Exhibit 10.22
REVOLVING LOAN AND SECURITY AGREEMENT
This Revolving Loan and Security Agreement ("Agreement") among
COMMERCE BANK, N.A., having offices at 000 Xxxxx 00 Xxxx, Xxxxxx Xxxx XX
00000 ("Lender"); INTEGRATED BIOPHARMA, INC., a Delaware Corporation,
MANHATTAN DRUG COMPANY, INC., a New York Corporation, IHT HEALTH PRODUCTS,
INC., a Delaware Corporation, INTEGRATED HEALTH IDEAS, INC., a New Jersey
Corporation (f/k/a Manhattan International, Inc., a New Jersey corporation),
IHT PROPERTIES CORP., a Delaware corporation, NUCYCLE THERAPY, INC., a New
Jersey corporation, VITAMIN FACTORY, INC., a Delaware Corporation (jointly
and severally "Borrower") all having an address at 000 XX Xxxxxxx 00, Xxxxxxxx,
Xxx Xxxxxx, 00000; and E. XXXXXX XXX, residing at 0 Xxxxxxxx Xxxxx, Xxxx Xxxx,
Xxx Xxxxxx, 00000 ("Guarantor") is effective on June 11, 2003.
STATEMENTS
A. The Borrower has requested financial accommodation(s) from Lender.
B. Lender is willing to render the requested financial accommodation(s)
to the Borrower in connection with the Borrower's business and on certain terms
and conditions.
C. To secure the financial accommodation(s), the Borrower is willing,
among other things, to grant a first priority security interest to Lender in
certain assets of the Borrower.
NOW, THEREFORE, in consideration of the promises, covenants and
understandings set forth in this Agreement and the benefits to be received from
the performance of such promises, covenants and understandings, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
DEFINITIONS
"Accounts" - as defined in Exhibit A
"Advance Limit" - as defined in Section 1.1(b)
"Affiliate" - as defined in Section 7.12
"Chattel Paper" - as defined in Exhibit A
"Collateral" - as defined in Article 4
"Commercial Tort Claims" - as defined in Exhibit A
"Debt" - as defined in Article 3
"Debt Service Coverage Ratio" - as defined in Section 7.16
"Default" - as defined in Section 9.1
"Delivered Financials" - as defined in Section 5.4(a)
"Deposit Accounts" - as defined in Exhibit A
"Environmental Laws" - as defined in Section 5.15(c)
"Equipment" - as defined in Exhibit A
"ERISA" - as defined in Section 5.10
"GAAP" - as defined in Section 5.4(a)
"General Intangibles" - as defined in Exhibit A
"Goods" - as defined in Exhibit A
"Instruments" - as defined in Exhibit A
"Inventory" - as defined in Exhibit A
"Investment Property" - as defined in Exhibit A
"Letter of Credit Rights" - as defined in Exhibit A
"Operating Documents" - as defined in Section 5.1(c)
"OSHA" - as defined in Section 5.11
"Participant" - as defined in Section 2.4(b)
"Plan" - as defined in Section 5.10
"Prime Rate" - as defined in Section 1.2(e)
"Revolving Loan" - as defined in Section 1.1(a)
"Tangible Net Worth" - as defined in Section 7.15
AGREEMENTS
ARTICLE 1. THE REVOLVING LOAN
Section 1.1 The Revolving Loan
1.1(a) Lender agrees to provide, pursuant to the terms of this
Agreement and in the absence of an event of Default, at one time or from time to
time, at the request of the Borrower, loans to the Borrower in an aggregate
amount up to but not in excess of the Borrower's Advance Limit on a revolving
loan basis (the "Revolving Loan") during the term of this Agreement. The
Revolving Loan is to be payable in full on the earlier of (i) June 10, 2005, as
provided in this Agreement, or (ii) upon a Default as provided in this
Agreement. The Borrower has the right to prepay such Revolving Loan without
penalty.
1.1(b) The term "Advance Limit" means the loans or advances
which Lender may make to the Borrower pursuant to this Agreement which are not
in the aggregate at any time outstanding to exceed One Million Dollars
($1,000,000.00).
1.1(c) Without limiting any other rights, terms, conditions or
remedies of Lender, all loans, advances or financial accommodations made or
otherwise available to Borrower is subject to Lender's continuing right, in its
sole and absolute discretion, to withhold from Borrower a reserve, and to
increase and decrease such reserve from time to time, if and to the extent that,
in Lender's sole judgment, such reserve is necessary to protect the interests of
Lender against possible non-payment of Accounts, for any reason, by account
debtors, possible non-payment by Borrower of any indebtedness owed to, or liens
held by, third parties, or to protect the interests of Lender against the
possible adverse effect of any state of facts which does or would, with or
without notice or passage of time, or both, constitute a Default hereunder.
Section 1.2 Interest Rate and Other Provisions Relating to The Revolving Loan
1.2(a) Interest accrues on the Revolving Loan at Lender's
floating Prime Rate (as that term is defined in this Agreement).
1.2(b) Each change in the floating interest rate is to take
effect simultaneously with a corresponding change in the Prime Rate without
notice to Borrower. Interest is to be calculated on a daily basis with each day
representing 1/360th of a year.
1.2 (c) The Revolving Loan is to be evidenced by promissory
note(s) (the "Note") in the form required by Lender.
1.2(d) In the event of Default (as defined in this Agreement),
interest accrues on the Revolving Loan and the Debt (as defined in this
Agreement) at a rate equal to five (5%) percent above the interest rate
otherwise payable hereunder. Borrower acknowledges that: (i) such additional
rate is a material inducement to Lender to make the Revolving Loan; (ii) Lender
would not have made the Revolving Loan in the absence of the agreement of the
Borrower to pay such default rate; (iii) such additional rate represents
compensation for increased risk to Lender that the Revolving Loan will not be
repaid; and (iv) such rate is not a penalty and represents a reasonable estimate
of (a) the cost to Lender in allocating its resources (both personnel and
financial) to the ongoing review, monitoring, administration and collection of
the Revolving Loan and (b) compensation to Lender for losses that are difficult
to ascertain.
1.2(e) The Prime Rate means the fluctuating Prime Rate of
interest published in the Wall Street Journal (or its successors and assigns)
from time to time. The Prime Rate is established for the convenience of Lender.
It is not necessarily Lender's lowest rate. In the event that there should be a
change in the Prime Rate, such change shall be effective on the date of such
change without notice to Borrower or any Guarantor, endorser or surety. Any such
change will not effect or alter any other term or conditions of any promissory
note or this Agreement.
1.2(f) Interest on the Revolving Loan is payable by the
Borrower each month beginning on the first banking day of Lender in the month
following the effective date of this Agreement, unless otherwise provided herein
or in the Note. Lender may, at its sole and absolute discretion, charge unpaid
interest or principal to any checking or other account of the Borrower or
Guarantor, deduct unpaid interest or principal from any future advance to the
Borrower, or apply any proceeds received by Lender to the payment of unpaid
interest or principal. Any failure or delay by Lender in submitting an
invoice(s) for interest payments does not discharge or relieve the Borrower of
the obligation to render timely payments. Borrower is to maintain its main
operating accounts with Lender and is to maintain sufficient balances therein at
all times to enable Lender to directly charge all sums due to Lender.
1.2(g) In no event is the interest rate or other charges of
this Agreement to exceed the highest rate permissible under law. If any
provision of this Agreement or any other instrument executed in connection
thereto be construed or held to permit the collection of or to require the
payment of any amount of interest in excess of that permitted by applicable law,
the provisions of this paragraph control and override any contrary or
inconsistent provision of this Agreement or instrument. The intention of the
parties is to conform strictly to the applicable laws relating to maximum rates
of interest. This Agreement and each other instrument evidencing or relating to
the Debt are to be held subject to reduction or rebate as to any amount paid by
or on behalf of the Borrower in violation of any such law.
1.2(h) The Borrower is to, during each twelve (12) month
period of time following the date of this Agreement, pay to Lender the full
unpaid principal balance of the Revolving Loan and refrain from requesting
Advances on account of the Revolving Loan for a period of at least thirty (30)
consecutive days.
Section 1.3 Monthly Statement
Once each month Lender may render a statement of account to
the Borrower reflecting the current status of the Revolving Loan. Such statement
is to be deemed an accounting and an authenticated record within the meaning of
the Uniform Commercial Code. If any statement indicates that the outstanding
balance of the Revolving Loan exceeds the Advance Limit, the Borrower must
immediately pay the excess balance to Lender. Such excess is not to be construed
as a commitment or obligation of Lender to make advances in excess of the
Advance Limit. Each statement of account is to be considered correct, accepted
by the Borrower and conclusively binding upon the Borrower, unless the Borrower
gives notice to Lender to the contrary in writing within ten (10) banking days
after the sending of the statement by Lender. If the Borrower disputes the
accuracy of Lender's statement, the Borrower's notice is to specify in detail
the basis of the dispute. If the Borrower requests an accounting more frequently
than once per six (6) month period, Lender may charge the Borrower for the cost
of each additional accounting.
Section 1.4 Method of Advances
Advances under the Revolving Loan may be made through
telephone requests from the Borrower from an individual purporting to be an
authorized representative of the Borrower or other written notification means
acceptable to Lender, by deposit of the amount requested pursuant to this
Agreement in such controlled account(s) which the Borrower is to maintain at
designated branches of Lender or as may be indicated in writing by the Borrower
with the written consent of Lender. All such telephone requests, means of
notification and writings are to be deemed conclusively binding upon the
Borrower. In the event Lender honors a check of the Borrower resulting in the
Borrower's checking account being deemed overdrawn, Lender is to be deemed to
have made an advance to the Borrower in the amount overdrawn on the Lender's
banking day immediately preceding the day on which the Borrower's check is
tendered to Lender for collection (even if that amount is in excess of the
Advance Limit). Notwithstanding, Lender has no obligation to honor any overdraft
of the Borrower.
Section 1.5 Reimbursement of Increased Cost to Lender
If any law, regulation or guideline, or change in any law,
regulation or guideline or in the interpretation thereof, or any order or ruling
by any regulatory body, court or other governmental authority, or compliance by
the Lender with any request or directive (whether or not having the force of
law) of any such regulatory body, court or authority, imposes, modifies, or
deems applicable to Lender any reserve, capital, special deposit or other
requirement or condition in respect of the Debt, which results in an increased
cost or reduced benefit to Lender (as determined by reasonable allocation of the
aggregate of such increased costs or reduced benefits to Lender resulting from
such event), then Borrower is to pay to Lender from time to time upon demand
additional amounts sufficient to compensate Lender for such increased costs or
reduced benefits, together with interest on each such amount from a date ten
(10) days after the date of such demand until payment in full thereof at the
highest interest rate then applicable to any of the Debt. A certificate setting
forth in reasonable detail such increased cost incurred or reduced benefit
realized by Lender as a result of any such event is to be conclusive as to the
amount thereof, absent manifest error.
Section 1.6 Conditions Precedent to the Revolving Loan
The obligation of Lender to make the Revolving Loan and the
discretion by Lender to make any advances pursuant to this Agreement is further
subject to the following conditions:
1.6(a) Such assurances (including certificates from
representatives of the Borrower or Guarantor) that Lender requires that the
representations and warranties of the Borrower and Guarantor set forth in this
Agreement or relating to this Agreement are true, accurate and complete;
1.6(b) Such assurances (including certificates from
representatives of the Borrower or Guarantor) that Lender requires that the
proceeds of the Revolving Loan are to be utilized by the Borrower for the
purposes set forth in this Agreement;
1.6(c) Such assurances (including certificates from
representatives of the Borrower or Guarantor) that Lender requires that no event
of Default defined in this Agreement or other documents relating to this
Agreement exists, continues to exist, or would exist but for the lapse of time
or notice; and
1.6(d) Such other terms and conditions, delivery of documents,
guarantees, searches, origination fee, opinions of counsel or other matters that
Lender may require, including those set forth in any conditional commitment made
to the Borrower by Lender relating to the Revolving Loan, all in form and
substance satisfactory to Lender.
ARTICLE 2. ADDITIONAL OBLIGATIONS OF THE BORROWER AND GUARANTOR
Section 2.1 Existing Obligations
The Borrower and Guarantor agree to pay and perform, when due,
all other debts, liabilities and duties of every kind and character now existing
to Lender regardless of whether such debts, liabilities and duties may be
direct, indirect, or the result of any derivative transaction, primary or
secondary, joint or several, fixed or contingent (regardless of form, existence
of collateral therefor, whether guaranteed, or subject to a participation
agreement).
