EXHIBIT 10.49
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement") is made as of this
17th day of May, 2000 by and between KARTS INTERNATIONAL INCORPORATED, a Nevada
corporation ("Borrower") and THE ▇▇▇▇▇▇▇▇▇ FOUNDATION ("▇▇▇▇▇▇▇▇▇"). In
connection with the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
1. Definitions. All terms and phrases used herein which are defined in the
Uniform Commercial Code in the State of Texas, as amended from time to
time (the "UCC"), shall have the meanings given them in the UCC unless
otherwise defined herein. The following definitions shall apply
throughout this Agreement:
"Affiliate" means with respect to any Person in question, any other
Person owned or controlled by, or which owns or controls or is under
common control or is otherwise affiliated with such Person in question.
A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.
"BTK" means ▇▇▇▇▇▇▇'▇ Thunder Karts, Inc., a Louisiana corporation.
"Business Day" means any day other than Saturday, Sunday or any other
day on which financial institutions doing business in Dallas, Texas are
closed.
"Collateral" has the meaning given it in Section 4.
"Common Stock" shall mean the common stock, $.001 par value, of the
Borrower.
"Environmental Laws" means any and all federal, state and local laws,
regulations, rules, orders, licenses, agreements or other governmental
restrictions relating to the protection of human health or the
environment or to emissions, discharges or releases of pollutants or
industrial, toxic or hazardous substances into the environment, or
otherwise relating to the manufacture, processing, treatment, transport
or handling of pollutants or industrial, toxic or hazardous substances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations
promulgated with respect thereto.
"ERISA Affiliate" means with respect to any Person in question, any
Person that would be treated as a single, employer with Borrower.
"ERISA Plan" means any pension benefit plan subject to Title IV of
ERISA maintained by Borrower or any ERISA Affiliate thereof with
respect to which Borrower or any ERISA Affiliate has a fixed or
contingent liability.
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"Event of Default" has the meaning given it in Section 12.
"GAAP" means those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting
Standards Board (or any generally recognized successor), consistently
applied throughout the period involved.
"Guarantors" means USA, BTK, ▇▇▇▇ and Straight Line (whether one or
more).
"Indemnified Claims" means any and all claims, demands, actions, causes
of action, judgments, suits, liabilities, obligations, losses, damages
and consequential damages, penalties, fines, costs, fees, expenses and
disbursements (including without limitation, fees and expenses of
attorneys and other professional consultants and experts in connection
with any investigation or defense) of every kind or nature, known or
unknown, existing or hereafter arising, foreseeable or unforeseeable,
which may be imposed upon, threatened or asserted against or incurred
or paid by any Indemnified Person at any time and from time to time,
because of or resulting from, in connection with or in any way relating
to or arising out of the Loan, the Collateral or any other transaction,
act, omission, event or circumstance in any way connected with or
contemplated by this Agreement or the other Loan Documents or any
action taken or omitted by any such Indemnified Person under or in
connection with any of the foregoing (including but not limited to any
investigation, litigation, proceeding, enforcement of ▇▇▇▇▇▇▇▇▇'▇
rights or defense of ▇▇▇▇▇▇▇▇▇'▇ actions related to or arising out of
this Agreement or the other Loan Documents), whether or not any
Indemnified Person is a party hereto.
"Indemnified Person" shall collectively mean ▇▇▇▇▇▇▇▇▇ and its
officers, directors, shareholders, employees, attorneys,
representatives, agents, Affiliates, successors and assigns.
"▇▇▇▇" means ▇▇▇▇, L.L.C., a Louisiana limited liability company.
"Lien" means any mortgage, lien, pledge, assignment, adverse claim,
charge, security interest or other encumbrance.
"Loan" has the meaning given it in Section 2.
"Loan Documents" means this Agreement, the Note and all other
documents, agreements and instruments now or hereafter required by
▇▇▇▇▇▇▇▇▇ to be executed and delivered in connection herewith
(including, without limitation, all documents, agreements and
instruments evidencing, securing, governing, guaranteeing and/or
pertaining to the Note and the Loan).
"Maximum Rate" means, with respect to ▇▇▇▇▇▇▇▇▇, the maximum
non-usurious interest rate, if any, that any time or from time to time
may be contracted for, taken, reserved, charged or received with
respect to the Loan or other amount as to which such rate is to be
determined, payable to ▇▇▇▇▇▇▇▇▇ pursuant to this Agreement or any
other Loan Document, under laws applicable to ▇▇▇▇▇▇▇▇▇ which are
presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than applicable laws now
allow. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments and other charges in respect of the
Loan Documents that constitute interest under applicable law. Each
change in any interest rate provided for herein based upon the Maximum
Rate resulting from a change in the Maximum Rate shall take effect
without notice to the Borrower at the time of such change in the
Maximum Rate. For purposes of determining the Maximum Rate under Texas
law, the applicable rate ceiling shall be (a) the "weekly ceiling"
described in and computed in accordance with the provisions of Section
303.003 of the Texas Finance Code, as amended or (b) if the parties
subsequently contract as allowed by Texas law, the quarterly ceiling or
the annualized ceiling computed pursuant to Section 303.008 of the
Texas Finance Code, as amended; provided, however, that at any time the
"weekly ceiling", the quarterly ceiling or the annualized ceiling shall
be less than 18% per annum or more than 24% per annum, the provisions
of Section 303.009(a) and Section 303.009(b) of the Texas Finance Code,
as amended, shall control for purposes of such determination, as
applicable.
