the
Lender, or to such other address as may be hereafter notified
by the respective parties hereto
If to the Borrower:
Silver Maple (2001), Inc.
0000 X.X. Xxxxx Xxxxxxx Drive, 2nd Floor
North Xxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx, President
Facsimile: (000) 000-0000
with a copy to:
Silver Maple (2001), Inc.
000 Xxx Xxxxxx, Xxxxx 0000
Xxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxx Xxxxx, Vice President
Facsimile: (000)000-0000
with a copy to:
Xxxx X. Xxxxxx, Esq.
00000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Lender:
[Commercial Bank]
_________________________
_________________________
Attention: __________________
Facsimile: __________________
with copy to:
_________________________
_________________________
_________________________
Attention: ___________________
Facsimile: ___________________
and with a copy to:
31
Xxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
8.3. No Waiver. No failure or delay on the part of the Lender in
exercising any right, power or privilege hereunder or under
any Loan Document, nor any course of dealing between the
Borrower and the Lender, shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right,
power or privilege.
8.4. Expenses. The Borrower agrees (a) to pay or reimburse the
Lender for all of its out-of-pocket costs and expenses
incurred in connection with the development, preparation and
execution of this Agreement, the other Loan Documents, and any
other documents prepared in connection herewith or therewith,
and any amendment, supplement or modification thereof or
thereto, and the consummation and administration of the
transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of
counsel to the Lender, and (b) to pay or reimburse the Lender
for all its out-of-pocket costs and expenses incurred in
connection with the enforcement or preservation of any rights
under this Agreement, the other Loan Documents and any such
other documents, including, without limitation, the reasonable
fees and disbursements of counsel to the Lender.
8.5. Set-Off. In addition to any rights and remedies of the Lender
provided by law, the Lender shall have the right, without
prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or
demand, provisional or final, including, without limitation,
the Collateral Account), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Lender or any
branch, agency or (to the extent permitted by applicable law)
banking affiliate thereof to or for the credit or the account
of the Borrower. The Lender agrees promptly to notify the
Borrower after any such set-off and application made by the
Lender, provided that the failure to give such notice shall
not affect the validity of the set-off and application.
8.6. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate
counterparts (including by facsimile transmission), and all of
said counterparts taken together shall be deemed to constitute
one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the
Borrower and the Lender.
32
8.7. Severability. Any provision of this Agreement or any other
Loan Document 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 or thereof, and
any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8.8. Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower and the Lender with
respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the
Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
8.9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
8.10. Submission to Jurisdiction. The Borrower hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and
the other Loan Documents to which it is a party, or
for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York,
the courts of the United States of America for the
Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that
it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof
by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 8.2 or
at such other address of which the Lender shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner
permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, except in the case of bad faith, willful
misconduct or gross negligence (and otherwise to the
maximum extent not prohibited by law), any right it
may have to claim or recover in any legal action or
proceeding
33
referred to in this Section 8.10 any special,
exemplary, or consequential damages.
8.11. WAIVERS OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, THE BORROWER AND THE LENDER HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.12. Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the
other Loan Documents;
(b) The Lender has no fiduciary relationship with or duty
to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents,
and the relationship between the Lender and the
Borrower, in connection herewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the
transactions contemplated hereby between the Borrower
and the Lender.
8.13. Headings. Section headings are for convenience only and shall
not affect the interpretation or construction of this
Agreement or any other Loan Document.
8.14. Release of Collateral. Promptly after the Borrower shall have
repaid the Loans in full and shall have paid and repaid to the
Lender any and all of the sums due to the Lender hereunder and
under all other Loan Documents, and provided any and all of
the sums due to the Lender under documents signed between the
Borrower and the Lender shall have been paid to the Lender in
full, the Lender shall release the Liens over the Collateral.
8.15. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lender, and their
respective successors and assigns, except that the
Borrower may not assign or transfer any of their
rights or obligations under this Agreement without
the prior written consent of the Lender.
(b) The Lender may, in the ordinary course of its
commercial banking business and in accordance with
applicable law, at any time sell to one or more banks
or other financial institutions ("Participants")
participating interests in any Loan owing to the
Lender, the Term Loan Commitment or any other
interest of the Lender hereunder and under the other
Loan Documents. In the event of any such sale by the
Lender of a participating
34
interest to a Participant, the Lender's obligations
under this Agreement shall remain unchanged, the
Lender shall remain solely responsible for the
performance thereof, the Lender shall remain the
holder of any such Loan for all purposes under this
Agreement and the other Loan Documents, and the
Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's
rights and obligations under this Agreement and the
other Loan Documents. The Lender shall not be
entitled to create in favor of any Participant, in
the participation agreement pursuant to which such
Participant's participating interest shall be created
or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any
other Loan Document except for those specified in
clauses (i) and (ii) of the proviso to Section 8.1 or
otherwise expressly set forth in this Agreement or
any other Loan Document. The Borrower agrees that if
amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the
maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its
participating interest in amounts owing under this
Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a
Lender under this Agreement; provided that, in
purchasing such participating interest, such
Participant shall be deemed to have agreed to share
with the Lender the proceeds thereof as fully as if
it were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the
benefits of Sections 2.12, 2.13 and 2.14 with respect
to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender;
provided that, in the case of Section 2.13, such
Participant shall have complied with the requirements
of said subsection, and provided, further, that no
Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the
Lender would have been entitled to receive in respect
of the amount of the participation transferred by the
Lender to such Participant had no such transfer
occurred. The Lender shall provide the Borrower with
written notice of the identity of any such
Participant and the amount of any such participating
interest.
(c) The Borrower authorizes the Lender to disclose to any
Participant and any prospective Participant any and
all financial information in the Lender's possession
concerning the Borrower and its Affiliates which has
been delivered to the Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been
delivered to the Lender by or on behalf of the
Borrower in connection with the Lender's credit
evaluation of the Borrower and its Affiliates prior
to becoming a party to this Agreement, provided that
any such Participant agrees to hold such information
in confidence. Nothing herein shall be construed so
as to authorize Lender or any Participant to use any
such information for any improper purpose.
35
(d) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 8.15
concerning assignments of Loans relate only to
absolute assignments and that such provisions do not
prohibit assignments creating security interests,
including, without limitation, any pledge or
assignment by the Lender of any Loan to any Federal
Reserve Bank in accordance with applicable law.
[SIGNATURE PAGE TO FOLLOW]
36
IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed and delivered by their duly authorized officers,
all as of the date first above written.
SILVER MAPLE (2001), INC.
By: /s/ Xxxx Xxxxx
-------------------------------
Xxxx Xxxxx
Vice President
[COMMERCIAL BANK]
By: /s/
-------------------------------
Name:
Title:
By: /s/
-------------------------------
Name:
Title:
