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Exhibit 10.11
AGREEMENT WITH RESPECT TO STANDBY LETTER OF CREDIT FACILITY
THIS AGREEMENT WITH RESPECT TO STANDBY LETTER OF CREDIT FACILITY
("Agreement"), dated December 1, 2000 (the "Effective Date"), is by and among
XXXXXXXXX INDUSTRIES, INC., a Delaware corporation (the "Borrower"), and each of
XXXXX VENTURES, L.P., a Texas limited partnership, XXXXXX XXXXXX, an individual
residing in New York, New York, LJH CORPORATION, a Texas corporation, and XXX X.
XXXXXXX, an individual residing in Houston, Texas (individually, a "Lender" and
collectively, the "Lenders").
W I T N E S S E T H:
BACKGROUND. Borrower has requested that Lenders issue one or more
Standby Letters of Credit aggregating $8,000,000 for the benefit of Agent (as
hereinafter defined), and Lenders are willing to do so upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises herein contained, and
each intending to be legally bound hereby, the parties agree as follows:
SECTION I. DEFINITIONS.
As used herein:
1.01 "ACQUISITION" means the acquisition by Borrower of the parts
redistribution business of Aviation Sales Distribution Services Company ("AVS
Distribution"), a wholly-owned subsidiary of Aviation Sales Company ("AVS"), and
the acquisition by KAV Inventory, LLC ("KAV"), of the aircraft parts and engine
parts inventory of AVS Distribution.
1.02 "AGENT" means Bank of America, N.A., formerly NationsBank, N.A.,
in its capacity as agent for the lenders under the Senior Loan Agreement.
1.03 "XXXXXXXXX COMMON STOCK" means common stock, $0.01 par value,
issued by Borrower.
1.04 "KELLSTOM HEADQUARTERS BUILDING" means VRDN Real Estate and the
Parking Facility Real Estate (both as defined in the Senior Loan Agreement)
1.05 "LC TERMINATION DATE" means the earlier to occur of (i) the sale
by Borrower of the Xxxxxxxxx Headquarters Building, (ii) June 1, 2001, or (iii)
written notice from Borrower to Lenders that no further draws shall be made on
Letters of Credit, which notice must include a written consent to the foregoing
from the Agent.
1.06 "LOAN MATURITY DATE" means December 1, 2001.
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1.07 "SENIOR LOAN AGREEMENT" means that certain Amended and Restated
Loan and Security Agreement dated as of December 14, 1998 among Borrower and
certain subsidiaries of Borrower, as borrowers, and the Agent, certain other
lenders and other parties thereto, as amended through the date hereof.
1.08 "SENIOR LOAN EVENT OF DEFAULT" means an Event of Default (as
defined in the Senior Loan Agreement) under the Senior Loan Agreement.
1.09 "INTERCREDITOR AGREEMENT" means that certain Intercreditor
Agreement dated of even date herewith, by and between the Agent and each of
Lenders, which Intercreditor Agreement is in the form attached hereto as EXHIBIT
"1.09".
SECTION II. THE STANDBY LETTER OF CREDIT FACILITY.
2.01 ESTABLISHMENT OF THE STANDBY LETTER OF CREDIT FACILITY. Subject to
the terms and conditions of this Agreement, each Lender agrees to cause to be
issued a letter of credit (individually, a "Letter of Credit" and collectively,
the "Letters of Credit") for the benefit of Agent for the ratable benefit of the
lenders under the Senior Loan Agreement (the "Beneficiary") in the amount of
$2,000,000. The aggregate amount of the Letters of Credit shall be $8,000,000.
The Letters of Credit shall be in the form attached hereto as EXHIBIT "2.01" and
shall be issued by one or more of the banks listed on SCHEDULE "2.01". All draws
under the Letters of Credit shall be allocated pro rata among the Letters of
Credit. Partial draws shall be permitted under the Letters of Credit, although
pay downs and redraws under the Letters of Credit shall not be permitted. The
Letters of Credit shall expire (or be returned to Lenders, as applicable) upon
the LC Termination Date.
