FIRST UNION NATIONAL BANK OF FLORIDA
AMENDMENT TO LOAN AGREEMENTS
AND OTHER LOAN DOCUMENTS
This Amendment to Loan Agreement and Other Loan Documents (hereinafter the
"Agreement") is made on the 12th day of October, 1995, by and between First
Union National Bank of Florida, a national banking association organized and
existing under the laws of the United States of America, Commercial Banking-WPB,
Florida (hereinafter referred to as "Bank"); and Top Source Technologies, Inc.,
a Delaware corporation authorized to do business in the state of Florida, and On
Site Analysis, Inc., a Georgia corporation (each hereinafter referred to jointly
and severally as "Borrower"), and having their principal place of business as
follows:
Top Source Technologies, Inc. On Site Analysis, Inc.
0000 X.X.X. Xxxxxxxxx, Xxxxx 0000 0000 Xxxxxxxxxxxx Xxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000 Xxxxx 000
Xxxxxxx, XX 00000-0000
and is joined by Top Source Automotive, Inc., a Florida corporation, United
Testing Group, Inc., a Georgia corporation, and ARCS Safety Seat, Inc., a
Florida corporation (each hereinafter referred to jointly and severally as
"Guarantors"), and having their principal place of business as follows:
Top Source Automotive, Inc. United Testing Group, Inc.
0000 X.X.X. Xxxxxxxxx, Xxxxx 0000 0000 Xxxxxxxxxxxx Xxxxx
Xxxx Xxxxx Xxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
ARCS Safety Seat, Inc.
0000 X.X.X. Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxx Xxxxxxx, XX 00000
RECITALS:
A. On November 22, 1994, Borrower executed a Loan Agreement (the "Loan
Agreement") with Bank setting forth certain terms and conditions under which
Bank would make two loans to Borrower described as follows:
Revolver Loan #1- (hereinafter sometimes "Loan #1") in the principal
amount of $4,500,000.00, the terms and conditions of which are more
fully described in the Promissory Note and Security Agreement in such
principal amount executed by Borrower in favor of Bank on November 22,
1994 ("Note #1"); and
Revolver Loan #2- (hereinafter sometimes "Loan #2") in the principal
amount of $500,000.00, the terms and conditions of which are more fully
described in the Promissory Note and Security Agreement in such
principal amount executed by Borrower in favor of Bank on November 22,
1994 ("Note #2).
B. On April 13, 1995, Borrower executed an additional Loan Agreement
with Bank setting forth certain terms and conditions under which Bank would make
an additional loan to Borrower described as follows:
Revolver Loan #3- (hereinafter sometimes "Loan #3") in the principal
amount of $250,000.00, the terms and conditions of which are more fully
described in the Promissory Note and Security Agreement in such
principal amount executed by Borrower in favor of Bank on April ,13,
1995 ("Note #3).
(Each of the above loans and the Promissory Note(s) described in
Recital "A" and "B" or Instrument(s) and Security Agreement(s) executed
pursuant thereto is hereinafter jointly and severally sometimes
referred to as the "Note(s)" and/or the "Loans")
C. In addition to the Notes, the terms of the Loans are set forth in
various other loan documents (the "Loan Documents" which term includes, but is
not restricted to, the Loan Agreement dated November 22, 1994 [Loan Agreement
#1], concerning Loan #1 and Loan # 2, and the Loan Agreement executed April 13,
1995 [Loan Agreement #2], concerning Loan #3, the Notes [Note #1, Note #2, and
Note #3], the Guarantees, an Assignment of Leases, Rents, and Fees, and a
Collateral Assignment of Interest in Security Deposit and Additional Agreements
by Borrowers) executed and delivered at the closing of the Loans on November 22,
1994, or executed on later dates in accordance with agreements reached at the
closing of the Loans on November 22, 1994, and executed and delivered at the
closing of the Loan on April 13, 1995, or executed on later dates in accordance
with agreements reached at the closing of the Loan on April 13, 1995.
D. All of the obligations of Borrower to Bank under the terms of the
Loans and the Loan Documents were unconditionally guaranteed by the Guarantors
under the terms of separate guaranty agreements (the "Guarantees") executed by
each of the Guarantors.
E. Borrower has requested that Bank make an additional Revolver Loan
(sometimes herein referred to as Loan #4) in the principal amount of SEVEN
HUNDRED AND FIFTY THOUSAND AND 00/100 DOLLARS ($750,000.00) to Borrower and that
Loan #4 be consolidated with Loan #2 and Loan #3 into a single consolidated Loan
(the "Consolidated Loan") in total principal amount of ONE MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS ($1,500,000.00) in accordance with the terms of the
Consolidated Promissory Note a copy of which is attached hereto as Exhibit "A"
and made a part hereof, and in accordance with the terms of this agreement.
F. Relying upon the representations and warranties and the agreements
and covenants set forth in the Loan Documents and herein contained, and in
consideration of the modifications to the Loan Agreement and the other Loan
Documents described herein, the Bank is willing to make Loan #4 and to
consolidate Loan #4 with Loan #2
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and Loan #3 upon the terms and subject to the conditions
hereinbefore and hereinafter set forth.
The Bank, Borrower, and the Guarantors hereby agree as follows:
1. The Recitals set forth in paragraphs A through F inclusive as set
forth above are true and correct and ratified and confirmed by the parties
hereto.
2. Borrower confirms that all representations and warranties set forth
in Loan Agreement #1 and Loan Agreement #2 remain true and correct as of the
date hereof.
3. The Loans referred to in Loan Agreement #1 as Revolver Loan #2 in
principal amount of $500,000.00, and in Loan Agreement #2 as the Revolver Loan
in principal amount of $250,000.00 are hereafter referred to as the "Revolver
Loan" and is described as follows:
Revolver Loan - (hereinafter sometimes "Loan") in the principal amount
of $1,500,000.00, the terms and conditions of which are more fully
described in the Consolidated Promissory Note and Security Agreement in
such principal amount executed by Borrower in favor of Bank on October
12, 1995 ("Consolidated Promissory Note").
4. Paragraph 2 (f) is hereby added to the Loan Agreement as
follows:
f. NET WORTH: Borrower will at all times maintain a minimum
consolidated tangible net worth of THREE MILLION AND 00/100
DOLLARS ($3,000,000.00). Consolidated tangible net worth shall
mean the consolidated net worth of the Borrower and its
subsidiaries, after subtracting therefrom the aggregate amount
of (i) deferred income tax assets, and (ii) any intangible
assets of the Borrower and its subsidiaries, including, and
without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks, and
capitalized database.
5. Paragraph 6 (a) (3) of Loan Agreement #1 is hereby
modified to provide as follows:
6. Security: ...
a. PERSONALTY: ....
3. All of the presently owned or hereinafter acquired other
assets, including, without limitations, accounts, inventory,
equipment, chattel paper, instruments, general intangibles and
documents, as those terms are defined by the Uniform
Commercial Code of the State of Florida, or
3
as otherwise determined by Bank, owned by Borrower and by
Top Source Automotive, Inc.
