Exhibit 10.54
XXXXXXX XXXXX WCMA(R) REDUCING REVOLVER LOAN AND SECURITY AGREEMENT
WCMA REDUCING REVOLVER(SM) LOAN AND SECURITY AGREEMENT N0. 7WD-07018 ("Loan
Agreement") dated as of June 19, 2001, between RENT-A-WRECK OF AMERICA, INC.
D/B/A "RENT-A-WRECK" AND "PRICELESS", a corporation organized and existing under
the laws of the State of Delaware having its principal office at 00000 Xxxxx
Xxxxxxxx Xxxx, Xxxxxx Xxxx, XX 00000 ("Customer"), and XXXXXXX XXXXX BUSINESS
FINANCIAL SERVICES INC., a corporation organized and existing under the laws of
the State of Delaware having its principal office at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, XX 00000 ("MLBFS").
In accordance with that certain WORKING CAPITAL MANAGEMENT(R) ACCOUNT AGREEMENT
N0. 7WD-07018 ("WCMA Agreement") between Customer and MLBFS' affiliate, XXXXXXX
LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED ("MLPF&S"), Customer has subscribed
to the WCMA Program described in the WCMA Agreement. The WCMA Agreement is by
this reference incorporated as a part hereof. In conjunction therewith, Customer
has requested that MLBFS make a WCMA Reducing Revolver Loan (a "Reducing
Revolver") to Customer in the amount and upon the terms hereafter specified,
and, subject to the terms and conditions hereafter set forth, MLBFS has agreed
to provide a Reducing Revolver for Customer.
A Reducing Revolver is a term credit facility, similar to a conventional term
loan, but funded out of a line of credit under the WCMA Program ("WCMA Line of
Credit") in the amount of the initial loan. With a Reducing Revolver: (i)
interest will generally be charged each month to Customer's WCMA account, and,
so long as the WCMA Line of Credit is in effect, paid with an additional loan
under the WCMA Line of Credit (i.e., added to the loan balance), (ii) the
maximum WCMA Line of Credit will be reduced each month by the amount that would
be payable on account of principal if the Reducing Revolver were a conventional
term loan amortized over the same term and in the same manner as the Reducing
Revolver, and (iii) Customer will be required to make sufficient payments on
account of the Reducing Revolver to assure that the outstanding balance of the
Reducing Revolver does not at any time exceed the Maximum WCMA Line of Credit,
as reduced each month.
Absent a prepayment by Customer, this structure results in required monthly
payments for the Reducing Revolver that are substantially the same as the
required monthly payments for a conventional term loan with the same term and
amortization. However, unlike most conventional term loans, because it is funded
out of a line of credit, the Reducing Revolver permits both a prepayment in
whole or in part at any time, and, subject to certain conditions, the
reborrowing on a revolving basis of any such prepaid amounts up to the Maximum
WCMA Line of Credit, as reduced each month. The structure therefore will enable
Customer at its option to use any excess or temporary cash balances that it may
have from time to time to prepay the Reducing Revolver and thereby effectively
reduce interest expense on the Reducing Revolver without impairing its working
capital.
Accordingly, and in consideration of the premises and of the mutual covenants of
the parties hereto, Customer and MLBFS hereby agree as follows:
ARTICLE I. DEFINITIONS
1.1 Specific Terms. In addition to terms defined elsewhere in this Loan
Agreement, when used herein the following terms shall have the following
meanings:
(a) "Account Debtor" shall mean any party who is or may become obligated with
respect to an Account or Chattel Paper.
(b) "Additional Agreements" shall mean all agreements, instruments, documents
and opinions other than this Loan Agreement, whether with or from Customer or
any other party, which are contemplated hereby or otherwise reasonably required
by MLBFS in connection herewith, or which evidence the creation, guaranty or
collateralization of any of the Obligations or the granting or perfection of
liens or security interests upon the Collateral or any other collateral for the
Obligations.
(c) "Bankruptcy Event" shall mean any of the following: (i) a proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt or
receivership law or statute shall be filed or consented to by Customer or any
Guarantor, or (ii) any such proceeding shall be filed against Customer or any
Guarantor and shall not be dismissed or withdrawn within sixty (60) days after
filing; or (iii) Customer or any Guarantor shall make a general assignment for
the benefit of creditors; or (iv) Customer or any Guarantor shall generally fail
to pay or admit in writing its inability to pay its debts as they become due: or
(v) Customer or any Guarantor shall be adjudicated a bankrupt or insolvent.
(d) "Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day on which the New York Stock Exchange is regularly closed.
(e) "Closing Date" shall mean the date upon which all conditions precedent to
MLBFS' obligation to make the first advance on account of the Loan shall have
been met to the satisfaction of MLBFS.
(f) "Collateral" shall mean all Accounts, Chattel Paper, Contract Rights,
Inventory, Equipment, Fixtures, General Intangibles, Deposit Accounts,
Documents, Instruments, Investment Property and Financial Assets of Customer,
howsoever arising, whether now owned or existing or hereafter acquired or
arising and wherever located; together with all parts thereof (including spare
parts), all accessories, and accessions thereto, all books and records
(including computer records) directly related thereto, all proceeds thereof
(including, without limitation, proceeds in the form of Accounts and insurance
proceeds), and the additional collateral described in Section 4.6 (b) hereof.
(g) "Commitment Fee" shall mean a fee of $2,500.00 due to MLBFS in connection
with this Loan Agreement.
(h) "Conversion Date" shall mean the first to occur of the date of funding the
final advance on account of the Loan permitted under the terms hereof, or
December 31, 2001.
(i) "Default" shall mean either an "Event of Default" as defined in Section 4.5
hereof, or an event which with the giving of notice, passage of time, or both,
would constitute such an Event of Default.
(j) "General Funding Conditions" shall mean each of the following conditions
precedent to the obligation of MLBFS to make the Loan or any Subsequent WCMA
Loan hereunder: (i) Customer shall have validly subscribed to and continued to
maintain the WCMA Account with MLPF&S, and the WCMA Account shall then be
reflected as an active "Commercial" WCMA Account (i.e., one with line of credit
capabilities) on MLPF&S' WCMA computer system; (ii) no Default shall have
occurred and be continuing or would result from the making of the Loan or such
Subsequent WCMA Loan by MLBFS; (iii) there shall not have occurred and be
continuing any material adverse change in the business or financial condition of
Customer or any Guarantor; (iv) all representations and warranties of Customer
or any Guarantor herein or in any Additional Agreements shall then be true and
correct in all material respects; (v) MLBFS shall have received this Loan
Agreement and all Additional Agreements, duly executed and filed or recorded
where applicable, all of which shall be in form and substance reasonably
satisfactory to MLBFS; (vi) the Commitment Fee shall have been paid in full;
(vii) MLBFS shall have received, as and to the extent applicable, copies of
invoices, bills of sale, loan payoff letters and/or other evidence reasonably
satisfactory to it that the proceeds of the Loan will satisfy the Loan Purpose;
(viii) MLBFS shall have received evidence reasonably satisfactory to it as to
the ownership of the Collateral and the perfection and priority of MLBFS' liens
and security interests thereon, as well as the ownership of and the perfection
and priority of MLBFS' liens and security interests on any other collateral for
the Obligations furnished pursuant to any of the Additional Agreements; (ix)
MLBFS shall have received evidence reasonably satisfactory to it of the
insurance required hereby or by any of the Additional Agreements; and (x) any
additional conditions specified in the "WCMA Reducing Revolver Loan Approval"
letter executed by MLBFS with respect to the transactions contemplated hereby
shall have been met to the reasonable satisfaction of MLBFS.