2.02 DRAWS UPON LETTERS OF CREDIT. The Letters of Credit may be drawn
only upon the Letter of Credit issuers' receipt of sight drafts and certificates
in the form of EXHIBIT "2.02" attached hereto, each properly completed and
executed; provided, however, in no event may the Letters of Credit be drawn on
or after the LC Termination Date.
2.03 THE NOTES. Any draw by Beneficiary under the Letters of Credit in
accordance with its terms shall be deemed a term loan (the "Loan") from the
applicable Lender to Borrower. All draws shall be made in an amount pro rata to
the amounts of the respective Letters of Credit. The Loan shall be subject to
and repaid pursuant to the terms of the note executed by Borrower in favor of
each Lender, each such note to be in the form of EXHIBIT "2.03" hereto
(individually, a "Note" and collectively, the "Notes"), and each Lender shall
receive from Borrower at Closing (as hereinafter defined) an executed Note. All
payments made by Borrower under the Notes (other than reimbursement of expenses
as provided for herein or in the Notes) shall first be applied to accrued and
unpaid interest and then to principal.
2.04 PAYMENTS OF PRINCIPAL. Subject to the mandatory prepayment
provisions contained below, the principal of the Loan will be repaid in one
payment due upon the earlier to occur of the receipt by Borrower of any proceeds
(excluding deposits and other relatively de minimus amounts routinely received
prior to a closing) from the sale of the Xxxxxxxxx Headquarters Building, or the
Loan Maturity Date. All payments shall be made to Lenders on a
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pro rata basis in accordance with the amounts drawn under the Letters of Credit
and allocated to the Notes on the same basis, unless otherwise directed by
Lenders. In the event such payment is to be made other than pro rata, Lenders
shall provide notice to Borrower in the manner provided below, which notice
shall be executed by each of Lenders whose payment is being made other than pro
rata. Any such notice shall be given at least fifteen (15) days prior to the
date any payment is due to Lenders hereunder. Notwithstanding any other
provision to the contrary contained in this Agreement, payment of principal of
the Loan shall be made exclusively from the proceeds of a Permitted
Sale-Leaseback (as defined in the Senior Loan Agreement) of the VRDN Real Estate
and the Parking Facility Real Estate (both as defined in the Senior Loan
Agreement).
2.05 MANDATORY PREPAYMENT. Intentionally Omitted.
2.06 VOLUNTARY PREPAYMENT. Borrower may voluntarily prepay the Loan in
whole or, from time to time, in part, all without premium. All such prepayments
shall be allocated pro rata among Lenders with payments first allocated to
accrued and unpaid interest and then to principal.
2.07 INTEREST RATE AND PAYMENTS OF INTEREST.
(a) Interest shall be paid as follows:
(1) Subject to the provisions of Section
2.07(b), interest on the principal balance
of the Loan, from time to time outstanding,
will be payable at the rate (the "Rate")
equal to a fixed per annum rate of eighteen
percent (18%).
(2) Interest shall be calculated on the basis of
a 360-day year, and shall be payable on the
first day of each month in which amounts are
outstanding under the Loan; provided,
however, to the extent that there is
insufficient availability under the Senior
Loan Agreement (computed in the same manner
as availability for mandatory prepayments of
principal as described in Section 2.05
above), interest shall accrue and not be
payable until the sooner of the date in
which there is sufficient availability or
the Loan Maturity Date. After maturity,
whether by acceleration or otherwise,
accrued interest shall be payable on demand.