6. The following paragraph is added as subparagraph 9 (l) (v) to Loan
Agreement #1 and as subparagraph 9 (k) (iii) to Loan Agreement #2:
The total cumulative amount that will be outstanding as advanced to
Borrower at any time under the terms of the Consolidated Promissory
Note shall be the lesser of a) 75% of Eligible Accounts Receivable, or
b) $1,500,000.00. Eligible accounts receivable are defined and agreed
to be those Accounts Receivable of Top Source Automotive, Inc. aged 60
days or less; Accounts Receivable of On Site Analysis, Inc. aged 60
days or less; and Accounts Receivable of United Testing Group, Inc.
aged 60 days or less. To determine Eligible Accounts Receivable,
Borrower will submit to Bank a monthly Accounts Receivable Aging
Analysis. No portion of an Account Receivable will be considered
eligible if 50% of the Account Receivable is outstanding for 90 days or
more as evidenced by the monthly Accounts Receivable Aging Analysis.
The Accounts Receivable Aging Analysis will be submitted to Bank
monthly with an executed compliance certificate in the form attached
hereto as Exhibit "B" and made a part hereof.
7. The Assignment of Leases, Rents, and Fees, and the Collateral
Assignment of Interest in Security Deposit and Additional Agreements by
Borrowers both executed and delivered at the closing of the Loans on November
22, 1994, are hereby amended to provide that all obligations of the Borrower
under the terms of Loan #1, and due under Loan #2, Loan #3, and Loan #4 as
consolidated in total principal amount of SIX MILLION AND 00/100 DOLLARS
($6,000,000.00) are secured by the security interests therein granted.
8. The Guarantors join in the execution of this instrument for the
specific purpose of consenting to the terms hereof and to ratify and confirm
their continuing obligations under the terms and provisions of the Guarantees,
and to further acknowledge that nothing contained herein, or contained in any
other document modifying or supplementing the Loan Documents, in any way limits
or otherwise reduces or restricts the obligations and liabilities of any
Guarantor to the extent provided in the Guarantees as to any obligation or
liability of the Borrowers to be performed or owed in connection with Loan #1,
and Loan #2, Loan #3, and Loan #4 as consolidated.
9. All terms and provisions of the Loan Agreements and any other of the
Loan Documents not specifically modified by this agreement or modified by any
other agreement executed by the parties, remain in full force and effect and
fully enforceable in accordance with such terms.
4
IN WITNESS WHEREOF, the Borrower, Guarantors, and the Bank have caused
this Modification to Loan Agreements and other Loan Documents to be duly
executed all as of the day and year first above written:
Witnesses: BORROWERS:
TOP SOURCE TECHNOLOGIES,
INC.
/s/Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx BY:/s/Xxxxx Xxxxx
type or print name of witness
/s/Xxxx Xxx Xxxxxx its Chief Financial Officer
Xxxx Xxx Xxxxxx
type or print name of witness
ATTEST:
(CORPORATE SEAL)
BY:/s/Xxxxxxxx Xxxxx
its Secretary
ON SITE ANALYSIS, INC.
/s/Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx BY:/s/Xxxxx Xxxxx
type or print name of witness
/s/Xxxx Xxx Xxxxxx its Chief Financial Officer
Xxxx Xxx Xxxxxx
type or print name of witness
ATTEST:
BY:/s/Xxxxxxxx Xxxxx
its Secretary
5
GUARANTORS:
TOP SOURCE AUTOMOTIVE, INC.
/s/Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx BY:/s/Xxxxx Xxxxx
type or print name of witness
/s/Xxxx Xxx Xxxxxx its Chief Financial Officer
Xxxx Xxx Xxxxxx
type or print name of witness
ATTEST:
(CORPORATE SEAL)
BY:/s/Xxxxxxxx Xxxxx
Secretary
ARCS SAFETY SEAT, INC.
/s/Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx BY:/s/Xxxxx Xxxxx
type or print name of witness
/s/Xxxx Xxx Xxxxxx its Chief Financial Officer
Xxxx Xxx Xxxxxx
type or print name of witness
ATTEST:
(CORPORATE SEAL)
BY:/s/Xxxxxxxx Xxxxx
Secretary
UNITED TESTING GROUP,
INC.
/s/Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx BY:/s/Xxxxx Xxxxx
type or print name of witness
/s/Xxxx Xxx Xxxxxx its Chief Financial Officer
Xxxx Xxx Xxxxxx
type or print name of witness
ATTEST:
(CORPORATE SEAL)
BY:/s/Xxxxxxxx Xxxxx
its Secretary
6
BANK:
FIRST UNION NATIONAL BANK
OF FLORIDA
/s/Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx BY:/s/Xxxx X. Xxxxxxx
type or print name of witness Xxxx X. Xxxxxxx
its Vice President
/s/Xxxx Xxx Xxxxxx
Xxxx Xxx Xxxxxx
type or print name of witness
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CONSOLIDATED
PROMISSORY NOTE AND SECURITY AGREEMENT
$1,500,000.00 October 12, 1995
(Date of Execution and Delivery)
LENDER: FIRST UNION NATIONAL BANK OF FLORIDA (hereinafter
termed "LENDER"), Commercial Banking-WPB, Florida
BORROWERS: TOP SOURCE TECHNOLOGIES, INC., 0000 X.X.X.
Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxx Xxxxxxx, Xxxxxxx
00000; and ON-SITE ANALYSIS, INC., 0000
Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000-0000.
BORROWERS REPRESENT HEREWITH THAT THE LOAN EVIDENCED HEREBY IS
BEING OBTAINED FOR THE PRIMARY PURPOSE OF BUSINESS.
RECITALS:
A. On November 22, 1994, Borrower executed a Promissory Note and
Security Agreement (Promissory Note #1) in favor of Bank in principal amount of
$500,000.00, the terms and conditions of which are more fully described in the
Promissory Note and Security Agreement in such principal amount executed by
Borrower in favor of Bank on November 22, 1994.
B. On April 13, 1995, Borrower executed a Promissory Note and Security
Agreement (Promissory Note #2) in favor of Bank in principal amount of
$250,000.00, the terms and conditions of which are more fully described in the
Promissory Note and Security Agreement in such principal amount executed by
Borrower in favor of Bank on April 13, 1995.
C. Bank has agreed to extend to Borrower an additional loan in
principal amount of $750,000.00 and to consolidate the loans evidenced by
Promissory Note #1 and Promissory Note #2 with the additional loan in amount of
$750,000.00 into a single loan in principal amount of $1,500,000.00 evidenced by
this single Consolidated Promissory Note and Security Agreement.
Therefore, the obligations of Borrower to Bank under the terms of
Promissory Note #1 and Promissory Note #2 and the obligations of Borrower to
Bank as to an additional loan to Borrower being made as of the execution of this
Consolidated Promissory Note and Security Agreement are hereby consolidated into
a single obligation in principal amount of $1,500,000.00 and this Consolidated
Promissory Note and Security Agreement is executed by Borrower to evidence the
total obligation being hereby consolidated.
FOR VALUE RECEIVED: To wit, money loaned the undersigned Borrowers (hereinafter
collectively termed "BORROWER"), jointly and severally (if more than one
borrower) promise to pay to the order of LENDER at its office in the above city,
or wherever else LENDER may
8
specify, the sum of ONE MILLION AND FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($1,500,000.00) with interest until paid, at the rate of LENDER'S PRIME RATE
plus eighty-five one-hundredths percent (.85%) as that rate may change from time
to time with changes to occur on the date the LENDER'S PRIME RATE changes;
payable in full on demand, with monthly payments of interest only on all
outstanding principal commencing November 12, 1995, and continuing on the same
day of each month thereafter until all outstanding sums of principal plus
accrued interest are paid in full. The foregoing principal sum may be advanced
to BORROWER in such installments as BORROWER may request, or as a lump sum, and
may be prepaid by BORROWER in whole or in part without penalty at any time.
Provided that BORROWER is not in default under any of the OBLIGATIONS (as
defined herein), BORROWER may from time to time and until maturity, draw
additional funds in accordance with the terms hereof notwithstanding prior
principal repayments; provided, however, that the total principal sum due from
BORROWER at any time shall not exceed the total principal sum of ONE MILLION AND
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00) or such lesser amount
as may be determined in accordance with the Loan Agreements dated November 22,
1994 and April 13, 1995, as modified by modification agreement of even d
hereof. Provided, further, that all obligation of LENDER to make any advance to
BORROWER under the terms of this agreement will terminate on January 31, 1996,
and will at all times be subject LENDER's determination, in its sole and
absolute discretion, that BORROWER's financial condition is satisfactory.
BORROWER agrees as follows:
1. The BORROWER agrees to pay a late charge equal to five percent (5%) of each
payment of principal and/or interest which is not paid within ten (10) days of
the date on which it is due. At LENDER'S option, the contract rate shall become
the highest rate allowed by the law of the state of LENDER'S office as set forth
herein, commencing with and continuing for so long as the loan or portion
thereof is in default (as hereinafter defined). Further, upon BORROWER'S default
and where LENDER deems it necessary or proper to employ an attorney to enforce
collection of any unpaid balance hereunder, then BORROWER agrees to pay LENDER'S
reasonable attorney's fees (including appellate costs, if any) and collection
costs. Liability for reasonable attorney's fees and costs shall exist whether or
not any suit or proceeding is commenced.
2. INTEREST is computed on the basis of a three hundred sixty (360) day year for
the actual number of days in the interest period (ACTUAL/360 COMPUTATION).
LENDER'S ACTUAL/360 or 365/360 COMPUTATION determines the annual effective
interest yield by taking the stated (nominal) interest rate for a year's period
and then dividing said rate by 360 to determine the daily periodic rate to be
applied for each day in the interest period. Application of such computation
produces an annualized effective interest rate exceeding that of the nominal
rate. If the interest provision contained herein refers to LENDER'S PRIME RATE,
then BORROWER
9
acknowledges that LENDER'S PRIME RATE is not represented or intended to be the
lowest or most favorable rate of interest offered by LENDER.
3. All payments received during normal banking hours after 2:00
p.m. shall be deemed received at the opening of the next banking
day. At LENDER'S option, any repayments of this Note, other than
by U.S. currency, will not be credited to the outstanding loan
balance until LENDER receives collected funds.
4. BORROWER'S payment will increase if the scheduled payment amount is
insufficient to pay accrued interest. If the scheduled payment amount is
insufficient to pay accrued interest, the scheduled payment amount shall be
immediately increased as is necessary to pay all accruals of interest for the
period and all accruals of unpaid interest from previous periods. Such
adjustments to the scheduled payment amount shall remain in effect for as long
as the interest accruals shall exceed the original scheduled payment amount and
shall be further adjusted upward or downward to reflect changes in the variable
interest rate. In no event shall the scheduled payment amount be reduced below
the original scheduled payment specified herein.
5. Each of the undersigned, whether BORROWER, sureties, or endorser, and all
others who may become liable for all or any part of the obligations evidenced
and secured hereby, do hereby, jointly and severally; waive presentment, demand,
protest, notice of protest and/or of dishonor, and also notice of acceleration
of maturity on default or otherwise. Further, they agree that LENDER may, from
time to time, extend, modify, amend or renew this Note and Security Agreement
for any period (whether or not longer than the original period of the Note) and
grant any releases, compromises or indulgences with respect to the Note or any
extensions, modifications, amendments or renewals thereof or any security
therefore, or to any party liable thereunder or hereunder, all without notice to
or consent of any of the undersigned and without affecting the liability of the
undersigned hereunder.
6. If more than one person has signed this instrument, such parties are jointly
and severally obligated hereunder. Further, use of the masculine pronoun herein
shall include the feminine and neuter and also the plural. If any provision of
this instrument shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remainder of such provision or the remaining provisions of this Note.
7. TIME IS OF THE ESSENCE HEREOF. Any notices to BORROWER shall
be sufficiently given, if mailed or delivered to the principal
place of business.
8. To secure payment of this Note, all obligations of the
undersigned BORROWER hereunder, and all other obligations of
10
BORROWER to LENDER, its successors and assigns, howsoever created, arising or
evidenced; whether direct or indirect, absolute or contingent, or now or
hereafter existing or due to become due (the loan and debt evidenced by this
Note and secured by the Security Agreement and all other present and future
obligations of BORROWER owed to LENDER are hereinafter collectively termed the
"OBLIGATIONS"); the undersigned BORROWER hereby mortgages, conveys and grants to
LENDER, as permitted by law, a security interest in, and herewith pledges and
deposits as collateral, the following described and identified intangible and/or
tangible personal and/or real property, and any and all additions, accessions,
and substitutions thereto or therefore, including all cash, stock, or other
dividends and all proceeds thereof, and all rights to subscribe for securities
incident thereto, ( hereinafter termed the "COLLATERAL"), and a security
interest in proceeds and product of the COLLATERAL is granted to LENDER:
(a) Each on-site analysis unit (OSA) purchased by BORROWER
with funds not borrowed from LENDER, and each OSA
purchased by BORROWER with funds advanced by LENDER in
accordance with this Promissory Note and Security
Agreement, which OSA's are purchased in accordance with
the terms and provisions of those certain existing
agreements by and between Borrower and Thermo Xxxxxxx Xxx
Corporation, a Massachusetts corporation, for the
purchase of OSA's, which agreements may (but for purposes
of this agreement are not required to) be superseded by
a master agreement expressing all of the agreements
between the parties as to the purchase and sale of OSA's
(all of the agreements existing and to be executed in the
future are collectively referred to herein as the
"Purchase Agreement").
(b) A first security interest in and a collateral assignment
of each lease and/or lease and license agreement of all
OSA's purchased by BORROWER with funds not borrowed from
LENDER, and each OSA purchased by BORROWER with funds
advanced by LENDER in accordance with a separate
Promissory Note and Security Agreement dated November 22,
1994 in principal amount of $4,500,000.00, which are
purchased under the terms of the Purchase Agreement,
wherein BORROWER leases an OSA(s) or enters into any
agreement for the use of an OSA(s) with any third party,
and the right to receive any and all rentals and revenues
payable thereunder.
(c) All presently owned or hereafter acquired other assets,
including, without limitations, accounts, inventory,
equipment, chattel paper, instruments, general
intangibles and documents, as those are defined by the
Uniform Commercial Code of the State of Florida, or, as
otherwise determined by LENDER, owned by BORROWER and
owned by BORROWER'S subsidiary corporation known as Top
Source Automotive, Inc., a Florida corporation.
11
(d) A first security interest in and assignment of the rights to
receive the security deposit in the amount of $650,000.00 paid
by BORROWER under the terms and provisions of the Purchase
Agreement consented to and acknowledged by Thermo Xxxxxxx Xxx
Corporation.
9. BORROWER HEREBY WARRANTS, COVENANTS, AND AGREES THAT:
(a) BORROWER'S principal place of business is that shown
above.
(b) That part of the COLLATERAL which is personal property is used
or is being purchased for business use and portions of the
COLLATERAL is being acquired with the proceeds of an advance
evidenced by this Agreement, which LENDER may disburse
directly to the seller of said personal property.