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"Net Profit" means net income after taxes (including extraordinary
losses and excluding extraordinary gains) as of the end of time period
being measured.
"Note" has the meaning given it in Section 3.
"Obligations" means any and all indebtedness, liabilities and
obligations of Borrower or any other Obligor to ▇▇▇▇▇▇▇▇▇, evidenced by
and/or arising pursuant to any of the Loan Documents (including,
without limitation, this Agreement and the Note), now existing or
hereafter arising, whether direct, indirect, related, unrelated, fixed,
contingent, liquidated, unliquidated, joint, several or joint and
several, including, without limitation, (a) the obligations of the
Borrower or any other Obligor to repay the Loan, to pay interest on the
Loan (including, without limitation, interest accruing after any, if
any, bankruptcy, insolvency, reorganization or other similar filing)
and to pay all fees, indemnities, costs and expenses (including
attorneys' fees) provided for in the Loan Documents and (b) the
indebtedness constituting the Loan and such interest, fees,
indemnities, costs and expenses.
"Obligors" means Borrower and Guarantors.
"Original Loan Agreement" means that certain Loan Agreement dated June
3, 1999 between ▇▇▇▇▇▇▇▇▇ and Borrower, as amended.
"Original Loan" means the "Loan" as such term is defined in the
Original Loan Agreement.
"Original Loan Documents" means the "Loan Documents" as such term is
defined in the Original Loan Agreement.
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"Person" means a corporation, association, partnership, limited
liability company, organization, business, individual, governmental or
political subdivision thereof or governmental agency.
"Subordinated Debt" means indebtedness owing by Borrower to a creditor
other than ▇▇▇▇▇▇▇▇▇ which has been subordinated and subject in right
of payment to the prior payment of all indebtedness and obligations now
or hereafter owing by Borrower to ▇▇▇▇▇▇▇▇▇, such subordination to be
evidenced by a written agreement between ▇▇▇▇▇▇▇▇▇ and the subordinated
creditor which is in form and substance satisfactory to ▇▇▇▇▇▇▇▇▇.
"Straight Line" means Straight Line Manufacturing, Inc., a Michigan
corporation.
"Tangible Net Worth" means, as of any date, the amount by which
Borrower's total assets exceeds its total liabilities plus Subordinated
Debt, less any intangible assets (as defined by GAAP), less deferred
charges.
"Termination Event" means (a) the occurrence with respect to any ERISA
Plan of (i) a reportable event described in Sections 4043(b)(5) of
ERISA or (ii) any other reportable event described in Section 4043 of
ERISA other than a reportable event not subject to the provision for
30-day notice to the Pension Benefit Guaranty Corporation pursuant to a
waiver by such corporation under Section 4043(a) of ERISA, (b) the
withdrawal of Borrower or any Affiliate of Borrower from any ERISA Plan
during a plan year in which it was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA, or (c) any event or condition which
might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
ERISA Plan.
"USA" means USA Industries Incorporated, an Alabama corporation.
2. Loan.
(a) Loan and Repayment. Subject to the terms of this Agreement, on the
date of this Agreement or at such time that all applicable conditions
have been satisfied, whichever is later, ▇▇▇▇▇▇▇▇▇ will make a loan in
one or more advances to the Borrower (the "Loan"), to the extent
requested by the Borrower as of such date, in an original principal
amount not to exceed Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000) in the aggregate. Notwithstanding anything to the
contrary contained in this Agreement, the Borrower and ▇▇▇▇▇▇▇▇▇ agree
that, as of the date hereof, the aggregate outstanding principal amount
of the Original Loan is $___________, which amount shall be deemed
outstanding as part of the Loan hereunder. (Such loans referred to in
this Section 2 (a) now or hereafter made or deemed made by ▇▇▇▇▇▇▇▇▇ to
Borrower are hereinafter collectively called the "Loan".) Principal of
the Loan shall be due and payable in one installment of all unpaid
principal and accrued unpaid interest on May ___, 2005.
(b) Prepayment. On or after the second anniversary of the date hereof,
Borrower may prepay the Loan in full or in part at any time prior to
May __, 2005, provided, that the Borrower shall (i) give ▇▇▇▇▇▇▇▇▇
thirty (30) days' written notice of the Borrower's intention to do so
[and (ii) pay to ▇▇▇▇▇▇▇▇▇, as liquidated damages and not as a penalty,
an amount equal to the twelve percent (12%) multiplied by the principal
amount of the Loan being prepaid at such time.- in previous deal]
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3. Promissory Note.
(a) Note. Borrower agrees to execute, contemporaneously herewith,
a promissory note payable to the order of ▇▇▇▇▇▇▇▇▇, in form
and substance acceptable to ▇▇▇▇▇▇▇▇▇ in ▇▇▇▇▇▇▇▇▇'▇ sole and
absolute discretion, for the Loan provided hereunder to
evidence the indebtedness owing by Borrower to ▇▇▇▇▇▇▇▇▇ under
the Loan (whether one or more, together with any renewals,
extensions and increases thereof, the "Note").
(b) Rate and Payments. The principal of and interest on the Note
shall be due and payable and may be prepaid in accordance with
the terms and conditions set forth in the Note and in this
Agreement. Interest on the Note shall accrue at the rate set
forth therein.
(c) Conversion. The Note and the outstanding amount of the Loan
shall be convertible into common stock and/or preferred stock
of the Borrower and shall have certain registration rights in
favor of the holder thereof, in accordance with the terms and
conditions set forth in the Note.
4. Collateral. As security for the Obligations, ▇▇▇▇▇▇▇▇▇ shall receive a
Lien in and to the collateral described in the other Loan Documents
(the "Collateral").
5. Guarantors. As a condition precedent to ▇▇▇▇▇▇▇▇▇'▇ obligation to
provide the Loan to Borrower, Borrower agrees to cause the Guarantors
to each execute and deliver to ▇▇▇▇▇▇▇▇▇ contemporaneously herewith a
guaranty agreement, in form and substance acceptable to ▇▇▇▇▇▇▇▇▇ in
▇▇▇▇▇▇▇▇▇'▇ sole and absolute discretion.
6. Representations and Warranties. Borrower hereby represents and warrants
to ▇▇▇▇▇▇▇▇▇ as follows:
(a) Existence. Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the state of
its incorporation and is duly licensed, qualified to do
business and is in good standing in all other states in which
such licensing, qualification and good standing are necessary.
Borrower has all requisite power and authority (i) to own and
operate its properties, (ii) to carry on its business as now
conducted and as proposed to be conducted, and (iii) to
execute and deliver this Agreement and the other Loan
Documents to which Borrower is a party.
(b) Binding Obligations. The execution, delivery, and performance
of this Agreement and all of the other Loan Documents by
Borrower have been duly authorized by all necessary action by
Borrower, have been duly executed and delivered by Borrower
and constitute legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency or similar
laws of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies
may generally be limited by equitable principles.
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(c) No Consent. The execution, delivery and performance of this
Agreement and the other Loan Documents, and the consummation
of the transactions contemplated hereby and thereby, do not
(i) conflict with, result in a violation of, or constitute a
default under (A) any provision of Borrower's articles or
certificate of incorporation or bylaws, (B) any law,
governmental regulation, court decree or order applicable to
Borrower, or (C) any other document or agreement to which
Borrower is a party, or (ii) require the consent, approval or
authorization of any third party.
(d) Financial Condition. Each financial statement of Borrower
supplied to ▇▇▇▇▇▇▇▇▇ is true, correct and complete in all
material respects and fairly presents Borrower's financial
condition in all material respects as of the date of each such
statement. There has been no material adverse change in such
financial condition or results of operations of Borrower
subsequent to the date of the most recent financial statement
supplied to ▇▇▇▇▇▇▇▇▇.
(e) Litigation. There are no actions, suits or proceedings,
pending or, to the knowledge of Borrower, threatened against
or affecting Borrower or the properties of Borrower, before
any court or governmental department, commission or board,
which, if determined adversely to Borrower, would have a
material adverse effect on the business, financial condition,
properties, operations or prospects of Borrower.
(f) Taxes. Governmental Charges. Borrower has filed all federal,
state and local tax reports and returns required by any law or
regulation to be filed by it and has either duly paid all
taxes, duties and charges indicated due on the basis of such
returns and reports, or made adequate provision for the
payment thereof, and the assessment of any material amount of
additional taxes in excess of those paid and reported is not
reasonably expected. There is no tax Lien notice against
Borrower or its properties presently on file.
(g) ERISA Compliance. Borrower is in compliance with ERISA
concerning Borrower's ERISA Plan, if any, or is not required
to contribute to any "multi-employer plan" as defined in
Section 401 of ERISA.
(h) Compliance with Laws. Borrower is conducting its business in
material compliance with all statutes, rules, regulations
and/or ordinances imposed by any governmental unit upon
Borrower or upon its businesses, operations and property
(including, without limitation, all Environmental Laws).
Borrower has all permits and licenses necessary for the
operations of its business as presently conducted and as
proposed to be conducted.
(i) Tradenames. Borrower and Guarantors conduct business under no
trade or assumed name except ▇▇▇▇ conducts business under the
tradename Bird Promotions.