(k) "Guarantor" shall mean a person or entity who has either guaranteed or
provided collateral for any or all of the Obligations; and "Business Guarantor"
shall mean any such Guarantor that is a corporation, partnership,
proprietorship, limited liability company or other entity regularly engaged in a
business activity.
(l) "Interest Due Date" shall mean the last Business Day of each calendar month
during the term hereof (or, if Customer makes special arrangements with MLPF&S,
on the last Friday of each calendar month during the term hereof).
(m) "Interest Rate" shall mean a variable per annum rate equal to the sum of (i)
2.90% per annum, and (ii) the interest rate from time to time published in the
"Money Rates" section of The Wall Street Journal as the "Dealer Commercial
Paper" rate for 30-day high-grade unsecured notes sold through dealers by major
corporations (the "30-day Dealer Commercial Paper Rate"). The Interest Rate will
change as of the date of publication in The Wall Street Journal of a 30-day
Dealer Commercial Paper Rate that is different from that published on the
preceding Business Day. In the event that The Wall Street Journal shall, for any
reason, fail or cease to publish the 30-day Dealer Commercial Paper Rate, MLBFS
will choose a reasonably comparable index or source to use as the basis for the
Interest Rate.
(n) "Loan" shall mean the specific multiple advance Reducing Revolver by MLBFS
to Customer pursuant to this Agreement for the Loan Purpose and in an aggregate
amount equal to the Loan Amount.
(o) "Loan Amount" shall mean an amount equal to the lesser of: (i)100% of the
amount required by Customer to satisfy or fulfill the Loan Purpose, (ii) the
aggregate amount which Customer shall request be advanced by MLBFS on account of
the Loan Purpose on or prior to the Conversion Date, or (iii) $500,000.00.
(p) "Loan Purpose" shall mean the purpose for which the proceeds of the Loan
will be used; to wit: to purchase vehicles.
(q) "Location of Tangible Collateral" shall mean the address of Customer set
forth at the beginning of this Loan Agreement, together with any other address
or addresses set forth on an exhibit hereto as being a Location of Tangible
Collateral.
(r) "Maximum WCMA Line of Credit" shall mean the maximum aggregate line of
credit which MLBFS will extend to Customer subject to the terms and conditions
hereof, as the same shall be increased by advances prior to the Conversion Date
and reduced each month thereafter in accordance with the terms hereof. On the
Conversion Date, the Maximum WCMA Line of Credit will equal the Loan Amount.
(s) "Obligations" shall mean all liabilities, indebtedness and other obligations
of Customer to MLBFS, howsoever created, arising or evidenced, whether now
existing or hereafter arising, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary or joint or several, and,
without limiting the foregoing, shall include interest accruing after the filing
of any petition in bankruptcy, and all present and future liabilities,
indebtedness and obligations of Customer under this Loan Agreement.
(t) "Permitted Liens" shall mean with respect to the Collateral: (i) liens for
current taxes not delinquent, other non-consensual liens arising in the ordinary
course of business for sums not due, and, if MLBFS' rights to and interest in
the Collateral are not materially and adversely affected thereby, any such liens
for taxes or other non-consensual liens arising in the ordinary course of
business being contested in good faith by appropriate proceedings; (ii) liens in
favor of MLBFS; (iii) liens which will be discharged with the proceeds of the
initial WCMA Loan; and (iv) any other liens expressly permitted in writing by
MLBFS.
(u) "Subsequent WCMA Loan" shall mean each WCMA Loan other than the Loan,
including, without limitation, each WCMA Loan to pay accrued interest.
(v) "Termination Date" shall mean the first to occur of: (i) the last Business
Day of the sixtieth (60th) full calendar month following the Conversion Date, or
(ii) if earlier, the date of termination of the WCMA Line of Credit pursuant to
the terns hereof.
(w) "WCMA Account" shall mean and refer to the Working Capital Management
Account of Customer with MLPF&S identified as WCMA Account No. 7WD-07018 and any
successor Working Capital Management Account of Customer with MLPF&S.
(x) "WCMA Loan" shall mean each advance made by MLBFS pursuant to the WCMA Line
of Credit, including the Loan and each Subsequent WCMA Loan.
(y) "WCMA Loan Balance" shall mean an amount equal to the aggregate unpaid
principal balance of all WCMA Loans.
1.2 Other Terms. Except as otherwise defined herein: (i) all terms used in this
Loan Agreement which are defined in the Uniform Commercial Code of Illinois
("UCC") shall have the meanings set forth in the UCC, and (ii) capitalized terms
used herein which are defined in the WCMA Agreement (including, without
limitation, "Money Accounts", "Minimum Money Accounts Balance", "WCMA Directed
Reserve Program" and "WCMA Program") shall have the meanings set forth in the
WCMA Agreement.
ARTICLE II. THE LOAN
2.1 Commitment. Subject to the terms and conditions hereof, MLBFS hereby agrees
to make the Loan to Customer, and Customer hereby agrees to borrow the Loan from
MLBFS. The Loan will be funded in up to four separate advances as requested by
Customer prior to the Conversion Date; provided, however, that Customer shall
not request funding of, and MLBFS shall not be obligated to fund, any advances
on account of the Loan in an amount less than $125,000.00. Except as otherwise
provided in Section 3.1 hereof, each such advance will be disbursed by MLBFS out
of the WCMA Line of Credit either directly to the applicable third party or
parties on account of the Loan Purpose or to reimburse Customer for amounts
directly expended by it for the Loan Purpose; all as directed by Customer in an
Advance Certificate to be executed and delivered to MLBFS prior to the date of
each funding.
2.2 Conditions of MLBFS' Obligation. The Closing Date and MLBFS' obligations to
activate the WCMA Line of Credit, as hereafter set forth, and make each advance
on account of the Loan prior to the Conversion Date are subject to the prior
fulfillment of each of the following conditions; (a) not less than two Business
Days prior to any requested funding date, MLBFS shall have received an Advance
Certificate, duly executed by Customer, setting forth, among other things, the
amount of such advance and the method of payment and payee(s) of the proceeds
thereof; (b) after giving effect to such advance, the WCMA Loan Balance will not
exceed either the Maximum WCMA Line of Credit or the Loan Amount; (c) the
Conversion Date shall not then have occurred; and (d) each of the General
Funding Conditions shall then have been met or satisfied to the reasonable
satisfaction of MLBFS.
2.3 Commitment Fee. In consideration of the agreement by MLBFS to extend the
Loan and any Subsequent WCMA Loans to Customer in accordance with and subject to
the terms hereof, Customer has paid or shall, on or before the Closing Date pay,
the Commitment Fee to MLBFS. Customer acknowledges and agrees that the
Commitment Fee has been fully earned by MLBFS, and that it will not under any
circumstances be refundable.
2.4 Use of Loan Proceeds. Unless otherwise agreed by MLBFS in writing, the
proceeds of the Loan shall be used solely for the Loan Purpose. The Proceeds of
each Subsequent WCMA Loan initiated by Customer shall be used by Customer solely
for working capital in the ordinary course of its business, or, with the prior
written consent of MLBFS, for other lawful business purposes of Customer not
prohibited hereby. Customer agrees that under no circumstances will the proceeds
of the Loan or any Subsequent WCMA Loan be used: (i) for personal, family or
household purposes of any person whatsoever, or (ii) to purchase, carry or trade
in securities, or repay debt incurred to purchase, carry or trade in securities,
whether in or in connection with the WCMA Account, another account of Customer
with MLPF&S or an account of Customer at any other broker or dealer in
securities, or (iii) unless otherwise consented to in writing by MLBFS, to pay
any amount to Xxxxxxx Xxxxx and Co., Inc. or any of its subsidiaries, other xxxx
Xxxxxxx Xxxxx Bank USA, Xxxxxxx Xxxxx Bank & Trust Co. or any subsidiary of
either of them (including MLBFS and Xxxxxxx Xxxxx Credit Corporation).