(c) The OSA's will be manufactured at the manufacturing
facilities of Thermo Xxxxxxx Xxx Corporation in Colorado
and will be shipped from the manufacturing facility to
the site designated by the person or entity leasing the
OSA from BORROWER. Except on termination of lease or in
connection with maintenance and repairs, the OSA will not
be removed or transported from the site designated by the
person or entity leasing the OSA from BORROWER without
the approval and consent of LENDER. Except for
transactions in the ordinary course of business, all
other portions of the COLLATERAL which is personal
property will be kept at the principal place of business
of BORROWER or Guarantors and will not be removed or
transferred from the principal place of business of
BORROWER or Guarantors without the written consent of
LENDER.
(d) BORROWER will provide LENDER with executed Uniform
Commercial Code Financing Statements for recordation in
the State of Florida, the State of Colorado (the state in
which the OSA's are manufactured), and the state in which
the OSA(s) will be located pursuant to any lease or other
agreement by and between BORROWER and the lessee of the
OSA(s). BORROWER will also provide executed Uniform
Commercial Code Financing Statements to be recorded in
any state in which any COLLATERAL is located.
(e) None of the COLLATERAL which is personal property, including
OSA's, will be affixed to real property and become a fixture
to real property.
(f) All COLLATERAL is free and clear of all liens, security
interests, claims, and/or encumbrances other than any to
LENDER.
12
(g) This Note is subject to the terms and conditions of all
Commitment Letters issued by Bank in connection with the
loans consolidated into the single loan evidenced by this
Note, Loan Agreements, as amended, executed in connection
with the loans so consolidated between BORROWER and
LENDER and Other Loan Documents executed in connection
with the loans so consolidated, which are incorporated
herein by reference.
10. WAIVER: BORROWER agrees that LENDER shall, after the occurrence of any event
of default, be entitled to immediate possession of the COLLATERAL subject to the
terms of any lease and the terms of the separate Assignment of Leases, Ren
and Fees of even date herewith from BORROWER to LENDER. BORROWER agrees that
LENDER'S interest in the COLLATERAL arose out of a commercial transaction.
11. BORROWER HEREBY FURTHER WARRANTS, COVENANTS AND AGREES AS
FOLLOWS:
(a) Anything contained herein to the contrary
notwithstanding, if for any reason, the
effective rate of interest on this Note should
exceed the maximum lawful rate, the effective
rate shall be deemed reduced to and shall be
such maximum lawful rate, and any sums of
interest which have been collected in excess
of such maximum lawful rate shall be applied
as a credit against the unpaid balance due
hereunder.
(b) No waivers, amendments, or modifications shall
be valid unless in writing. No waiver by
LENDER of any default(s) shall operate as a
waiver of any other default or the same
default on a future occasion. All rights of
LENDER hereunder shall enure to the benefit of
its successors and assigns, and all
obligations of BORROWER shall bind BORROWER'S
heirs, executors, administrators, successors
and/or assigns.
(c) In the case of conflict between the terms of
this Note and the Loan Agreement of even date
herewith and/or Commitment Letters issued in
connection herewith, the priority of
controlling terms shall be first the Loan
Agreement, then this Note, then the Security
Instrument, if any, then the Commitment
Letter, except as otherwise provided herein.
(d) In the event any provision(s) of this
instrument shall be left blank or incomplete,
BORROWER hereby authorizes and empowers LENDER
13
to supply and complete the necessary information as a
ministerial task consistent with the understanding between the
parties.
(e) BORROWER WILL IMMEDIATELY NOTIFY LENDER in writing of any (1)
change in BORROWER'S principal place of business and/or
residence; (2) change in BORROWER'S name or identity; (3)
change in BORROWER'S corporate structure other than as
permitted in the Loan Agreement.
(f) BORROWER warrants that BORROWER or any principal of BORROWER
does not have either a record or reputation for violating laws
of the United States or of any state relating to liquor(s) as
referred to in 18 USCA 3617, et seq., or narcotics and/or any
commercial crimes.
12. Upon the occurrence of any of the "EVENTS OF DEFAULT" as hereinafter
defined; LENDER is herewith expressly authorized to exercise its right of
SET-OFF or bank lien as to any monies deposited in demand, checking, time,
savings, or other accounts of any nature maintained in and with it by any of the
undersigned, without advance notice. Said right of SET-OFF shall also be
exercised and applicable where LENDER is indebted to any signer hereof by reason
of any certificate of deposit, note, or otherwise.
13. BORROWER shall promptly pay all documentary and/or intangible taxes on this
transaction, whether assessed at closing or arising from time to time.
14. WAIVER OF JURY TRIAL: BY THE EXECUTION HEREOF, BORROWER HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY AGREES THAT: (A) NEITHER THE BORROWER NOR ANY
ASSIGNEE, SUCCESSOR, HEIR OR LEGAL REPRESENTATIVE OF ANY OF THE SAME SHALL SEEK
A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEDURE ARISING FROM OR BASED UPON THIS PROMISSORY NOTE, ANY OTHER LOAN
AGREEMENT, OR ANY OTHER LOAN DOCUMENT EVIDENCING, SECURING, OR RELATING TO THE
OBLIGATIONS, OR TO THE DEALINGS OR RELATIONSHIP BETWEEN OR AMONG THE PARTIES
THERETO; (B) NEITHER THE BORROWER, NOR LENDER WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED; (C) THE PROVISIONS OF THIS
PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND THESE PROVISIONS
SHALL BE SUBJECT TO NO EXCEPTIONS; (D) NEITHER THE BORROWER, NOR LENDER HAS IN
ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF
THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES; AND (E) THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THIS TRANSACTION.
15. EVENTS OF DEFAULT: BORROWER shall be in default under this
Note, upon the happening of any of the following events,
circumstances, or conditions; namely:
14
(a) Default in the payment or performance of any of the
OBLIGATIONS provided hereunder or in that certain
Promissory Note and Security Agreements dated November
22, 1994 by and between LENDER and BORROWER in principal
amount of $4,500,000.00, or in connection herewith or
therewith, or any other OBLIGATIONS of BORROWER or any
affiliate as defined in 11 USC 101(2), (hereinafter
"AFFILIATE") of BORROWER or any endorser, guarantor, or
surety for BORROWER to LENDER or any AFFILIATE of
BORROWER, however created, primary or secondary, whether
direct or indirect, absolute or contingent, now or
hereafter existing, due or to become due, or of any other
covenant, warranty, or undertaking expressed herein,
therein, or in any other document establishing said
endorsement, guaranty, or surety; provided, however, that
in the case of nonpayment of principal or interest
payments due, such default shall continue uncured for a
period of thirty days, and in the case of any other
default, such default shall continue for a period of
thirty days from written notice from LENDER; or
(b) Any warranty, representation, or statement made or
furnished to LENDER by or on behalf of BORROWER, or any
guarantor, endorser or surety for BORROWER in connection
with this Note or to induce LENDER to make a loan to
BORROWER which was false in any material respect when
made or furnished or has become materially false, if such
warranty of BORROWER, or guarantor, endorser, or surety
for BORROWER was ongoing in nature and not cured within
thirty days from written notice from LENDER; or
(c) Any representation or warranty made in this Note or in
any Loan Document shall prove to be false or misleading
in any material respect; or
(d) Any report, certificate, financial statement or other document
furnished in connection with any Loan Document or the loans
made pursuant thereto, shall prove to be false or misleading
in any material respect; or
(e) BORROWER shall default on any other obligation of
BORROWER when due or in the performance of any obligation
incurred for money borrowed if, in the opinion of LENDER
such default in any way threatens the security or the
ability of BORROWER to meet its obligations hereunder or
under any loan document to LENDER and such default
continues for a period of 30 days after receipt by
BORROWER of notice from LENDER that such default exists;
or
(f) Should a custodian, as that term is defined in the
Bankruptcy Code, be appointed for or take possession of
any or all of the assets of the BORROWER or any GUARANTOR
15
(other than ARCS Safety Seat, Inc.) as a result of any
proceeding under the Bankruptcy Code, or should the BORROWER
or any GUARANTOR (other than ARCS Safety Seat, Inc.) either
voluntarily or involuntarily become subject to any insolvency
proceeding, proceeding to dissolve the BORROWER or any
GUARANTOR (other than ARCS Safety Seat, Inc.) which is not
discharged within thirty (30) days, or should BORROWER or any
GUARANTOR (other than ARCS Safety Seat, Inc.) be the subject
of a proceeding to have a receiver appointed of assets, or
should there be an attachment, execution, or other judicial
seizure of all or any portion of the BORROWER'S or GUARANTOR'S
assets (other than ARCS Safety Seat, Inc.), which, in the
opinion of the LENDER, jeopardize any security interest
granted LENDER or otherwise jeopardizes repayment of any
amounts owed to LENDER by BORROWER, and such receiver or
seizure is not discharged within thirty (30) days, or should
the BORROWER or GUARANTOR (other than ARCS Safety Seat, Inc.)
make an assignment for the benefit of creditors, or
(g) Breach of any covenant, condition, or agreement made by
BORROWER pursuant to this Note, and, except where the default
is failure to make any payment of any installment of principal
and/or interest due under the Note which is governed by
Section 14(a) hereof, such default continues for a period of
30 days after receipt by BORROWER of notice from LENDER that
such default exists; or
(h) Final judgment for the payment of money shall be rendered
against the BORROWER or any GUARANTOR in excess of $250,000.00
and shall remain undischarged for a period of thirty (30)
days, unless such judgment and execution thereon shall be
effectively stayed; or
(i) Dissolution or termination of the existence of a
corporate Borrower or Guarantor (other than ARCS Safety
Seat, Inc.) or their respective subsidiaries, if any; or
(j) If LENDER should otherwise deem itself or the debt created
hereunder unsafe or insecure; or should LENDER, in good faith,
believe that the prospect of payment or other performance is
impaired; or
(k) The BORROWER or any GUARANTOR (other than ARCS Safety
Seat, Inc.) shall be a debtor, either voluntarily or
involuntarily, under (as the term debtor is defined in)
the Bankruptcy Code; or
(l) The BORROWER shall be in default under the terms of the
Purchase Agreement (which continues after any applicable grace
period) and such default, under the terms of the Purchase
Agreement, could result in a loss of BORROWER'S material
rights thereunder.
16
(m) Except and to the extent permitted in the Loan Agreement,
Failure of said BORROWER, endorser, guarantors or sureties to
furnish financial statements or other financial information
and reports requested by LENDER or required by the Loan
Agreement or any other loan document; or
(n) Loss, theft, substantial damage, destruction, sale or
encumbrance to or of any COLLATERAL except when the
COLLATERAL is insured and the proceeds of such insurance
is paid to LENDER, or the assertion or making of any
levy, seizure, mechanic's or materialman's lien or
attachment thereof or thereon which is not discharged or
satisfied within thirty (30) days after written notice
from LENDER.
16. ADDITIONAL PROVISIONS FOR PERSONAL PROPERTY COLLATERAL:
BORROWER HEREBY FURTHER WARRANTS, COVENANTS AND AGREES AS FOLLOWS:
(a) THE COLLATERAL SHALL, AT ALL TIMES, BE AT
BORROWER'S RISK. The loss, injury to or
destruction of COLLATERAL shall not release
BORROWER from payment or other performance
hereof. BORROWER agrees to obtain and keep in
force physical damage and/or property damage
insurance and any other insurance required
LENDER. Such insurance is to be in form and
amount satisfactory to LENDER, with same
payable to LENDER.
(b) All such policies shall provide for ten (10)
days written minimum cancellation notice to
LENDER. BORROWER shall furnish to LENDER the
original policies or certificates or other
evidence satisfactory to LENDER of compliance
with the foregoing provisions. LENDER is
authorized, but not obligated, to purchase any
or all of said insurance, or "single interest
insurance," protecting only its security
interest, all at BORROWER'S expense. In such
event, BORROWER agrees to reimburse LENDER for
the cost of such insurance to the extent that
the same is not included in the principal
amount of this Note.
(c) BORROWER hereby assigns to LENDER the proceeds
of all such insurance to the extent of the
unpaid balance hereunder, and directs any
insurer to make payments directly to LENDER.
BORROWER further hereby grants to LENDER its
power of attorney exercisable only in the
event of default as declared by LENDER, which
shall be irrevocable for so long as any amount
17
is paid hereunder. Said power of attorney gives LENDER the
sole right to file proof of loss and/or any other forms
required to collect from any insurer any amount due from any
loss, damage or destruction of the COLLATERAL; to agree to and
bind BORROWER as to the amount of said recovery; to designate
payee(s) of such recovery; to grant releases to payor-insurers
for their liability; to grant subrogation rights to any such
payor- insurer; to endorse any settlement check or draft. In
the event of default, BORROWER further agrees not to exercise
any of the foregoing powers granted to LENDER without the
LENDER'S written consent. In the event of any default
hereunder, LENDER is authorized, in its sole discretion, to
cancel any insurance and to credit any premium refund against
the unpaid balance due on BORROWER'S OBLIGATIONS.
(d) If, with respect to any security pledged
hereunder, a stock dividend is declared or any
stock split-up made or right to subscribe is
issued, all the certificates for the shares
representing such stock dividend or stock
split-up or right to subscribe will be
immediately delivered, duly endorsed, to the
LENDER as additional COLLATERAL security.
(e) If, at any time, the COLLATERAL shall be
deemed unsatisfactory to and by LENDER, or in
the event LENDER shall otherwise deem itself,
its security interest, its COLLATERAL, or said
debt unsafe or insecure, then and on demand of
LENDER, BORROWER shall immediately furnish
such further COLLATERAL or make such payment
on said account as will be satisfactory to
LENDER to be held by said LENDER as if
originally pledged hereunder.
(f) At its option, LENDER may discharge taxes,
liens, security interests, or other
encumbrances at any time levied or placed on
said COLLATERAL, and may pay for insurance and
for the maintenance and preservation of same
if BORROWER fails to pay or discharge same
within 30 days after written notice from
LENDER that such payment must be made unless
LENDER determines that such payment must be
sooner made to protect any right or interest
of LENDER established by any Loan Document.
BORROWER agrees to reimburse LENDER, on
demand, for any such payment made, or any such
expense incurred by LENDER pursuant to the
18
foregoing authorization. Until default, as hereinafter
defined, BORROWER shall have the right to retain possession of
the COLLATERAL, unless otherwise agreed by the parties hereto,
and to use it in any lawful manner not inconsistent with this
Note and with any policy of insurance thereon.
(g) Upon occurrence of an event of default, LENDER
may, with or without notice, before or after
maturity of this Note, transfer or register in
the name of its nominee(s) all or any part of
the COLLATERAL and also exercise any or all
rights of collection, conversion, or exchange
and other similar rights, privileges and
options pertaining to the COLLATERAL; but
shall have no duty to exercise any such
rights, privileges or options, or to sell or
otherwise realize upon any of the COLLATERAL
as herein authorized or to preserve the same
and shall not be responsible for any failure
to do so or delay in so doing. As to any
COLLATERAL consisting of instruments or
chattel paper, it is agreed that LENDER shall
not be required to take any steps whatever to
preserve any rights against prior parties.
(h) LENDER shall have no custodial or ministerial
duties to perform with regard to COLLATERAL
pledged except for its safe keeping; and by
way of explanation and not by way of
limitation thereof, LENDER shall incur no
liability for any of the following except to
the extent caused by its gross negligence or
willful misconduct: Either loss or
depreciation of the COLLATERAL; or its failure
to present any paper for payment or protest or
to protest or give notice of non-payment or
any other notice with respect to any paper or
collateral; or its failure to present or
surrender for redemption, conversion or
exchange any bond, stock, paper, or other
security, whether in connection with any
merger, consolidation, recapitalization,
reorganization, or arising out of their
intendment or refunding of the original
security; or its failure to notify any party
hereto that the COLLATERAL should be so
presented or surrendered.
(i) Upon any transfer of this Note, the LENDER may deliver the
property held as security, or any part thereof, to the
transferee, as well as any subsequent holder hereof, who shall
19
thereupon become vested with all the powers and rights herein
given to the LENDER in respect to the property so transferred
and delivered; and the LENDER shall thereafter be forever
relieved and fully discharged from any liability or
responsibility thereafter with respect to such property so
transferred, but with respect to any property not so
transferred, the LENDER shall retain all rights and powers
hereby given.
(j) With prior written consent of LENDER, other COLLATERAL may be
substituted for the original COLLATERAL herein, in which event
all rights, duties, OBLIGATIONS, remedies and security
interests provided for, created or granted shall apply fully
to such substitute COLLATERAL.
(k) BORROWER will not use any COLLATERAL in any
jurisdiction other than a state in which
BORROWER shall have previously advised LENDER
such COLLATERAL will be used. If certificates
are issued or outstanding as to any of said
COLLATERAL, BORROWER will cause the security
interest of LENDER to be properly protected
and perfected. Absent advance written consent
of LENDER, the COLLATERAL therein described
will not be used outside the territorial
limits of the United States of America.
(l) BORROWER and GUARANTORS (or one or more of the
undersigned) has, or forthwith will acquire,
full title to COLLATERAL, and will at all
times, keep same free of all liens, security
interests, attachments and/or claims
whatsoever, other than the security interests
hereunder. BORROWER and Guarantors have good
indivisible marketable title to the COLLATERAL
and will warrant and defend same against all
claims. BORROWER and Guarantors are not and
will not attempt to transfer, sell, or
encumber the COLLATERAL or use it for hire or
in violation of any statute or ordinance
except as specifically approved by LENDER or
permitted in the Loan Agreement. BORROWER and
Guarantors further agree to pay promptly all
taxes and assessments upon the COLLATERAL
and/or for its use or operation, and/or on the
agreement to keep, use, and maintain said
COLLATERAL in a reasonably careful manner so
as not to unreasonably or unnecessarily expose
the same to waste, damage, wear or
depreciation, and to keep the same in good
20
order and repair. If permitted by any applicable lease, LENDER
may examine and inspect COLLATERAL or any part thereof,
wherever located at any reasonable time(s). All equipment,
accessories and parts shall become part of said COLLATERAL by
accession.
(m) BORROWER will, at all times, keep LENDER'S
security interest properly perfected and
hereby designates LENDER as its attorney-in-
fact to do any acts or deeds or execute such
documents reasonably appropriate to accomplish
said perfection. Said designation shall be
irrevocable as long as any OBLIGATION of
BORROWER is outstanding.
17. REMEDIES ON DEFAULT (INCLUDING POWERS OF SALE) FOR PERSONAL PROPERTY
COLLATERAL: Upon the occurrence of any of the foregoing events, circumstances or
conditions of default, all of the OBLIGATIONS evidenced herein and secured
hereby shall, at the option of the LENDER, immediately be due and payable
without notice. Further, LENDER shall then have all rights and remedies of a
SECURED PARTY under the Uniform Commercial Code as adopted by the state of
LENDER'S office as set forth herein. Without limitation thereto, LENDER shall
have the following specific rights and remedies:
(a) Subject to the right of any lessee of an OSA to continue
possession and quiet enjoyment of the OSA while not in
default of its lease, to take immediate possession of the
COLLATERAL without notice or resort to legal process; and
for such purpose, to enter upon any premises on which the
COLLATERAL or any part thereof may be situated and remove
the same therefrom; or, at its option, to render the
COLLATERAL unusable. Further, also at its option, to
dispose of said COLLATERAL on BORROWER'S premises.
(b) To require BORROWER to assemble the COLLATERAL and make it
available to LENDER at a place to then be designated by
LENDER, which is reasonably convenient to both parties.
(c) To exercise its rights of SET-OFF by applying any monies
of BORROWER and/or a GUARANTOR on deposit with LENDER
toward payment of the OBLIGATIONS evidenced or referred
to herein or secured hereby, without notice. If any
process is issued or ordered to be served on LENDER
seeking to seize BORROWER'S and/or a GUARANTOR'S rights
and/or interest in any bank account maintained with
LENDER, the balance in any said account shall immediately
be deemed to have been and shall be SET-OFF against any
and all OBLIGATIONS of BORROWER to LENDER, as of the time
of issuance of any such writ or process, whether or not
BORROWER and/or LENDER shall have been served therewith.
21
(d) To dispose of COLLATERAL as allowed by the Uniform Commercial
Code as adopted by the state of LENDER'S office as set forth
herein, in any county or place selected by LENDER, at either
private or public sale (at which public sale LENDER may be the
purchaser), with or without having the COLLATERAL physically
present at said sale.
(e) To make or have made any repairs deemed necessary or desirable
at time of repossession, possession, or sale, the cost of
which is to be charged against BORROWER.
(f) To receive all rents and fees payable to BORROWER under the
terms of all leases of OSA(s) by BORROWER to any third party.
(g) To apply the proceeds realized from disposition of the
COLLATERAL to satisfy the following items, in order here
listed:
(aa) The cost of reimbursing any person whose interest in
the premises is physically damaged by the entry and
removal of the COLLATERAL, upon BORROWER'S failure to
do so; next, to
(bb) The expenses of taking, removing, holding for sale,
repairing or otherwise preparing for sale and selling
of said COLLATERAL, specifically including the
LENDER'S reasonable attorney's fees (including
appellate costs, if any), and both legal and
collection expenses; next, to
(cc) The expense of liquidating any liens, security
interests, attachments or encumbrances superior to
the security interests herein created; and, finally
(dd) The unpaid principal and all accumulated interest
hereunder, and to any other debts owed to LENDER by
any signer hereof.
Any surplus, after the satisfaction of the foregoing items (aa) through (dd)
shall be paid to BORROWER or to any other party lawfully entitled thereto and
known to the LENDER. Further, if proceeds realized from disposition of the
COLLATERAL shall fail to satisfy any of the foregoing items (a) through (d),
BORROWER shall forthwith pay the deficiency balance to LENDER.
17. No waivers, amendments or modifications shall be valid unless in writing.
Further, this Note shall be governed by and construed under the laws of the
state of the LENDER'S office as set forth herein. All terms and expressions
contained herein which are defined in Articles 1, 3, or 9 of the Uniform
Commercial Code of the state of LENDER'S office set forth herein shall have the
same meaning herein as in said Articles of said Code.
22
IN WITNESS WHEREOF, the BORROWER, on the day and year first written above, has
caused this Security Agreement to be executed under seal by its duly authorized
officers by hereunto setting their hands and seals.