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7. Conditions Precedent to Loan. ▇▇▇▇▇▇▇▇▇'▇ obligation to make the Loan
under this Agreement and the other Loan Documents shall be subject to
the conditions precedent that, as of the date of such Loan and after
giving effect thereto (i) all representations and warranties made to
▇▇▇▇▇▇▇▇▇ in this Agreement and the other Loan Documents shall be true
and correct, as of and as if made on such date, (ii) no material
adverse change in the financial condition of Borrower or its business
since the effective date of the most recent financial statements
furnished to ▇▇▇▇▇▇▇▇▇ by Borrower shall have occurred, (iii) no Event
of Default shall have occurred and no event has occurred and is
continuing, or would result from the requested Loan, which with notice
or lapse of time, or both, would constitute an Event of Default (as
hereinafter defined), (iv) ▇▇▇▇▇▇▇▇▇ shall have received all Loan
Documents appropriately executed by Borrower and all other proper
parties and all such Loan Documents are in full force and effect, (v)
all indebtedness, liabilities and obligations of each of the Obligors
to KBK Financial, Inc. shall be paid in full concurrently with the
making of the Loan, (vi) ▇▇▇▇▇▇▇▇▇ shall have received all documents,
certificates, agreements and instruments relating to the issuance of
[preferred shares of capital stock] of Borrower to ▇▇▇▇▇▇▇▇▇, in form
and substance satisfactory to ▇▇▇▇▇▇▇▇▇, appropriately executed by
Borrower and all other proper parties, (vii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇ shall have each entered into an employment agreement with
Borrower that is for a term of at least three (3) years and is
otherwise in form and substance satisfactory to ▇▇▇▇▇▇▇▇▇ and (viii)
▇▇▇▇▇▇▇▇▇ shall have received all fees and expenses owing to ▇▇▇▇▇▇▇▇▇
under this Agreement and the other Loan Documents (including, without
limitation, legal fees incurred in connection with the Original Loan
Agreement and the other Original Loan Documents in the amount of
$__________ which are reimbursable by Borrower to ▇▇▇▇▇▇▇▇▇).
8. Affirmative Covenants. Until the Note and all other obligations and
liabilities of Borrower under this Agreement and the other Loan
Documents are fully paid and satisfied, and Borrower agrees and
covenants that it will, unless ▇▇▇▇▇▇▇▇▇ shall otherwise consent in
writing (which consent may be withheld by ▇▇▇▇▇▇▇▇▇ in ▇▇▇▇▇▇▇▇▇'▇ sole
and absolute discretion):
(a) Accounts and Records. Maintain its books and records in
accordance with GAAP.
(b) Right of Inspection. Permit ▇▇▇▇▇▇▇▇▇ to visit its properties
and installations and to examine, audit and make and take away
copies or reproductions of Borrower's books and records, at
all reasonable times. Borrower agrees to pay all costs
associated with any such audits, at a rate equal to $500.00
per day, per person, plus out-of-pocket expenses; provided,
however, as long as no Event of Default has occurred,
Borrower's obligation for ▇▇▇▇▇▇▇▇▇'▇ audits shall not exceed
$15,000.00 per calendar year.
(c) Right to Additional Information. Furnish ▇▇▇▇▇▇▇▇▇ with such
additional information and statements, lists of assets and
liabilities, tax returns, and other reports with respect to
Borrower's financial condition and business operations as
▇▇▇▇▇▇▇▇▇ may request from time to time.
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(d) Compliance with Laws. Conduct its business in an orderly and
efficient manner consistent with good business practices, and
perform and comply with all statutes, rules, regulations
and/or ordinances imposed by any governmental unit upon
Borrower, its businesses, operations and properties (including
without limitation, all Environmental Laws).
(e) Taxes. Pay and discharge when due all assessments, taxes,
governmental charges and levies, of every kind and nature,
imposed upon Borrower or its properties, income or profits,
prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a Lien upon any of
Borrower's property, income or profits; provided, however,
Borrower will not be required to pay and discharge any such
assessment, tax, charge, levy or claim so long as (i) same
shall be contested in good faith by appropriate judicial,
administrative or other legal proceedings timely instituted,
(ii) Borrower shall have established adequate reserves with
respect to such contested assessment, tax, charge, levy or
claim in accordance with GAAP, and (iii) the perfection and
priority of ▇▇▇▇▇▇▇▇▇'▇ security interest in the Collateral,
or the value of the Collateral, is not impaired.
(f) Insurance. Maintain, with financially sound and reputable
insurers, such insurance as deemed necessary or otherwise
reasonably required by ▇▇▇▇▇▇▇▇▇, including but not limited
to, fire insurance, comprehensive property damage, public
liability, worker's compensation and business interruption
insurance.
(g) Notice of Material Change/Litigation. Borrower shall promptly
notify ▇▇▇▇▇▇▇▇▇ in writing (i) of any material adverse change
in Borrower's financial condition or its businesses, and (ii)
of any litigation or claims against Borrower which could
materially affect Borrower or its business operations,
financial condition or prospects.
(h) Corporate Existence. Maintain its corporate existence and good
standing in the state of its incorporation and its
qualification and good standing in all other states where
required by applicable law.
(i) ERISA. Borrower shall promptly notify ▇▇▇▇▇▇▇▇▇ in writing of
the adoption or amendment of any plan that results in the
representations in Subsection 7(g) no longer being true and
correct.
(j) Additional Documentation. Execute and deliver, or cause to be
executed and delivered, any and all other agreements,
instruments or documents which ▇▇▇▇▇▇▇▇▇ may reasonably
request in order to give effect to the transactions
contemplated under this Agreement and the other Loan
Documents.