ARTICLE III. THE WCMA LINE OF CREDIT
3.1 Activation of the WCMA Line of Credit. Subject to the terms and conditions
hereof, on the Closing Date MLBFS will activate a WCMA Line of Credit for
Customer in the amount of the advance on account of the Loan made on such date.
Concurrently with each subsequent advance on account of the Loan prior to the
Conversion Date, the Maximum WCMA Line of Credit will be increased by the amount
of such advance. All such advances will be funded out of the WCMA Line of Credit
immediately after such activation or increase (or, if and to the extent
otherwise expressly contemplated in the definition of Loan Purpose or otherwise
directed in the Advance Certificate and hereafter expressly agreed by MLBFS, all
or part of the Loan may be made available as a WCMA Line of Credit and funded by
Customer.)
3.2 Subsequent WCMA Loans. Subject to the terms and conditions hereof, during
the period from and after the Closing Date to the Termination Date: (a) Customer
may repay the WCMA Loan Balance in whole or in part at any time without premium
or penalty (except, as hereafter set forth, upon a refinancing by another
lender), and request a re-borrowing of amounts repaid on a revolving basis, and
(b) in addition to Subsequent WCMA Loans made automatically to pay accrued
interest, as hereafter provided, MLBFS will make such Subsequent WCMA Loans as
Customer may from time to time request or be deemed to have requested in
accordance with the terms hereof. Customer may request Subsequent WCMA Loans by
use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or such other means of
access to the WCMA Line of Credit as may be permitted by MLBFS from time to
time; it being understood that so long as the WCMA Line of Credit shall be in
effect, any charge or debit to the WCMA Account which but for the WCMA Line of
Credit would under the terms of the WCMA Agreement result in an overdraft, shall
be deemed a request by Customer for a Subsequent WCMA Loan.
3.3 Conditions of Subsequent WCMA Loans. Notwithstanding the foregoing, MLBFS
shall not be obligated to make any Subsequent WCMA Loan, and may without notice
refuse to honor any such request by Customer, if at the time of receipt by MLBFS
of Customer's request: (a) the making of such Subsequent WCMA Loan would cause
the Maximum WCMA Line of Credit, as reduced pursuant to the provisions of
Section 3.6 hereof, to be exceeded; or (b) the Termination Date shall have
occurred; or (c) an event shall have occurred and be continuing which shall have
caused any of the General Funding Conditions to not then be met or satisfied to
the reasonable satisfaction of MLBFS. The making by MLBFS of any Subsequent WCMA
Loan (including, without limitation, the making of a Subsequent WCMA Loan to pay
accrued interest or late charges, as hereafter provided) at a time when any one
or more of said conditions shall not have been met shall not in any event be
construed as a waiver of said condition or conditions or of any Default, and
shall not prevent MLBFS at any time thereafter while any condition shall not
have been met from refusing to honor any request by Customer for a Subsequent
WCMA Loan.
3.4 WCMA Note. Customer hereby promises to pay to the order of MLBFS, at the
times and in the manner set forth in this Loan Agreement, or in such other
manner and at such place as MLBFS may hereafter designate in writing: (a) the
WCMA Loan Balance; (b) interest at the Interest Rate on the outstanding WCMA
Loan Balance (computed for the actual number of days elapsed on the basis of a
year consisting of 360 days), from and including the date on which the first
advance on account of the Loan is made until the date of payment of all WCMA
Loans in full; and (c) on demand, all other sums payable pursuant to this Loan
Agreement, including, but not limited to, any late charges. Except as otherwise
expressly set forth herein, Customer hereby waives presentment, demand for
payment, protest and notice of protest, notice of dishonor, notice of
acceleration, notice of intent to accelerate and all other notices and
formalities in connection with this WCMA Note and this Loan Agreement.
3.5 Interest. (a) An amount equal to accrued interest on the WCMA Loan Balance
shall be payable by Customer monthly on each Interest Due Date, commencing with
the Interest Due Date occurring in the calendar month in which the Closing Date
shall occur. Unless otherwise hereafter directed in writing by MLBFS on or after
the Termination Date, such interest will be automatically charged to the WCMA
Account on the applicable Interest Due Date, and, to the extent not paid with
free credit balances or the proceeds of sales of any Money Accounts then in the
WCMA Account, as hereafter provided, such interest will be paid by a Subsequent
WCMA Loan and added to the WCMA Loan Balance. All interest shall be computed for
the actual number of days elapsed on the basis of a year consisting of 360 days.
(b) Notwithstanding any provision to the contrary in this Agreement or any of
the Additional Agreements, no provision of this Agreement or any of the
Additional Agreements shall require the payment or permit the collection of any
amount in excess of the maximum amount of interest permitted to be charged by
law ("Excess Interest"). If any Excess Interest is provided for, or is
adjudicated as being provided for, in this Agreement or any of the Additional
Agreements, then: (i) Customer shall not be obligated to pay any Excess
Interest; and (ii) any Excess Interest that MLBFS may have received hereunder or
under any of the Additional Agreements shall, at the option of MLBFS, be either
applied as a credit against the then WCMA Loan Balance, or refunded to the payer
thereof.
3.6 Periodic Reduction of Maximum WCMA Line of Credit. Commencing on the last
Business Day of the first full calendar month following the Conversion Date, and
continuing on the last Business Day of each calendar month thereafter to and
including the last Business Day of the fifty-ninth (59th) such calendar month,
the Maximum WCMA Line of Credit shall be reduced by an amount equal to
one-sixtieth (1/60th) of the Loan Amount per month. Unless the WCMA Line of
Credit shall have been earlier terminated pursuant to the terms hereof, on the
last Business Day of the sixtieth (60th) calendar month following the Conversion
Date, the WCMA Line of Credit shall, without further action of either of the
parties hereto, be terminated, Customer shall pay to MLBFS the entire WCMA Loan
Balance, if any, and all other Obligations, and the WCMA Account, at the option
of Customer, will either be converted to a WCMA Cash Account (subject to any
requirements of MLPF&S) or terminated. No failure or delay on the part of MLBFS
in entering into the WCMA computer system any scheduled reduction in the Maximum
WCMA Line of Credit pursuant to this Section shall have the effect of preventing
or delaying such reduction.
3.7 Mandatory Payments. CUSTOMER AGREES THAT IT WILL, WITHOUT DEMAND, INVOICING
OR THE REQUEST OF MLBFS, FROM TIME TO TIME MAKE SUFFICIENT PAYMENTS ON ACCOUNT
OF THE WCMA LOAN BALANCE TO ASSURE THAT THE WCMA LOAN BALANCE WILL NOT AT ANY
TIME EXCEED THE MAXIMUM WCMA LINE OF CREDIT, AS REDUCED EACH MONTH PURSUANT TO
SECTION 3.6 HEREOF.
3.8 Method of Making Payments. All payments required or permitted to be made
pursuant to this Loan Agreement shall be made in lawful money of the United
States. Unless otherwise hereafter directed by MLBFS, such payments may be made
by the delivery of checks (other than WCMA Checks), or by means of FTS or wire
transfer of funds (other than funds from the WCMA Line of Credit) to MLPF&S for
credit to the WCMA Account. Payments to MLBFS from funds in the WCMA Account
shall be deemed to be made by Customer upon the same basis and schedule as funds
are made available for investment in the Money Accounts in accordance with the
terms of the WCMA Agreement. The acceptance by or on behalf of MLBFS of a check
or other payment for a lesser amount than shall be due from Customer, regardless
of any endorsement or statement thereon or transmitted therewith, shall not be
deemed an accord and satisfaction or anything other than a payment on account,
and MLBFS or anyone acting on behalf of MLBFS may accept such check or other
payment without prejudice to the rights of MLBFS to recover the balance actually
due or to pursue any other remedy under this Loan Agreement or applicable law
for such balance. All checks accepted by or on behalf of MLBFS in connection
with this Loan Agreement are subject to final collection.