"BORROWER"
TOP SOURCE TECHNOLOGIES, INC.
BY: /s/Xxxxx Xxxxx
(CORPORATE SEAL)
TAXPAYER IDENTIFICATION NO.:
00-0000000
ON-SITE ANALYSIS, INC.
BY: /s/Xxxxx Xxxxx
(CORPORATE SEAL)
TAXPAYER IDENTIFICATION NO.:
00-0000000
23
BORROWER'S REPRESENTATIONS, WARRANTIES
AND AFFIDAVIT
STATE OF GEORGIA
COUNTY OF XXXXXX
WHEREAS, FIRST UNION NATIONAL BANK OF FLORIDA, a national banking
association ("BANK") has agreed to extend a loan to TOP SOURCE TECHNOLOGIES,
INC., of 0000 XXX Xxxxxxxxx, Xxxxx 0000, Xxxx Xxxxx Xxxxxxx, Xxxxxxx 00000; and
ON-SITE ANALYSIS, INC., of 0000 Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000-0000 (collectively referred to herein as the "BORROWERS") in the
total principal amount of SEVEN HUNDRED AND FIFTY THOUSAND AND NO/100 DOLLARS
($750,000.00); and
WHEREAS, as a material condition to said loan, the BANK has required
the BORROWERS and Top Source Automotive, Inc., a subsidiary of Top Source
Technologies, Inc., to grant a security interest in and to certain personal
property owned by BORROWERS and Top Source Automotive, Inc., or to be acquired
by BORROWERS with the proceeds of the loan; and
WHEREAS, as a further condition to granting of said loan, the BANK has
required the GUARANTORS listed herein to ratify and confirm existing Guaranty
Agreements guarantying the obligations of BORROWERS to BANK in form acceptable
to BANK; and
WHEREAS, as a further condition to the granting of said loan, the BANK
has required the BORROWERS to make certain representations and warranties to
BANK, its successors and assigns.
NOW, THEREFORE, in consideration of the BANK'S agreement to extend the
loan ("Loan") to the BORROWERS, the BORROWERS, through the undersigned officer
of each of the BORROWERS, hereby jointly and severally make the following
representations and warranties to BANK, its successors and assigns:
1. Xxxxx Xxxxx is the Chief Financial Officer of TOP SOURCE
TECHNOLOGIES, INC., a Delaware corporation authorized to do business in the
State of Florida, and is the Chief Financial Officer of ON-SITE ANALYSIS, INC.,
a Georgia corporation, and, therefore, has personal knowledge of the matters set
forth herein and has the ability and authority to bind each of said corporations
to the covenants and warranties set forth herein.
2. ON-SITE ANALYSIS, INC., a Georgia corporation, is a wholly owned
subsidiary of TOP SOURCE TECHNOLOGIES, INC., a Delaware corporation, authorized
to do business in the State of Florida. In addition, the following corporations
("GUARANTORS") which are confirming their existing guarantees of the obligations
24
of BORROWERS, are wholly owned subsidiary corporations of TOP
SOURCE TECHNOLOGIES, INC.:
A. ARCS SAFETY SEAT, INC., a Florida corporation;
B. TOP SOURCE AUTOMOTIVE, INC., a Florida corporation;
and
C. UNITED TESTING GROUP, INC., a Georgia corporation.
3. Personal properties of BORROWERS and Top source Automotive, Inc.,
being pledged as security for the loan are owned by BORROWERS and/or Top Source
Automotive, Inc., free and clear from any pledge, hypothecation, assignment, or
other security interest other than the security interest being granted to BANK.
4. There are no parties other than BORROWERS, Guarantors, and lessees
in possession of or claiming possession to any of the property in which a
security interest is given to BANK by BORROWERS as security for the loan.
5. Except as described in Exhibit "A" attached hereto and made a part
hereof, there are no actions, suits or proceedings pending or to the knowledge
of the undersigned, threatened against or affecting any of the BORROWERS or
GUARANTORS before any court or any governmental department or agency which may
result in any material adverse change in any of the BORROWERS' or GUARANTORS'
financial conditions. Except as previuosly described in representations given to
BANK as supplimented by Exhibit "A" attached hereto and made a part hereof,
there are no claims involving the BORROWERS or GUARANTORS.
6. None of the BORROWERS or GUARANTORS is a party to any contract or
agreement which materially and/or adversely affects their properties, or any
part thereof, or which results in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon their properties, or any part
thereof, superior to the liens given by BORROWERS to BANK to secure the loan.
Neither the execution nor delivery of any security interest on the properties of
BORROWERS, the execution and delivery of a Amendment to Loan Agreement and other
Loan Documents of even date, the execution and delivery of a Promissory Note and
Security Agreement evidencing the loan, the execution and delivery of any
Unconditional Guaranty Agreement by a GUARANTOR, and/or the execution and
delivery of any other loan document will conflict or result in a breach of the
terms, conditions, or provisions of, or constitute a default under any agreement
or other instrument to which any BORROWER or GUARANTOR is a party or by which
any BORROWER or GUARANTOR is bound.
7. Except as expressly permitted in the Loan Agreement as
amended between BORROWERS and BANK, the BORROWERS or any GUARANTOR
will not execute any instrument or do any act whatsoever which
25
would or might in any way affect the title to any property in which a security
interest is granted to the BANK.
8. BORROWERS and GUARANTORS are each duly incorporated and in good
standing in their state of incorporation and each is authorized to do business
in each state where business is transacted by such corporation to the extent
failure to be so authorized would have a material adverse affect on such
corporation or the interests and rights of the Bank under any Loan Document, and
each has the requisite power and authority to execute the loan documents
executed by each, including the Promissory Note and Security Agreement,
Amendment to Loan Agreement and other Loan Documents, and Guaranty, and all such
action has been duly approved by the Board of Directors of each and otherwise
approved and authorized as required by the Articles of Incorporation, Charter,
and By-Laws of each.
9. If any of the representations and warranties contained herein are
not true and correct in any respect that materially adversely affects the
interests and rights of the Bank under any Loan Document at any time during the
term of the loan, the same shall be deemed a material default under all loan
documents to the extent required in the Loan Agreement as amended. In addition
to all other rights of the BANK, the BANK shall be relieved of its obligation to
disburse any of the loan proceeds until such representations and warranties are
cured and corrected.
10. If a representation or warranty is ongoing in nature and
subsequently becomes materially false, BORROWERS and GUARANTORS shall have the
right to cure same within 30 days from written notice from BANK before same
shall constitute a default or event of default. The BORROWERS acknowledge that
this Affidavit is given as a material inducement to BANK to make the loan. In
addition, the BORROWERS declare that this Affidavit is true, correct and
complete in all respects that materially adversely affect the interests and
rights of the Bank under any Loan Document, and that there is no matter which
constitutes any excuse for the performance under the terms and provisions of the
loan documents. The BORROWERS agree to indemnify and hold BANK, its directors,
officers, employees, affiliates, successors and assignees harmless if any of the
foregoing provisions of this Affidavit are not true. The foregoing
indemnification and hold harmless shall survive the closing of the loan, and
shall include all costs and expenses incurred by the BANK, including, without
limitation, attorney's fees and paralegal fees, through all trial and appellate
levels and post judgment proceedings to the extent that BANK is the prevailing
party.
11. This instrument may be executed in counterparts by each of the
parties hereto and each counterpart will be considered as the agreement and as
the representation of the party or parties executing the counterpart.