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9. Negative Covenants. Until the Note and all other obligations and
liabilities of Borrower under this Agreement and the other Loan
Documents are fully paid and satisfied, Borrower will not and will
cause Guarantors to not, without the prior written consent of ▇▇▇▇▇▇▇▇▇
(which consent, withhold in ▇▇▇▇▇▇▇▇▇'▇ sole and absolute discretion):
(a) Nature of Business. Make any material change in the nature of
its business as carried on as of the date hereof.
(b) Liquidations, Mergers, Consolidations; Acquisitions; Name
Change. Liquidate, merge or consolidate with or into any other
Person, convert from one type of legal entity to another type
of legal entity, form or acquire any new subsidiary or acquire
by purchase or otherwise all or substantially all of the
assets of any other Person, or change its name or operate
under any new trade or assumed names.
(c) Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange
of property or the rendering of any service, with any
Affiliate of any Obligor, except in the ordinary course of and
pursuant to the reasonable requirements of an Obligor's
business, upon fair and reasonable terms no less favorable to
Obligor than would be obtained in a comparable arm's-length
transaction with a person or entity not an Affiliate of any
Obligor and in accordance with the terms and provisions of the
Loan Documents.
(d) Sale of Assets. Sell, lease, transfer or otherwise dispose of
all or substantially all of its assets or properties, other
than inventory sold in the ordinary course of business and as
necessary to replace obsolete equipment.
(e) Liens. Create or incur any Lien on any of its assets, other
than (i) Liens securing indebtedness owing to ▇▇▇▇▇▇▇▇▇, (ii)
pledges or deposits to secure the payment of obligations under
any worker's compensation laws or similar laws, (iii) deposits
to secure the payment of public or statutory obligations, (iv)
mechanic's, carriers', ▇▇▇▇▇▇▇'▇, repairman's or other Liens
arising by operation of law in the ordinary course of business
which secure obligations that are not overdue or are being
contested in good faith and for which such entity has
established adequate reserves in accordance with generally
accepted accounting principles, (and for which ▇▇▇▇▇▇▇▇▇'▇
security interest in the Collateral is not impaired) and (v)
Liens existing as of the date hereof which have been disclosed
to and approved by ▇▇▇▇▇▇▇▇▇ in writing.
(f) Change in Management. Permit a change in the senior management
of Borrower.
(g) Loans. Make any loans to any person or entity.
10. Financial Covenants. Until the Note and all other obligations and
liabilities of Borrower under this Agreement and the other Loan
Documents are fully paid and satisfied, Obligors, on a consolidated
basis, will maintain the following financial covenants:
(a) Current Ratio. At the end of each fiscal month, a ratio of (i)
current assets (excluding prepaid expenses), to (ii) current
liabilities of not less than 1.5 to 1.0.
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(b) Debt/Tangible Net Worth Ratio. At the end of each fiscal
month, a ratio of total liabilities to Tangible Net Worth of
less than 2.5 to 1.0.
(c) Tangible Net Worth. At the end of each fiscal month, its
Tangible Net Worth of not less than $2,500,000.00.
Unless otherwise specified, all accounting and financial terms and
covenants set forth above are to be determined according to GAAP.
11. Reporting Requirements. Until the Note and all other obligations and
liabilities of Borrower under this Agreement and the other Loan
Documents are fully paid and satisfied, Borrower will and will cause
the Guarantors to, unless ▇▇▇▇▇▇▇▇▇ shall otherwise consent in writing,
furnish to ▇▇▇▇▇▇▇▇▇:
(a) Financial Statements. The following financial statements: (i)
within 120 days after the last day of each fiscal year of
Borrower a consolidated statement of income and a consolidated
statement of cash flows of Obligors for such fiscal year, and
a consolidated balance sheet of Obligors as of the last day of
such fiscal year in each case audited by an independent
certified public accounting firm acceptable to ▇▇▇▇▇▇▇▇▇,
together with a copy of any report to management delivered to
Borrower by such accountants in connection therewith; and (ii)
within 30 days after the last day of each fiscal month of
Borrower, an unaudited consolidated statement of income and
statement of cash flows of Obligors for such fiscal month, and
an unaudited consolidated balance sheet of Obligors as of the
last day of such fiscal month. Borrower represents and
warrants that each such statement of income and statement of
cash flows will fairly represent, in all material respects,
the results of operations and cash flows of Borrower for the
period set forth therein, and that each such balance sheet
will fairly represent, in all material respects, the financial
condition of Borrower as of the date set forth therein, all in
accordance with GAAP, (or, with respect to unaudited financial
statements, in the notes thereto and subject to year-end
review adjustments).
(b) Inventory Listing. A list of inventory for USA and BTK by
location and type (to include the following: raw materials,
work in process and finished goods) within ten (10) Business
Days after the end of each month, in form and detail
satisfactory to ▇▇▇▇▇▇▇▇▇.