Section 2.2 Future Advances
The Borrower and Guarantor agree to pay and perform, when due,
future advances, loans, debts, liabilities and duties to Lender whether direct
or indirect, primary or secondary, joint or several, fixed or contingent whether
or not relating to this Agreement or the Revolving Loan (regardless of form,
existence of collateral therefor, whether guaranteed, or subject to a
participation agreement).
Section 2.3 Expenses in Preserving Interests of Lender
The Borrower and Guarantor agree to pay on demand, such
advances made by Lender to or for the account of the Borrower or Guarantor,
including advances for insurance, repairs to any Collateral, taxes, and such
costs incurred by Lender (in its discretion and regardless as to whether any
such advance increases the unpaid balance of the Revolving Loan or the Debt) in
the discharge of any lien, security interest, encumbrance, lease, pledge or
assignment.
Section 2.4 Obligations to Lender Affiliates or Participants
2.4(a) The Borrower and Guarantor agree to pay and perform,
when due, all other debts, liabilities and duties of every kind and character to
any Affiliate or participants of Lender, whether such debts, liabilities and
duties exist now or may exist in the future, and regardless of whether such
debts, liabilities and duties may be direct or indirect, primary or secondary,
joint or several, fixed or contingent (regardless of form, existence of
collateral therefor, whether guaranteed, or subject to a participation
agreement).
2.4(b) The Borrower and Guarantor acknowledge that in the
regular course of commercial banking business Lender may at any time and from
time to time transfer or sell participating interest(s) in the Revolving Loan to
other financial institutions (each such transferee or purchaser of a
participating interest, a "Participant"). Each Participant may exercise all
rights to payment (including without limitation rights of set-off) with respect
to the interests held by it as determined by Lender provided that Borrower is
not required to pay more than the amount which it would have been required to
pay to Lender had Lender retained such interest. Borrower hereby grants to any
Participant a continuing security interest in any deposits, moneys or other
property actually or constructively held by such Participant as security for the
Participant's interest in the Revolving Loan.
Section 2.5 Expenses in Realizing Upon Security Interest
The Borrower and Guarantor agree to pay, on demand, all costs
and expenses, including reasonable attorneys fees of both outside and in-house
counsel, incurred by Lender to preserve, collect, protect, foreclose, sell, or
otherwise realize upon its security interest in the Collateral identified in
this Agreement or in any other security agreement executed by the Borrower or
Guarantor of the Revolving Loan or other obligation of the Borrower or Guarantor
to Lender.
Section 2.6 Expenses in Enforcing and Defending Rights
The Borrower and Guarantor agree to pay, on demand, all costs
and expenses, including reasonable attorneys fees of both outside and in-house
counsel, incurred by Lender in the prosecution or defense of any action or
proceeding relating to the subject matter of this Agreement or other agreement
or instrument executed by the Borrower or Guarantor.
Section 2.7 Costs of Lender
The Borrower and Guarantor agree to pay, on demand, to Lender
all costs and expenses incurred by Lender in the preparation, execution and
administration of this Agreement or other agreements including, but not limited
to, reasonable attorneys fees, consultant and other professional fees, search
fees and other out-of-pocket expenses.
ARTICLE 3. THE DEBT
For purposes of this Agreement, the term "Debt" is defined as the Revolving Loan
and those additional obligations of the Borrower and Guarantor defined in
Article 1 and Article 2 of this Agreement.
ARTICLE 4. SECURITY INTEREST
To secure the payment and performance by the Borrower and
Guarantor of the Debt to Lender, the Borrower hereby pledges, sets over,
assigns, delivers and grants a first priority security interest to Lender in all
Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Equipment,
General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter
of Credit Rights and all other Collateral more particularly described in Exhibit
A annexed hereto and incorporated herein, in the guaranty of the Guarantor and
in the insurance for the benefit of Lender described in Section 6.13 of this
Agreement and in the Mortgage between Lender and IHT PROPERTIES CORP. of even
date herewith as to real property located at 000 XX Xxxxxxx 00, Xxxxxxxx (Block
1108, Lot 47), Union County, New Jersey ("Mortgage"). The Borrower and Guarantor
hereby pledge, set over, assign, deliver and grant such additional security
interests set forth in such other security agreements and control agreements
delivered in connection with this Agreement. The security interest pledged, set
over, assigned and granted by the Borrower and Guarantor to Lender is to be a
first and only priority security interest pursuant to applicable law (unless
otherwise provided on Schedule 1 annexed hereto or in the other security or
control agreements delivered) and the Borrower and Guarantor are to take all
such action to create and perfect such security interest as Lender may require.
The foregoing is, collectively, the "Collateral."
ARTICLE 5. REPRESENTATIONS AND WARRANTIES TO LENDER
In order to induce Lender to execute this Agreement, the
Borrower, for itself, its subsidiaries (if any) and the Guarantor (collectively,
"they", "them" or "their") make the following representations and warranties:
Section 5.1 Organization and Standing
5.1(a) The Borrower consists of duly organized, validly
existing registered organizations organized in good standing under the laws of
the state of their incorporation. The spelling and identification of the
Borrower in this Agreement is accurate in all respects and consistent with the
Borrower's registration. They are duly licensed or qualified to do business in
each jurisdiction in which qualification is required by law, and they are in
good standing in all such jurisdictions. They have full power and authority to
own their properties and to carry on business in all jurisdictions where they
are doing business. All leases relating to the use by them of properties or
assets are in full force and effect.
5.1(b) They possess all licenses, permits, franchises,
patents, copyrights, trademarks, and trade names, or rights thereto, to conduct
their respective business substantially as now conducted and as presently
proposed to be conducted, and are not in violation of rights of others with
respect to any of the foregoing.
5.1(c) Lender has been provided with true copies of the filed
Certificates of Incorporation, shareholder agreements (if any), resolutions,
with respect to the Debt, bylaws and any amendments thereto (collectively and
where applicable "Operating Documents") as the same are still in full force and
effect. Lender may rely on the accuracy and integrity of the Operating
Documents. Borrower has the authority to execute this Agreement and perform the
undertakings set forth herein.
5.1(d) There has been no Certificate of Cancellation or
Certificate of Dissolution filed on behalf of the Borrower nor has the Borrower
been de facto dissolved by any event such as the death, retirement, resignation,
expulsion, bankruptcy or dissolution of any shareholder or any other event which
would cause the dissolution of Borrower pursuant to applicable law.
5.1(e) The individual(s) executing this Agreement on behalf of
the Borrower are authorized as officers to do so and to bind and obligate the
Borrower pursuant to the terms hereof.
5.1(f) To the extent that the provisions of this Agreement are
inconsistent with the provisions of the Operating Documents, the provisions of
this Agreement will control.
Section 5.2 Power
5.2(a) They have the power to execute, deliver and carry out
this Agreement, and such other related documents and instruments executed by
them. Borrower's governing boards have duly authorized and approved the terms of
this Agreement and all related actions. No other action, whether by resolution,
governmental entity, or otherwise, is necessary for the consummation of the
transactions contemplated by this Agreement. Their performance hereunder does
not and will not constitute a breach or default of any agreement or law to which
they are subject.
5.2(b) This Agreement and the documents relating thereto, upon
execution and delivery, will constitute their legal, valid and binding
agreements enforceable in accordance with their terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or similar laws relating to or affecting the
rights of creditors generally and general principles of equity.
Section 5.3 Litigation
There are no judgments, lawsuits, judicial proceedings,
investigations or complaints pending or threatened against them relating to any
aspect of their business or properties, including but not limited to
environmental protection. They are not in default with respect to any judgment,
order, injunction or assessment issued by any court or any governmental agency
relating to any aspect of their business or properties or relating to their
ability to consummate the transactions contemplated by this Agreement.
Section 5.4 Financial Statements and Solvency
5.4(a) Prior to the execution of this Agreement, the Borrower
has delivered to Lender its financial statements (the "Delivered Financials")
requested by Lender. The Delivered Financials are accurate and complete, have
been prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP"), and fairly and accurately present the assets,
liabilities, results of operations and capital as at the dates thereof. The
Delivered Financials reflect or provide for all fixed and contingent claims
against debts and liabilities as of the dates thereof. There has not been any
material change of financial condition between the date of the most recent of
the Delivered Financials and the date of this Agreement. No fact or condition
exists, is contemplated or threatened which may cause any such change at any
time in the future.
5.4(b) Except as shown on the Delivered Financials, the
Borrower has no other liabilities as of the date hereof which would materially
or adversely affect its financial condition.
5.4(c) All books and records of account are accurate, complete
and properly reflect all transactions purported to be documented thereby.
5.4(d) Borrower's assets, at a fair valuation, exceed
Borrower's liabilities (including, without limitation, contingent liabilities).
Borrower is paying its debts as they become due, and Borrower has capital and
assets sufficient to carry on its business.
Section 5.5 Compliance with Law
5.5 (a) They are in compliance in all material respects with
all laws, governmental rules and regulations applicable to their business and
properties, including those relating to environmental protection.
5.5(b) They are in compliance with all requirements of the
Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., including, but
not limited to, those regulations promulgated by the Architectural and
Transportation Barrier Compliance Board at 36 CFR 1191 et seq., and by the
Department of Justice at 28 CFR 36 et seq.
Section 5.6 No Adverse Restrictions
They are not subject to any provision in their Operating
Documents, any contract, mortgage, lease, judgment, court order, rule or
regulation, which would materially and adversely affect their business and
properties, the results of their operations or their ability to fulfill any
obligations in this Agreement or in any document relating thereto. No contract,
instrument, understanding, judgment, statute, court order, rule or regulation to
which they are a party or by which they are bound has been or will be violated
or breached by the execution and performance of this Agreement.
Section 5.7 Taxes and Tax Returns
5.7(a) They have filed all tax returns which were required
to be filed as of the date of this Agreement.
5.7(b) The provisions for taxes shown in the Delivered
Financials are sufficient to satisfy all taxes due and all assessments received
for all periods ended on or prior to the dates thereof, without consideration as
to whether Borrower is a Subchapter S corporation for Federal income tax
purposes.
5.7(c) As of the date of this Agreement, no taxes are due from
Borrower and no tax liabilities have been assessed or proposed against Borrower
which either remain unpaid or are not otherwise provided for in the Delivered
Financials.
5.7(d) They are not aware of any basis upon which any
assessment for a material amount of additional taxes can be made against them.
5.7(e) They have not signed any extension agreement with the
Internal Revenue Service or any governmental authority or given any waiver of a
statute of limitations with respect to the payment of taxes.
5.7(f) The results of any governmental examination or audit of
tax returns are properly reflected in the Delivered Financials.
5.7(g) All taxes which they are required by law to withhold or
collect (the "Withholding Taxes") have been duly withheld and collected. To the
extent required, they have paid over the Withholding Taxes to the proper
governmental authorities on a timely basis or have reflected them as a liability
in the Delivered Financials.
Section 5.8 Title to Collateral
The Borrower has good and marketable title to all of its
tangible and intangible assets subject only to those liens, encumbrances,
security interests, assignments, pledges, mortgages or leases set forth on the
Delivered Financials. The Borrower has good and marketable title and rights to
the Collateral except for the security interest granted to Lender by the
Borrower, or except as provided on Schedule 1 or in the other security and
control agreements delivered in connection with this Agreement. The Borrower has
the right and power to grant the security interests in and to the Collateral
provided by or referred to in this Agreement. Except as herein provided, none of
the Collateral is or is about to become subject to any other assignment,
mortgage, pledge, lien, security interest, lease or encumbrance by virtue of the
execution or performance of this Agreement.
Section 5.9 Use of Proceeds of the Revolving Loan
5.9(a) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System. The proceeds of the Revolving Loan are not intended by the Borrower to
be used to purchase or carry any margin stock or to reduce or retire any
indebtedness incurred for such purpose. If requested by Lender, the Borrower has
furnished to Lender statements in conformity with the requirements of Federal
Reserve Form U-1 referred to in Regulation U to the foregoing effect.
5.9(b) The Borrower is a "United States person(s)" and does
not intend to apply the proceeds of the Revolving Loan directly or indirectly to
the "acquisition" of "stock" of a "foreign issuer" or "debt obligation" of a
"foreign obligor", as such terms are defined in the United States Interest
Equalization Tax Act, or to take or permit any other action which would subject
Lender to the tax imposed by said Act.