3.9 Irrevocable Instructions to MLPF&S. In order to minimize the WCMA Loan
Balance, Customer hereby irrevocably authorizes and directs MLPF&S, effective on
the Closing Date and continuing thereafter so long as this Agreement shall be in
effect: (a) to immediately and prior to application for any other purpose pay to
MLBFS to the extent of any WCMA Loan Balance or other amounts payable by
Customer hereunder all available free credit balances from time to time in the
WCMA Account; and (b) if such available free credit balances are insufficient to
pay the WCMA Loan Balance and such other amounts, and there are in the WCMA
Account at any time any investments in Money Accounts (other than any
investments constituting any Minimum Money Accounts Balance under the WCMA
Directed Reserve Program), to immediately liquidate such investments and pay to
MLBFS to the extent of any WCMA Loan Balance and such other amounts the
available proceeds from the liquidation of any such Money Accounts.
3.10 Late Charge. Any payment or deposit required to be made by Customer
pursuant to this Loan Agreement or any of the Additional Agreements not paid or
made within ten (10) days of the applicable due date shall be subject to a late
charge in an amount equal to the lesser of: (a) 5% of the overdue amount, or (b)
the maximum amount permitted by applicable law. Such late charge shall be
payable on demand, or, without demand, may in the sole discretion of MLBFS be
paid by a Subsequent WCMA Loan and added to the WCMA Loan Balance in the same
manner as provided herein for accrued interest with respect to the WCMA Line of
Credit,
3.11 Prepayment Customer may prepay the Loan and any Subsequent WCMA Loan at any
time in whole or in part without premium or penalty; provided, however, that any
refinancing of the WCMA Loan Balance by another financial institution shall: (a)
if such refinancing shall occur prior to the first anniversary of the Conversion
Date, be accompanied by a premium in an amount equal to 3% of the amount prepaid
by such refinancing; (b) if such refinancing shall occur thereafter, but prior
to the second anniversary of the Conversion Date, be accompanied by a premium in
an amount equal to 2% of the amount prepaid by such refinancing; and (c) if such
refinancing shall occur on or at any time after the second anniversary of the
Conversion Date, be accompanied by a premium in an amount equal to 1% of the
amount prepaid by such refinancing.
3.12 Option of Customer to Terminate. Customer will have the option to terminate
the WCMA Line of Credit at any time upon written notice to MLBFS. Concurrently
with any such termination, Customer shall pay to MLBFS the entire WCMA Loan
Balance and all other Obligations.
3.13 Limitation of Liability. MLBFS shall not be responsible, and shall have no
liability to Customer or any other party, for any delay or failure of MLBFS to
honor any request of Customer for a WCMA Loan or any other act or omission of
MLBFS, MLPF&S or any of their affiliates due to or resulting from any system
failure, error or delay in posting or other clerical error, loss of power, fire,
Act of God or other cause beyond the reasonable control of MLBFS, MLPF&S or any
of their affiliates unless directly arising out of the willful wrongful act or
active gross negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential damages arising from any
act or omission by MLBFS, MLPF&S or any of their affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.
3.14 Statements. MLPF&S will include in each monthly statement it issues under
the WCMA Program information with respect to WCMA Loans and the WCMA Loan
Balance. Any questions that Customer may have with respect to such information
or the Loan should be directed to MLBFS; and any questions with respect to any
other matter in such statements or about or affecting the WCMA Program should be
directed to MLPF&S.
ARTICLE IV. GENERAL PROVISIONS
4.1 Representations and Warranties.
Customer represents and warrants to MLBFS that:
(a) Organization and Existence. Customer is a corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware and is
qualified to do business and in good standing in each other state where the
nature of its business or the property owned by it make such qualification
necessary; and, where applicable, each Business Guarantor is duly organized,
validly existing and in good standing under the laws of the state of its
formation and is qualified to do business and in good standing in each other
state where the nature of its business or the property owned by it make such
qualification necessary.
(b) Execution, Delivery and Performance. The execution, delivery and performance
by Customer of this Loan Agreement and by Customer and each Guarantor of such of
the Additional Agreements to which it is a party: (i) have been duly authorized
by all requisite action, (ii) do not and will not violate or conflict with any
law or other governmental requirement, or any of the agreements, instruments or
documents which formed or govern Customer or any such Guarantor, and (iii) do
not and will not breach or violate any of the provisions of, and will not result
in a default by Customer or any such Guarantor under, any other agreement,
instrument or document to which it is a party or by which it or its properties
are bound.
(c) Notices and Approvals. Except as may have been given or obtained, no notice
to or consent or approval of any governmental body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by Customer or any
Guarantor of such of this Loan Agreement and the Additional Agreements to which
it is a party.
(d) Enforceability. This Loan Agreement and such of the Additional Agreements to
which Customer or any Guarantor is a party are the respective legal, valid and
binding obligations of Customer and such Guarantor, enforceable against it or
them, as the case may be, in accordance with their respective terms, except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principles of equity.
(e) Collateral. Except for any Permitted Liens: (i) Customer has good and
marketable title to the Collateral, (ii) none of the Collateral is subject to
any lien, encumbrance or security interest, and (iii) upon the filing of all
Uniform Commercial Code financing statements executed by Customer with respect
to the Collateral in the appropriate jurisdiction(s) and/or the completion of
any other action required by applicable law to perfect its liens and security
interests, MLBFS will have valid and perfected first liens and security
interests upon all of the Collateral.
(f) Financial Statements. Except as expressly set forth in Customer's or any
Business Guarantor's financial statements, all financial statements of Customer
and each Business Guarantor furnished to MLBFS have been prepared in conformity
with generally accepted accounting principles, consistently applied, are true
and correct in all material respects, and fairly present the financial condition
of it as at such dates and the results of its operations for the periods then
ended (subject, in the case of interim unaudited financial statements, to normal
year-end adjustments); and since the most recent date covered by such financial
statements, there has been no material adverse change in any such financial
condition or operation. All financial statements furnished to MLBFS of any
Guarantor other than a Business Guarantor are true and correct in all material
respects and fairly represent such Guarantors financial condition as of the date
of such financial statements, and since the most recent date of such financial
statements, there has been no material adverse change in such financial
condition.
(g) Litigation. No litigation, arbitration, administrative or governmental
proceedings are pending or, to the knowledge of Customer, threatened against
Customer or any Guarantor, which would, if adversely determined, materially and
adversely affect the liens and security interests of MLBFS hereunder or under
any of the Additional Agreements, the financial condition of Customer or any
such Guarantor or the continued operations of Customer or any Business
Guarantor.
(h) Tax Returns. All federal, state and local tax returns, reports and
statements required to be filed by Customer and each Guarantor have been filed
with the appropriate governmental agencies and all taxes due and payable by
Customer and each Guarantor have been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely affect either the
liens and security interests of MLBFS hereunder or under any of the Additional
Agreements, the financial condition of Customer or any Guarantor, or the
continued operations of Customer or any Business Guarantor).
(i) Collateral Location. All of the tangible Collateral is located at a Location
of Tangible Collateral.