(b) Notwithstanding any provision herein or in the Notes
to the contrary, it is the intention of the parties
hereto to conform strictly to applicable usury laws
as in effect from time to time during the term of
this Agreement. Accordingly, if any transaction or
transactions contemplated hereby would be usurious
under applicable law (including the laws of the
United States of America, or of any other
jurisdiction whose laws may be mandatorily
applicable), then, in that event, notwithstanding
anything to the contrary in the Notes, or any
agreement entered into in connection with the Notes,
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it is agreed as follows: (i) the provisions of this
paragraph shall govern and control; (ii) the
aggregate of all interest (as defined under
applicable law) that is contracted for, charged or
received under the Notes (or any of them), or under
any of the other aforesaid agreements or otherwise in
connection with this Agreement, shall under no
circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be
promptly credited to Borrower by Lenders (or, if such
consideration shall have been paid in full, such
excess shall be promptly refunded to Borrower by
Lenders); (iii) neither Borrower nor any other person
or entity now or hereafter liable in connection with
the Notes shall be obligated to pay the amount of
such interest to the extent that it is in excess of
the maximum interest permitted by the applicable
usury laws; and (iv) the effective rate of interest
shall be IPSO FACTO reduced to the Highest ---- -----
Lawful Rate (as hereinafter defined). All sums paid,
or agreed to be paid, to Lenders for the use,
forbearance and detention of the indebtedness of
Borrower to Lenders shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and
spread throughout the full term of the indebtedness
described in the Notes, in any of the aforesaid
agreements, or in this Agreement, until payment in
full so that the actual rate of interest does not
exceed the Highest Lawful Rate in effect at any
particular time during the full term thereof. The
maximum lawful interest rate, if any, referred to in
this paragraph that may accrue pursuant to the Notes
is referred to herein as the "Highest Lawful Rate".
2.08 COLLATERAL. Lenders shall receive a collateral assignment of the
proceeds from the sale of the Xxxxxxxxx Headquarters Building (the "Collateral")
in the form attached hereto as EXHIBIT "2.08" (the "Collateral Assignment"). The
interest of Lenders in and to the Collateral shall be subject to the
Intercreditor Agreement. In connection with the Collateral, Borrower shall
cooperate with Lenders in the filing of UCC-1s in the applicable UCC records in
Florida (the "UCC-1s") and a Memorandum of Collateral Assignment of Proceeds
(the "Memorandum of Collateral Assignment") as well as an Agreement Not to
Encumber (the "Agreement Not to Encumber") in the applicable real property
records in Florida.
SECTION III. WARRANT COVERAGE. At the Closing, each Lender shall
receive a detachable Warrant in the form attached hereto as EXHIBIT "3" to
purchase 10,000 shares of Xxxxxxxxx Common Stock (the "Closing Warrants") at an
exercise price equal to the higher of (i) the unweighted average of the closing
price per share for the twenty consecutive trading days prior to the date of the
Closing; and (ii) the closing price for such Common Stock on the trading day
immediately preceding the Closing. If the obligations of Lenders to make the
Letters of Credit available hereunder are completely satisfied by the release of
the Letters of Credit and the occurrence of the LC Termination Date within
thirty (30) days after the Closing, Warrants to purchase 5,000 shares of
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Xxxxxxxxx Common Stock will be forfeited and returned to Borrower by each
Lender. If the LC Termination Date has not yet occurred after 60 days after the
Closing, then on the first day of each succeeding thirty-day period, commencing
on the 61st day after the Closing and concluding on the 151st day after the
Closing, each Lender will be granted a Warrant to purchase an additional 5,000
shares of Xxxxxxxxx Common Stock with each incremental issuance of Warrants
being priced at the higher of (i) the unweighted average of the closing price
per share for the twenty consecutive trading days prior to the date of issuance,
and (ii) the closing price for the Xxxxxxxxx Common Stock on the date of
issuance; provided, however, to the extent that the Letters of Credit have been
drawn as of the first day of any of the thirty-day periods described above, the
number of shares of Xxxxxxxxx Common Stock that shall be issuable upon exercise
of the Warrant granted on such first day shall be reduced by the percentage of
the face amount of the Letters of Credit that have been drawn; provided,
further, that beginning on the 91st day after the Closing and concluding on the
151st day after the Closing, the amount of shares of Xxxxxxxxx Common Stock that
shall be issuable upon exercise of the Warrant granted to each Lender on such
first day shall be further reduced by a number of shares equal to (A) the
product of (i) the aggregate face amount of the Letter of Credit applicable to
such Lender that was drawn prior to the 15th of the preceding 30 day period
divided by (ii) $2,000,000, times (B) 2,500. All Warrants issued by Borrower to
Lenders will be exercisable at any time within five (5) years after the
applicable date of issuance. The Warrants (but not the shares once issued) will
contain standard anti-dilution clauses in the event of stock splits or stock
dividends. Lenders will be granted piggyback registration rights. As described
above, the Warrants to be granted pursuant to the foregoing shall be issued to
the individual Lenders on a pro rata basis in accordance with the amount of
their commitment unless otherwise requested by all Lenders who are to receive
the Warrants other than on a pro rata basis, and any Warrants forfeited and
returned to Borrower in accordance herewith shall be returned on a pro rata
basis in accordance with the number each Lender was originally granted.
SECTION IV. CONDITIONS PRECEDENT. The obligation of each Lender to
provide his respective Letter of Credit is subject to the following conditions
precedent:
4.01 DOCUMENTS REQUIRED FOR THE CLOSING. Borrower shall have duly
delivered to Lenders, prior to the release of the Letters of Credit (the
"Closing"), the following:
(a) The Notes;
(b) The UCC-1s, the Collateral Assignment, the Memorandum
of Collateral Assignment and the Agreement Not to
Encumber;
(c) A certified (dated as of the date of the Closing) copy
of resolutions of Borrower's board of directors
authorizing the execution, delivery and performance of
this Agreement, the Notes, the Collateral Assignment,
the Agreement Not to Encumber, the Warrants, the
Purchase and Sale Agreement (as hereafter defined) and
each other document to be delivered pursuant hereto;
(d) A copy certified as of the most recent practicable
date by the Secretary of State, of Borrower's
certificate of incorporation, together with a
certificate (dated the date of the Closing) of
Borrower's corporate secretary to the effect that such
certificate of incorporation have not been amended
since the date of the aforesaid certification;
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(e) Certificates, as of the most recent dates practicable,
of the aforesaid Secretary of State, the Secretary of
State of each state in which Borrower is qualified as
a foreign corporation, and the department of revenue
or taxation of each of the foregoing states, as to the
good standing of Borrower;
(f) The Closing Warrants;
(g) The Purchase and Sale Agreement and the Memorandum of
Purchase and Sale Agreement, as defined below;
(h) A fee payable in cash in the amount of three percent
(3%) of the face amount of the Letters of Credit (the
"Fee"). The Fee shall be payable by cashier's check or
wire transfer to each of Lenders in the amount of
$60,000;
(i) Lenders shall have received consent to the transaction
contemplated hereby from the Agent under the Senior
Loan Agreement; and
(j) Lenders shall have received an opinion of counsel for
Borrower in form and substance reasonably acceptable
to Lenders.
4.02 CERTAIN EVENTS. At the time of the Closing:
(a) No Event of Default shall have occurred and be
continuing, and no event shall have occurred and be
continuing that, with the giving of notice or passage
of time or both, would be an Event of Default;
(b) Each of the parties thereto shall have entered into
the Tenth Amendment to the Senior Loan Agreement;
(c) The Acquisition shall have been completed, including
the funding of a loan pursuant to that certain Loan
and Security Agreement of even date herewith among
Bank of America, N.A., certain other lenders and KAV,
subject only to the completion of the Closing; and
(d) Each of the representations and warranties of Borrower
contained in the Senior Loan Agreement and in this
Agreement shall be true and correct in all material
respects as if made on the date of the Closing,
Borrower shall be otherwise in compliance with all
covenants and conditions hereunder and under the
Senior Loan Agreement, and Borrower shall have
delivered to Lenders a certificate of its Chief
Financial Officer confirming the foregoing.