5.9(c) The Borrower is not an "investment company", or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940. The application of the proceeds and repayment thereof of the Revolving
Loan by the Borrower and the performance of the transactions contemplated by
this Agreement will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.
5.9(d) The Revolving Loan has been requested by Borrower for
working capital purposes.
Section 5.10 ERISA.
Borrower is in compliance in all material respects with the
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the related provisions of the Internal Revenue Code, and with all
regulations and published interpretations issued thereunder by the United States
Treasury Department, the United States Department of Labor and the Pension
Benefit Guaranty Corporation ("PBGC").Neither a reportable event as defined in
Section 4043 of ERISA, nor a prohibited transaction as defined in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code, has occurred and is
continuing with respect to any employee benefit plan subject to ERISA
established or maintained, or to which contributions have been or may be made,
by Borrower or by any trade or business (whether or not incorporated) which
together with Borrower would be treated as a single employer under Section 4001
of ERISA (any such trade or business being referred to as an "ERISA Affiliate,"
and any such employee benefit plan being referred to as a "Plan"). No notice of
intention to terminate a Plan has been filed nor has any Plan been terminated;
the PBGC has not instituted proceedings to terminate, or to appoint a trustee to
administer, any Plan, nor do circumstances exist that constitute grounds for any
such proceedings; and neither Borrower nor any ERISA Affiliate has completely or
partially withdrawn from any multiemployer Plan described in Section 4001(a) (3)
of ERISA. Borrower and each ERISA Affiliate has met the minimum funding
standards under ERISA with respect to each of its Plans; no Plan of Borrower or
of any ERISA Affiliate has an accumulated funding deficiency or waived funding
deficiency within the meaning of ERISA; and no material liability to the PBGC
under ERISA has been incurred by Borrower or any ERISA Affiliate.
Section 5.11. OSHA
Borrower has duly complied with, and its facilities, business,
leaseholds, equipment and other property are in compliance in all material
respects with, the provisions of the federal Occupational Safety and Health Act
("OSHA") and all rules and regulations thereunder and all similar state and
local laws, rules and regulations; and there are no outstanding citations,
notices or orders of non-compliance issued to Borrower or relating to its
facilities, business, leaseholds, equipment or other property under any such
law, rule or regulation.
Section 5.12 Inventory
The Inventory of the Borrower consists of items of a quality
and quantity usable or saleable in the ordinary course of its business and is in
compliance with the Fair Labor Standards Act. The value of obsolete items, items
below standard quality and items in the process of repair have been written down
to realizable market value, or adequate reserves have been provided. The value
of Inventory reflected on the Delivered Financials is set at the lower of cost
or market in accordance with GAAP.
Section 5.13 Accounts
The most recent list of Accounts of the Borrower delivered to
Lender is complete, and contains an accurate aging. All of the Accounts are
collectible, are subject to no counterclaims or setoffs of any nature
whatsoever, and require no further action to constitute such accounts as due and
owing by the account debtors. None of the Accounts includes any conditional
sales, consignments or sales on any basis other than that of an absolute sale in
the ordinary and usual course of business, except as otherwise noted. No
agreement has been made under which any deductions or discounts may be claimed
except regular discounts in the usual course of business.
Section 5.14 No Consents or Approvals Needed
Under the state of the applicable law at the time of the
signing of this Agreement, no approval, consent, authorization, or notice by or
to any party, including a governmental entity, is required in connection with
this Agreement and the consummation of the transactions and matters covered by
this Agreement.
Section 5.15 Environmental Compliance
5.15(a) None of the Collateral or real or personal property
owned or occupied by them in the State of New Jersey has ever been used by
previous owners or operators to refine, produce, store, handle, transfer,
process or transport hazardous substances, hazardous wastes, pollutants or other
related substances as those terms are defined by New Jersey or federal law. They
have not nor do they intend to use any of their Collateral or real or personal
property owned or occupied by them in the State of New Jersey for the purpose of
refining, producing, storing, handling, transferring, processing or transporting
such hazardous substances, hazardous wastes, pollutants or other related
substances.
5.l5(b) No friable asbestos or any substance containing
asbestos deemed hazardous by federal or state regulations has been installed in
the Collateral.
5.15(c) Neither they nor the Collateral or real or personal
property owned or occupied by them in the State of New Jersey are in violation
of or subject to any existing, pending, or, to their best knowledge, threatened
investigation or inquiry or to any remedial obligations under any federal or
state laws pertaining to health or the environment, including, but not limited
to the Industrial Site Recovery Act f/k/a the Environmental Cleanup
Responsibility Act ("ISRA") (N.J.S.A.13:1K-6 et seq., as amended), the Spill
Compensation and Control Act (N.J.S.A.58:10 23.11 as amended), the Hazardous and
Solid Waste Amendments of 1984 Pub. L98-616 (42 U.S.C. 699 et. seq., as
amended); a certain statute adopted by New Jersey for registration of
underground storage tanks (N.J.S.A.58:10-21 et seq.,), the Resource Conservation
and Recovery Act (42 U.S.C. 6901 et. seq., as amended) and the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. 9601 et seq.,
as amended); (all such federal, state, county, municipal or other laws,
ordinances or regulations are hereinafter collectively referred to as the
"Environmental Laws").
5.15(d) They have not obtained and are not required to obtain
any permits, licenses or similar authorizations to construct, occupy, operate or
use any buildings, improvements, fixtures and equipment by reason of any
Environmental Laws.
5.15(e) None of the Collateral or real or personal property
owned or occupied by them in the State of New Jersey has, is now or is intended
to be used as a major storage facility or for the operation of a hazardous
substance or waste disposal facility as those terms are defined by any
Environmental Laws.
5.15(f) No lien or claim has been attached to or made against
them, any revenues, the Collateral or any real or personal property owned or
occupied by them in the State of New Jersey by the State of New Jersey or the
federal government for damages or cleanup and removal costs, as those terms are
defined by any Environmental Laws arising from an intentional or unintentional
act or omission of them or any previous owner or operator of their real or
personal property resulting in the releasing, spilling, pumping, pouring,
emitting, emptying, discharging or dumping of hazardous substances, hazardous
wastes, pollutants or other related substances as those terms are defined by any
Environmental Laws.
5.15(g) Neither they nor any occupant has taken any
intentional or unintentional act or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging or dumping
of hazardous substances, hazardous wastes, pollutants or related substances as
those terms are defined by any Environmental Laws.
5.15(h) They have conducted (and will, upon reasonable request
by Lender, conduct) a complete and thorough on site inspection of all real
property owned or occupied by them, including, but not limited to a
geohydrological survey of soil and sub-surface conditions to determine the
presence of hazardous substances, hazardous wastes, pollutants or related
substances as those terms are defined by any Environmental Laws and have found
no evidence of such presence.
5.15(i) They have required that the seller of any real
property acquired (either directly or indirectly, by such means as a stock
transaction, for example) by them on or after January l, 1984 and all occupants
of all real property owned by them since January 1, 1984 comply with the
provisions of ISRA and have provided evidence of such compliance to Lender. They
have otherwise complied with ISRA, will not take or fail to take such action
which would render its representations or covenants made in this section to be
untrue or incapable of performance, and have and will provide evidence of such
compliance to Lender.
Section 5.16 Identification of the Borrower
5.16(a) Schedule 2 annexed hereto sets forth a complete and
accurate list of all names by which the Borrower is known or under which the
Borrower is conducting business, including, without limitation, its fictitious
names, alternate names and trade names. Schedule 2 sets forth all of the federal
tax identification numbers of the Borrower and its organizational numbers (if
any) assigned by the states of incorporation.
5.16(b) Schedule 2 annexed hereto sets forth a complete and
accurate list of all offices and locations at which the Borrower conducts any of
its business or operations, the locations of all Collateral and records relating
to Collateral and the Borrower's chief executive office, if any.
5.16(c) The Borrower has not, within the six (6) year period
immediately preceding the effective date of this Agreement, changed its name,
been the survivor of a merger or consolidation, or acquired all or substantially
all of the assets of any person or entity except as otherwise set forth in
Schedule 2.
5.16(d) All of the issued and outstanding capital stock or
other ownership interests of the Borrower is owned and registered as otherwise
disclosed in writing by or on behalf of the Borrower.
5.16(e) Schedule 2 annexed hereto sets forth the Standard
Industrial Classification Codes applicable to the properties and operations of
Borrower.
Section 5.17 Duration and Effect of Representations and Warranties
5.17(a) The representations and warranties made to Lender in
this Article 5 are to be true, accurate and complete for the duration of the
term of this Agreement.
5.17(b) None of the representations, warranties or statements
made to Lender in this Agreement or in connection with this Agreement contain
any untrue statement of a material fact, or omit to state a material fact
necessary in order to make the statements made not misleading.
ARTICLE 6. COVENANTS TO LENDER
In order to induce Lender to execute this Agreement, the
Borrower, for itself, its subsidiaries (if any) and the Guarantor (collectively,
"they", "them", or "their") make the following affirmative covenants:
Section 6.1 Payment of Debt
They are to pay all of their obligations, including the Debt
to Lender, when due in accordance with such documents evidencing or documenting
such obligations including but not limited to, this Agreement.
Section 6.2 Change of Financial Conditions
Any and all future substantial and material adverse changes in
their financial condition are to be immediately brought to the attention of
Lender.
Section 6.3 Litigation
They are to immediately notify Lender if any judgments,
lawsuits, losses, claims, judicial proceedings, investigations, complaints,
notices, or citations including but not limited to, those relating to
occupational health, safety, or environmental protection, are pending or
threatened against the Borrower in an amount claimed of $100,000 or more,
individually or in the aggregate.
Section 6.4 Organization and Standing
Borrower is to continue to be duly licensed or qualified to do
business in each jurisdiction in which qualification is required by law, and to
continue to be in good standing and to preserve legal existence.
Section 6.5 Compliance with Law
They are to comply in all material respects with all laws,
governmental rules and regulations applicable to their business and properties,
including, but not limited to, ERISA, OSHA and Environmental Laws.
Section 6.6 Taxes
They are to make due and timely payment of all Federal, State
and local taxes and assessments required by law and to execute and deliver to
Lender, on demand, appropriate certificates attesting to the payment or deposit
of any such taxes or assessments.
Section 6.7 Reports
They are to provide to Lender, (for Lender, Participant, or
governmental authority having jurisdiction) in form and substance satisfactory
to Lender:
6.7(a) As soon as available, but in no event later than one
hundred twenty (120) days after the end of each fiscal year of each Borrower, a
consolidated and consolidating balance sheet as of the end of such year and
statements of income, cash flows and changes in equity for such year (all in
reasonable detail and with all notes and supporting schedules), prepared on an
audited basis by an independent certified public accountant satisfactory to
Lender, and attested to by the President of each Borrower, as presenting fairly
Borrower's financial condition as of the dates and for the periods indicated and
as having been prepared in accordance with GAAP, except as may be otherwise
disclosed in such financial statements or the notes thereto, together with
certified copies of current state and federal income tax returns of the Borrower
(and any other entity in which Borrower has an ownership interest), and
accompanied by an accountant's reliance letter acknowledging Lender's reliance
upon such balance sheet and financial information and Borrower's current 10K
filings with the Securities & Exchange Commission.
6.7(b) As soon as available, but in no event later than
forty-five (45) days after the end of the first, second and third quarterly
fiscal periods of Borrower, a consolidated and consolidating balance sheet as of
the end of such period and statements of income, cash flows and changes in
equity for such period commencing at the end of the previous fiscal year and
ending with the end of such period (all in reasonable detail and with all notes
and supporting schedules), prepared by the Borrower, and attested to by the
President of each Borrower, as presenting fairly Borrower's financial condition
as of the dates and for the periods indicated and as having been prepared in
accordance with GAAP, except as may be otherwise disclosed in such financial
statements or the notes thereto, together with Borrower's current 10Q filings
with the Securities & Exchange Commission.
.
6.7(c) On or before the tenth (10th) day of each quarter, a
detailed aging report setting forth the amount due and owing on Accounts on the
Borrower's books as of the close of the preceding quarter, together with a
reconciliation report satisfactory to Lender showing all sales, collections,
payments and adjustments to Accounts, together with a current list of names and
addresses of all account debtors on the Borrower's books as of the close of the
preceding quarter.
6.7(d) As soon as available, but in no event later than
forty-five (45) days after the end of each quarterly fiscal period of Borrower,
a detailed aging report setting forth the amount due and owing on the Borrower's
accounts payable on the Borrower's books as of the close of the preceding
quarter, together with a reconciliation report satisfactory to Lender showing
all purchases, payments and adjustments to accounts payable on the Borrower's
books as of the close of the preceding quarter.
6.7(e) Immediately, notice, in such form acceptable to Lender,
stating such information and attaching such pertinent documentation as to any
and all claims, citations, demands, notices or events, the occurrence of which
would make any representation, warranty or covenant of them to be untrue or
incapable of performance.
6.7(f)Upon demand:
(A) Certificates of insurance and loss payable endorsements
for all policies of insurance to be maintained pursuant to
this Agreement;
(B) An estoppel certificate executed by an authorized
representative of them indicating that there then exists no
event of default and no event which, with the giving of notice
or lapse of time, or both, would constitute an event of
default under any material agreement to which they are a
party;
(C) All original and other documents evidencing right to
payment or evidencing Accounts, including but not limited to
invoices, original orders, shipping and delivery receipts; and
(D) All information received by the Borrower affecting the
financial status or condition of any account debtor.
6.7(g) From time to time and at the time of each advance, such
information as Lender may reasonably request, including
financial projections, cash flow analysis and information
otherwise to be submitted in accordance with this Section.
6.7(h) Promptly after preparation or receipt:
(A) Copies of all reports, including annual reports, and
notices which the Borrower and its subsidiaries file with or
receive under ERISA, OSHA or any occupational safety, pension
or retirement, or Environmental Laws;
(B) Copies of any statement or report furnished to any other
party pursuant to the terms of any indenture, loan, or credit
or similar agreement and not otherwise required to be
furnished to Lender pursuant to this Agreement; and
(C) Copies of all proxy statements, financial statements, and
reports which the Borrower and its subsidiaries send to
stockholders or owners, and copies of all regular, periodic,
and special reports, and all registration statements which
they file or receive with any national securities exchange or
regulatory agency.
6.7(i) Guarantor is to provide to Lender financial statements,
in such form required by Lender, on an annual basis, within 90
days of calendar year end, together with certified copies of
Guarantor's current federal income tax returns when filed.
Section 6.8 Access to Records and Property
At any time and from time to time, upon reasonable written
request by Lender, delivered at least five (5) business days in advance (which
request is not required following a Default), they are to give any
representatives of Lender or independent contractor selected by Lender access
during normal business hours (and after Default at any time) to examine, audit,
copy or make extracts from, any and all books, records and documents in their
possession relating to their affairs and the Collateral, and to inspect any of
their properties wherever located. In the event that during the term of this
Agreement or any extension thereof, Lender deems it necessary to obtain a
current appraisal of any Collateral, Lender may engage the services of an
appraiser in providing the current appraisal which expense is to be paid by
Borrower upon demand by Lender.
Section 6.9 Additional Collateral
The Borrower is to extend the security interest granted to
Lender by this Agreement to such additional collateral as Lender may demand, or
pay such amount to Lender as Lender may reasonably request, in the event of any
loss, destruction or material diminution in the value of the Collateral. The
additional collateral is to become part of the Collateral and subject to the
terms and conditions of this Agreement.
Section 6.10 Preservation of Title to Collateral
They are to immediately notify Lender of any material loss or
damage to, or any occurrence which would adversely affect the security interest
of Lender in and to the Collateral. The Collateral is to be free and clear of
all assignments, mortgages, pledges, liens, security interests, leases, or
encumbrances, except as provided on Schedule 1. The Borrower is to continue to
maintain good and marketable title to the Collateral, as the case may be, except
as provided in this Agreement, at the sole expense of the Borrower.
Section 6.11 Financial Records and Location of Collateral
They are to maintain true, accurate and complete books,
records, and accounts of their business affairs in accordance with GAAP. The
Borrower is to keep accurate records of the Collateral, which records are at all
times to be physically located at the address of the Borrower set forth on
Schedule 2. All tangible Collateral is to be physically located at the address
of the Borrower set forth on Schedule 2, unless otherwise agreed by Lender and
documented to the satisfaction of Lender.
Section 6.12 Condition of Buildings and Collateral
All Collateral is to be used solely by the Borrower in
connection with its business. The Borrower is to maintain the Collateral and
they are to maintain their buildings, plants, improvements and structures in
good condition, repair and in compliance with all zoning laws, ordinances, and
regulations of governmental authorities having jurisdiction.
Section 6.13 Insurance
6.13(a) The Borrower (and its subsidiaries, if any) is to
maintain in full force and effect on the Collateral (and on
all of its other assets, if requested by Lender), the
following insurance:
(i) Comprehensive general public liability insurance in an
amount not less than $3,000,000.00 in the aggregate and
$1,000,000.00 per occurrence.
(ii) "All-Risk" coverage policy of fire, pilferage, theft,
burglary, loss in transit, title and extended coverage hazard
insurance (together with vandalism and malicious mischief
endorsements) in an aggregate amount not less than 100% of the
agreed upon full insurable replacement value of the
Collateral;
(iii) If the Collateral is required to be insured pursuant to
the Flood Disaster Protection Act of 1973 or the National
Flood Insurance Act of 1968, and the regulations promulgated
thereunder, flood insurance in an amount not less than the
outstanding principal balance of the Revolving Loan or the
maximum limit of coverage available, whichever amount is less;
(iv) Business interruption and/or loss of rental insurance
sufficient to pay, during the period of interruption or loss,
normal operating expenses in connection with the Collateral;
(v) Boiler and machinery insurance covering vessels, air
tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment in such amounts as Lender
requires from time to time, provided that such equipment is
part of the Collateral; and
(vi) Title insurance coverage in the form of a standard ALTA
Mortgage title insurance policy insuring the Mortgage as a
first lien, in the principal amount of the Advance Limit.
(b) Each insurance policy required under this Section 6.13 is
to be written by insurance companies authorized or licensed to
do business in New Jersey having an Xxxxxx X. Best Company,
Inc. rating of A+ or higher and a financial size category of
not less than VII, and is to be on such forms and written by
such companies as reasonably approved by Lender.
(c) Each insurance policy required under this Section 6.13
providing insurance against loss or damage to property is to
be written or endorsed so as to (i) contain a New Jersey
standard mortgagee, secured party, or loss payee endorsement,
as the case may be, or its equivalent, and (ii) make all
losses payable directly to the Lender, without contribution.
(d) Each insurance policy required under this Section 6.13
providing public liability coverage is to be written and
endorsed so as to name the Lender as an additional insured, as
its interest may appear.
(e) Each insurance policy required under this Section 6.13 is
to contain a provision to the effect that such policy is not
to be canceled, altered or in any way limited in coverage or
reduced in amount unless the Lender is notified in writing at
least thirty (30) days prior to such change. At least thirty
(30) days prior to the expiration of any such policy, the
Borrower is to furnish evidence satisfactory to the Lender
that such policy has been renewed or replaced or is no longer
required by this Section.
(f) Each insurance policy required under this Section 6.13
(except flood insurance written under the federal flood
insurance program) is to contain an endorsement by the insurer
that any loss is to be payable to Lender, as its interest may
appear, in accordance with the terms of such policy
notwithstanding any act or negligence or breach of any
warranty of or by the Borrower which might otherwise result in
forfeiture of said insurance and the further agreement of the
insurer waiving all rights of setoff, counterclaim, deduction
or subrogation against the Borrower (so as not to interfere
with Lender's rights).
(g) In the event of loss or damage to the Collateral, the
proceeds of any insurance provided hereunder is to be applied
as set forth in Section 6.13(k); except that if there is a
public liability claim, the proceeds of any insurance provided
hereunder is to be applied toward extinguishing or satisfying
the liability and expense incurred in connection therewith.
(h) The Borrower is not to take out any separate or additional
insurance with respect to the Collateral which is contributing
in the event of loss unless it is properly compatible with all
of the requirements of this Section.
(i) Borrower is to pay the premiums on the policies therefor
as they become payable, and is to deliver to Lender such
policies, with standard clauses in favor of Lender attached.
(j) Each insurance policy required under this Section 6.13 is
to be written and endorsed to provide that the intentional
actions of Borrower are not to affect the insurable interest
of Lender or prevent payment of the proceeds of the policy to
Lender.
(k) Lender is entitled to receive all insurance proceeds, and,
at its option, to apply the same on account of the Debt and/or
to reimburse Borrower for the cost of the replacement or
repair of the Collateral.
(l) In no event is Lender required either to (i) ascertain
the existence of or examine any insurance policy, or (ii) advise Borrower in the
event such insurance coverage does not comply with the requirements of this
Agreement.
Section 6.14 Payment of Proceeds
Upon receipt of any or all proceeds of the Collateral, the
Borrower is to pay such proceeds directly to Lender upon demand.
Section 6.15 Further Assurances
They are to execute and/or hereby consent to the execution and
filing by Lender of such further instruments and documents, including Uniform
Commercial Code financing statements, as may be required by Lender in order to
render effective the terms and conditions of this Agreement. Any such Uniform
Commercial Code financing statements are to be filed in such locations as Lender
may require, at Borrower's sole expense. If requested, the Borrower is to
provide Lender with satisfactory evidence of such filing(s) prior to any advance
under the Revolving Loan. The Borrower is to provide Lender with satisfactory
evidence that any common law or statutory liens affecting any of the Collateral,
including, but not limited to landlords lien or materialman's lien, have been
subordinated in favor of Lender's security interest or adequate reserves
established in the discretion of Lender prior to any advance under the Revolving
Loan. The Borrower is to provide Lender with true copies of all documents
(negotiable or non-negotiable) which evidence bailments together with evidence
that all bailees have acknowledged that they hold Collateral for the benefit of
Lender if required by Lender. Borrower is to execute, re-execute, cause any
Guarantor or other third party(ies) involved in the loan transaction to execute
and/or re-execute and to deliver to Lender or its legal counsel as may be deemed
appropriate, any document or instrument signed in connection with the Debt which
was incorrectly drafted and/or signed, as well as any document or instrument
which should have been signed at or prior to the closing of the Debt, but which
was not so signed and delivered. Borrower is to comply with any written request
by Lender within ten (10) days after receipt by Borrower of such request.
Failure by Borrower to so comply is, at the option of Lender, upon notice to
Borrower, an event of Default.
Section 6.16 Identification of Collateral
If requested by Lender, the Borrower is to cause each unit of
Collateral as applicable, and to the extent reasonably practicable, to be kept
numbered and identified in order to protect the security interest of Lender in
and to such Collateral.
Section 6.17 Delivery of Documents
If any of the Accounts are evidenced by notes, trade
acceptances or instruments or documents, or if any Inventory is covered by
documents of title or chattel paper, Borrower is to immediately endorse and
deliver them to Lender in trust for Lender upon demand. The Borrower is to waive
protest regardless of the form of the endorsement. If the Borrower fails to
endorse any instrument or document, Lender is authorized to endorse it on behalf
of the Borrower. Lender may establish reserves subject to Borrower's compliance
with this Section.
Section 6.18 Government Contracts
If any of the Collateral arises out of contracts with the
United States, or any of its departments, agencies or instrumentalities, the
Borrower is to notify Lender and execute any necessary instruments or documents
requested by Lender in order to insure that all monies due or to become due
under such contracts are to be made payable to Lender and that proper notice of
such assignment is given under applicable Federal law.
Section 6.19 Trademarks, Patents and Copyrights
If any of the Collateral consists of trademarks, patents or
copyrights, the Borrower is to:
(a) comply with all applicable federal and state law
regulating the maintenance and quality;
(b) execute such documents and take such other actions
necessary to extend the Collateral to any newly issued trademarks, patents or
copyrights;
(c) maintain the exclusive right to use the trademarks,
patents and copyrights;
(d) execute such documents to permanently assign to Lender all
of the Borrower's rights to the trademarks, patents and copyrights in the event
of a Default. Among other things, the Borrower consents to the execution of the
Assignments (if attached hereto as Exhibit "B") by Lender following a Default.
Section 6.20. Fees.
Borrower is to pay Lender a commitment fee of $10,000.00 on or
before the date hereof. This fee is non-refundable.
Section 6.20 Duration of Covenants
The covenants made in this Article 6 are to be true, accurate
and complete as of the effective date of this Agreement and are to be true,
accurate and complete for the duration of the term of this Agreement.
ARTICLE 7. COVENANTS TO LENDER
REGARDING PROHIBITED TRANSACTIONS
In order to induce Lender to execute this Agreement, the
Borrower, for itself, its subsidiaries (if any) and the Guarantor (collectively,
"they", "their" or "them") make the following negative covenants:
Section 7.1 Merger or Consolidation
Except for the transactions described in Schedule 7.1, the
Borrower is not to merge with, consolidate with, or acquire any assets of any
other corporation, partnership, or entity except for the purchase of assets in
the ordinary course of business, nor acquire all or substantially all of the
assets or stock of any other corporation, partnership, or entity without the
prior written consent of Lender.
Section 7.2 Sale of Assets
Other than the sale or lease of Inventory in the ordinary
course of business, the Borrower is not to sell, transfer or encumber any of its
property or assets without the prior written consent of Lender.
Section 7.3 Other Liens
The Borrower is not to incur, create or permit to exist any
mortgage, assignment, pledge, hypothecation, security interest, lien or other
encumbrance on any of its property or assets, whether now owned or hereafter
acquired, except (a) liens for taxes not delinquent; (b) those liens in favor of
Lender created by this Agreement and related documents; (c) those liens set
forth on Schedule 1 annexed hereto; (d) those liens, such as carrier,
warehousemen, unemployment or retirement liens arising by operation of law in
the ordinary course of business if subordinated on terms acceptable to Lender or
reserves established to the satisfaction of Lender; and (e) easements,
rights-of-way, restrictions and other similar encumbrances which, in the
aggregate, do not materially interfere with the use or occupation of those
properties or assets.
Section 7.4 Other Liabilities
The Borrower is not to incur, create, assume or permit to
exist any indebtedness or liability on account of either borrowed money, the
deferred purchase price of property, or the lease of assets or property for the
conduct of business, except (a) the Debt to Lender; (b) indebtedness
subordinated to payment of the Debt on terms approved by Lender in writing; (c)
those liabilities set forth on Schedule 1 or otherwise permitted by this
Agreement; or (d) those leases already in effect as of the effective date of
this Agreement as disclosed in the Delivered Financials.
Section 7.5 Dividends and Capital Distributions
The Borrower is not to declare or pay any dividends or other
distributions on its capital stock or ownership interests, nor effect any
distribution, redemption or other acquisition of any of its capital stock or
other ownership interests except (if the Borrower is an "S" Corporation for
federal income tax purposes) distributions to shareholders during a given fiscal
year in an amount no greater than such shareholders' federal income tax
expenditures arising from such shareholder status without the prior written
consent of Lender.
Section 7.6 Guaranties
The Borrower is not to assume, guarantee, endorse,
contingently agree to purchase or otherwise become liable upon the obligation of
any person, firm or entity except (a) by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; or (b) contingent obligations under letters of credit in the
ordinary course of business for the purchase of merchandise for resale.
Section 7.7 Loans or Investments
They are not to make any advances or loans to the Borrower's
officers, directors or employees or any entity; except that the Borrower is
permitted to make advances or loans to its employees in an amount not to exceed
$5,000 per employee and provided that not more than $100,000 is outstanding in
the aggregate at any time; and, except further that Integrated Biopharma, Inc.
is permitted to make loans to any or all of the other entities constituting the
Borrower provided that such loans are subordinated on such terms and conditions
required by Lender.
Section 7.8 Impairment of Title to Collateral
The Borrower is not to sell, conditionally sell, sell on
approval, consign, lease, encumber, transfer, remove from its premises set forth
on Schedule 2 or otherwise dispose of any Collateral (other than Inventory in
the ordinary course of business or other than Accounts for collection, without
recourse, in the ordinary course of business) without the prior written consent
of Lender. The Borrower is not to transfer or create Chattel Paper without
placing a legend thereon indicating Lender's security interest. In the event of
such prior written consent by Lender, the Borrower is to promptly deliver the
proceeds or other value received by the Borrower to Lender to reduce the amount
of the Debt applied in the discretion of Lender.
Section 7.9 No Future Adverse Restrictions
The Borrower is not to change its status as a registered
organization, its Operating Documents, the nature of its business, or execute
any contract, mortgage, lease or other agreement which could be unduly
burdensome or materially and adversely affect its business and properties, the
results of its operations, or its ability to perform according to this Agreement
or related documents.
Section 7.10 Settlements
The Borrower is not to compromise, settle or adjust any claims
in a material amount relating to any of the Collateral, without the prior
written consent of Lender.
Section 7.11 Change of Location or Name
They are not to change the place where their books and records
are maintained, change their name, change their location as the term is now or
hereafter defined in the Uniform Commercial Code, change the nature of their
business in any material respect, or transact business under any other name
without the prior written consent of Lender. Within four (4) months of any
permitted change, the Borrower is to authenticate or otherwise cooperate in any
action deemed necessary by Lender to maintain its rights and security interests
as provided in this Agreement.
Section 7.12 Affiliates
Except as disclosed on Schedule 7.12, they are not to enter
into or be a party to any transaction with any Affiliate (defined as any
business, person, corporation, partnership or entity affiliated by common
ownership or interest, or familial lineage, and their successors and assigns)
except in the ordinary course of and pursuant to the reasonable requirements of
business and upon fair and reasonable terms which are fully disclosed to Lender
and are not less favorable to any of them than would be obtained in an arms
length transaction.
Section 7.13 Change of Accounting Practices.
The Borrower is not to change its present accounting
principles or practices in any material respect, except as may be required by
changes in GAAP.
Section 7.14. Inconsistent Agreement.
The Borrower is not to enter into any agreement containing any
provision that would be violated by the performance of Borrower's obligations
under this Agreement or under any document delivered or to be delivered by it in
connection therewith.
Section 7.15. Tangible Net Worth.
The Borrower is not to cause or permit Tangible Net Worth, on
a consolidated basis, to be less than (a) $8,000,000 for fiscal year ending June
30, 2003 and (b) $9,000,000 for fiscal year ending June 30, 2004. The term
Tangible Net Worth is defined as the difference between (a) the sum of (i) the
par value (or value stated on the books of Borrower) of the capital stock of all
classes of Borrower, plus (or minus in the case of a deficit) (ii) the amount of
Borrower's surplus, whether capital or earned, less (b) the sum of treasury
stock, unamortized debt discount and expense, good will, trademarks, trade
names, patents, deferred charges, leasehold improvements and other intangible
assets, and any write-up of the value of any assets, all determined in
accordance with GAAP.
Section 7.16 Debt Service Coverage Ratio
The Borrower is not to cause or permit its Debt Service
Coverage Ratio to be less than 1.30:1 as of the time of any determination
thereof. Debt Service Coverage Ratio is defined as the ratio of Cash Flow for
the prior 12 month period to principal and interest on all debt that was
scheduled to be paid during that 12 month period. Cash Flow is defined as net
income after taxes plus depreciation, amortization and interest expense, minus
distributions or loans to shareholders.
Section 7.17 No Violations of Environmental Statutes
They are not to cause or permit to exist a releasing,
spilling, leaking, pumping, emitting, pouring, emptying, discharging, or dumping
of a hazardous substance, hazardous wastes, pollutants or related substances as
those terms are defined by any Environmental Laws, whether or not resulting in a
lien or claim being attached or made against them for damages or cleanup costs
by the State of New Jersey or the Federal government. Borrower is not to
manufacture or distribute ephedra-based products.
Section 7.18 Violation of Representations, Warranties and Covenants
They are not to take any action or omit to take any action
which could render any of their representations, warranties or covenants to be
untrue or incapable of performance.
Section 7.19 Duration of Covenants Regarding Prohibited Transactions
The covenants made in this Article 7 are to remain in
effect for the duration of the term of this Agreement.
ARTICLE 8. MISCELLANEOUS RIGHTS AND DUTIES OF LENDER
Section 8.1 Charges Against Credit Balances
At any time prior to or following Default, Lender, without
notice, in its sole and absolute discretion, may charge, setoff and withdraw
from any credit balance, Collateral or property which Borrower or Guarantor may
then have with Lender or any Affiliate, any amount(s) which become due to Lender
or which are otherwise expended or advanced by Lender under this Agreement.
Section 8.2 Collections; Modification of Terms
At any time following Default, Lender, without notice, in its
sole and absolute discretion, may demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of or in exchange for,
or make any compromises it deems desirable, or otherwise modify the terms or
rights of the Borrower with respect to any of the Collateral without notice and
without otherwise discharging or affecting the Debt.
Section 8.3 Notification of Account Debtors
At any time prior to or following Default, Lender, in its sole
and absolute discretion, may require the Borrower to notify and obtain the
acknowledgment of any account debtor or bailee of Lender's security interest in
the Collateral. At any time prior to or following Default, Lender may, in its
sole and absolute discretion, without notice: (1) notify any account debtors on
any of the Accounts to make payment directly to Lender, and/or enforce the
Borrower's rights of every type and nature as against any such account debtors
or collateral which secures their obligations to Borrower; or (2) endorse all
items of payment or Collateral received by Lender which are payable to the
Borrower. In the event that Lender elects to foreclose a mortgage securing any
such account debtors' obligations to Borrower, Lender may record a copy or
abstract of this Agreement and an affidavit of default in the public records
where such mortgage is recorded. Until such time as Lender elects to exercise
these rights, the Borrower is to act upon and protect the Collateral under the
restrictions and terms of this Agreement only.
Section 8.4 Uniform Commercial Code
At all times prior to and following Default, Lender is
entitled to all the rights and remedies of a secured party under the Uniform
Commercial Code as now or hereafter enacted in New Jersey and any other
jurisdiction where Collateral is located.
Section 8.5 Preservation of Collateral
At any time prior to and following Default, Lender, without
notice, in its sole and absolute discretion, may take any and all action which,
in its sole and absolute discretion, is necessary and proper to preserve the
Collateral, or Lender's interests under this Agreement, including without
limitation, those duties of the Borrower imposed by this Agreement. Any sums so
expended by Lender are to be secured by the Collateral and added to the Debt.
Such sums (including reasonable attorneys' fees) are to be payable on demand
with interest at the highest interest rate set forth in this Agreement until
repaid by Borrower. Lender may also demand that escrow accounts be established
to fund anticipated future expenditures.
Section 8.6 Mails
Following Default, Lender, without notice, in its sole and
absolute discretion, is authorized to (and the Borrower is to, upon request of
Lender) notify the postal authorities to deliver all of the Borrower's mail,
correspondence or parcels to Lender at such address as Lender may direct.
Section 8.7 Test Verifications
At any time prior to and following Default, Lender, without
notice, in its sole and absolute discretion, may, in its name or in the name of
others, make test verifications of any and all Accounts in any manner and
through any medium Lender considers advisable with or without the assistance of
the Borrower.
Section 8.8 Power of Attorney
Lender is hereby irrevocably appointed and authenticated by
Borrower as its lawful attorney and agent in fact to file, authenticate or
execute financing statements and other documents and agreements as Lender may
deem necessary for the purpose of perfecting any security interests, mortgages
or liens under any applicable law. The Borrower hereby grants a power of
attorney to Lender to endorse the Borrower's name on checks, notes, acceptances,
drafts and any other documents or instruments requiring the Borrower's
endorsement, to change the address where the Borrower's mail should be sent and
to open all mail and to do such other acts and things necessary to effectuate
the purposes of this Agreement when so permitted by the terms of this Agreement.
All acts by Lender or its designee are hereby ratified and approved, and neither
Lender, nor its designee, is to be liable for any acts of omission or
commission, or for any error of judgment or mistake unless the result of gross
negligence or willful misconduct. The powers of attorney granted to Lender in
this Agreement are coupled with an interest and are irrevocable during the term
of this Agreement. Whenever Lender deems it desirable that any legal action be
instituted with respect to any Collateral or that any other extraordinary action
be taken in an attempt to effectuate collection of any Collateral, Lender may
reassign the item in question to the Borrower (without recourse to Lender) and
require the Borrower to proceed with such legal or other action, at the
Borrower's sole liability, cost and expense, in which event all amounts
collected by the Borrower on such items are to, nevertheless, be treated as
proceeds of Collateral.
ARTICLE 9. DEFAULT
Section 9.1 Definition of Default
The Borrower is in default and the Debt becomes immediately
due and payable, without notice, at the option of Lender upon the occurrence of
any or all of the following events, circumstances or determinations ("Default")
which are set forth for purposes of illustration and as a supplement, and not a
limitation, to Lender's right to demand payment of the Debt if otherwise
provided in any note or instrument evidencing the Debt:
9.1(a) Upon the failure of the Borrower or the Guarantor to
pay, when due, all or any part of Debt as set forth in any
instrument, document, or agreement evidencing the Debt
executed between the Borrower and Lender.
9.1(b) Upon the failure of the Borrower or the Guarantor to
observe or perform any other covenant, term or condition
required by this Agreement or by any other instrument,
document or agreement related thereto as executed among the
Borrower or Guarantor and Lender either (i) within ten (10)
days of the date due or (ii) within 30 days after Lender sends
notice to Borrower of Borrower's failure to comply with
Section 7.15 hereof and Borrower's failure to cure same to
Lender's satisfaction within such 30 day period.
9.1(c) Upon the occurrence of any event of default as defined
with reference to any other obligation or indebtedness of the
Borrower or Guarantor in an amount greater than $50,000 to any
third parties so that the holder of such obligation or
indebtedness declares or has the right to declare such
obligation or indebtedness due prior to its date of maturity.
9.1(d) Upon any breach of representation or warranty under
this Agreement in any material respect by the Borrower or
Guarantor, or if any such representation or warranty is no
longer true or capable of performance.
9.1(e) Upon the submission to Lender of any materially false
or fraudulent statement by the Borrower or Guarantor, whether
or not in connection with this Agreement.
9.1(f) Upon any adverse and material change in the condition
or affairs, financial or otherwise, of the Borrower or
Guarantor which, in the opinion of Lender, materially impairs
the interests of Lender.
9.1(g) Upon either the death, retirement, permanent disability
or discontinuance of services of E. Xxxxxx Xxx, a principal
and Chief Executive Officer of the Borrower or the
termination, suspension, dissolution, or the liquidation of
any material business conducted by the Borrower.
9.1(h) Upon the commencement, by, against or as to the
Borrower or Guarantor, of any insolvency proceedings,
bankruptcy proceedings, reorganization proceedings, assignment
for the benefit of creditors, or proceedings of like
character, or the appointment of a receiver, custodian or
trustee as to any or all assets; in the event of any
involuntary proceeding, if it has not been dismissed within
forty-five (45) days of the institution thereof.
9.1(i) Upon the occurrence of any event of default otherwise
defined in any separate instrument, document, or agreement
existing now or in the future executed by or among the
Borrower or Guarantor and Lender, any Participant, or their
Affiliate.
9.1(j) Upon the entry of any judgment against the Borrower or
Guarantor which remains unpaid, undischarged, unsatisfied,
unbonded or undismissed following thirty (30) days after
entry.
9.1(k) Upon the event that any or all of the assets of the
Borrower or Guarantor, including, but not limited to the
Collateral, are attached, distrained, levied upon or made
subject to any lien not discharged or removed following thirty
(30) days after attachment.
9.1(l) Upon the event of any material (as determined by Lender
in its sole and absolute discretion) diminution in the value
of any Equipment or any other fixed assets constituting a part
of the Collateral after Lender sends notice to Borrower
thereof and Borrower's failure to cure such diminution to
Lender's satisfaction within 30 days following the sending of
such notice.
.
9.1(m) Upon the event of any loss, repossession, reclamation,
damage, theft, condemnation or destruction to any asset(s) of
the Borrower or Guarantor whether or not covered by insurance
after Lender sends notice to Borrower thereof and Borrower's
failure to cure same to Lender's satisfaction within 30 days
following the sending of such notice.
9.1(n) Upon the event that less than 30% of the ownership
interests of the Borrower is owned directly or indirectly by
Guarantor.
9.1(o) Upon the event that any indorser or Guarantor is
determined, or seeks to determine that it is to be no longer
liable for its obligations as contemplated by this Agreement
or related documents.
9.1(p) Upon the death of Guarantor.
9.1(q) Upon any investigation undertaken by any governmental
entity or if any indictment, charge or proceeding is filed or
commenced, whether criminal or civil, pursuant to Federal or
State law against Borrower or Guarantor for which forfeiture
of any of the property or assets of Borrower or Guarantor of
the Debt is a penalty.
9.1(r) Upon the event that Borrower takes any material action
to authorize its liquidation or dissolution, except that a
liquidation or dissolution of Vitamin Factory, Inc. is not an
event of Default if the net proceeds of which are distributed
to the remaining entities constituting the Borrower.
9.1(s) Upon the event that Borrower (a) becomes unable or
fails to pay its debts generally as they become due, (b)
admits in writing its inability to pay its debts, or (c)
proposes or makes a composition agreement with creditors, a
general assignment for the benefit of creditors, or a bulk
sale.
9.1(t) In the event that, with respect to any Plan (as defined
in Section 5.10 of this Agreement), there occurs or exists any
of the events or conditions described in the following clauses
(a) through (h) and such event or condition, together with all
like events or conditions, could in the reasonable opinion of
Lender subject the Borrower to any tax, penalty or other
liability that might, singly or in the aggregate, have a
material adverse effect on the financial condition or the
properties or operations of Borrower:(a) a reportable event as
defined in Section 4043 of ERISA, (b) a prohibited transaction
as defined in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code, (c) termination of the Plan or filing
of notice of intention to terminate, (d) institution by the
Pension Benefit Guaranty Corporation of proceedings to
terminate, or to appoint a trustee to administer, the Plan, or
circumstances that constitute grounds for any such
proceedings, (e) complete or partial withdrawal from a
multiemployer Plan, or the reorganization, insolvency or
termination of a multiemployer Plan, (f) an accumulated
funding deficiency within the meaning of ERISA, (g) violation
of the reporting, disclosure or fiduciary responsibility
requirements of ERISA or the Internal Revenue Code, or (h) any
act or condition which could result in direct, indirect or
contingent liability to any Plan or the Pension Benefit
Guaranty Corporation; or
9.1(u) Upon the termination of Borrower's contract, as
amended, with Herbalife International of America, Inc., or
upon an event of default as defined therein.
ARTICLE 10. REMEDIES OF LENDER UPON DEFAULT
Section 10.1 Rights of Lender
Upon the occurrence of any event constituting Default, Lender
(or any Participant) has the right, without notice:
10.1(a) Collection - To institute legal or deficiency
proceedings or otherwise enforce its rights to collect the
Debt against the Borrower or Guarantor of the Debt, all of
which becomes immediately payable. If a judgment is entered in
favor of Lender, the lien of the judgment relates back to the
earliest date of perfection of the Lender's security interests
hereunder.
10.1(b) Set Off - To charge, setoff and withdraw from any
credit balance which the Borrower or Guarantor may then have
with Lender, Participant, or with any Affiliate thereof, such
amounts as may be necessary to satisfy the Debt.
10.1(c) Existing Commitments - To terminate and cancel any
existing commitment to the Borrower or Guarantor for a line of
credit, loan, or balance of the Revolving Loan.
10.1(d) Assembly of Collateral - With or without judicial
process, (i) to seize the Collateral or to require the
Borrower to assemble the Collateral or (ii) to render the
Collateral unusable without need for Lender to post a bond or
security or (iii) to make the Collateral available at a Lender
designated place for sale, lease, license or other disposition
by Lender (and if such disposition is to Lender, at a public
execution unless the Collateral is that customarily sold on a
recognized market or the subject of widely distributed
standard price quotations) to satisfy the Debt without any
right of Borrower or Guarantor to adjourn such disposition.
Any such sale, lease, license or other disposition may be made
of the Collateral in its present condition or following any
commercially reasonable preparation or processing at the
expense of Borrower.
10.1(e) Tax Notification - To sign the name of Borrower upon
any local, state or federal agency information release form
including, but not limited to, Tax Information Authorization
Form 8821 of the Internal Revenue Service;
10.1(f) Cumulative Rights - To exercise all rights and
remedies set forth in this Agreement or otherwise provided by
law or other agreement (whether or not referred to in this
Agreement) on a cumulative or simultaneous basis and in any
order selected by Lender; or
10.1(g) Rights of Transferee - A transferee who purchases,
leases, licenses or otherwise receives the benefits of a
disposition of Collateral after Default takes free of all
Borrower's rights and the rights of any subordinate security
interest or lien. A transferee is entitled to the recording of
a transfer statement to document public notice of such
disposition.
Section 10.2 Application of Proceeds of Disposition of Collateral
The proceeds of any sale, lease, license or other disposition
of the Collateral are to be applied to satisfy the following items in the
following order:
10.2(a) First, to Lender's expenses in preserving its
interests and rights hereunder, to expenses incurred by Lender
in realizing upon security interests created or referred to
herein, and expenses of Lender in enforcing and defending its
rights as set forth in Article 2 and Article 8 of this
Agreement.
10.2(b) Second, to the Debt as defined in this Agreement.
10.2(c) Third, any excess or amounts remaining are to be paid
to any subordinate security interest or lien if the holder
thereof supplies proof of its interest or lien and if the
holder thereof makes an authenticated demand therefor before
distribution and any balance thereafter is to be paid to
Borrower unless Lender determines that reserves are warranted
to implement the indemnification provisions of this Agreement.
Section 10.3 Redemption of Collateral
In the event that the Borrower may elect to redeem any or all
of the Collateral prior to the sale, lease, license or other disposition by
Lender, the Borrower is to pay to Lender, in full, the Revolving Loan and that
additional part of the Debt that Lender requires.
Section 10.4 Notice of Disposition of Collateral
If the Collateral is perishable, threatens to decline speedily
in value, or is of a type customarily sold on a recognized market, Lender need
not give notice of any intended disposition of the Collateral. In all other
cases, Lender is to give authenticated reasonable notice to Borrower and any
other party entitled thereto under applicable law of the time and place of a
public sale, lease, license or other disposition of the Collateral.
Authenticated notice is presumed to be reasonable (a) if given ten (10) days
prior to such disposition unless a shorter period is warranted under the
circumstances, (b) if sent to the chief executive office and, if none, to the
address of the Borrower set forth on Schedule 2 annexed hereto in accordance
with Section 11.5 hereof and (c) if it contains a statement of the Collateral
and its intended disposition, the time and place of disposition and a statement
that the Borrower is entitled to an accounting of such disposition. Lender may
disclaim any warranties that may apply to any sale, lease, license or other
disposition of the Collateral.
Section 10.5 Marshaling of Assets
Lender has no obligation whatsoever to proceed first against
any of the Collateral or any Guarantor before proceeding against any other of
the Collateral, other Guarantor or other collateral for the Debt. It is
expressly understood and agreed that all of the Collateral stands as equal
security for the Debt and that Lender has the right to proceed against or
dispose of any/or all of the Collateral or other collateral in any order as
Lender, in its sole discretion, determines.
ARTICLE 11. MISCELLANEOUS PROVISIONS
Section 11.1 Binding Effect
This Agreement is binding upon, inures to the benefit of and
is enforceable by the heirs, personal representatives, successors and assigns of
the parties, any Affiliate or Participant. This Agreement is not assignable by
the Borrower or Guarantor without the prior written consent of Lender.
Section 11.2 Non Waiver
Neither a course of dealing, nor a failure or delay on the
part of Lender, or its successors and assigns, in the exercise of any right,
power, or privilege is to operate as a waiver. A partial exercise of any right,
power, or privilege by Lender is not to preclude any further right, power, or
privilege, nor be deemed a waiver. Any waiver or modification to this Agreement
or any other document, instrument, or agreement executed by the Borrower or
Guarantor, is to be in a writing executed by Lender and them. Any written
modification signed by Lender and them is to be deemed part of this Agreement.
Section 11.3 Non Liability of Lender
Lender has no duty to preserve or protect the Collateral, to
preserve the rights of the Borrower or Guarantor against other parties, or to
sell, lease, or otherwise dispose of any or all of the Collateral, or its
proceeds, or in any priority, unless it elects to do so as provided in this
Agreement. This Section is to be deemed an express waiver of the defense of
impairment of Collateral.
Section 11.4 Disclaimer by Lender on Documents
Lender is not to be deemed to assume any liability or
responsibility to the Borrower or any other party for the correctness, the
validity, or the genuineness of any instruments or documents that may be
executed in connection with this Agreement, or for the existence, character,
quantity, quality, condition, value, or delivery of any Collateral purporting to
be represented by any such documents. Lender, by accepting the security interest
in the Collateral, or by releasing any Collateral to the Borrower, is not to be
deemed to have assumed any obligation or liability to any supplier or debtor of
the Borrower. The Borrower is to indemnify and hold Lender harmless with respect
to any claim or proceeding arising out of such matters.
Section 11.5 Notices and Banking Days
11.5(a) Each demand, notice or other communication by Lender
to the Borrower or by the Borrower to Lender is to be sent by certified mail,
postage prepaid, return receipt requested, or recognized courier service for
which a receipt is available.
11.5(b) Notices to Lender are to be directed to the following
address:
COMMERCE BANK, N.A
0000 Xxxxx 00 Xxxx
Xxxxxx Xxxx XX 00000
11.5(c) Notices to the Borrower are to be directed to the
following address:
INTEGRATED BIOPHARMA, INC.
MANHATTAN DRUG COMPANY, INC.
IHT HEALTH PRODUCTS, INC.
INTEGRATED HEALTH IDEAS, INC.
IHT PROPERTIES CORP
NUCYCLE THERAPY, INC.
VITAMIN FACTORY, INC.
For all of the above entities:
To: 000 Xxxx Xxxxxx, Xxxxxxxx #00
Xxxxxxxx, X J 07205
Att: Chief Executive Officer
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
St. Xxxx & Xxxxx, X.XX. Xxx Xxxx Xxxxx Xxxx Xxxxxx XX
00000 Att: Xxxxxxx X. Xxxxxxxx, Esq. Tel:
000-000-0000 Fax: 000-000-0000
A notice to the Borrower is presumed to be received by
Guarantor.
11.5(d) A banking day is any day that Lender designates or
otherwise conducts business. A payment or duty which becomes due on a day not
designated by Lender as a banking day automatically becomes due on the next day
that is designated by Lender as a banking day.
Section 11.6 Captions
The captions and titles appearing in this Agreement are
inserted solely for the convenience of the parties and do not in any way define,
limit or describe the terms and conditions of this Agreement.
Section 11.7 Entire Agreement
There are no understandings, agreements, representations,
warranties or covenants, express or implied, which are not specified herein, or
in the other written instruments, documents, or agreements referred to in this
Agreement. All prior oral understandings, negotiations, or agreements are deemed
to be superseded by the terms of this Agreement and such other written
instruments, documents or agreements referred to in this Agreement.
Section 11.8 Severability
In the event that any portion of this Agreement is deemed
unenforceable by a court of competent jurisdiction, such provision declared to
be unenforceable is to be deemed to have been omitted from this Agreement, and
all such remaining terms and conditions of this Agreement are to continue in
full force and effect.
Section 11.9 Joint and Several Liability
The terms and conditions of this Agreement are jointly and
severally binding upon all parties identified as the Borrower and Guarantor.
Each Borrower is jointly and severally liable without regard to which entity
receives or has received the proceeds of the Revolving Loan and advances made
hereunder. Each such entity hereby acknowledges that it expects to derive
economic advantage from each loan or advance made. Each Borrower hereby
acknowledges and agrees that part or all of the proceeds for any given advance
hereunder are transferred to such Borrower on an on-going basis, depending upon
the relative needs of each Borrower at such time as the proceeds of such an
advance are necessary to satisfy obligations of that Borrower arising in the
ordinary course of the Borrower's business. Each Borrower further acknowledges
and agrees that: (i) it conducts similar business operations and (ii) each
Borrower's primary source of financing its operations is the proceeds received
from the advances hereunder and from the business so financed.
Section 11.10 Applicable Law and Consent to Jurisdiction
This Agreement is to be interpreted and enforced in accordance
with the laws of the State of New Jersey (without regard to the conflicts of law
rules of New Jersey) except that the law of the State where the Borrower is
located governs perfection and priority claims to the Collateral (except as
otherwise provided in the Uniform Commercial Code). Borrower and Guarantor
hereby irrevocably consent to the jurisdiction of the Courts of the State of New
Jersey and to the jurisdiction of the United States District Court for the
District of New Jersey, for the purpose of any suit, action or other proceeding
arising out of or relating to this Agreement or the Debt, or the subject matter
hereof or thereof. Borrower and Guarantor hereby waive, and agree not to assert
in any such suit, action or proceeding any claim that they are not personally
subject to such jurisdiction, or any right to remove an action brought in State
to Federal Court, or any claim that such suit, action or proceeding is in an
inconvenient forum or that the venue thereof is improper. Borrower and Guarantor
hereby consent that they may be served with process by the notification
procedure set forth in this Agreement.
Section 11.11 Consents
The Borrower and its subsidiaries (if any), and the Guarantor
consent:
11.11(a)To any extension, postponement of time of payment,
indulgence or to any substitution, exchange or release of Collateral.
11.11(b)To any addition to or release of any party or persons
primarily or secondarily liable, or acceptance of partial payments on any
Accounts or instruments and the settlement, comprising or adjustment thereof.
Section 11.12. Waiver of Liability
Lender is not liable due to any action or failure to act by
Lender relating to this Agreement or the Debt except as a result of Lender's
gross negligence or willful misconduct. This provision shall survive the
termination or expiration of this Agreement or payment of the Debt.
SECTION 11.13 WAIVE JURY TRIAL
THE BORROWER, FOR ITSELF, ITS SUBSIDIARIES (IF ANY) AND THE
GUARANTOR AND LENDER HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN ANY
LITIGATION RELATING TO THIS AGREEMENT OR THE DEBT AS AN INDUCEMENT TO THE
EXECUTION OF THIS AGREEMENT.
Section 11.14. Execution in Counterparts.
This Agreement may be executed in any number of counterparts,
each of which when so executed is deemed to be an original and all of which
taken together constitute but one and the same agreement.
ARTICLE 12. INDEMNIFICATION
As part of the Debt, Borrower and Guarantor agree to and
hereby indemnify and hold Lender harmless from and against, and to reimburse
Lender with respect to any and all claims, demands, causes of action, losses,
damages, liabilities, costs and expenses (including consequential damages,
reasonable attorneys' fees and court costs) of any and every kind or character,
known or unknown, fixed or contingent, asserted against or incurred by Lender at
any time and from time to time by reason of or arising out of:
(a) the breach of any representation, warranty or covenant of
Borrower or Guarantor set forth in this Agreement;
(b) the failure of Borrower or Guarantor to perform any
obligation herein required to be performed by Borrower or
Guarantor; or
(c) the ownership, construction, occupancy, operation, use and
maintenance of the Collateral.
This covenant survives the date on which the Debt is paid and performed in full
and notwithstanding whether Borrower or Guarantor has been released and
discharged or whether Lender becomes the owner of the Collateral.
ARTICLE 13. TERM
This Agreement is to remain in effect for so long as the Debt remains unpaid.
ARTICLE 14. TERMINATION OF AGREEMENT IN ABSENCE OF DEFAULT
Section 14.1. Termination by Lender.
This Agreement terminates, insofar as it relates to the
Revolving Loan, two years from the date hereof. At the termination date: (a) all
provisions for additional advances under this Agreement terminate, (b) the
principal and interest of the Revolving Loan becomes immediately due and
payable, and all other Debt becomes immediately due and payable, all without
presentment, demand, protest, or further notice of any kind, all of which are
hereby expressly waived by Borrower, and (c) Lender is entitled to exercise
forthwith (to the extent and in such order as Lender may elect, in its sole
discretion) any or all of the rights and remedies referred to in this Agreement
as available following Default for the collection of such amounts.
Section 14.2. Termination By Borrower.
14.2(a) In the absence of a Default, Borrower may terminate
this Agreement only upon:
(i) giving sixty (60) days' prior written notice to Lender of
the intended termination date; and
(ii) paying to Lender in full the principal and interest of
the Revolving Loan, and all other Debt.
Section 14.3. Effect on Advance Limit
Upon the giving of notice of termination pursuant to this
Section, the Advance Limit thereafter will not increase in excess of the
principal balance of the Revolving Loan at the time of such notice.
Section 14.4. Mutual Release.
Upon full and final payment and performance of the Revolving
Loan and all other Debt, Borrower, Guarantor and Lender thereupon automatically
each are fully, finally and forever released and discharged from any and all
claims, liabilities and obligations, whether in contract or tort, arising out of
or relating in any way to this Agreement, the Revolving Loan, or any act or
omission relating to any of the foregoing or to any of the Collateral, except as
otherwise provided herein.
ARTICLE 15. CROSS DEFAULT/CROSS COLLATERAL
All other existing and future agreements between or among
Lender, any Participant and/or any Affiliate, Borrower and/or any Affiliate,
Guarantor and/or any Affiliate are hereby amended so that a Default under this
Agreement is a default under such other agreements and a default under such
other agreements is a Default under this Agreement. Any collateral pledged under
such other agreements between Lender or Participant and/or Affiliate and the
Borrower and/or any Affiliate, Guarantor and/or any Affiliate secures the Debt
under this Agreement and the Collateral under this Agreement secures any and all
obligations under such other agreements.
ARTICLE 16. FURTHER ACKNOWLEDGMENTS OF BORROWER AND LENDER
Section 16.1. Representation by Counsel.
Borrower, Guarantor and Lender acknowledge and agree that they
(i) have independently reviewed and approved each and every provision of this
Agreement, including the Exhibits and schedules attached hereto, the Guaranty of
Guarantor and any and all other documents and items as they or their counsel
have deemed appropriate, and (ii) have entered into this Agreement, the
Guaranty, and have executed the closing documents voluntarily, without duress or
coercion, and have done all of the above with the advice of their legal counsel.
Section 16.2. Waiver of Objection.
Borrower, Guarantor and the Lender acknowledge and agree that,
to the extent deemed necessary by them or their counsel, they and their counsel
have independently reviewed, investigated and/or have full knowledge of all
aspects of the transaction and the basis for the transaction contemplated by
this Agreement and/or have chosen not to so review and investigate (in which
case, Borrower and Guarantor acknowledge and agree that they have knowingly and
upon the advice of counsel waived any claim or defense based on any fact or any
aspect of the transaction that any investigation would have disclosed),
including without limitation:
(i) the risks and benefits of the various waivers of rights
contained in this Agreement, including but not limited to, the
waiver of the right to a jury trial;
(ii) the adequacy of the consideration being transferred under
this Agreement, including the adequacy of the consideration
for the Mutual Release as set forth in Section 14.4 hereof.
Section 16.3. No Reliance Upon Lender.
Borrower and Guarantor acknowledge and agree that they have
made their own investigation or elected not to make such investigation as to all
matters deemed material to this transaction and have not relied on any statement
of fact or opinion, disclosure or non-disclosure of the Lender, and have not
been induced by the Lender in any way, except for the consideration recited
herein, in entering into this Agreement and executing the closing documents
contemplated hereby, and further acknowledge that the Lender has not made any
warranties or representations of any kind in connection with this transaction
except as specifically set forth herein or in the documents executed in
conjunction with this Agreement, and Borrower and Guarantor are not relying on
any such representations or warranties.
Section 16.4. All Material Matters Reviewed
Borrower and Guarantor acknowledge and agree that, after
careful consideration, they do not deem any matter not reviewed or investigated
by them to be material to this Agreement and the transactions contemplated
hereby.
IN WITNESS WHEREOF, the Borrower, Guarantor and Lender have
executed this Agreement.
Attest/Witness: INTEGRATED BIOPHARMA, INC. A Delaware Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title: Vice President
Signatures continued...............
..... continuation of signatures to Revolving Loan and Security Agreement
Attest/Witness: MANHATTAN DRUG COMPANY, INC.
A New York Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title: Vice President
Attest/Witness: IHT HEALTH PRODUCTS, INC.
A Delaware Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title:Vice President
Attest/Witness: INTEGRATED HEALTH IDEAS, INC.
A New Jersey Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title: Vice President
Attest/Witness: IHT PROPERTIES CORP.
A Delaware Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title: Vice President
Attest/Witness: NUCYCLE THERAPY, INC.
A New Jersey Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title: Vice President
Attest/Witness: VITAMIN FACTORY, INC.
A Delaware Corporation
/s/ Xxxxxxx XxXxxxxxx By: /s/ Xxxx Xxxxxxxx
Name: XXXXXXX XxXXXXXXX Print Name: XXXX XXXXXXXX
Title: Secretary Title: Vice President
Signatures continued...............
..... continuation of signatures to Revolving Loan and Security Agreement
Witness:
/s/ Xxxxxxx XxXxxxxxx /s/ E. Xxxxxx Xxx
Print Name: E. XXXXXX XXX
Guarantor
COMMERCE BANK, N.A.
By: /s/ Xxxxxxxxxxx X. Arabia
Print Name: Xxxxxxxxxxx X. Arabia
Title: Assistant Vice President
SCHEDULE 1
Other Liens
UCC Financing Statement (Manhattan Drug Co., Inc.) in favor of The Chase
Manhattan Bank, filed with the NJ Department of the Treasury on July 31, 2000
as to leased equipment
Schedule 2. Identification of the Borrower
Names of the Borrower
1. Integrated BioPharma, Inc., a Delaware corporation (f/k/a Integrated Health
Technologies, Inc., a Delaware corporation) 2. Manhattan Drug Company, Inc., a
New York corporation 3. IHT Health Products, Inc., a Delaware corporation 4.
Integrated Health Ideas, Inc., a New Jersey corporation (f/k/a Manhattan
International, Inc., a New Jersey
corporation)
5. IHT Properties Corp., a Delaware corporation 6. NuCycle Therapy, Inc., a New
Jersey corporation 7. Vitamin Factory, Inc., a Delaware corporation
Fictitious Names, Alternate Names and Trade Names of the Borrower
-----------------------------------------------------------------
Integrated BioPharma, Inc. (f/k/a Chem Holding, Inc. in New Jersey)
Federal Tax Identification Numbers and State Organizational Numbers of the Borrower
Entity State Federal ID Number Organizational Number SIC #
------ ----- ----------------- --------------------- -----
Integrated BioPharma, Inc. DE # 00-0000000 # 2538924 2834
Manhattan Drug Company, Inc. NY # 00-0000000 n/a 2834
IHT Health Products, Inc. DE # 00-0000000 # 3275322 2834
Integrated Health Ideas, Inc. NJ # 00-0000000 # 0100529400 2834
IHT Properties Corp. DE # 00-0000000 # 3289320 2834
NuCycle Therapy, Inc. NJ # 00-0000000 # 0000000000 2834
Vitamin Factory, Inc. DE # 00-0000000 # 0945245 2834
List of offices, locations, and locations of Collateral 000 XX Xxxxxxx 00,
Xxxxxxxx, Xxx Xxxxxx 00000 (factory) The following entities are located therein:
- Manhattan Drug Company, Inc.
- Integrated Health Ideas, Inc.
- NuCycle Therapy, Inc.
000 Xxxx Xxxxxx, Xxxxxxxx #00, Xxxxxxxx, Xxx Xxxxxx 00000 (executive offices)
The following entities are located therein: - Integrated BioPharma, Inc.
- Manhattan Drug Company, Inc.
- IHT Health Products, Inc.
- Integrated Health Ideas, Inc.
- NuCycle Therapy, Inc.
- Vitamin Factory, Inc.
Integrated BioPharma, Inc.
- Integrated Health Technologies, Inc., a Delaware corporation, changed its name
to Integrated BioPharma, Inc., a Delaware corporation, effective January 29,
2003.
- Integrated Health Technologies, Inc., a Delaware corporation, previously
changed its name from Chem International, Inc., a Delaware corporation,
effective December 19, 2000.
- Chem International, Inc., a New York corporation, previously merged with and
into Chem International, Inc., a Delaware corporation, effective February 2,
1996.
IHT Properties Corp.
Morristown Holding Company, a Delaware corporation, previously merged with and
into IHT Properties Corp., a Delaware corporation, effective December 29, 2000.
Schedule 7.1
Integrated BioPharma, Inc. (f/k/a Integrated Health Technologies, Inc.)
(the "Company") and Trade Investment Services, L.L.C., a Delaware limited
liability company ("TIS") entered into an agreement dated as of February 1, 2003
(the "Paxis Purchase Agreement") pursuant to which the Company agreed to
purchase from TIS all of its interests in TisorEx, Inc. (to be renamed Paxis
Pharmaceuticals, Inc. or "Paxis"), a Delaware corporation, which consists of
fifty percent (50%) of the equity of Paxis, in exchange for $500,000 payable at
closing and twenty-five percent (25%) of the after-tax profits of Paxis until
TIS has received an additional $49,500,000 (the "Paxis Acquisition"). The Paxis
Acquisition is subject to the completion of satisfactory due diligence and
certain conditions of closing, including: (i) if requested by Paxis, the Company
to provide a $7,000,000 loan to Paxis (the "Paxis Financing") at a nine (9%)
percent rate of interest, with such Paxis Financing to be repaid from free cash
flow of Paxis prior to any distributions to the Company's stockholders and to
mature on the second anniversary of such financing; and (ii) the Company to
receive equity in Paxis equal to one-third of the shares outstanding of Paxis
after such issuance.
E. Xxxxxx Xxx, the Chairman of the Board of the Company and beneficial
owner of approximately fifty percent (50%) of the stock of the Company (or,
approximately sixty-two percent (62%) if family trusts of which he is a trustee
are attributed to him), is the owner of one-third (1/3) of the equity of TIS.
Xxxxxx Xxx, the brother of E. Xxxxxx Xxx, is also the owner of one-third (1/3)
of the equity of TIS. Xxxx XxXxxxxx, the father of Xxxx XxXxxxxx who is a
director of the Company, is the owner of one-third (1/3) of the equity of TIS.
Schedule 7.12
Integrated BioPharma, Inc. (f/k/a Integrated Health Technologies, Inc.)
(the "Company") and Trade Investment Services, L.L.C., a Delaware limited
liability company ("TIS") entered into an agreement dated as of February 1, 2003
(the "Paxis Purchase Agreement") pursuant to which the Company agreed to
purchase from TIS all of its interests in TisorEx, Inc. (to be renamed Paxis
Pharmaceuticals, Inc. or "Paxis"), a Delaware corporation, which consists of
fifty percent (50%) of the equity of Paxis, in exchange for $500,000 payable at
closing and twenty-five percent (25%) of the after-tax profits of Paxis until
TIS has received an additional $49,500,000 (the "Paxis Acquisition"). The Paxis
Acquisition is subject to the completion of satisfactory due diligence and
certain conditions of closing, including: (i) if requested by Paxis, the Company
to provide a $7,000,000 loan to Paxis (the "Paxis Financing") at a nine (9%)
percent rate of interest, with such Paxis Financing to be repaid from free cash
flow of Paxis prior to any distributions to the Company's stockholders and to
mature on the second anniversary of such financing; and (ii) the Company to
receive equity in Paxis equal to one-third of the shares outstanding of Paxis
after such issuance.
E. Xxxxxx Xxx, the Chairman of the Board of the Company and beneficial
owner of approximately fifty percent (50%) of the stock of the Company (or,
approximately sixty-two percent (62%) if family trusts of which he is a trustee
are attributed to him), is the owner of one-third (1/3) of the equity of TIS.
Xxxxxx Xxx, the brother of E. Xxxxxx Xxx, is also the owner of one-third (1/3)
of the equity of TIS. Xxxx XxXxxxxx, the father of Xxxx XxXxxxxx who is a
director of the Company, is the owner of one-third (1/3) of the equity of TIS.
EXHIBIT A
(i) "Accounts", which means, in addition to the definition now and hereafter
contained in the Uniform Commercial Code, all accounts and any and all
obligations of any kind at any time due and/or owing to the Borrower and all
rights of the Borrower to receive payment or any other consideration, whether or
not earned by performance, including without limitation, invoices, contract
rights, Accounts, and all other debts, obligations and liabilities for property
sold, leased, licensed, assigned or disposed of, for services rendered, for a
policy of insurance issued or to be issued, for a secondary obligation, arising
out of a credit card or for health-care insurance receivable, in whatever form,
owing to Borrower from any person, firm, governmental authority, corporation or
any other entity, all security therefor, all of which whether now existing or
hereafter acquired.
(ii) "Chattel Paper", which means, in addition to the definition now and
hereafter contained in the Uniform Commercial Code, all chattel paper and
records that evidence both a monetary obligation and a security interest or
lease in specific goods and software used in the goods, a lease of specific
goods or a lease of specific goods and license of software used in the goods,
including electronic chattel paper or whatever form, owing to Borrower or in
which the Borrower has an interest, all of which whether now existing or
hereafter acquired.
(iii) "Commercial Tort Claims", which means, in addition to the definition now
and hereafter contained in the Uniform Commercial Code, all claims arising in
tort in the course of the Borrower's business more specifically described on the
attachment hereto (if any), all of which whether now existing or hereafter
acquired.
(iv) "Deposit Accounts", which means, in addition to the definition now and
hereafter contained in the Uniform Commercial Code, all deposit accounts,
whether demand, time, savings, passbook or similar accounts maintained by the
Borrower at any bank, all of which whether now existing or hereafter acquired.
(v) "Equipment", which means, in addition to the definition now and hereafter
contained in the Uniform Commercial Code, all equipment, machinery, furniture
and all other related goods, all replacements, repairs, modifications,
alterations, additions, controls and operating accessories therefor, all
substitutions and replacements therefor, all accessions and additions thereto of
the Borrower, all of which whether now existing or hereafter acquired.
(vi) "General Intangibles," which means, in addition to the definition now and
hereafter contained in the Uniform Commercial Code, all general intangibles and
payment intangibles and any and all personal property, choses-in-action, and
things in action, leases, income tax refunds, copyrights, licenses, rights,
patents, patent rights, franchise rights, distributorship rights, trademarks,
tradenames, service marks, trademark rights, formulae, customer lists and
goodwill of the Borrower, all of which whether now existing or hereafter
acquired.
(vii) "Goods," which means, in addition to the definition now and hereafter
contained in the Uniform Commercial Code, all goods, fixtures, manufactured
homes and embedded computer programs and all things and property of the Borrower
which are not otherwise defined in this Exhibit A, all of which whether now
existing or hereafter acquired.
(viii) "Instruments", which means, in addition to the definition now and
hereafter contained in the Uniform Commercial Code, all instruments, negotiable
instruments or other writings that evidence a right of the Borrower to payment
of a monetary obligation that is transferrable in the ordinary course of the
Borrower's business with any necessary endorsement or assignment, all of which
whether now existing or hereafter acquired.
(ix) "Inventory", which means, in addition to the definition now and hereafter
contained in the Uniform Commercial Code, all inventory and all goods,
merchandise or other personal property held by the Borrower for sale or lease or
under a contract of service or to be furnished under labels and other devices,
names or marks affixed thereto for purposes of selling or identification, and
all right, title and interest of the Borrower therein and thereto, all raw
materials, packaging and shipping materials, work or goods in process or
materials and supplies of every nature used, consumed or to be consumed in the
Borrower's business, all of which whether now existing or hereafter acquired.
(x) "Investment Property", which means, in addition to the definition now and
hereafter contained in the Uniform Commercial Code, all of the Borrower's
certificated or uncertificated securities, security entitlements, securities
accounts, commodity contracts or commodity accounts whether now existing or
hereafter acquired.
(xi) "Letter of Credit Rights", which means, in addition to the definition now
and hereafter contained in the Uniform Commercial Code, all of the Borrower's
rights to payment or performance under a letter of credit whether or not the
beneficiary has demanded or is at the time entitled to demand payment or
performance whether now existing or hereafter acquired.
(xii) All promissory notes, documents, software and supporting obligations (and
security interests and liens securing them) of the Borrower as now and hereafter
defined in the Uniform Commercial Code whether now existing or hereafter
acquired.
(xiii) As to all of the foregoing (i) through (xii) inclusive, all cash
proceeds, non-cash proceeds and products thereof, additions and accessions
thereto, replacements and substitutions therefor.
STATE OF )
COUNTY OF )ss:
BE IT REMEMBERED, that on this 9th day of June, 2003, before me, the subscriber,
personally came and appeared XXXX XXXXXXXX and XXXXXXX XxXXXXXXX to me known,
who I am satisfied are, and who, being by me duly sworn, did depose and say that
they are the indicated officers of each of the corporations described in and
which executed the foregoing instrument and that each signed the same as said
officer; and I have first made known to them the contents thereof, they did
further depose, say and acknowledge that they signed said instrument as said
officers of said corporations, that they know the seals of said corporations,
that the seals affixed to said instrument are such corporate seals and that they
sealed the same and affixed said seals and delivered said instrument as the
voluntary act and deed of said corporations, made by virtue of authority and by
order of and from their Boards of Directors, and that they signed their names
thereto by like order.
/s/ Pora X. Xxxxx
Pora X. Xxxxx
Notary Public of New Jersey