(j) No Outside Broker. Except for employees of MLBFS, MLPF&S or one of their
affiliates, Customer has not in connection with the transactions contemplated
hereby directly or indirectly engaged or dealt with, and was not introduced or
referred to MLBFS by, any broker or other loan arranger.
Each of the foregoing representations and warranties: (i) has been and will be
relied upon as an inducement to MLBFS to make the Loan and each Subsequent WCMA
Loan, and (ii) is continuing and shall be deemed remade by Customer on the
Closing Date, on the date of funding of each additional advance on account of
the Loan, on the Conversion Date, and concurrently with each request by Customer
for a Subsequent WCMA Loan.
4.2 Financial and Other Information.
(a) Customer shall furnish or cause to be furnished to MLBFS during the term of
this Loan Agreement all of the following:
(i) Annual Financial Statements. Within 120 days after the close of each fiscal
year of Customer, a copy of the annual audited consolidated financial statements
of Customer and the annual audited consolidated financial statements of each
Business Guarantor, including, in each case, in reasonable detail, a balance
sheet and statement of retained earnings as at the close of such fiscal year and
statements of profit and loss and cash flow for such fiscal year
(ii) Interim Financial Statements. Within 45 days after the close of each fiscal
quarter of Customer, a copy of the interim financial statements of Customer and
each Business Guarantor for such fiscal quarter (including in reasonable detail
both a balance sheet as of the close of such fiscal period, and statement of
profit and loss for the applicable fiscal period);
(iii) A/R Agings. Within 45 days after the close of each fiscal quarter of
Customer, a copy of the Accounts Receivable Aging of Customer as of the end of
such fiscal quarter; and
(iv) Other Information. Such other information as MLBFS may from time to time
reasonably request relating to Customer, any Guarantor or the Collateral.
(b) General Agreements With Respect to Financial Information. Customer agrees
that except as otherwise specified herein or otherwise agreed to in writing by
MLBFS: (i) all annual financial statements required to be furnished by Customer
to MLBFS hereunder will be prepared by either the current independent
accountants for Customer or other independent accountants reasonably acceptable
to MLBFS, and (ii) all other financial information required to be furnished by
Customer to MLBFS hereunder will be certified as correct in all material
respects by the party who has prepared such information, and, in the case of
internally prepared information with respect to Customer or any Business
Guarantor, certified as correct by their respective chief financial officer.
4.3 Other Covenants. Customer further covenants and agrees during the term of
this Loan Agreement that:
(a) Financial Records; Inspection. Customer and each Business Guarantor will:
(i) maintain at its principal place of business complete and accurate books and
records, and maintain all of its financial records in a manner consistent with
the financial statements heretofore furnished to MLBFS or prepared on such other
basis as may be approved in writing by MLBFS; and (ii) permit MLBFS or its duly
authorized representatives, upon reasonable notice and at reasonable times, to
inspect its properties (both real and personal), operations, books and records.
(b) Taxes. Customer and each Guarantor will pay when due all taxes, assessments
and other governmental charges, howsoever designated, and all other liabilities
and obligations, except to the extent that any such failure to pay will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements, the financial condition of
Customer or any Guarantor or the continued operations of Customer or any
Business Guarantor.
(c) Compliance With Laws and Agreements. Neither Customer nor any Guarantor will
violate any law, regulation or other governmental requirement. any judgment or
order of any court or governmental agency or authority, or any agreement,
instrument or document to which it is a party or by which it is bound, if any
such violation will materially and adversely affect either the liens and
security interests of MLBFS hereunder or under any of the Additional Agreements,
the financial condition of Customer or any Guarantor, or the continued
operations of Customer or any Business Guarantor.
(d) No Use of Xxxxxxx Xxxxx Name. Neither Customer, nor any Guarantor will
directly or indirectly publish, disclose or otherwise use in any advertising or
promotional material, or press release or interview, the name, logo or any
trademark of MLBFS, MLPF&S, Xxxxxxx Xxxxx and Co., Incorporated or any of their
affiliates.
(e) Notification By Customer. Customer shall provide MLBFS with prompt written
notification of: (i) any Default; (ii) any materially adverse change in the
business, financial condition or operations of Customer or any Business
Guarantor; (iii) any information which indicates that any financial statements
of Customer or any Guarantor fail in any material respect to present fairly the
financial condition and results of operations purported to be presented in such
statements; and (iv) any change in Customer's outside accountants. Each
notification by Customer pursuant hereto shall specify the event or information
causing such notification, and, to the extent applicable, shall specify the
steps being taken to rectify or remedy such event or information.
(f) Notice of Change. Customer shall give MLBFS not less than 30 days prior
written notice of any change in the name (including any fictitious name) or
principal place of business or residence of Customer or any Guarantor.
(g) Continuity. Except upon the prior written consent of MLBFS, which consent
xxxx not be unreasonably withheld: (i) neither Customer nor any Business
Guarantor shall be a party to any merger or consolidation with, or purchase or
otherwise acquire all or substantially all of the assets of, or any material
stock, partnership, joint venture or other equity interest in, any person or
entity, or sell, transfer or lease all or any substantial part of its assets, if
any such action would result in either: (A) a material change in the principal
business, ownership or control of Customer or such Business Guarantor, or (B) a
material adverse change in the financial condition or operations of Customer or
such Business Guarantor; (ii) Customer and each Business Guarantor shall
preserve their respective existence and good standing in the jurisdiction(s) of
establishment and operation; (iii) neither Customer nor any Business Guarantor
shall engage in any material business substantially different from their
respective business in effect as of the date of application by Customer for
credit from MLBFS, or cease operating any such material business; (iv) neither
Customer nor any Business Guarantor shall cause or permit any other person or
entity to assume or succeed to any material business or operations of Customer
or such Business Guarantor; and (v) neither Customer nor any Business Guarantor
shall cause or permit any material change in its controlling ownership.
(h) Minimum Tangible Net Worth. Customer's "tangible net worth" shall at all
times exceed $1,600,000.00. For the purposes hereof, the term "tangible net
worth" shall mean Customer's net worth as shown on Customer's regular financial
statements prepared in a manner consistent with the terms hereof, but excluding
an amount equal to (i) any assets which are ordinarily classified as
"intangible" in accordance with generally accepted accounting principles, and
(ii) any amounts now or hereafter directly or indirectly owing to Customer by
officers, shareholders or affiliates of Customer.
(i) Fixed Charge Coverage Ratio. Customer shall at all times during the term
hereof maintain a Fixed Charge Coverage Ratio of not less than 3 to 1. The term
"Fixed Charge Coverage Ratio" shall mean the ratio of: (a) income before
interest (including payments in the nature of interest under capital leases),
taxes, depreciation and amortization, less internally financed capital
expenditures, to (b) the sum the aggregate principal and interest paid or
accrued, the aggregate rental under capital leases paid or accrued, any
dividends and other distributions paid or payable to shareholders and taxes paid
in cash; all as determined on a quarterly basis from the regular consolidated
financial statements of Customer prepared in a manner consistent with the terms
hereof.
4.4 Collateral
(a) Pledge of Collateral. To secure payment and performance of the Obligations,
Customer hereby pledges, assigns, transfers and sets over to MLBFS, and grants
to MLBFS first liens and security interests in and upon all of the Collateral,
subject only to Permitted Liens.
(b) Liens. Except upon the prior written consent of MLBFS, Customer shall not
create or permit to exist any lien, encumbrance or security interest upon or
with respect to any Collateral now owned or hereafter acquired other than
Permitted Liens.
(c) Performance of Obligations. Customer shall perform all of its obligations
owing on account of or with respect to the Collateral; it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise, shall be deemed an assumption by MLBFS of any of Customer's said
obligations.