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SECTION V. REPRESENTATIONS AND WARRANTIES. To induce Lenders to enter
into this Agreement, Borrower represents and warrants to Lenders as follows:
5.01 INCORPORATION BY REFERENCE OF REPRESENTATIONS FROM SENIOR LOAN
AGREEMENT. Each of the representations and warranties contained in the Senior
Loan Agreement in favor of the Agent and the other lenders described therein
(the "Representations and Warranties") are true in all material respects as of
the date hereof and Lenders shall be entitled to rely upon the Representations
and Warranties as if they were made directly to Lenders. In connection with the
foregoing, each of the Representations and Warranties are hereby incorporated
herein by reference and made a part hereof as if set forth in full herein.
5.02 POWER AND AUTHORITY. Borrower has the power and authority to enter
into and perform its obligations under this Agreement, the Notes, the Warrants,
the Purchase and Sale Agreement and the Collateral Assignment, and to incur the
obligations herein and therein provided for, and has taken all actions necessary
to authorize the execution, delivery and performance of this Agreement, the
Notes, the Warrants, the Purchase and Sale Agreement and the Collateral
Assignment.
5.03 ENFORCEABILITY. Each of this Agreement, the Notes, the Warrants,
the Purchase and Sale Agreement and the Collateral Assignment are or will when
delivered be valid, binding and enforceable in accordance with their respective
terms.
5.04 VALID ISSUANCE OF COMMON STOCK. The shares of Common Stock of
Borrower issuable upon the exercise of the Warrants have been duly and validly
reserved for issuance and, upon issuance in accordance with the terms of the
Warrants (including receipt of any payment required to be made upon exercise of
the Warrants), shall be duly and validly issued, fully paid and nonassessable,
and issued in compliance with all applicable securities laws, as presently in
effect, of the United States and each of the states whose securities laws govern
the issuance of any of the Common Stock pursuant to the Warrants.
5.05 NO CONFLICT. The execution, delivery and performance of this
Agreement, the Notes, the Collateral Assignment and the Warrants, and the
consummation of the transactions contemplated hereby and thereby shall not
result in any material violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event that, other than with respect to the Collateral Assignment and the
Purchase and Sale Agreement, results in the creation of any lien, charge or
encumbrance upon any assets of Borrower or the suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to Borrower, its business or operations or
any of its assets or properties.
All the representations and warranties set forth in this Section V
shall survive until all obligations of Borrower to Lenders hereunder, or under
the Notes, the Collateral Assignment or the Purchase and Sale Agreement (the
"Obligations") are satisfied in full.
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SECTION VI. COVENANTS OF BORROWER. Borrower does hereby covenant and
agree with Lender, that, so long as any of the obligations under the Notes and
this Agreement remain unsatisfied or any commitments hereunder remain
outstanding, it will comply at all times with the following affirmative
covenants:
6.01 SALE-LEASEBACK. Borrower will use its commercial best efforts to
complete the sale-leaseback of the Xxxxxxxxx Headquarters Building (the
"Sale-Leaseback") to Corporate Realty Investment Company L.L.C. ("CRIC") in
accordance with the provisions of the commitment letter executed by Borrower and
CRIC dated October 31, 2000 (the "Commitment Letter") in connection therewith.
Borrower shall communicate with Lenders on a regular basis and as requested by
Lenders as to the status of such sale. Borrower agrees that until such time the
Obligations are satisfied in full, Borrower shall not grant any additional liens
on the Xxxxxxxxx Headquarters Building without written permission of Lenders. At
the Closing, Borrower and the Lenders shall enter into a Purchase and Sale
Agreement with respect to the Xxxxxxxxx Headquarters Building (the "Purchase and
Sale Agreement") pursuant to which the Lenders shall have the right and option
to purchase the Xxxxxxxxx Headquarters Building subject to the terms and
conditions set forth therein. Further, at the Closing, Borrower will cooperate
with Lenders in executing a Memorandum of Purchase and Sale Agreement
("Memorandum of Purchase and Sale Agreement") for filing in the appropriate real
property records in Florida.