12. Events of Default. Each of the following shall constitute an "Event of
Default" under this Agreement and the other Loan Documents:
(a) Failure to Pay Indebtedness. Borrower shall fail to pay as and
when due any part of the principal of, or interest on, the
Note or any other Obligations now or hereafter owing to
▇▇▇▇▇▇▇▇▇ by Borrower.
(b) Non-Performance of Covenants. Any of the Obligors shall breach
any covenant or agreement made herein in any of the other Loan
Documents or in any other agreement now or hereafter entered
into between any of the Obligors and ▇▇▇▇▇▇▇▇▇.
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(c) False Representation. Any warranty or representation made
herein, or in any of the other Loan Documents shall be false
or misleading in any material respect when made.
(d) Default Under Other Loan Documents. The occurrence of an event
of default under any of the other Loan Documents or any other
agreement now or hereafter entered into between any of the
Obligors and ▇▇▇▇▇▇▇▇▇.
(e) Untrue Financial Report. Any report, certificate, schedule,
financial statement, profit and loss statement or other
statement furnished by any Obligor, or by any other person on
behalf of any Obligor, to ▇▇▇▇▇▇▇▇▇ is not true and correct in
any material respect.
(f) Default to Third Party. The occurrence of any event which
permits the acceleration of the maturity of any indebtedness
owing by any of the Obligors to any third party under any
agreement or undertaking.
(g) Bankruptcy. The filing of a voluntary or involuntary case by
or against any of the Obligors under the United States
Bankruptcy Code or other present or future federal or state
insolvency, bankruptcy or similar laws, or the appointment of
a receiver, trustee, conservator or custodian for a
substantial portion of the assets of any of the Obligors.
(h) Insolvency. Any of the Obligors shall become insolvent, make a
transfer in fraud of creditors or make an assignment for the
benefit of creditors.
(i) Involuntary Lien. The filing or commencement of any
involuntary Lien, garnishment, attachment or the like shall be
issued against or with respect to the Collateral.
(j) Material Adverse Change. A material adverse change shall have
occurred in the financial condition, business prospects or
operations of any of the Obligors.
(k) Tax Lien. Any of the Obligors shall have a federal or state
tax Lien filed against any of its properties.
(l) Execution on Collateral. The Collateral or any portion thereof
is taken on execution or other process of law.
(m) ERISA Plan. Either (i) any "accumulated funding deficiency"
(as defined in Section 412(a) of the Internal Revenue Code of
1986, as amended) in excess of $25,000 exists with respect to
any ERISA Plan of Borrower or its ERISA Affiliate, or (ii) any
Termination Event occurs with respect to any ERISA Plan of
Borrower or its ERISA Affiliate and the then current value of
such ERISA Plan's benefit liabilities exceeds the then current
value of such ERISA Plan's assets available for the payment of
such benefit liabilities by more than $25,000.
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(n) Guarantor's Obligations. If any of the obligations of any
Guarantor is limited or terminated by operation of law or by
such Guarantor, or any such Guarantor becomes the subject of
an insolvency proceeding.
(o) Judgment. The entry against any of the Obligors of a final and
nonappealable judgment for the payment of money in excess of
$25,000 (not covered by insurance satisfactory to ▇▇▇▇▇▇▇▇▇ in
▇▇▇▇▇▇▇▇▇'▇ sole discretion).
Nothing contained in this Loan Agreement shall be construed to limit
the events of default enumerated in any of the other Loan Documents and
all such events of default shall be cumulative.
13. Remedies. Upon the occurrence of any one or more of the foregoing
Events of Default, the entire unpaid balance of principal of the Note,
together with all accrued but unpaid interest thereon, and all other
indebtedness owing to ▇▇▇▇▇▇▇▇▇ by Borrower at such time shall, at the
option of ▇▇▇▇▇▇▇▇▇, become immediately due and payable without further
notice, demand, presentation, notice of dishonor, notice of intent to
accelerate, notice of acceleration, protest or notice of protest of any
kind, all of which are expressly waived by Borrower; provided, however,
concurrently and automatically with the occurrence of an Event of
Default under Subsections 12 (g) or 12 (h) of this Agreement the Note
and all other indebtedness owing to ▇▇▇▇▇▇▇▇▇ by Borrower at such time
shall, without any action by ▇▇▇▇▇▇▇▇▇, become immediately due and
payable, without further notice, demand, presentation, notice of
dishonor, notice of acceleration, notice of intent to accelerate,
protest or notice of protest of any kind, all of which are expressly
waived by Borrower. All rights and remedies of ▇▇▇▇▇▇▇▇▇ set forth in
this Agreement and in any of the other Loan Documents are cumulative
and may also be exercised by ▇▇▇▇▇▇▇▇▇, at its option and in its sole
discretion, upon the occurrence of an Event of Default.