(d) Sales and Collections. So long as no Event of Default shall have occurred
and be continuing, Customer may in the ordinary course of its business: (i) sell
any Inventory normally held by Customer for sale, (ii) use or consume any
materials and supplies normally held by Customer for use or consumption, and
(iii) collect all of its Accounts. Customer shall take such action with respect
to protection of its Inventory and the other Collateral and the collection of
its Accounts as MLBFS may from time to time reasonably request.
(e) Account Schedules. Upon the request of MLBFS, made now or at any reasonable
time or times hereafter, Customer shall deliver to MLBFS, in addition to the
other information required hereunder, a schedule identifying, for each Account
and all Chattel Paper subject to MLBFS' security interests hereunder, each
Account Debtor by name and address and amount, invoice or contract number and
date of each invoice or contract Customer shall furnish to MLBFS such additional
information with respect to the Collateral, and amounts received by Customer as
proceeds of any of the Collateral, as MLBFS may from time to time reasonably
request.
(f) Alterations and Maintenance. Except upon the prior written consent of MLBFS,
Customer shall not make or permit any material alterations to any tangible
Collateral which might materially reduce or impair its market value or utility.
Customer shall at all times keep the tangible Collateral in good condition and
repair, reasonable wear and tear excepted, and shall pay or cause to be paid all
obligations arising from the repair and maintenance of such Collateral, as well
as all obligations with respect to each Location of Tangible Collateral, except
for any such obligations being contested by Customer in good faith by
appropriate proceedings.
(g) Location. Except for movements required in the ordinary course of Customer's
business, Customer shall give MLBFS 30 days' prior written notice of the placing
at or movement of any tangible Collateral to any location other than a Location
of Tangible Collateral. In no event shall Customer cause or permit any material
tangible Collateral to be removed from the United States without the express
prior written consent of MLBFS.
(h) Insurance. Customer shall insure all of the tangible Collateral under a
policy or policies of physical damage insurance providing that losses will be
payable to MLBFS as its interests may appear pursuant to a Lender's Loss Payable
Endorsement and containing such other provisions as may be reasonably required
by MLBFS. Customer shall further provide and maintain a policy or policies of
comprehensive public liability Insurance naming MLBFS as an additional party
insured. Customer and each Business Guarantor shall maintain such other
insurance as may be required by law or is customarily maintained by companies in
a similar business or otherwise reasonably required by MLBFS. All such insurance
policies shall provide that MLBFS will receive not less than 10 days prior
written notice of any cancellation, and shall otherwise be in form and amount
and with an insurer or insurers reasonably acceptable to MLBFS. Customer shall
furnish MLBFS with a copy or certificate of each such policy or policies and,
prior to any expiration or cancellation, each renewal or replacement thereof.
(i) Event of Loss. Customer shall at its expense promptly repair all repairable
damage to any tangible Collateral. In the event that any tangible Collateral is
damaged beyond repair, lost, totally destroyed or confiscated (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of $25,000.00
or more, then, on or before the first to occur of (i) 90 days after the
occurrence of such Event of Loss, or (ii) 10 Business Days after the date on
which either Customer or MLBFS shall receive any proceeds of insurance on
account of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer or MLBFS that it disclaims liability in
respect of such Event of Loss, Customer shall, at Customer's option, either
replace the Collateral subject to such Event of Loss with comparable Collateral
free of all liens other than Permitted Liens (in which event Customer shall be
entitled to utilize the proceeds of insurance on account of such Event of Loss
for such purpose, and may retain any excess proceeds of such insurance), or
permanently prepay the Loan by an amount equal to the actual cash value of such
Collateral as determined by either the insurance company's payment (plus any
applicable deductible) or, in absence of insurance company payment, as
reasonably determined by MLBFS; it being further understood that any such
permanent prepayment shall be accompanied by a like permanent reduction in the
Maximum WCMA Line of Credit. Notwithstanding the foregoing, if at the time of
occurrence of such Event of Loss or any time thereafter prior to replacement or
line reduction, as aforesaid, an Event of Default shall have occurred and be
continuing hereunder, then MLBFS may at its sole option, exercisable at any time
while such Event of Default shall be continuing, require Customer to either
replace such Collateral or prepay the Loan and reduce the Maximum WCMA Line of
Credit, as aforesaid.
(j) Notice of Certain Events. Customer shall give MLBFS immediate notice of any
attachment, lien, judicial process, encumbrance or claim affecting or involving
$25,000.00 or more of the Collateral.
(k) Indemnification. Customer shall indemnify, defend and save MLBFS harmless
from and against any and all claims, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising out
of or in any manner occasioned by (i) the ownership, collection, possession, use
or operation of any Collateral, or (ii) any failure by Customer to perform any
of its obligations hereunder; excluding, however, from said indemnity any such
claims, liabilities, etc. arising directly out of the willful wrongful act or
active gross negligence of MLBFS. This indemnity shall survive the expiration or
termination of this Loan Agreement as to all matters arising or accruing prior
to such expiration or termination.
4.5 Events of Default
The occurrence of any of the following events shall constitute an "Event of
Default" under this Loan Agreement:
(a) Failure to Pay. (i) Customer shall fail to deposit into the WCMA Account an
amount sufficient to assure that the WCMA Loan Balance does not exceed the
Maximum WCMA Line of Credit, as reduced In accordance with the provisions
hereof, or (ii) Customer shall fail to pay to MLBFS a deposit into the WCMA
Account when due any other amount owing or required to be paid or deposited by
Customer under this Loan Agreement, or (iii) Customer shall fail to pay when due
any other Obligations; and any such failure shall continue for more than five
(5) Business Days after written notice thereof shall have been given by MLBFS to
Customer.
(b) Failure to Perform. Customer or any Guarantor shall default in the
performance or observance of any covenant or agreement on its part to be
performed or observed under this Loan Agreement or any of the Additional
Agreements (not constituting an Event of Default under any other clause of this
Section), and such default shall continue unremedied for ten (10) Business Days
after written notice thereof shall have been given by MLBFS to Customer.
(c) Breach of Warranty. Any representation or warranty made by Customer or any
Guarantor contained in this Loan Agreement or any of the other Additional
Agreements shall at any time prove to have been incorrect in any material
respect when made.
(d) Default Under Other Agreement. A default or Event of Default by Customer or
any Guarantor shall occur under the terms of any other agreement, instrument or
document with or intended for the benefit of MLBFS, MLPF&S or any of their
affiliates, and any required notice shall have been given and required passage
of time shall have elapsed.
(e) Bankruptcy Event. Any Bankruptcy Event shall occur.
(f) Material Impairment Any event shall occur which shall reasonably cause MLBFS
to in good faith believe that the prospect of full payment or performance by
Customer or any Guarantor of any of their respective liabilities or obligations
under this Loan Agreement or any of the Additional Agreements to which Customer
or such Guarantor is a party has been materially impaired. The existence of such
a material impairment shall be determined in a manner consistent with the intent
of Section 1208 of the UCC.
(g) Acceleration of Debt to Other Creditors. Any event shall occur which results
in the acceleration of the maturity of any indebtedness of $100.000.00 or more
of Customer or any Guarantor to another creditor under any indenture, agreement,
undertaking, or otherwise.
(h) Seizure or Abuse of Collateral. The Collateral, or any material part
thereof, shall be or become subject to any material abuse or misuse, or any
levy, attachment, seizure or confiscation which is not released within ten (10)
Business Days.