6.02 FINANCIAL STATEMENTS. Borrower will furnish to Lenders the same
financial statements and financial compliance certificates required to be
furnished to the Agent under the Senior Loan Agreement on the same timetable set
forth in the Senior Loan Agreement. Lenders acknowledge that the information
disclosed pursuant to this Section 6.02 may constitute material non-public
information regarding the Company, that the Company is subject to the Securities
Exchange Act of 1934, as amended, and that Federal and state securities laws are
applicable that would prohibit a person in possession of material non-public
information regarding a publicly-held issuer from, among other things, trading
in the securities of such issuer. Lenders agree to maintain in confidence all
non-public material information provided to Lenders pursuant hereto, and not to
trade while in possession of any such information.
6.03 INSPECTION. Borrower will, when requested to do so, make available
for inspection by duly authorized representatives of Lenders any of its books
and records and will furnish Lenders any information regarding its business
affairs and financial condition within a reasonable time after written request
therefor.
6.04 DEFAULT UNDER SENIOR LOAN AGREEMENT. Borrower will give prompt
notice to Lenders if it becomes aware of the occurrence of any Senior Loan Event
of Default or any fact, condition or event that only with the giving of notice
or passage of time or both, would become a Senior Loan Event of Default or if it
becomes aware of any material adverse change in the business prospects,
financial condition (including, without limitation, proceedings in bankruptcy,
insolvency, reorganization, or the appointment of a receiver or trustee), or
results of operations of Borrower, or of the failure of Borrower to observe any
of its undertakings hereunder.
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6.05 AVAILABILITY UNDER SENIOR LOAN AGREEMENT. Borrower will use its
best commercial efforts to cause the Letters of Credit not to be drawn upon by
the Agent and, if drawn upon, to permit Borrower to prepay any outstanding
indebtedness hereunder as soon as possible after such indebtedness becomes
outstanding.
SECTION VII. DEFAULT.
7.01 EVENT OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "Event of Default" hereunder:
(a) Borrower shall fail to pay any principal payable
hereunder that is due on the Loan Maturity Date;
(b) Borrower shall fail to pay any other principal
payable hereunder, including mandatory prepayments
described above, and such failure shall continue for
a period of five (5) calendar days;
(c) Borrower, shall fail to pay when due any installment
of interest or other amount payable hereunder, and
such failure shall continue for a period of five (5)
calendar days;
(d) Borrower shall fail to observe or perform any other
obligation to be observed or performed by it
hereunder, or in the Notes, and such failure shall
continue for ten (10) calendar days after either (i)
notice of such failure from any one of Lenders, or
(ii) Borrower was otherwise notified or became aware
of such failure;
(e) Any financial statement, representation, warranty, or
certificate made or furnished by or with respect to
Borrower to Lenders in connection with this Agreement,
or as inducement to Lenders to enter into this
Agreement, or in any separate statement or document to
be delivered to Lenders hereunder, shall be materially
false, incorrect, or incomplete when made;
(f) Borrower shall admit in writing its inability to pay
its debts as they mature or shall make an assignment
for the benefit of creditors;
(g) Proceedings in bankruptcy, or for reorganization of
Borrower or for the readjustment of any of its debts
under the Bankruptcy Code, as amended, or any part
thereof, or under any other laws, whether state or
federal, for the relief of debtors, now or hereafter
existing, shall be commenced against or by Borrower,
and, except with respect to any such proceedings
instituted by Borrower, shall not be discharged within
ninety (90) days of their commencement; or
(h) A receiver or trustee shall be appointed for Borrower
or for any substantial part of its assets, or any
proceedings shall be instituted for the dissolution or
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the full or partial liquidation of Borrower, and
except with respect to any such appointments requested
or instituted by Borrower, such receiver or trustee
shall not be discharged within ninety (90) days of his
appointment, and except with respect to such
proceedings instituted by Borrower, such proceedings
shall not be discharged within ninety (90) days of
their commencement, or Borrower shall discontinue
business or materially change the nature of its
business.
7.02 ACCELERATION. Immediately and without notice upon the occurrence
of an Event of Default specified in the foregoing subparagraphs (g) or (h) of
Section 7.01, or at the option of Lenders, but only upon notice to Borrower,
upon the occurrence of any other Event of Default, all Obligations shall
immediately become due and payable without further action of any kind.
7.03 REMEDIES. After any acceleration, as provided for in Section 7.02,
subject to the restrictions contained in the Intercreditor Agreement, Lenders
shall have, in addition to the rights and remedies given them by this Agreement
and the Notes, all those allowed by all applicable laws, including, but without
limitation, the Uniform Commercial Code as enacted in any jurisdiction in which
any Collateral may be located.
SECTION VIII. MISCELLANEOUS.
8.01 CONSTRUCTION. The provisions of this Agreement shall be in
addition to those of any guaranty, pledge or security agreement, note, or other
evidence of liability now or hereafter executed by Borrower in connection with
the Loan, all of which shall be construed as complementary to each other. To the
extent the provisions of this Agreement and the provisions of any guaranty,
pledge or security agreement, note or other evidence of liability are
inconsistent, the provision in this Agreement shall control; otherwise, nothing
herein contained shall prevent Lenders from enforcing any or all other guaranty,
pledge or security agreements, notes, or other evidences of liability in
accordance with their respective terms.
8.02 FURTHER ASSURANCE. From time to time, Borrower will execute and
deliver to Lenders such additional documents and will provide such additional
information as Lenders may reasonably require to carry out the terms of this
Agreement and be informed of the status and affairs of Borrower.
8.03 ENFORCEMENT AND WAIVER BY LENDERS. Lenders shall have the right at
all times to enforce the provisions of this Agreement and in strict accordance
with the terms hereof, notwithstanding any conduct or custom on the part of
Lenders in refraining from so doing at any time or times. The failure of Lenders
at any time or times to enforce their rights under such provisions, strictly in
accordance with the same, shall not be construed as having created a custom in
any way or manner contrary to specified provisions of this Agreement or as
having in any way or manner modified or waived the same. All rights and remedies
of Lenders are cumulative and concurrent, and the exercise of one right or
remedy shall not be deemed a waiver or release of any other right or remedy.
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8.04 SEVERABILITY. If any provision of this Agreement shall be held
invalid under any applicable laws, such invalidity shall not affect any other
provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.
8.05 BENEFIT AND BINDING EFFECT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
legal and personal representatives, and their successors and assigns.
8.06 GOVERNING LAW. This Agreement is to be governed by and construed
in accordance with the laws of the State of New York.
8.07 NOTICE. Except as otherwise provided herein, all notices, demands
and requests that any party is required or elects to give to any other shall be
in writing, or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (a) upon personal delivery
thereof, including, but not limited to, delivery by overnight mail and courier
service, (b) four (4) days after it shall have been mailed by United States
mail, first class, certified or registered, with postage prepaid, or (c) in the
case of notice by such a telecommunications device, when properly transmitted,
in each case addressed to the party to be notified as follows:
(a) If to Borrower:
Xxxxxxxxx Industries, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopy No.: (000) 000-0000
With a copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. March
Telecopy No. (000) 000-0000
(b) If to Lender:
Xxxxx Ventures, L.P.
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telecopy No. (000) 000-0000
And:
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Xx. Xxxxxx Xxxxxx
000 0xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy No. (000) 000-0000
With a copy to:
Fried Xxxxx Xxxxxx Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Telecopy No. (000) 000-0000
And:
LJH Corporation
000 Xxxx Xxxx
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
And:
Xx. Xxx X. Xxxxxxx
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
With a copy in all cases to:
Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopy No. (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
8.08 APPROVAL AND CONSENT OF LENDER. In the event the approval or
consent of Lenders is required pursuant to the terms hereof, such approval or
consent shall be deemed to have been given upon receipt by Borrower of approval
or consent of the each of Lenders.
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8.09 SEVERAL OBLIGATIONS OF LENDER. The obligations contained herein of
Lenders are several to each Lender and not joint. No Lender shall be liable for
the obligations of any other Lenders contained in this Agreement.
8.10 INDEMNIFICATION. Borrower agrees to indemnify and hold Lenders and
each of them, their respective affiliates and each such party's respective
directors, officers, employees, agents, attorneys and consultants, harmless from
and against any and all losses, claims, damages, liabilities and expenses
(including fees and disbursements of counsel) that may be incurred by or
asserted against any such indemnitees in connection with or arising out of any
documentation, investigation, litigation, proceeding or other matters related to
this Agreement, whether or not any such indemnitees are a party to such
documentation, investigation, litigation, proceeding or other matters; provided,
however, that no person shall have the right to be so indemnified hereunder for
matters arising solely from its own willful misconduct, gross negligence or bad
faith.
8.11 NO LIABILITY FOR CONSEQUENTIAL DAMAGES. Neither Lenders nor any of
their affiliates shall be responsible or liable to Borrower or any other person
for any special, indirect, punitive, exemplary or consequential damages which
may be alleged.
8.12 WAIVER OF TRIAL BY JURY. BORROWER HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER THIS LETTER, ANY TRANSACTION RELATING HERETO, OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.
8.13 JURISDICTION; VENUE. BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA, IN EACH CASE LOCATED IN
THE COUNTY OF NEW YORK, FOR ANY ACTION, PROCEEDING OR INVESTIGATION IN ANY COURT
OR BEFORE ANY GOVERNMENTAL AUTHORITY ("LITIGATION") ARISING OUT OF OR RELATING
TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO
COMMENCE ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER
AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY REGISTERED
MAIL TO ITS ADDRESS SET FORTH IN THIS AGREEMENT SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. Borrower hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any Litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the United States of America,
in each case located in the County of New York, and hereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such Litigation brought in any such court has been brought in an
inconvenient forum.
8.14 ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE NOTES, THE
WARRANTS AND THE COLLATERAL ASSIGNMENT, EMBODY THE FINAL, ENTIRE AGREEMENT
RELATING TO THE HEREIN CONTAINED SUBJECT MATTER AMONG THE PARTIES AND SUPERSEDE
ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER
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WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS
AMONG THE PARTIES HERETO.
(Remainder of Page Intentionally Left Blank)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
BORROWER:
XXXXXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxx, Chief Financial Officer
LENDERS:
Xxxxx Ventures, L.P.
By: Danro Corporation, Managing General Partner
By: /s/ Xxxxxx Xxxxxx
----------------------------------------------
Xxxxxx Xxxxxx, President
/s/ Xxxxxx Xxxxxx
--------------------------------------------------
Xxxxxx Xxxxxx
LJH Corporation
By: /s/ Xxxx X. Xxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------------------
Title: President
-------------------------------------------
/s/ Xxx X. Xxxxxxx
--------------------------------------------------
Xxx X. Xxxxxxx
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EXHIBITS AND SCHEDULES
EXHIBIT "1.10" Form of Intercreditor Agreement
EXHIBIT "2.01" Form of Letter of Credit
EXHIBIT "2.02" Form of Sight Draft and Certificate
EXHIBIT "2.03" Form of Notes
EXHIBIT "2.08" Form of Collateral Assignment
EXHIBIT "3" Form of Warrant
SCHEDULE "2.01" List of Banks Supplying Letters of Credit
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