14. Indemnification. Borrower hereby indemnifies and agrees to hold
harmless and defend all Indemnified Persons from and against any and
all Indemnified Claims. THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH INDEMNIFIED CLAIMS ARE IN ANY WAY OR TO ANY EXTENT
OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM OR THEORY OF STRICT
LIABILITY, OR ARE CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY INDEMNIFIED PERSON, but shall exclude any of the
foregoing resulting from such Indemnified Person's gross negligence or
willful misconduct. If Borrower or any third party ever alleges any
gross negligence or willful misconduct by any Indemnified Person, the
indemnification provided for in this Section shall nonetheless be paid
upon demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment as to
the extent and affect of the alleged gross negligence or willful
misconduct. Upon notification and demand, Borrower agrees to provide
defense of any Indemnified Claim and to pay all costs and expenses of
counsel selected by any Indemnified Person in respect thereof. Any
Indemnified Person against whom any Indemnified Claim may be asserted
reserves the right to settle or compromise any such Indemnified Claim
as such Indemnified Person may determine in its sole discretion, and
the obligations of such Indemnified Person, if any, pursuant to any
such settlement or compromise shall be deemed included within the
Indemnified Claims. Except as specifically provided in this Section,
Borrower waives all notices from any Indemnified Person. The provisions
of this Section shall survive the termination of this Agreement.
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15. Rights Cumulative. All rights of ▇▇▇▇▇▇▇▇▇ under the terms of this
Agreement shall be cumulative of, and in addition to, the rights of
▇▇▇▇▇▇▇▇▇ under any and all other agreements between Borrower and
▇▇▇▇▇▇▇▇▇ (including, but not limited to, the other Loan Documents),
and not in substitution or diminution of any rights now or hereafter
held by ▇▇▇▇▇▇▇▇▇ under the terms of any other agreement.
16. Waiver and Agreement. Neither the failure nor any delay on the part of
▇▇▇▇▇▇▇▇▇ to exercise any right, power or privilege herein or under any
of the other Loan Documents shall operate as a waiver thereof, nor
shall any single or partial exercise of such right, power or privilege
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. No waiver of any provision in this
Loan Agreement or in any of the other Loan Documents and no departure
by Borrower therefrom shall be effective unless the same shall be in
writing and signed by ▇▇▇▇▇▇▇▇▇, and then shall be effective only in
the specific instance as specified in such writing. No modification or
amendment to this Loan Agreement or to any of the other Loan Documents
shall be valid or effective unless the same is signed by the party
against whom it is sought to be enforced.
17. Benefits. This Agreement shall be binding upon and inure to the benefit
of ▇▇▇▇▇▇▇▇▇ and Borrower, and their respective successors and assigns;
provided, however, that Borrower may not, without the prior written
consent of ▇▇▇▇▇▇▇▇▇, assign any rights, powers, duties or obligations
under this Agreement or any of the other Loan Documents.
18. Notices. All notices, requests, demands or other communications
required or permitted to be given pursuant to this Agreement shall be
in writing and given by (i) personal delivery, (ii) expedited delivery
service with proof of delivery, (iii) United States mail, postage
prepaid, registered or certified mail, return receipt requested, or
(iv) telecopy (with receipt thereof confirmed by telecopier) sent to
the intended addressee at the address set forth on the signature page
hereof and shall be deemed to have been received either, in the case of
personal delivery, as of the time of personal delivery, in the case of
expedited delivery service, as of the date of first attempted delivery
at the address and in the manner provided herein, in the case of mail,
upon deposit in a depository receptacle under the care and custody of
the United States Postal Service, or in the case of telecopy, upon
receipt. Either party shall have the right to change its address for
notice hereunder to any other location within the continental United
States by notice to the other party of such new address at least thirty
(30) days prior to the effective date of such new address.
19. Governing Law; Venue; Submission to Jurisdiction. THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, EXCEPT TO THE EXTENT
PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE
SECURITY INTEREST GRANTED HEREUNDER OR THEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF TEXAS. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
ARE PERFORMABLE BY THE PARTIES IN DALLAS COUNTY, TEXAS. BORROWER AND
▇▇▇▇▇▇▇▇▇ EACH AGREE THAT DALLAS COUNTY, TEXAS, SHALL BE THE EXCLUSIVE
VENUE FOR LITIGATION OF ANY DISPUTE OR CLAIM ARISING UNDER OR RELATING
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND THAT SUCH COUNTY IS
A CONVENIENT FORUM IN WHICH TO DECIDE ANY SUCH DISPUTE OR CLAIM.
BORROWER AND ▇▇▇▇▇▇▇▇▇ EACH CONSENT TO THE PERSONAL JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS FOR THE
LITIGATION OF ANY SUCH DISPUTE OR CLAIM. BORROWER IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT
IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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20. Waiver of Jury Trial. BORROWER AND ▇▇▇▇▇▇▇▇▇ EACH HEREBY IRREVOCABLY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH.
21. Invalid Provisions. If any provision of this Agreement or any of the
other Loan Documents is held to be illegal, invalid or unenforceable
under present or future laws, such provision shall be fully severable
and the remaining provisions of this Agreement or any of the other Loan
Documents shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance.
22. Expenses. Borrower shall pay all costs and expenses (including, without
limitation, reasonable attorneys' fees) in connection with (i) the
preparation of the Loan Documents, (ii) any action required in the
course of administration of the indebtedness and obligations evidenced
by the Loan Documents, and (iii) any action in the enforcement of
▇▇▇▇▇▇▇▇▇'▇ rights upon the occurrence of Event of Default.
23. Participation of the Loan. Provided that the prospective purchaser
and/or assignee is not a business competitor of Borrower, as determined
by ▇▇▇▇▇▇▇▇▇ in its reasonable discretion, Borrower agrees that
▇▇▇▇▇▇▇▇▇ may, at its option, sell interests in the Loan and its rights
under this Agreement and the other Loan Documents and, in connection
with each such sale, ▇▇▇▇▇▇▇▇▇ may disclose any financial and other
information available to ▇▇▇▇▇▇▇▇▇ concerning Borrower to each
prospective purchaser and assignee.
24. Maximum Interest Rate.
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(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any
time the interest rate (the "Contract Rate") for the Loan or
any other indebtedness, liability or obligation shall exceed
the Maximum Rate, thereby causing the interest accruing
thereon to be limited to the Maximum Rate, then any subsequent
reduction in the Contract Rate therefor shall not reduce the
rate of interest therefor below the Maximum Rate until the
aggregate amount of interest accrued thereon equals the
aggregate amount of interest which would have accrued thereon
if the Contract Rate had at all times been in effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and
provisions of this Agreement or the other Loan Documents shall
ever be construed to create a contract or obligation to pay
interest at a rate in excess of the Maximum Rate; and
▇▇▇▇▇▇▇▇▇ shall never charge, receive, take, collect, reserve
or apply, as interest on the Loan or any other indebtedness,
liability or obligation, any amount in excess of the Maximum
Rate. The parties hereto agree that any interest, charge, fee,
expense or other obligation provided for in this Agreement or
in the other Loan Documents which constitutes interest under
applicable law shall be, ipso facto and under any and all
circumstances, limited or reduced to an amount equal to the
lesser of (i) the amount of such interest, charge, fee,
expense or other obligation that would be payable in the
absence of this Section 24(b) or (ii) an amount, which when
added to all other interest payable under this Agreement and
the other Loan Documents, equals the Maximum Rate. If,
notwithstanding the foregoing, ▇▇▇▇▇▇▇▇▇ ever contracts for,
charges, receives, takes, collects, reserves or applies as
interest any amount in excess of the Maximum Rate, such amount
which would be deemed excessive interest shall be deemed a
partial payment or prepayment of principal of the Loan or any
other indebtedness, liability or obligation and treated
hereunder as such; and if the Loan or any other indebtedness,
liability or obligation, or applicable portions thereof, are
paid in full, any remaining excess shall promptly be paid to
the Borrower or other applicable Obligor or Obligors (as
appropriate). In determining whether the interest paid or
payable, under any specific contingency, exceeds the Maximum
Rate, the Borrower and the other Obligors and ▇▇▇▇▇▇▇▇▇ shall,
to the maximum extent permitted by applicable law, (a)
characterize any nonprincipal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize,
prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated
term of the Loan or any other indebtedness, liability or
obligation, or applicable portions thereof, so that the
interest rate does not exceed the Maximum Rate at any time
during the term of the Loan or any other indebtedness,
liability or obligation; provided that, if the unpaid
principal balance is paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds
the Maximum Rate, ▇▇▇▇▇▇▇▇▇ shall refund to the Borrower or
other applicable Obligor or Obligors (as appropriate) the
amount of such excess and, in such event, ▇▇▇▇▇▇▇▇▇ shall not
be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting,
reserving or applying interest in excess of the Maximum Rate.
15
25. Conflicts. In the event any term or provision hereof is inconsistent
with or conflicts with any term or provision in any of the Loan
Documents, the terms and provisions contained in this Agreement shall
be controlling.
26. Counterparts. This Agreement may be separately executed in any number
of counterparts, each of which shall be an original, but all of which,
taken together, shall be deemed to constitute one and the same
instrument. Delivery of an executed counterpart of this Agreement by
telecopy shall be equally as effective as delivery of a manually
executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telecopy also shall deliver a
manually executed counterpart of this Agreement but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
27. Amendment and Restatement of the Original Loan Agreement. Effective as
of the date hereof, this Agreement shall constitute an amendment and
restatement of all, but not an extinguishment, discharge, satisfaction
or novation of any, indebtedness liabilities and/or obligations of
Borrower under the Original Loan Agreement.
28. ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT
TO THE TRANSACTIONS CONTEMPLATED HEREIN AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. THIS AGREEMENT ALSO AMENDS AND SUPERSEDES ANY OF THE TERMS OF
ANY PRIOR WRITTEN AGREEMENTS WITH RESPECT TO THE MATTERS SET FORTH IN
THIS AGREEMENT.
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EXECUTED as of the date first above written.
BORROWER: ▇▇▇▇▇▇▇▇▇:
KARTS INTERNATIONAL
INCORPORATED
THE ▇▇▇▇▇▇▇▇▇ FOUNDATION
By:_______________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President & C.E.O. By:___________________
Name:_________________
Borrower's Address: Title:________________
P. O. Box 695 ▇▇▇▇▇▇▇▇▇'▇ Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ The ▇▇▇▇▇▇▇▇▇ Foundation
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
17