4.6 Remedies.
(a) Remedies Upon Default. Upon the occurrence and during the continuance of any
Event of Default, MLBFS may at its sole option do any one or more or all of the
following, at such time and in such order as MLBFS may in its sole discretion
choose:
(i) Termination. MLBFS may without notice terminate its obligation to make any
further advances on account of the Loan (if any portion of the Loan has not then
been funded), terminate the WCMA Line of Credit, and terminate any obligation to
make any Subsequent WCMA Loan (including, without limitation, any Subsequent
WCMA Loan to pay accrued interest) or otherwise extend any credit to or for the
benefit of Customer (it being understood that upon the occurrence of any
Bankruptcy Event the WCMA Line of Credit and all such obligations shall
automatically terminate without any action on the part of MLBFS); and upon any
such termination MLBFS shall be relieved of all such obligations.
(ii) Acceleration. MLBFS may declare the WCMA Loan Balance and all other
Obligations to be forthwith due and payable, whereupon all such amounts shall be
immediately due and payable, without presentment, demand for payment, protest
and notice of protest, notice of dishonor, notice of acceleration, notice of
intent to accelerate or other notice or formality of any kind, all of which are
hereby expressly waived; provided, however, that upon the occurrence of any
Bankruptcy Event the WCMA Loan Balance and other Obligations shall automatically
become due and payable without any action on the part of MLBFS.
(iii) Exercise Other Rights. MLBFS may exercise any or all of the remedies of a
secured party under applicable law, including, but not limited to, the UCC, and
any or all of its other rights and remedies under this Loan Agreement and the
Additional Agreements.
(iv) Possession. MLBFS may require Customer to make the Collateral and the
records pertaining to the Collateral available to MLBFS at a place designated by
MLBFS which is reasonably convenient to Customer, or may take possession of the
Collateral and the records pertaining to the Collateral without the use of any
judicial process and without any prior notice to Customer.
(v) Sale. MLBFS may sell any or all of the Collateral at public or private sale
upon such terms and conditions as MLBFS may reasonably deem proper. MLBFS may
purchase any Collateral at any such public sale. The net proceeds of any such
public or private sale and all other amounts actually collected or received by
MLBFS pursuant hereto, after deducting all costs and expenses incurred at any
time in the collection of the Obligations and in the protection, collection and
sale of the Collateral, will be applied to the payment of the Obligations, with
any remaining proceeds paid to Customer or whoever else may be entitled thereto,
and with Customer and each Guarantor remaining jointly and severally liable for
any amount remaining unpaid after such application.
(vi) Delivery of Cash, Checks, Etc. MLBFS may require Customer to forthwith upon
receipt, transmit and deliver to MLBFS in the form received, all cash, checks,
drafts and other instruments for the payment of money (properly endorsed, where
required, so that such items may be collected by MLBFS) which may be received by
Customer at any time in full or partial payment of any Collateral, and require
that Customer not commingle any such items which may be so received by Customer
with any other of its funds or property but instead hold them separate and apart
and in trust for MLBFS until delivery is made to MLBFS.
(vii) Notification of Account Debtors. MLBFS may notify any Account Debtor that
its Account or Chattel Paper has been assigned to MLBFS and direct such Account
Debtor to make payment directly to MLBFS of all amounts due or becoming due with
respect to such Account or Chattel Paper; and MLBFS may enforce payment and
collect, by legal proceedings or otherwise, such Account or Chattel Paper,
(viii) Control of Collateral. MLBFS may otherwise take control in any lawful
manner of any cash or non-cash items of payment or proceeds of Collateral and of
any rejected, returned, stopped in transit or repossessed goods included in the
Collateral and endorse Customer's name on any item of payment on or proceeds of
the Collateral,
(b) Set-Off. MLBFS shall have the further right upon the occurrence and during
the continuance of an Event of Default to set-off, appropriate and apply toward
payment of any of the Obligations, in such order of application as MLBFS may
from time to time and at any time elect, any cash, credit, deposits, accounts,
financial assets, investment property, securities and any other property of
Customer which is in transit to or in the possession, custody or control of
MLBFS, MLPF&S or any agent, bailee, or affiliate of MLBFS or MLPF&S. Customer
hereby collaterally assigns and grants to MLBFS a continuing security interest
in all such property as additional Collateral.
(c) Power of Attorney. Effective upon the occurrence and during the continuance
of an Event of Default, Customer hereby irrevocably appoints MLBFS as its
attorney-in-fact, with full power of substitution, in its place and stead and in
its name or in the name of MLBFS, to from time to time in MLBFS' sole discretion
take any action and to execute any instrument which MLBFS may deem necessary or
advisable to accomplish the purposes of this Loan Agreement, including, but not
limited to, to receive, endorse and collect all checks, drafts and other
instruments for the payment of money made payable to Customer included in the
Collateral.
(d) Remedies are Severable and Cumulative. All rights and remedies of MLBFS
herein are severable and cumulative and in addition to all other rights and
remedies available in the Additional Agreements, at law or in equity, and any
one or more of such rights and remedies may be exercised simultaneously or
successively.
(e) Notices. To the fullest extent permitted by applicable law, Customer hereby
irrevocably waives and releases MLBFS of and from any and all liabilities and
penalties for failure of MLBFS to comply with any statutory or other requirement
imposed upon MLBFS relating to notices of sale, holding of sale or reporting of
any sale, and Customer waives all rights of redemption a reinstatement from any
such sale. Any notices required under applicable law shall be reasonably and
properly given to Customer if given by any of the methods provided herein at
least 5 Business Days prior to taking action. MLBFS shall have the right to
postpone or adjourn any sale or other disposition of Collateral at any time
without giving notice of any such postponed or adjourned date. In the event
MLBFS seeks to take possession of any or all of the Collateral by court process,
Customer further irrevocably waives to the fullest extent permitted by law any
bonds and any surety or security relating thereto required by any statute, court
rule or otherwise as an incident to such possession, and any demand for
possession prior to the commencement of any suit or action.
4.7 Miscellaneous.
(a) Non-Waiver. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to this Loan Agreement or any of the Additional
Agreements shall operate as a waiver thereof, and no single or partial exercise
of any such right, power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any waiver
of any provision of this Loan Agreement or any of the Additional Agreements, nor
any consent to any departure by Customer therefrom, shall be effective unless
the same shall be in writing and signed by MLBFS. Any waiver of any provision of
this Loan Agreement or any of the Additional Agreements and any consent to any
departure by Customer from the terms thereof shall be effective only in the
specific instance and for the specific purpose for which given. Except as
otherwise expressly provided herein, no notice to or demand on Customer shall in
any case entitle Customer to any other or further notice or demand in similar or
other circumstances.
(b) Disclosure. Customer hereby irrevocably authorizes MLBFS and each of its
affiliates, including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred) obtain from and disclose to each other
any and all financial and other information about Customer.
(c) Communications. All notices and other communications required or permitted
hereunder or in connection with any of the Additional Agreements shall be in
writing, and shall be either delivered personally, mailed by postage prepaid
certified mail or sent by express overnight courier or by facsimile. Such
notices and communications shall be deemed to be given on the date of personal
delivery, facsimile transmission or actual delivery of certified mail, or one
Business Day after delivery to an express overnight courier. Unless otherwise
specified in a notice sent or delivered in accordance with the terms hereof,
notices and other communications in writing shall be given to the parties hereto
at their respective addresses set forth at the beginning of this Loan Agreement,
or, in the case of facsimile transmission, to the parties at their respective
regular facsimile telephone number.