26
IN WITNESS WHEREOF, the BORROWERS have caused this Affidavit,
Representations and Warranties, to be executed this 12th day of October, 1995.
TOP SOURCE TECHNOLOGIES, INC.,
a Delaware corporation
authorized to do business in
the State of Florida
BY:/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
its Chief Financial Officer
ON-SITE ANALYSIS, INC., a
Georgia corporation
BY:/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
its Chief Financial Officer
STATE OF Georgia
COUNTY OF Xxxxxx
Sworn to (or affirmed) and subscribed before me this 12th day of
October, 1995, Xxxxx Xxxxx, as Chief Financial Officer of TOP SOURCE
TECHNOLOGIES, INC., a Delaware corporation authorized to do business in the
State of Florida, on behalf of the corporation.
NOTARY PUBLIC
/s/ Xxxx Xxx Xxxxxx
(SEAL)
Xxxx Xxx Xxxxxx
(Print Name)
My commission expires:09/14/98
Commission No.
Personally Known X OR Produced Identification .
Type of identification Produced .
STATE OF Georgia
COUNTY OF Xxxxxx
Sworn to (or affirmed) and subscribed before me this 12th day of
October, 1995, Xxxxx Xxxxx, as Chief Financial Officer of ON- SITE ANALYSIS,
INC., a Georgia corporation, on behalf of the corporation.
27
NOTARY PUBLIC
/s/ Xxxx Xxx Xxxxxx
(SEAL)
Xxxx Xxx Xxxxxx
(Print Name)
My commission expires:09/14/98
Commission No.
Personally Known X OR Produced Identification .
Type of identification Produced .
TOP SOURCE AUTOMOTIVE, INC., a
Florida corporation
BY:/s/ Xxxxx Xxxxx
its Chief Financial Officer
STATE OF Georgia
COUNTY OF Xxxxxx
Sworn to (or affirmed) and subscribed before me this 12th day of
October, 1995, Xxxxx Xxxxx, as Chief Financial Officer of TOP SOURCE AUTOMOTIVE,
INC., a Florida corporation, on behalf of the corporation.
NOTARY PUBLIC
/s/ Xxxx Xxx Xxxxxx
(SEAL)
Xxxx Xxx Xxxxxx
(Print Name)
My commission expires:09/14/98
Commission No.
Personally Known X OR Produced Identification .
Type of identification Produced .
28
ARCS SAFETY SEAT INC., a
Florida corporation
BY:/s/ Xxxxx Xxxxx
its Chief Financial Officer
STATE OF Georgia
COUNTY OF Xxxxxx
Sworn to (or affirmed) and subscribed before me this 12th day of
October, 1995, Xxxxx Xxxxx, as Chief Financial Officer of ARCS SAFETY SEAT,
INC., a Florida corporation, on behalf of the corporation.
NOTARY PUBLIC
/s/ Xxxx Xxx Xxxxxx
(SEAL)
Xxxx Xxx Xxxxxx
(Print Name)
My commission expires:09/14/98
Commission No.
Personally Known X OR Produced Identification .
Type of identification Produced .
UNITED TESTING GROUP, INC., a
Georgia corporation
BY:/s/ Xxxxx Xxxxx
its Chief Financial Officer
STATE OF Georgia
COUNTY OF Xxxxxx
Sworn to (or affirmed) and subscribed before me this 12th day of
October, 1995, Xxxxx Xxxxx, as Chief Financial Officer of UNITED TESTING GROUP,
INC., a Georgia corporation, on behalf of the corporation.
29
NOTARY PUBLIC
/s/ Xxxx Xxx Xxxxxx
(SEAL)
Xxxx Xxx Xxxxxx
(Print Name)
My commission expires:09/14/98
Commission No.
Personally Known X OR Produced Identification .
Type of identification Produced .
First Union National Bank
of Florida
000 Xxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
October 12, 1995
Xxxxx Xxxxx, Vice President and Chief Financial Officer
Top Source Technologies, Inc.
On-Site Analysis, Inc.
0000 X.X.X. Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxx Xxxxxxx, XX 00000
Re: Loan Commitment and Agreement
Dear Xx. Xxxxx:
We are pleased to advise you that First Union National Bank of Florida ("First
Union") has increased the Line of Credit for Top Source Technologies, Inc. and
On-Site Analysis, Inc. (collectively "Borrower") by $750,000.00 to a total
amount of $1,500,000.00. First Union's obligation to advance under this Line of
Credit will expire on January 31, 1996. All terms and conditions of the Line of
Credit as per the Loan Agreements dated November 24, 1994 and April 13, 1995
will remain in full force and effect, with the exception of the following:
1. The covenant pertaining to the Debt Service Coverage Ratio (and any
default relating thereto) as defined in Section g. under Financial
Statements, Reports, and Financial Covenants, has hereby been waived
through the expiration date of the Line of Credit or January 31, 1996.
This waiver only applies to the Line of Credit and, hence, not to the
$4,500,000.00 Revolver Loan.
30
2. The Borrower shall at all times maintain a minimum consolidated
tangible net worth of $3,000,000.00. Consolidated tangible net worth
shall mean the consolidated net worth of the Borrower and its
subsidiaries, after subtracting therefrom the aggregate amount of (I)
deferred income tax assets, and (ii) any intangible assets of the
Borrower and its subsidiaries, including, and without limitation,
goodwill, franchises, licenses, patents, trademarks, trade names,
copyrights, service marks, and capitalized database.
The Line of Credit shall be subject to a borrowing base formula defined as
follows:
Borrowing Formula: The maximum amount of the Line
shall be the lesser of a) 75% of eligible Accounts
Receivable or b) $1,500,000.00. Eligible Accounts
Receivable shall be defined as Accounts Receivable
of Top Source Automotive, Inc. aged 60 days or
less; Accounts Receivable of On-Site Analysis, Inc.
aged 60 days or less. Accounts Receivable will be
evidenced by a monthly Accounts
Top Source Technologies, Inc. and
On-Site Analysis, Inc.
Loan Commitment and Agreement
October 10, 1995
Page 2
Receivable aging submitted by the Borrower. No portion of an account
shall be defined as eligible if fifty percent (50%) of the account is
aged 90 days or more, as evidenced by the monthly Accounts Receivable
aging. The Borrower shall furnish said aging to the Bank on a monthly
basis with a compliance certificate as per the attached Exhibit 1.
Please indicate your acceptance of this commitment by executing your acceptance
immediately below and returning one executed copy of the Commitment Letter and
Agreement to the Bank. This Loan and Commitment Agreement letter supersedes and
replaces that certain Loan and Commitment Agreement Letter dated August 3, 1995.
Upon receipt, First Union shall refer the closing of this transaction to legal
counsel who shall prepare all necessary documents, including a consolidated Loan
Agreement which will detail the terms and conditions of this transaction.
31
Thank you for allowing First Union to be of service. Please do not hesitate to
give me a call if you have additional questions about the Line of Credit.
Sincerely,
FIRST UNION NATIONAL BANK OF FLORIDA
By: /s/ Xxxx X. Xxxxxxx
Vice President
The above Loan Commitment and Agreement is hereby accepted on the terms and
conditions outlined therein.
BORROWERS
TOP SOURCE TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxx
Xxxxx Xxxxx, Vice President, Chief
Financial Officer
Date: 10/12/95
ON-SITE ANALYSIS, INC.
By: /s/ Xxxxx Xxxxx
Xxxxx Xxxxx, Vice President, Chief
Financial Officer
Date: 10/12/95