(d) Fees, Expenses and Taxes. Customer shall pay or reimburse MLBFS for: (i) all
Uniform Commercial Code filing and search fees and expenses incurred by MLBFS in
connection with the verification, perfection or preservation of MLBFS' rights
hereunder or in the Collateral or any other collateral for the Obligations; (ii)
any and all stamp, transfer and other taxes and fees payable or determined to be
payable in connection with the execution, delivery and/or recording of this Loan
Agreement or any of the Additional Agreements; and (iii) all reasonable fees and
out-of-pocket expenses (including, but not limited to, reasonable fees and
expenses of outside counsel) incurred by MLBFS in connection with the collection
of any sum payable hereunder or under any of the Additional Agreements not paid
when due, the enforcement of this Loan Agreement or any of the Additional
Agreements and the protection of MLBFS' rights hereunder or thereunder,
excluding, however, salaries and normal overhead attributable to MLBFS'
employees. Customer hereby authorizes MLBFS, at its option, to either cause any
and all such fees, expenses and taxes to be paid with a WCMA Loan, or invoice
Customer therefor (in which event Customer shall pay all such fees, expenses and
taxes within 5 Business Days after receipt of such invoice). The obligations of
Customer under this paragraph shall survive the expiration or termination of
this Loan Agreement and the discharge of the other Obligations.
(e) Right to Perform Obligations. If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty on the part of Customer contained in this Loan Agreement shall be
breached, MLBFS may, in its sole discretion, after 5 Business Days written
notice is sent to Customer (or such lesser notice, including no notice, as is
reasonable under the circumstances), do the same or cause it to be done or
remedy any such breach, and may expend its funds for such purpose. Any and all
reasonable amounts so expended by MLBFS shall be repayable to MLBFS by Customer
upon demand, with interest at the Interest Rate during the period from and
including the date funds are so expended by MLBFS to the date of repayment, and
all such amounts shall be additional Obligations. The payment or performance by
MLBFS of any of Customer's obligations hereunder shall not relieve Customer of
said obligations or of the consequences of having failed to pay or perform the
same, and shall not waive or be deemed a cure of any Default.
(f) Further Assurances. Customer agrees to do such further acts and things and
to execute and deliver to MLBFS such additional agreements, instruments and
documents as MLBFS may reasonably require or deem advisable to effectuate the
purposes of this Loan Agreement or any of the Additional Agreements, or to
establish, perfect and maintain MLBFS' security interests and liens upon the
Collateral, including, but not limited to: (i) executing financing statements or
amendments thereto when and as reasonably requested by MLBFS; and (ii) if in the
reasonable judgment of MLBFS it is required by local law, causing the owners
and/or mortgagees of the real property on which any Collateral may be located to
execute and deliver to MLBFS waivers or subordinations reasonably satisfactory
to MLBFS with respect to any fights in such Collateral.
(g) Binding Effect. This Loan Agreement and the Additional Agreements shall be
binding upon, and shall inure to the benefit of MLBFS, Customer and their
respective successors and assigns. Customer shall not assign any of its rights
or delegate any of its obligations under this Loan Agreement or any of the
Additional Agreements without the prior written consent of MLBFS. Unless
otherwise expressly agreed to in a writing signed by MLBFS, no such consent
shall in any event relieve Customer of any of its obligations under this Loan
Agreement or any of the Additional Agreements.
(h) Headings. Captions and section and paragraph headings in this Loan Agreement
are inserted only as a matter of convenience, and shall not affect the
interpretation hereof.
(i) Governing Law. This Loan Agreement and, unless otherwise expressly provided
therein, each of the Additional Agreements, shall be governed in all respects by
the laws of the State of Illinois.
(j) Severability of Provisions. Whenever possible, each provision of this Loan
Agreement and the Additional Agreements shall be interpreted in such manner as
to be effective and valid under applicable law. Any provision of this Loan
Agreement or any of the Additional Agreements which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remaining provisions of this Loan Agreement and the Additional Agreements or
affecting the validity or enforceability of such provision m any other
jurisdiction.
(k) Term. This Loan Agreement shall become effective on the date accepted by
MLBFS at its office in Chicago, Illinois, and, subject to the terms hereof,
shall continue in effect so long thereafter as: (i) MLBFS shall be obligated to
make the Loan, (ii) the WCMA Line of Credit shall be in effect, (iii) there
shall be any moneys outstanding under this Loan Agreement, or (iv) there shall
be any other Obligations outstanding.
(I) Counterparts. This Loan Agreement may be executed in one or more
counterparts which, when taken together, constitute one and the same agreement.
(m) Jurisdiction; Waiver. CUSTOMER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN
ITS SOLE DISCRETION, TO ENFORCE THIS LOAN AGREEMENT AND THE ADDITIONAL
AGREEMENTS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER JURISDICTION WHERE
CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED. CUSTOMER
IRREVOCABLY SUBMITS ITSELF TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN
ANY STATE OR FEDERAL COURT IN THE COUNTY OF XXXX FOR SUCH PURPOSES, AND CUSTOMER
WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE
CONVENIENCE OF ANY SUCH FORUM, AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM
STATE TO FEDERAL COURT. CUSTOMER FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY
ACTION AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF XXXX AND STATE
OF ILLINOIS. MLBFS AND CUSTOMER HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER RELATING T0,
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN, THIS LOAN AGREEMENT, ANY
ADDITIONAL AGREEMENTS AND/OR ANY OF THE TRANSACTIONS WHICH ARE THE SUBJECT
MATTER OF THIS LOAN AGREEMENT. CUSTOMER FURTHER WAIVES THE RIGHT TO BRING ANY
NON-COMPULSORY COUNTERCLAIMS.
(n) Integration. THIS LOAN AGREEMENT, TOGETHER WITH THE ADDITIONAL AGREEMENTS,
CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN AGREEMENTS OR PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES. WITHOUT LIMITING THE FOREGOING, CUSTOMER ACKNOWLEDGES
THAT: (I) NO PROMISE OR COMMITMENT HAS BEEN MADE TO IT BY MLBFS, MLPF&S OR ANY
OF THEIR RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES TO MAKE THE LOAN OR ANY
SUBSEQUENT WCMA LOAN ON ANY TERMS OTHER THAN AS EXPRESSLY SET FORTH HEREIN, OR
TO MAKE ANY OTHER LOAN OR OTHERWISE EXTEND ANY OTHER CREDIT TO CUSTOMER OR ANY
OTHER PARTY; AND (II) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS LOAN
AGREEMENT SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS, LETTERS OF INTENT AND
APPROVAL AND COMMITMENT LETTERS FROM MLBFS TO CUSTOMER, NONE OF WHICH SHALL BE
CONSIDERED AN ADDITIONAL AGREEMENT. NO AMENDMENT OR MODIFICATION OF THIS
AGREEMENT OR ANY OF THE ADDITIONAL AGREEMENTS TO WHICH CUSTOMER IS A PARTY SHALL
BE EFFECTIVE UNLESS IN A WRITING SIGNED BY BOTH MLBFS AND CUSTOMER.
IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.
RENT-A-WRECK OF AMERICA, INC. D/B/A "RENT-A-WRECK" AND "PRICELESS"
By: /s/ Xxx Xxxx, Xx. By: /s/ Mitra Ghahramanlou
---------------------------- ----------------------------
Signature (1) Signature (2)
Xxx Xxxx, Xx. Mitra Ghahramanlou
---------------------------- ----------------------------
Printed Name Printed Name
President CAO
---------------------------- ----------------------------
Title Title
Accepted at Chicago, Illinois:
XXXXXXX XXXXX BUSINESS
FINANCIAL SERVICES INC.
By: /s/
----------------------------
EXHIBIT A
ATTACHED TO AND HEREBY MADE A PART OF WCMA REDUCING REVOLVER LOAN AND SECURITY
AGREEMENT NO. 7WD-07018 BETWEEN XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
AND RENT-A-WRECK OF AMERICA, INC. D/B/A "RENT-A-WRECK" AND "PRICELESS"
Additional Locations of Tangible Collateral:
