Exhibit 10.1
TEXTRON FINANCIAL
LOAN AND SECURITY AGREEMENT
(Revolving Credit Loan and Floorplan Loan)
Co-Borrowers
Micros-To-Mainframes, Inc.
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Federal Tax I.D. #: ▇▇-▇▇▇▇▇▇▇
PTI, Corporation
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Federal Tax I.D. #: ▇▇-▇▇▇▇▇▇▇
▇▇▇▇.▇▇▇ Results, Inc.
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Federal Tax I.D. #: ▇▇-▇▇▇▇▇▇▇
MTM Advanced Technology, Inc.
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Federal Tax I.D. #: ▇▇-▇▇▇▇▇▇▇
Amount of Credit Facility
$16,000,000
Date
January 17,2002
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TECHNOLOGY FINANCE DIVISION
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TABLE OF CONTENTS
1. DEFINITIONS.
1.1 Defined Terms
1.2 Other Terms
2. LOANS; INTEREST RATE AND OTHER CHARGES.
2.1 Total Facility .
2.2 Loans.
2.3 Reconciliation Payments.
2.4. Floorplan Credit Line.
2.5 Loan Account..
2.6 Interest; Fees..
2.7 Default Interest Rate.
2.8 Examination Fees.
2.9 Excess Interest
2.10 Principal Payments; Proceeds of Collateral.
2.11 Application of Collateral.
3. COLLATERAL.
3.1 Security Interest in the Collateral
3.2 Perfection and Protection of Security Interest
3.3 Preservation of Collateral.
3.4 Insurance
3.5 Collateral Reporting; Inventory.
3.6 Receivables.
3.7 Equipment.
3.8 Other Liens; No Disposition of Collateral.
3.9 Collateral Security.
4. CONDITIONS OF CLOSING.
4.1 Initial Advance
4.2 Subsequent Advances
5. REPRESENTATIONS AND WARRANTIES.
5.1 Due Organization
5.2 Other Names
5.3 Due Authorization
5.4 Binding Obligation
5.5 Intangible Property
5.6 Capital
5.7 Material Litigation
5.8 Title; Security Interests of TEXTRON
5.9 Restrictive Agreements; Labor Contracts
5.10 Laws
5.11 Consents
5.12 Defaults
5.13 Financial Condition
5.14 ERISA
5.15 Taxes
5.16 Locations
5.17 Business Relationships
5.18 Reaffirmations
6. COVENANTS.
Affirmative Covenants:
6.1 Taxes
6.2 Notice of Litigation
6.3 ERISA
6.4 Change in Location
6.5 Corporate Existence
6.6 Labor Disputes
6.7 Violations of Law
6.8 Defaults
6.9 Capital Expenditures
6.10 Books and Records
6.11 Leases; Warehouse Agreements
6.12 Additional Documents
6.13 Financial Covenants
6.14 Issuing of Credit Memoranda
6.15 Other Covenants.
Negative Covenants:
6.16 Mergers
6.17 Loans
6.18 Dividends
6.19 Adverse Transactions
6.20 Indebtedness of Others
6.21 Repurchase
6.22 Name
6.23 Prepayment
6.24 Capital Expenditure
6.25 Indebtedness
6.26 Affiliate Transactions
6.27 Nature of Business
6.28 Textron's Name
6.29 Margin Security
7. DEFAULT AND REMEDIES.
7.1 Events of Default.
7.2 Remedies
7.3 Standards for Determining Commercial Reasonableness
8. EXPENSES AND INDEMNITIES.
8.1 Expenses
8.2 Environmental Matters.
9. MISCELLANEOUS.
9.1 Examination of Records; Financial Reporting.
9.2 Term; Termination.
9.3 Recourse to Security; Certain Waivers
9.4 No Waiver by Textron
9.5 Binding on Successor and Assigns
9.6 Severability.
9.7 Amendments; Assignments
9.8 Integration.
9.9 Survival
9.10 Evidence of Obligations
9.11 Loan Requests
9.12 Notices
9.13 Brokerage Fees
9.14 Disclosure
9.15 Publicity
9.16 Captions.
9.17 Injunctive Relief
9.18 Counterparts.
9.19 Construction.
9.20 Time of Essence.
9.21 Limitation of Actions
9.22 Liability
9.23 Notice of Breach by Textron
9.24 Withholding and Other Tax Liabilities
9.25 Power of Attorney
9.26 GOVERNING LAW; WAIVERS
9.27 MUTUAL WAIVER OF RIGHT TO JURY TRIAL
THIS LOAN AND SECURITY AGREEMENT (collectively with the
Schedule to Loan and Security Agreement (the "Schedule")
attached hereto, the "Agreement") dated the date set forth
on the cover page, is entered into by and between the Co-
Borrowers named above (jointly and severally, the
"Borrower"), whose address is set forth on the cover page
and Textron FinancialCorporation ("TEXTRON"), whose
address is ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
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1. DEFINITIONS.
1.1 Defined Terms. In addition to terms defined elsewhere
in this Agreement, the following terms have the
definitions set forth below:
"ADA" has the meaning set forth in Section 4.1(r).
"Affiliate" means any Person controlling, controlled by or
under common control with Borrower. For purposes of this
definition, "control" means the possession, directly or
indirectly, of the power to direct or cause direction of
the management and policies of any Person, whether through
ownership of common or preferred stock or other equity
interests, by contract or otherwise. Without limiting the
generality of the foregoing, each of the following shall
be an Affiliate: any officer, director, employee or other
agent of Borrower, any shareholder or subsidiary of
Borrower, and any other Person with whom or which Borrower
has common shareholders, officers or directors.
"Business Day" means any day on which commercial banks in
both North Wales, Pennsylvania and Providence, Rhode
Island are open for business.
"Capital Expenditures" means all expenditures made and
liabilities incurred for the acquisition of any fixed
asset or improvement, replacement, substitution or
addition thereto which has a useful life of more than one
year and including, without limitation, those arising in
connection with Capital Leases.
"Capital Lease" means any lease of property by Borrower
that, in accordance with GAAP, should be capitalized for
financial reporting purposes and reflected as a liability
on the balance sheet of Borrower.
"Closing Date" has the meaning set forth in Section 4.1.
"Code" means the Uniform Commercial Code as adopted and in
effect in the State of Rhode Island from time to time.
"Collateral" has the meaning set forth in Section 3.1.
"Current Assets" at any date means the amount at which the
current assets of Borrower would be shown on a balance
sheet of Borrower as at such date, prepared in accordance
with GAAP, provided that amounts due from Affiliates and
investments in Affiliates shall be excluded therefrom.
"Current Liabilities" at any date means the amount at
which the current liabilities of Borrower would be shown
on a balance sheet of Borrower, including the Revolving
Loans as at such date, prepared in accordance with GAAP.
"Deposit Accounts" has the meaning set forth in Section 9-
105 of the Code.
"Due Date" has the meaning set forth in Section 2.10.
"Earnings Before Interest and Taxes" for any fiscal period
of Borrower means the net income of Borrower for such
fiscal period, plus interest expense and provision for
income taxes for such fiscal period, and minus non-
recurring miscellaneous income and expenses should
expenses by added not subtracted, all calculated in
accordance with GAAP.
"Environmental Costs" has the meaning set forth in Section
8.2.2(c).
"Equipment" means all of Borrower's present and hereafter
acquired machinery, molds, machine tools, motors,
furniture, equipment, furnishings, fixtures, trade
fixtures, motor vehicles, tools, parts, dyes, jigs, goods
and other tangible personal property (other than
Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any
interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions,
additions or improvements to any of the foregoing,
wherever located.
"ERISA" means the Employment Retirement Income Security
Act of 1974, as amended, and the regulations thereunder.
"ERISA Affiliate" means each trade or business (whether or
not incorporated and whether or not foreign) which is or
may hereafter become a member of a group of which Borrower
is a member and which is treated as a single employer
under ERISA Section 4001(b)(1), or IRC Section 414.
"Event of Default" means any of the events set forth in
Section 7.1.
"TEXTRON Affiliate" has the meaning set forth in Section
9.22.
"Floorplanned Inventory" means all Inventory from such
manufacturer or vendors acceptable to TEXTRON from time to
time, financed by TEXTRON pursuant to Section 2.4.
"Floorplan Collateral Coverage Reconciliation" has the
meaning set forth in Section 2.3.
"Floorplan Credit Line" has the meaning set forth in
Section 2.4.
"GAAP" means generally accepted accounting principles in
the United States of America as in effect from time to
time as set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards
Boards which are applicable to the circumstances as of the
date of determination consistently applied, except that,
for the financial covenants set forth in this Agreement,
GAAP shall be determined on the basis of such principles
in effect on the date hereof and consistent with those
used in the preparation of the audited financial
statements delivered to Lender prior to the date hereof.
"General Intangibles" means all general intangibles of
Borrower, whether now owned or hereafter created or
acquired by Borrower, including, without limitation, all
choses in action, causes of action, corporate or other
business records, Deposit Accounts, inventions, designs,
drawings, blueprints, patents, patent applications,
trademarks and the goodwill of the business symbolized
thereby, names, trade names, trade secrets, goodwill,
copyrights, registrations, licenses, franchises, customer
lists, security and other deposits, rights in all
litigation presently or hereafter pending for any cause or
claim (whether in contract, tort or otherwise), and all
judgments now or hereafter arising therefrom, all claims
of Borrower against TEXTRON, rights to purchase or sell
real or personal property, rights as a licensor or
licensee of any kind, royalties, telephone numbers,
proprietary information, purchase orders, and all
insurance policies and claims (including without
limitation credit, liability, property and other
insurance)tax refunds and claims, computer programs,
discs, tapes and tape files, claims under guaranties,
security interests or other security held by or granted to
Borrower to secure payment of any of the Receivables by an
account debtor, all rights to indemnification and all
other intangible property of every kind and nature (other
than Receivables).
"Hazardous Substances" has the meaning set forth in
Section 8.2.1(b).
"Indebtedness" means all of Borrower's present and future
obligations, liabilities, debts, claims and indebtedness,
contingent, fixed or otherwise, however evidenced,
created, incurred, acquired, owing or arising, whether
under written or oral agreement, operation of law or
otherwise, and includes, without limiting the foregoing
(i) the Obligations, (ii) obligations and liabilities of
any Person secured by a lien, claim, encumbrance or
security interest upon property owned by Borrower, even
though Borrower has not assumed or become liable therefor,
(iii) obligations and liabilities created or arising under
any lease (including Capital Leases) or conditional sales
contract or other title retention agreement with respect
to property used or acquired by Borrower, even though the
rights and remedies of the lessor, seller or lender are
limited to repossession, (iv) all unfunded pension fund
obligations and liabilities and (v) deferred taxes.
"Inventory" means all of Borrower's now owned and
hereafter acquired goods, merchandise or other personal
property, wherever located, to be furnished under any
contract of service or held for sale or lease, all raw
materials, work in process, finished goods and materials
and supplies of any kind, nature or description which are
or might be used or consumed in Borrower's business or
used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods,
merchandise or other personal property, and all documents
of title or other documents representing them.
"Investment Property" means all of Borrower's right, title
and interest in and to investment property of every kind,
nature or description, wherever located, whether now owned
or hereafter acquired by Borrower, including, without
limitation, investment property as defined in Section 9-
115 of the Code, all of Borrower's other securities
(whether certificated or uncertificated), security
entitlements, securities accounts, commodity contracts,
and commodity accounts, and all present and future rights
of exchange, subscription or substitution incident to or
arising from any of the foregoing, and all present and
future rights and interest in and to dividends or
distriibutions of any kind, profits, losses, or capital
accounts incident to or arising from any of the foregoing.
"IRC" means the Internal Revenue Code of 1986, as amended,
and the regulations thereunder.
"Loan" or Loans" has the meaning set forth in Section 2.2.
"Loan Documents" means, collectively, this Agreement, any
note or notes executed by Borrower and payable to TEXTRON,
and any other agreement entered into in connection with
this Agreement, including, without limitation, any
guaranty or surety agreements executed by any guarantors,
together with all alterations, amendments, changes,
extensions, modifications, refinancings, refundings,
renewals, replacements, restatements, or supplements, of
or to any of the foregoing.
"Loan Party" means Borrower and each other party (other
than TEXTRON, but including each Guarantor and
Subordinating Creditor, if any) to any of the Loan
Documents.
"Loan Reserves" means, as of any date of determination,
such amounts as TEXTRON may from time to time establish
and revise in good faith reducing the amount of Revolving
Credit Loans which would otherwise be available to
Borrower under the lending formula(s) provided in the
Schedule: (a) to reflect events, conditions,
contingencies or risks which, as determined by TEXTRON in
good faith, do or may affect either (i) the Collateral or
any other property which is security for the Obligations
or its value, (ii) the assets, business or prospects of
Borrower or any Guarantor or (iii) the security interests
and other rights of TEXTRON in the Collateral (including
the enforceability, perfection and priority thereof) or
(b) to reflect TEXTRON's good faith belief that any
collateral report or financial information furnished by or
on behalf of Borrower or any Guarantor to TEXTRON is or
may have been incomplete, inaccurate or misleading in any
material respect or (c) in respect of any state of facts
which TEXTRON determines in good faith constitutes an
Event of Default or may, with notice or passage of time or
both, constitute an Event of Default."
"Loan Year" means each twelve month period commencing on
the Closing Date.
"Maximum Interest Rate" has the meaning set forth in
Section 2.9.
"Multiemployer Plan" means a "multiemployer plan" as
defined in ERISA Sections 3(37) or 4001(a)(3) or IRC
Section 414(f) which covers employees of Borrower or any
ERISA Affiliate.
"Obligations" means all present and future loans,
advances, debts, liabilities, obligations, covenants,
duties and indebtedness at any time owing by Borrower to
TEXTRON, whether evidenced by this Agreement, any note or
other instrument or document, whether arising from an
extension of credit, opening of a letter of credit,
banker's acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including, without
limitation, those acquired by assignment and any
participation by TEXTRON in Borrower's debts owing to
others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges,
expenses, fees, attorney's fees, expert witness fees,
examination fees, letter of credit fees, collateral
monitoring fees, closing fees, facility fees, anniversary
fees, Termination Fees, and any other sums chargeable to
Borrower hereunder or under any other agreement with
TEXTRON.
"Overloan" has the meaning set forth in Section 2.3.
"PBGC" means the Pension Benefit Guarantee Corporation.
"Permitted Discretion" means TEXTRON's judgment exercised
in good faith based upon its consideration of any factor
which TEXTRON believes in good faith: (i) will or could
adversely affect the value of any Collateral, the
enforceability or priority of TEXTRON's liens thereon or
the amount which TEXTRON would be likely to receive (after
giving consideration to delays in payment and costs of
enforcement) in the liquidation of such Collateral; (ii)
suggests that any collateral report or financial
information delivered to TEXTRON by any Person on behalf
of Borrower is incomplete, inaccurate or misleading in any
material respect; (iii) materially increases the
likelihood of a bankruptcy, reorganization or other
insolvency proceeding involving Borrower, any Loan Party
or any of the Collateral, or (iv) creates or reasonably
could be expected to create an Event of Default. In
exercising such judgment, TEXTRON may consider such
factors already included in or tested by the definition of
Eligible Receivables or Eligible Inventory, as well as any
of the following: (i) the financial and business climate
of Borrower's industry and general macroeconomic
conditions, (ii) changes in collection history and
dilution with respect to the Receivables, (iii) changes in
demand for, and pricing of, Inventory, (iv) changes in any
concentration of risk with respect to Receivables and/or
Inventory, and (v) any other factors that change the
credit risk of lending to Borrower on the security of the
Receivables and Inventory. The burden of establishing
lack of good faith hereunder shall be on Borrower.NOTE
"Permitted Encumbrance" means each of the liens, mortgages
and other security interests set forth in the Schedule.
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability
company, government, or any agency or political division
thereof, or any other entity.
"Plan" means any plan described in ERISA Section 3(2)
maintained for employees of Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
"Prepared Financials" means the balance sheets of Borrower
as of the date set forth in the Schedule, and as of each
subsequent date on which audited balance sheets are
delivered to TEXTRON from time to time hereunder, and the
related statements of operations, changes in stockholder's
equity and changes in cash flow for the periods ended on
such dates.
"Prohibited Transaction" means any transaction described
in Section 406 of ERISA which is not exempt by reason of
Section 408 of ERISA, and any transaction described in
Section 4975(c) of the IRC which is not exempt by reason
of Section 4975(c)(2) of the IRC.
"Property" has the meaning set forth in Section 8.2.1(c).
"Receivables" means all of Borrower's now owned and
hereafter acquired accounts (whether or not earned by
performance), proceeds of any letters of credit naming
Borrower as beneficiary, contract rights, chattel paper,
instruments, documents and all other forms of obligations
at any time owing to Borrower, all guaranties and other
security therefor, whether secured or unsecured, all
merchandise returned to or repossessed by Borrower, and
all rights of stoppage in transit and all other rights or
remedies of an unpaid manufacturer or vendor, lienor or
secured party.
"Reportable Event" means a reportable event described in
Section 4043 of ERISA or the regulations thereunder, a
withdrawal from a Plan described in Section 4063 of ERISA,
or a cessation of operations described in Section 4068(f)
of ERISA.
"Revolver Overloan" has the meaning set forth in Section
2.3.
"Revolving Credit Loans" has the meaning set forth in the
Schedule.
"RMA Credits" means credit memoranda for return
merchandise authorizations issued by manufacturer or
vendors of Floorplanned Inventory which are within forty-
five (45) days of their issuance date.
"Schedule" has the meaning set forth in the Preamble.
"Subordinated Debt" means liabilities of Borrower for
which the repayment is subordinated to the payment and
performance of the Obligations, pursuant to a
subordination acceptable to TEXTRON in its Permitted
Discretion.
"Tangible Capital Funds" at any date means Tangible Net
Worth plus Subordinated Debt.
Tangible Net Worth" at any time means an amount equal to,
(i) the sum of the amounts at which Borrower's cash,
security deposits, Receivables, Inventory (calculated at
the lower of cost or market and determined on a first-in,
first-out basis) and net fixed assets would be shown on a
balance sheet of Borrower at such date prepared in
accordance with GAAP, provided that amounts due from
Affiliates shall be excluded therefrom, minus (ii) Total
Indebtedness of Borrower at such date.
"Term" has the meaning set forth in Section 9.2(a).
"Termination Fee" has the meaning set forth in Section
9.2(d).
"Total Facility" has the meaning set forth in Section 2.1.
Trademarks, Copyrights, Licenses and Patents" means all of
Borrower's right, title and interest in and to, whether
now owned or hereafter acquired: (i) trademarks, trademark
registrations, trade names, trade name registrations,
Internet domain names, Internet domain name registrations,
and trademark,. trade name or Internet domain name
applications, including without limitation those listed on
the Schedule, as the same may be amended from time to
time, and (a) renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable
with respect thereto, including without limitation,
damages and payments for past or future infringements
thereof, (c) the right to ▇▇▇ for past, present and future
infringements thereof, (d) all rights corresponding
thereto throughout the world, and (e) the goodwill of the
business operated by Borrower connected with and
symbolized by any trademarks or trade names; (ii)
copyrights, copyright registrations and copyright
applications, including without limitation those listed in
the Schedule, as the same may be amended from time to
time, and (a) renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable
with respect thereto, including without limitation,
damages and payments for past or future infringements
thereof, (c) the right to ▇▇▇ for past, present and future
infringements thereof, and (d) all rights corresponding
thereto throughout the world; (iii) license agreements,
including without limitation those listed in the Schedule,
and the right to prepare for sale, sell and advertise for
sale any Inventory now or hereafter owned by Borrower and
now or hereafter covered by such licenses; and (iv)
patents and patent applications, registered or pending,
including without limitation those listed in the Schedule,
together with all income, royalties, shop rights, damages
and payments thereto, the right to ▇▇▇ for infringements
thereof, and all rights thereto throughout the world and
all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof.
"Valid Price Protection" means any credit memorandum
issued by any manufacturer or vendor of Floorplanned
Inventory to reimburse Borrower for a decrease in the
value of Borrower's Floorplanned Inventory supplied by
such manufacturer or vendor caused by such manufacturer or
vendor's reduction of the purchase price from the
manufacturer or vendor of such Floorplanned Inventory.
1.2 Other Terms. All accounting terms used in this
Agreement, unless otherwise indicated, shall have the
meanings given to such terms in accordance GAAP. All
other terms contained in this Agreement, unless otherwise
indicated, shall have the meanings provided by the Code,
to the extent such terms are defined therein.
2. LOANS; INTEREST RATE AND OTHER CHARGES.
2.1 Total Facility. Upon the terms and conditions set
forth herein and provided that no Event of Default or
event which, with the giving of notice or the passage of
time, or both, would constitute an Event of Default, may
have occurred and be continuing, TEXTRON may, upon
Borrower's request, make advances to Borrower from time to
time in an aggregate outstanding principal amount not to
exceed the Total Facility amount (the "Total Facility")
set forth in the Schedule, subject to deduction of
reserves for accrued interest and such other reserves as
TEXTRON deems proper from time to time, and less amounts
TEXTRON may be obligated to pay in the future on behalf of
Borrower. The Schedule is an integral part of this
Agreement and all references to "herein", "herewith" and
words of similar import shall for all purposes be deemed
to include the Schedule.
2.2 Loans. Advances under the Total Facility (each, a
"Loan" and collectively, "Loans") shall be comprised of
the amounts and at the advance rates shown in the
Schedule. TEXTRON may, in its Permitted Discretion,
adjust the advance rates set forth in the Schedule.
2.3 Reconciliation Payments. If at any time or for any
reason (i) the outstanding principal amount of Revolving
Loans exceeds any of the applicable dollar or percentage
limitations contained in the Schedule (any such excess, a
"Revolver Overloan"); (ii) the sum of (a) the aggregate
outstanding principal amount of Floorplan Loans plus (b)
approvals given by TEXTRON to a manufacturer or vendor of
Floorplanned Inventory exceeds the Maximum Floorplan
Amount (any such excess a "Floorplan Overloan"), then
Borrower shall, upon TEXTRON's demand, immediately pay to
TEXTRON, in cash, the full amount of such Revolver
Overloan or Floorplan Collateral Coverage Reconciliation
(each, an "Overloan"). Without limiting Borrower's
obligation to repay to TEXTRON on demand any such amount
of any Overloan, Borrower shall pay TEXTRON interest on
the outstanding principal amount of any Revolver Overloan,
on demand, at the rate set forth in the Schedule.
2.4. Floorplan Credit Line. At the request of Borrower
and as part of the Total Facility, TEXTRON may, in its
Permitted Discretion, make Floorplan Loans to or for the
account of Borrower for the purpose of financing
Floorplanned Inventory proposed by Borrower to be financed
pursuant to this Section 2.4 (the "Floorplan Credit
Line"). At no time shall the sum of Borrower's
Obligations to TEXTRON in respect of the Floorplan Credit
Line exceed the amount specified in the Schedule. Upon
receipt by TEXTRON of an invoice for Floorplanned
Inventory from Borrower or the manufacturer or vendor of
such Floorplanned Inventory, which invoice is acceptable
to TEXTRON in its Permitted Discretion, TEXTRON shall, if
it elects to finance such Floorplanned Inventory, make a
Floorplan Loan to Borrower in an amount not to exceed
(subject to the other limitations set forth in this
Agreement) the cost, as reflected on the manufacturer's or
vendor's invoice, of such Floorplanned Inventory,
including freight. TEXTRON may, in its Permitted
Discretion, refuse to make a Floorplan Loan against any
invoice. If TEXTRON elects to make a Floorplan Loan,
TEXTRON may disburse the proceeds of such Floorplan Loan,
less the amount of any discount agreed to between TEXTRON
and the manufacturer or vendor of the Floorplanned
Inventory, directly to such manufacturer or vendor on
Borrower's behalf in accordance with the payment
arrangement then in effect between TEXTRON and such
manufacturer or vendor. TEXTRON will charge Borrower's
loan account for the full amount of the Floorplan Loan
without regard to any discount that TEXTRON may be
entitled to receive pursuant to any payment arrangement
referred to in the immediately preceding sentence. The
Floorplan Credit Line is an uncommitted line of credit,
may be terminated in whole or in part by TEXTRON, in its
Permitted Discretion, at any time and, upon such
termination, no further Floorplan Loans shall be available
from TEXTRON.
2.5 Loan Account. All advances made hereunder shall be
added to and deemed part of the Obligations when made.
TEXTRON may from time to time charge all Obligations of
Borrower when due to Borrower's loan account with TEXTRON.
2.6 Interest; Fees.
(a) Revolving Credit Line. Borrower shall pay TEXTRON
interest on the daily outstanding balance of the Revolving
Credit Loans, at the per annum rates set forth in the
Schedule and the Secured Revolving Credit Note, as
applicable. Borrower shall also pay TEXTRON the fees set
forth in the Schedule.
(b) Floorplan Credit Line. If Borrower fails to make any
payment to TEXTRON when due with respect to the Floorplan
Credit Line, Borrower shall pay TEXTRON interest on the
daily amount past due at the applicable per annum rate set
forth in the Schedule. In addition, in the event that
TEXTRON elects to make advances under the Floorplan Credit
Line which are not subsidized by the manufacturer or
vendor, such advances will bear interest from the invoice
date until the due date at the applicable rate set forth
in the Schedule. All such interest shall be payable upon
demand of TEXTRON.
2.7 Default Interest Rate. Upon the occurrence and during
the continuation of an Event of Default, Borrower shall
pay TEXTRON interest on the daily outstanding balance of
the Revolving Credit Loans at a rate per annum which is
six and one-half percentage points (6.5%) in excess of the
rate which would otherwise be applicable thereto pursuant
to the Schedule. All such default interest shall be
payable upon demand of TEXTRON.
2.8 Examination Fees. Borrower agrees to pay to TEXTRON
an examination fee in the amount set forth in the Schedule
in connection with each audit or examination of Borrower
performed by TEXTRON prior to or after the date hereof.
Without limiting the generality of the foregoing, Borrower
shall pay to TEXTRON an initial Examination Fee in an
amount equal to the amount set forth on the Schedule.
Such initial Examination Fee shall be deemed fully earned
at the time of payment and due and payable upon the
closing of this transaction, and shall be deducted from
any good faith deposit paid by Borrower to TEXTRON prior
to the date of this Agreement.
2.9 Excess Interest. The contracted for rate of interest
of the loan contemplated hereby, without limitation, shall
consist of the following: (i) the interest rate set forth
in the Schedule, calculated and applied to the principal
balance of the Obligations in accordance with the
provisions of this Agreement; (ii) interest after an Event
of Default, calculated and applied to the amount of the
Obligations in accordance with the provisions hereof; and
(iii) all Additional Sums (as herein defined), if any.
Borrower agrees to pay an effective contracted for rate of
interest which is the sum of the above-referenced
elements. The Examination Fees, attorneys fees, expert
witness fees, L/C Fees, Collateral Monitoring Fees,
Closing Fees, Facility Fees, other charges, goods, things
in action or any other sums or things of value paid or
payable by Borrower (collectively, the "Additional Sums"),
whether pursuant to this Agreement or any other documents
or instruments in any way pertaining to this lending
transaction, or otherwise with respect to this lending
transaction, that under any applicable law may be deemed
to be interest with respect to this lending transaction,
for the purpose of any applicable law that may limit the
maximum amount of interest to be charged with respect to
this lending transaction, shall be payable by Borrower as,
and shall be deemed to be, additional interest and for
such purposes only, the agreed upon and "contracted for
rate of interest" of this lending transaction shall be
deemed to be increased by the rate of interest resulting
from the inclusion of the Additional Sums.
It is the intent of the parties to comply with the
usury laws of the State of New York (the "Applicable Usury
Law"). Accordingly, it is agreed that notwithstanding any
provisions to the contrary in this Agreement, or in any of
the documents securing payment hereof or otherwise
relating hereto, in no event shall this Agreement or such
documents require the payment or permit the collection of
interest in excess of the maximum contract rate permitted
by the Applicable Usury Law (the "Maximum Interest Rate").
In the event (a) any such excess of interest otherwise
would be contracted for, charged or received from Borrower
or otherwise in connection with the loan evidenced hereby,
(b) the maturity of the Obligations is accelerated in
whole or in part, or (c) all or part of the Obligations
shall be prepaid, so that under any of such circumstances
the amount of interest contracted for, shared or received
in connection with the loan evidenced hereby, would exceed
the Maximum Interest Rate, then in any such event (1) the
provisions of this paragraph shall govern and control, (2)
neither Borrower nor any other person or entity now or
hereafter liable for the payment of the Obligations shall
be obligated to pay the amount of such interest to the
extent that it is in excess of the Maximum Interest Rate,
(3) any such excess which may have been collected shall be
either applied as a credit against the then unpaid
principal amount of the Obligations or refunded to
Borrower, at TEXTRON's option, and (4) the effective rate
of interest shall be automatically reduced to the Maximum
Interest Rate. It is further agreed, without limiting the
generality of the foregoing, that to the extent permitted
by the Applicable Usury Law; (x) all calculations of
interest which are made for the purpose of determining
whether such rate would exceed the Maximum Interest Rate
shall be made by amortizing, prorating, allocating and
spreading during the period of the full stated term of the
loan evidenced hereby, all interest at any time contracted
for, charged or received from Borrower or otherwise in
connection with such loan; and (y) in the event that the
effective rate of interest on the loan should at any time
exceed the Maximum Interest Rate, such excess interest
that would otherwise have been collected had there been no
ceiling imposed by the Applicable Usury Law shall be paid
to TEXTRON from time to time, if and when the effective
interest rate on the loan otherwise falls below the
Maximum Interest Rate, to the extent that interest paid to
the date of calculation does not exceed the Maximum
Interest Rate, until the entire amount of interest which
would otherwise have been collected had there been no
ceiling imposed by the Applicable Usury Law has been paid
in full. Borrower further agrees that should the Maximum
Interest Rate be increased at any time hereafter because
of a change in the Applicable Usury Law, then to the
extent not prohibited by the Applicable Usury Law, such
increases, if applicable, shall apply to all indebtedness
evidenced hereby regardless of when incurred; but, again
to the extent not prohibited by the Applicable Usury Law,
should the Maximum Interest Rate be decreased because of a
change in the Applicable Usury Law, such decreases shall
not apply to the indebtedness evidenced hereby regardless
of when incurred.
2.10 Principal Payments; Proceeds of Collateral.
(a) Principal Payments. Except where evidenced by notes
or other instruments issued or made by Borrower to TEXTRON
specifically containing payment provisions which are in
conflict with this Section 2.10(a) (in which event the
conflicting provisions of said notes or other instruments
shall govern and control), that portion of the Obligations
consisting of principal payable on account of Revolving
Loans and Floorplan Loans shall be payable by Borrower to
TEXTRON immediately upon the earliest of (i) the receipt
by TEXTRON or Borrower of any proceeds of any of the
Collateral, to the extent of said proceeds, (ii) the
occurrence of an Event of Default in consequence of which
TEXTRON elects to accelerate the maturity and payment of
such loans, (iii) any termination of this Agreement
pursuant to Section 9.2, or (iv) in the case of any
Floorplan Loan, the date that is the number of days set
forth in Exhibit A to this Agreement after the invoice
date for the Floorplanned Inventory purchased with the
proceeds of such Floorplan Loan, which number of days are
specified opposite the name of the manufacturer or vendor
of such Floorplanned Inventory in such Exhibit A (each, a
"Due Date") (and TEXTRON shall have the right, in its
Permitted Discretion, to amend or supplement such Exhibit
A in whole or in part by delivery from time to time of a
new such Exhibit A to Borrower), provided, however, that
any Revolver Overloan shall be payable on demand pursuant
to the provisions of Section 2.3.
(b) Collections. Until TEXTRON notifies Borrower to the
contrary, Borrower may make collection of all Receivables
for TEXTRON by directing all account debtors and other
third parties to remit all payments owing to Borrower to
the lockbox established in connection with the Blocked
Account. In the event Borrower shall nevertheless
directly receive any payments or other financial proceeds
of any Collateral, Borrower shall receive all payments as
trustee of TEXTRON and immediately deliver all payments to
TEXTRON in their original form as set forth below, duly
endorsed in blank or cause the same to be deposited into a
Blocked Account Dominion Account.
(c) Establishment of a Lockbox Account or Dominion
Account. Unless Borrower shall be otherwise directed by
TEXTRON in writing, Borrower shall cause all proceeds of
Collateral to be deposited into a lockbox account, or such
other "blocked account" as TEXTRON may require (each, a
"Blocked Account") pursuant to an arrangement with such
bank as may be selected by Borrower and be acceptable to
TEXTRON which proceeds, unless otherwise provided herein,
shall be applied in payment of the Obligations in such
order as TEXTRON determines in its Permitted Discretion.
Borrower shall issue to any such bank an irrevocable
letter of instruction directing said bank to transfer such
funds so deposited to TEXTRON, either to any account
maintained by TEXTRON at said bank or by wire transfer to
appropriate account(s) of TEXTRON. All funds deposited in
a Blocked Account shall immediately become the sole
property of TEXTRON and Borrower shall obtain the
agreement by such bank to waive any offset rights against
the funds so deposited. TEXTRON assumes no responsibility
for any Blocked Account arrangement, including without
limitation, any claim of accord and satisfaction or
release with respect to deposits accepted by any bank
thereunder. Alternatively, TEXTRON may establish
depository accounts in the name of TEXTRON at a bank or
banks for the deposit of such funds (each, a "Dominion
Account") and Borrower shall deposit all proceeds of
Receivables and all cash proceeds of any Collateral or
cause same to be deposited, in kind, in such Dominion
Accounts of TEXTRON in lieu of depositing same to Blocked
Accounts, and, unless otherwise provided herein, all such
funds shall be applied by TEXTRON to the Obligations in
such order as TEXTRON determines in its Permitted
Discretion.
(d) Payments Without Deductions. Borrower shall pay
principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any
deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.
(e) Collection Days Upon Repayment. In the event
Borrower repays the Obligations in part or in full at any
time hereafter, such payment in full shall be credited
(conditioned upon final collection) to Borrower's loan
account within the number of days referenced in the
Schedule after TEXTRON's receipt thereof.
(f) Monthly Accountings. TEXTRON shall provide Borrower
monthly with an account of advances, charges, expenses and
payments made pursuant to this Agreement. Such account
shall be deemed correct, accurate and binding on Borrower
and TEXTRON and an account stated (except for reverses and
reapplications of payments made and corrections of errors
discovered by TEXTRON), unless Borrower notifies TEXTRON
in writing to the contrary within thirty (30) days after
each account is rendered, describing the nature of any
alleged errors or omissions.
(g) Collections and Administration. TEXTRON may, at any
time, whether or not an Event of Default has occurred,
without notice to or assent of Borrower, (i) notify any
account debtor of the fact that the accounts and other
Collateral have been assigned to TEXTRON by Borrower and
that payment thereof is to be made to the order of and
directly to TEXTRON, and (ii) after the occurrence of an
Event of Default, or an event which, with the giving of
notice, passage of time, or both, would become an Event of
Default, demand, collect or enforce payment of any
accounts or such other Collateral, but without any duty to
do so, and TEXTRON shall not be liable for any failure to
collect or enforce payment thereof. At TEXTRON's request,
all invoices, or bills and statements sent to any account
debtor, other obligor or bailee, shall state that the
accounts and such Collateral shall have been assigned to
TEXTRON and are payable directly and only to TEXTRON.
TEXTRON shall have the right, at any time, in TEXTRON's
name or in the name of a nominee of TEXTRON, to verify the
validity, amount or any other matter relating to the
accounts or the other Collateral, by mail, telephone or
otherwise.
2.11 Application of Collateral. TEXTRON shall have the
continuing and exclusive right to apply or reverse and re-
apply any and all payments to any portion of the
Obligations, and such application or re-application can be
in any order or manner that TEXTRON deems necessary and
appropriate in its Permitted Discretion. To the extent
that Borrower makes a payment or TEXTRON receives any
payment or proceeds of the Collateral for Borrower's
benefit which is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be
repaid to a trustee, debtor in possession, receiver or any
other party under any bankruptcy law, common law or
equitable cause, then, to such extent, the Obligations or
part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been
received by TEXTRON, and TEXTRON may adjust the balance of
the Loan as TEXTRON, in its Permitted Discretion, deems
appropriate under the circumstances.
3. COLLATERAL.
3.1 Security Interest in the Collateral. To secure the
payment and performance of the Obligations when due,
Borrower hereby grants to TEXTRON (i) a first priority
security interest (subject only to Permitted Encumbrances)
in all of Borrower's now owned or hereafter acquired or
arising Inventory, Equipment, Receivables, life insurance
policies, Trademarks, Copyrights, Licenses and Patents,
Investment Property, and General Intangibles, including,
without limitation, all of Borrower's Deposit Accounts,
money, any and all property now or at any time hereafter
in TEXTRON's possession (including claims and credit
balances), any amounts owed to mutual customers of
Borrower and TEXTRON which are floorplanned by TEXTRON,
and all proceeds (including proceeds of any insurance
policies, proceeds of proceeds and claims against third
parties), all products and all books and records related
to any of the foregoing, and (ii) assigns, transfers and
sets over to TEXTRON all of its right, title and interest,
powers, privileges and other benefits of all leases,
rental agreements and related documents entered into by
Borrower with respect to any Equipment leased by Borrower
together with all income, proceeds and other benefits
thereof (all of the foregoing, together with all other
property in which TEXTRON may be granted a lien or
security interest, is referred to herein, collectively, as
the "Collateral").
3.2 Perfection and Protection of Security Interest.
Borrower shall, at its expense, take all actions requested
by TEXTRON at any time to perfect, maintain, protect and
enforce TEXTTRON's security interest and other rights in
the Collateral and the priority thereof from time to time,
including, without limitation, (i) executing and filing
financing or continuation statements and amendments
thereof and executing and delivering such documents and
titles in connection with motor vehicles as TEXTRON shall
require, all in form and substance satisfactory to
TEXTRON, (ii) maintaining a perpetual inventory and
complete and accurate inventory stock records, (iii)
delivering to TEXTRON warehouse receipts covering any
portion of the Collateral located in warehouses and for
which warehouse receipts are issued, and transferring
Inventory to warehouses designated by TEXTRON, (iv)
placing notations on Borrower's books of account to
disclose TEXTRON's security interest therein, and (v)
delivering to TEXTRON all letters of credit on which
Borrower is named beneficiary. TEXTRON may file, without
Borrower's signature, one or more financing statements
disclosing TEXTRON's security interest under this
Agreement. Borrower agrees that a carbon, photographic,
photostat or other reproduction of this Agreement or of a
financing statement is sufficient as a financing
statement. If any Collateral is at any time in the
possession or control of any warehouseman, bailee or any
of Borrower's agents or processors, Borrower shall notify
such Person of TEXTRON's security interest in such
Collateral and, upon TEXTRON's request, instruct them to
hold all such Collateral for TEXTRON's account subject to
TEXTRON's instructions. From time to time, Borrower
shall, upon TEXTRON's request, execute and deliver
confirmatory written instruments pledging the Collateral
to TEXTRON, but Borrower's failure to do so shall not
affect or limit TEXTRON's security interest or other
rights in and to the Collateral. Until the Obligations
have been fully satisfied and TEXTRON's obligation to make
further advances hereunder has terminated, TEXTRON's
security interest in the Collateral shall continue in full
force and effect.
3.3 Preservation of Collateral. TEXTRON may, in its
Permitted Discretion, at any time discharge any lien or
encumbrance on the Collateral or bond the same, pay any
insurance, maintain guards, pay any service bureau, obtain
any record or take any other action to preserve the
Collateral and charge the cost thereof to Borrower's loan
account as an Obligation.
3.4 Insurance. Borrower will maintain and deliver
evidence to TEXTRON of such insurance as is required by
TEXTRON, written by insurers, in amounts, and with
Lender's loss payee, additional insured and other
endorsements, satisfactory to TEXTRON. All premiums shall
be paid by Borrower as and when due. Accurate and complete
copies of all policies shall be delivered by Borrower to
TEXTRON. If Borrower fails to comply with this section,
TEXTRON may (but shall not be required to) procure such
insurance at Borrower's expense and charge the cost
thereof to Borrower's loan account as an Obligation.
3.5 Collateral Reporting.
(a) Invoices. Borrower shall not re-date any invoice or
sale from the original date thereof or make sales on
extended terms beyond those customary in Borrower's
industry, or otherwise extend or modify the term of any
Receivable. Borrower shall deliver a copy of any invoice
requested by TEXTRON. Each copy of an invoice delivered
to TEXTRON by Borrower will be a genuine copy of the
original invoice sent to the account debtor named therein;
and with respect to any invoice or accounts receivable
aging report delivered to TEXTRON, all goods described in
each invoice will have been delivered to the account
debtor and all services of Borrower described in each
invoice will have been performed.
(b) Instruments. If any Receivable is or becomes
evidenced by a promissory note, trade acceptance or any
other instrument for the payment of money, Borrower shall
immediately deliver such instrument to TEXTRON
appropriately endorsed to TEXTRON and, regardless of the
form of any presentment, demand, notice of dishonor,
protest or notice of protest with respect thereto,
Borrower shall remain liable thereon until such instrument
is paid in full.
(c) Physical Inventory. Borrower shall maintain its
computerized perpetual inventory system and shall conduct
a physical count of the Inventory at such intervals as
TEXTRON requests and promptly supply TEXTRON with a copy
of such accounts accompanied by a report of the quantity
and value (calculated at the lower of cost or market value
on a first in, first out basis) of the Inventory and such
additional information with respect to the Inventory as
TEXTRON may request from time to time.
(d) Returns. For so long as no Event of Default has
occurred and is continuing and subject to the provisions
of Section 3.6(b), if any account debtor returns any
Inventory to Borrower in the ordinary course of its
business, Borrower shall promptly determine the reason for
such return and may issue a credit memorandum to the
account debtor in the appropriate amount. In the event
any account debtor returns Inventory to Borrower after the
occurrence of any Event of Default, Borrower shall (i)
hold the returned Inventory in trust for TEXTRON, (ii)
segregate all returned Inventory from all of Borrower's
other property, (iii) conspicuously label the returned
Inventory as TEXTRON's property, (iv) immediately notify
TEXTRON of the return of any Inventory, specifying the
reason for such return, the location and condition of the
returned Inventory, and on TEXTRON's request deliver such
returned Inventory to TEXTRON, and (v) not dispose of, or
issue any credits or allowances with respect to, any
returned Inventory without TEXTRON's prior written
consent.
e) Consignments. Borrower shall not consign any
Inventory.
3.6 Receivables.
(a) Eligibility. (i) Borrower represents and warrants that
each Receivable covers and shall cover a bona fide sale or
lease and delivery by it of goods or the rendition by it
of services in the ordinary course of its business, and
shall be for a liquidated amount and shall not be subject
to any offset, deduction, counterclaim, rights of return
or cancellation, lien (except for TEXTRON's security
interest and Permitted Encumbrances) or other condition.
If any representation or warranty herein is breached as to
any Receivable or any Receivable ceases to be an Eligible
Receivable for any reason other than payment thereof, then
TEXTRON may, in addition to its other rights hereunder,
designate any and all Receivables owing by that account
debtor as not Eligible Receivables; provided, that TEXTRON
shall in any such event retain its security interest in
all Receivables, whether or not Eligible Receivables,
until the Obligations have been fully satisfied and
TEXTRON's obligation to provide loans hereunder has
terminated. If Borrower becomes aware of any matter
affecting any Receivable, including information affecting
the credit of the account debtor thereon, Borrower shall
promptly notify TEXTRON in writing.
(ii) TEXTRON at any time shall be entitled to (i)
establish and increase or decrease reserves against
Eligible Receivables and Eligible Inventory, (ii) reduce
the advance rates in the Schedule or restore such advance
rates to any level equal to or below the advance rates set
forth in the Schedule or (iii) impose additional
restrictions (or eliminate the same) to the standards of
eligibility set forth in the definitions of "Eligible
Receivables" and "Eligible Inventory," in the exercise of
its Permitted Discretion. TEXTRON may but shall not be
required to rely on the schedules and/or reports delivered
to TEXTRON in connection herewith in determining the then
eligibility of Receivables and Inventory. Reliance
thereon by TEXTRON from time to time shall not be deemed
to limit the right of TEXTRON to revise advance rates or
standards of eligibility as provided above.
(b) Disputes. Borrower shall notify TEXTRON promptly of
all disputes or claims and settle or adjust such disputes
or claims at no expense to TEXTRON, but no discount,
credit or allowance shall be granted to any account debtor
and no returns of merchandise shall be accepted by
Borrower without TEXTRON's consent, except for discounts,
credits and allowances made or given in the ordinary
course of Borrower's business. Borrower shall send TEXTRON
a copy of each credit memorandum in excess of the amount
provided in the Schedule as soon as issued or as soon as
known by Borrower. TEXTRON may, at any time after the
occurrence of an Event of Default, settle or adjust
disputes or claims directly with account debtors for
amounts and upon terms which TEXTRON considers advisable
in its reasonable credit judgment and, in all cases,
TEXTRON shall credit Borrower's loan account with only the
net amounts received by TEXTRON in payment of any
Receivables.
3.7 Equipment. Borrower shall keep and maintain the
Equipment in good operating condition and repair and make
all necessary replacements thereto to maintain and
preserve the value and operating efficiency thereof at all
times consistent with Borrower's past practice, ordinary
wear and tear excepted. Borrower shall not permit any item
of Equipment to become a fixture (other than a trade
fixture) to real estate or an accession to other property.
3.8 Other Liens; No Disposition of Collateral. Borrower
represents, warrants and covenants that except for
TEXTRON's security interest, Permitted Encumbrances, and
such other liens, claims and encumbrances as may be
permitted by TEXTRON in its Permitted Discretion from time
to time in writing, (a) all Collateral is and shall
continue to be owned by it free and clear of all liens,
claims and encumbrances whatsoever and (b) Borrower shall
not, without TEXTRONS's prior written approval, sell,
encumber or dispose of or permit the sale, encumbrance or
disposal of any Collateral or all or any substantial part
of any of its other assets (or any interest of Borrower
therein), except for the sale of Inventory in the ordinary
course of Borrower's business, Equipment which is obsolete
and non-material assets other than Receivables and
Inventory. In the event TEXTRON gives any such prior
written approval with respect to any such sale of
Collateral, the same may be conditioned on the sale price
being equal to, or greater than, an amount acceptable to
TEXTRON. The proceeds of any such sales shall be remitted
to TEXTRON pursuant to this Agreement for application to
the Obligations.
3.9 Collateral Security. The Obligations shall
constitute one loan secured by the Collateral. TEXTRON
may, in its Permitted Discretion, (i) exchange, enforce,
waive or release any of the Collateral, (ii) apply
Collateral and direct the order or manner of sale thereof
as it may determine, and (iii) settle, compromise, collect
or otherwise liquidate any Collateral in any manner
without affecting its right to take any other action with
respect to any other Collateral.
4. CONDITIONS OF CLOSING.
4.1 Initial Advance. The obligation of TEXTRON to make
the initial advance hereunder is subject to the
fulfillment, to the satisfaction of TEXTRON and its
counsel, of each of the following conditions and any
additional conditions specified in the Schedule on or
prior to the date set forth on the Schedule (the date of
fulfillment of all such conditions, the "Closing Date"):
(a) Loan Documents. TEXTRON shall have received each of
the following Loan Documents: (i) the Agreement fully
and properly executed by Borrower; (ii) promissory notes
in such amounts and on such terms and conditions as
TEXTRON shall specify, executed by Borrower; (iii) such
security agreements, intellectual property assignments,
guaranty agreements, pledge agreements, mortgages and
deeds of trust as TEXTRON may require with respect to this
Agreement, executed by each of the parties thereto and, if
applicable, duly acknowledged for recording or filing in
the appropriate governmental offices; (iv) such other
documents, instruments and agreements in connection
herewith as TEXTRON shall require, executed, certified
and/or acknowledged by such parties as TEXTRON shall
designate;
(b) Terminations by Existing Lender. Borrower's existing
lender(s) shall have executed and delivered UCC
termination statements and other documentation evidencing
the termination of its liens and security interests in the
assets of Borrower or a subordination agreement in form
and substance satisfactory to TEXTRON in its Permitted
Discretion; and TEXTRON shall have approved in its
Permitted Discretion any outstanding payoff arrangements
with the foregoing creditors;
(c) Charter and Other Corporate Documents. TEXTRON shall
have received copies of (i) Borrower's Bylaws and Articles
or Certificate of Incorporation, as amended, modified, or
supplemented to the Closing Date, certified by the
Secretary of Borrower; and (ii) Borrower's registrations
of fictitious names, trademarks, tradenames and Internet
domain names.
(d) Good Standing. TEXTRON shall have received a
certificate of status with respect to Borrower, and each
other Loan Party, dated within thirty (30) days prior to
the Closing Date, by the Secretary of State or other
similar official of the state of incorporation or
organization of Borrower or such Loan Party, which
certificate shall indicate that Borrower or such Loan
Party is in good standing in such state;
(e) Foreign Qualification. TEXTRON shall have received
certificates of status with respect to Borrower and each
other Loan Party, each dated within ten (10) days prior to
the Closing Date, issued by the Secretary of State or
other similar official of each state in which such party's
failure to be duly qualified or licensed would have a
material adverse effect on its financial condition or
assets, indicating that such party is in good standing;
(f) Authorizing Resolutions and Incumbency. TEXTRON
shall have received (i) a copy of resolutions of
Borrower's Board of Directors authorizing the execution
and delivery of this Agreement and the other Loan
Documents, (ii) a copy of resolutions of each other Loan
Party's Board of Directors authorizing the execution and
delivery of the Loan Documents to which such Loan Party is
a party, and authorizing specific officers of such Loan
Party to execute same, and (iii) a certificate from the
Secretary of Borrower and each other Loan Party attesting
to (A) the adoption of the such resolutions, and (B) the
authenticity of original specimen signatures of such
officers;
(g) Insurance. TEXTRON shall have received the insurance
certificates and certified copies of policies required by
Section 3.4 hereof, in form and substance satisfactory to
TEXTRON and its counsel, together with an additional
insured endorsement in favor of TEXTRON with respect to
all liability policies and a lender's loss payable
endorsement in favor of TEXTRON with respect to all
casualty and business interruption policies, each in form
and substance acceptable to TEXTRON and its counsel;
(h) Title Insurance. TEXTRON shall have received binding
commitments to issue title insurance, in form and
substance satisfactory to TEXTRON and its counsel, with
respect to any real property that constitutes part of the
Collateral;
(i) Searches; Certificates of Title. TEXTRON shall have
received searches reflecting the filing of its financing
statements and fixture filings in such jurisdictions as it
shall determine, and shall have received certificates of
title with respect to the Collateral which shall have been
duly executed in a manner sufficient to perfect all of the
security interests granted to TEXTRON;
(j) Landlord, Baileee and Mortgagee Waivers. TEXTRON
shall have received landlord, bailee and/or mortgagee
waivers from the lessors, bailors and/or mortgagees of all
locations where any Collateral is located;
(k) Fees. Borrower shall have paid all fees payable by
it on the Closing Date pursuant to this Agreement;
(l) Opinion of Counsel. TEXTRON shall have received an
opinion of Borrower's counsel covering such matters as
TEXTRON shall determine in its Permitted Discretion;
(m) Officer Certificate. TEXTRON shall have received a
certificate of the President and the Chief Financial
Officer or similar official of Borrower, attesting to the
accuracy of each of the representations and warranties of
Borrower set forth in this Agreement and the fulfillment
of all conditions precedent to the initial advance
hereunder;
(n) Solvency Certificate. TEXTRON shall have received a
signed certificate of the Borrower's duly elected Chief
Financial Officer or such other officer of Borrower
acceptable to TEXTRON, concerning the solvency and
financial condition of Borrower, on TEXTRON's standard
form;
(o) Blocked Account. Any Blocked Account required by
TEXTRON shall have been established to the satisfaction of
TEXTRON in its Permitted Discretion;
(p) THIS SECTION INTENTIONALLY LEFT BLANK
(q) THIS SECTION INTENTIONALLY LEFT BLANK
(r) ADA Compliance. If necessary, as of the Closing
Date, Borrower shall be in compliance with the Americans
with Disabilities Act of 1990, as amended ("ADA"), or, if
any renovations of Borrower's facilities or modifications
of Borrower's employment practices shall be required to
bring them into compliance with the ADA, review and
approval by TEXTRON of Borrower's proposed plan to come
into such compliance. Borrower shall deliver
representations and warranties to TEXTRON concerning
Borrower's compliance with the ADA, and no evidence shall
have come to the attention of TEXTRON indicating that
Borrower is not in compliance with the ADA (except to the
extent that TEXTRON has reviewed and approved Borrower's
plan to come into compliance).
(s) Minimum Excess Availability. If required by TEXTRON,
Borrower shall have Excess Availability under the
Revolving Credit Loans facility of not less than the
amount specified in the Schedule, after giving effect to
the initial advance hereunder and after giving effect to
any applicable Loan Reserves against borrowing
availability under the Revolving Credit Loans.
(t) Schedule Conditions. Borrower shall have complied
with all additional conditions precedent as set forth in
the Schedule.
(u) Other Matters. All other documents and legal matters
in connection with the transactions contemplated by this
Agreement shall have been delivered, executed or recorded
and shall be in form and substance satisfactory to TEXTRON
and its counsel.
4.2 Subsequent Advances. The obligation of TEXTRON to
make any advance shall be subject to the further
conditions precedent that, on and as of the date of such
advance: (i) the representations and warranties of
Borrower set forth in this Agreement shall be accurate,
before and after giving effect to such advance or issuance
and to the application of any proceeds thereof; (ii) no
Event of Default and no event which, with notice or
passage of time or both, would constitute an Event of
Default has occurred and is continuing, or would result
from such advance or issuance or from the application of
any proceeds thereof; (iii) no material adverse change
has occurred in the Borrower's business, operations,
financial condition, or assets or in the prospect of
repayment of the Obligations; and (iv) TEXTRON shall have
received such other approvals, opinions or documents as
TEXTRON shall reasonably request.
5. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants that:
5.1 Due Organization. It is a corporation duly
organized, validly existing and in good standing under the
laws of the State set forth on the Schedule, is qualified
and authorized to do business and is in good standing in
all states in which such qualification and good standing
are necessary in order for it to conduct its business and
own its property, and has all requisite power and
authority to conduct its business as presently conducted,
to own its property and to execute and deliver each of the
Loan Documents to which it is a party and perform all of
its Obligations thereunder and has not taken any steps to
wind up, dissolve or otherwise liquidate its assets;
5.2 Other Names. Borrower has not, during the preceding
five (5) years, been known by or used any other corporate
or fictitious name except as set forth in the Schedule,
nor has Borrower been the surviving entity of a merger or
consolidation or acquired all or substantially all of the
assets of any person during such time, except as set forth
in the Schedule;
5.3 Due Authorization. The execution, delivery and
performance by Borrower of the Loan Documents to which it
is a party have been authorized by all necessary corporate
action and do not and shall not constitute a violation of
any applicable law or of Borrower's Articles or
Certificate of Incorporation or By-Laws or any other
document, agreement or instrument to which Borrower is a
party or by which Borrower or its assets are bound;
5.4 Binding Obligation. Each of the Loan Documents to
which Borrower is a party is the legal, valid and binding
obligation of Borrower enforceable against Borrower in
accordance with its terms;
5.5 Intangible Property. Borrower possesses adequate
Trademarks, Copyrights, Licenses and Patents for the
present and planned future conduct of its business without
any known conflict with the rights of others, and each is
valid and has been duly registered or filed with the
appropriate governmental or regulatory authorities; and
each is valid and has been duly registered or filed with
the appropriate governmental or regulatory authorities;
each of Borrower's patents, patent applications,
copyrights, Internet domain names, trademarks and
trademark applications which have been registered or filed
with any governmental or regulatory authority (including
the U.S. Patent and Trademark Office, U.S. Copyright
Office and the Library of Congress) are listed by name,
date and filing number in the Schedule;
5.6 Capital. Borrower has capital sufficient to conduct
its business, is able to pay its debts as they mature and
owns property having a fair salable value greater than the
amount required to pay all of its debts (including
contingent debts);
5.7 Material Litigation. Borrower has no pending or
overtly threatened litigation, actions or proceedings
which would materially and adversely affect its business,
assets, operations, prospects or condition, financial or
otherwise, or the Collateral or any of TEXTRONS's
interests therein;
5.8 Title; Security Interests of TEXTRON. Borrower has
good, indefeasible and merchantable title to the
Collateral and, upon the execution and delivery of the
Loan Documents, filing of UCC-1 Financing Statements,
delivery of the certificate(s) evidencing any pledged
securities, the filing of any collateral assignments or
security agreements regarding Borrower's Trademarks,
Copyrights, Licenses and Patents, if any, with the
appropriate governmental or regulatory authorities, and
the recording of any mortgages or deeds of trust with
respect to real property, in each case in the appropriate
offices, this Agreement and such documents shall create
valid and perfected first priority liens in and to the
Collateral, subject only to Permitted Encumbrances;
5.9 Restrictive Agreements; Labor Contracts. Borrower is
not a party or subject to any contract or subject to any
charge, corporate restriction, judgment, decree or order
materially and adversely affecting its business, assets,
operations, prospects or condition, financial or
otherwise, or which restricts its right or ability to
incur Indebtedness, and it is not party to any labor
dispute. In addition, no labor contract is scheduled to
expire during the Term of this Agreement, except as
disclosed to TEXTRON in writing prior to the date hereof;
5.10 Laws. Borrower is not in violation of any
applicable statute, regulation, ordinance or any order of
any court, tribunal or governmental agency, in any respect
materially and adversely affecting the Collateral or its
business, assets, operations, prospects or condition,
financial or otherwise;
5.11 Consents. Borrower has obtained or caused to be
obtained or issued any required consent of a governmental
agency or other Person in connection with the financing
contemplated hereby;
5.12 Defaults. Borrower is not in default with respect
to any note, indenture, loan agreement, mortgage, lease,
deed or other agreement to which it is a party or by which
it or its assets are bound, nor has any event occurred
which, with the giving of notice or the lapse of time, or
both, would cause such a default;
5.13 Financial Condition. The Prepared Financials fairly
present Borrower's financial condition and results of
operations and those of such other Persons described
therein as of the date thereof in accordance with GAAP;
there are no material omissions from the Prepared
Financials or other facts or circumstances not reflected
in the Prepared Financials; and there has been no material
and adverse change in such financial condition or
operations since the date of the initial Prepared
Financials delivered to TEXTRON hereunder;
5.14 ERISA. None of Borrower, any ERISA Affiliate, or
any Plan is or has been in violation of any of the
provisions of ERISA, any of the qualification requirements
of IRC Section 401(a) or any of the published
interpretations thereunder, nor has Borrower or any ERISA
Affiliate received any notice to such effect. No notice
of intent to terminate a Plan has been filed under Section
4041 of ERISA, nor has any Plan been terminated under
ERISA. The PBGC has not instituted proceedings to
terminate, or appointed a trustee to administer, a Plan.
No lien upon the assets of Borrower has arisen with
respect to a Plan. No prohibited transaction or Reportable
Event has occurred with respect to a Plan. Neither
Borrower nor any ERISA Affiliate has incurred any
withdrawal liability with respect to any Multiemployer
Plan. Borrower and each ERISA Affiliate have made all
contributions required to be made by them to any Plan or
Multiemployer Plan when due. There is no accumulated
funding deficiency in any Plan, whether or not waived;
5.15 Taxes. Borrower has filed all tax returns and such
other reports as it is required by law to file and has
paid or made adequate provision for the payment on or
prior to the date when due of all taxes, assessments and
similar charges that are due and payable;
5.16 Locations; Federal Tax ID No. Borrower's chief
executive office and the offices and locations where it
keeps the Collateral (except for Inventory in transit) are
at the locations set forth in the Schedule, except to the
extent that such locations may have been changed after
notice to TEXTRON in accordance with Section 6.4;
Borrower's federal tax identification number is as shown
in the Schedule;
5.17 Business Relationships. There exists no actual or
threatened termination, cancellation or limitation of, or
any modification or change in, the business relationship
between Borrower and any customer or any group of
customers whose purchases individually or in the aggregate
are material to the business of Borrower, or with any
material supplier, and there exists no present condition
or state of facts or circumstances which would materially
and adversely affect Borrower or prevent Borrower from
conducting such business after the consummation of the
transactions contemplated by this Agreement in
substantially the same manner in which it has heretofore
been conducted; and
5.18 Reaffirmations. Each request for a loan made by
Borrower pursuant to this Agreement shall constitute (i)
an automatic representation and warranty by Borrower to
TEXTRON that there does not then exist any Event of
Default and (ii) a reaffirmation as of the date of said
request of all of the representations and warranties of
Borrower contained in this Agreement and the other Loan
Documents.
6. COVENANTS.
6.1 Affirmative Covenants: Borrower covenants that, so
long as any Obligation remains outstanding and this
Agreement is in effect, it shall:
6.1.1 Taxes. File all tax returns and pay or make
adequate provision for the payment of all taxes,
assessments and other charges on or prior to the date when
due;
6.1.2 Notice of Litigation. Promptly notify TEXTRON in
writing of any litigation, suit or administrative
proceeding in excess of Five Hundred Thousand Dollars
($500,000.00) which may materially and adversely affect
the Collateral or Borrower's business, assets, operations,
prospects or condition, financial or otherwise, whether or
not the claim is covered by insurance;
6.1.3 ERISA. Notify TEXTRON in writing (i) promptly upon
the occurrence of any event described in Paragraph 4043 of
ERISA, other than a termination, partial termination or
merger of a Plan or a transfer of a Plan's assets and (ii)
prior to any termination, partial termination or merger of
a Plan or a transfer of a Plan's assets;
6.1.4 Change in Location. Notify TEXTRON in writing
forty-five (45) days prior to any change in the location
of Borrower's chief executive office or the location of
any Collateral, or Borrower's opening or closing of any
other place of business;
6.1.5 Corporate Existence. Maintain its corporate
existence and its qualification to do business and good
standing in all states necessary for the conduct of its
business and the ownership of its property and maintain
adequate assets, Trademarks, Copyrights, Licenses and
Patents for the conduct of its business;
6.6 Labor Disputes. Promptly notify TEXTRON in writing
of any material labor dispute to which Borrower is or may
become subject and the expiration of any labor contract to
which Borrower is a party or bound;
6.1.7 Violations of Law. Promptly notify TEXTRON in
writing of any violation of any law, statute, regulation
or ordinance of any governmental entity, or of any agency
thereof, applicable to Borrower which may materially and
adversely affect the Collateral or Borrower's business,
assets, prospects, operations or condition, financial or
otherwise;
6.1.8 Defaults. Notify TEXTRON in writing within five
(5) Business Days of the occurrence of Borrower's default,
in an amount greater than Five Hundred Thousand Dollars
($500,000.00), under any note, indenture, loan agreement,
mortgage, lease or other agreement to which Borrower is a
party or by which Borrower is bound, or of any other
default under any Indebtedness of Borrower
6.1.9 Capital Expenditures. Promptly notify TEXTRON in
writing of the making of any Capital Expenditure
materially affecting Borrower's business, assets,
prospects, operations or condition, financial or
otherwise, except to the extent permitted in the Schedule;
6.1.10 Books and Records. Keep adequate records and
books of account with respect to its business activities
in which proper entries are made in accordance with GAAP,
reflecting all of its financial transactions;
6.1.11 Leases; Warehouse Agreements. Provide TEXTRON
with (i) copies of all agreements between Borrower and any
landlord or warehouseman which owns any premises at which
any Collateral may, from time to time, be located, and
(ii) without limiting the landlord and mortgagee waivers
to be provided pursuant to Section 4.1(j) hereof, landlord
and mortgagee waivers in form acceptable to TEXTRON with
respect to all locations where any Collateral is hereafter
located;
6.1.12 Additional Documents. At TEXTRON's request,
promptly execute or cause to be executed and delivered to
TEXTRON any and all documents, instruments or agreements
deemed necessary by TEXTRON to facilitate the collection
of the Obligations or the Collateral or otherwise to give
effect to or carry out the terms or intent of this
Agreement or any of the other Loan Documents. Without
limiting the generality of the foregoing, if any of the
Receivables with a face value in excess of the amount set
forth in the Schedule arises out of a contract with the
United States of America or any department, agency,
subdivision or instrumentality thereof, Borrower shall
promptly notify TEXTRON of such fact in writing and shall
execute any instruments and take any other action required
or requested by TEXTRON to comply with the provisions of
the Federal Assignment of Claims Act;
6.1.13 Financial Covenants. Comply with the financial
covenants set forth in the Schedule;
6.1.14 Issuing of Credit Memoranda. Borrower shall issue
credit memoranda in the ordinary course of its business no
later than the number of Business Days referenced in the
Schedule after: (i) Borrower's receipt of returned goods
or merchandise; or (ii) any account debtor shall become
entitled to a credit from Borrower under any other
circumstances; and
6.1.15 Other Covenants. Borrower shall comply with any
other covenants set forth in the Schedule.
6.2 Negative Covenants: Without TEXTRON's prior written
consent, which consent TEXTRON may withhold in its
Permitted Discretion, so long as any Obligation remains
outstanding and this Agreement is in effect, Borrower
shall not:
6.2.1 Mergers. Merge or consolidate with or acquire any
other Person (in which case TEXTRON's consent shall not be
unreasonably withheld), or make any other material change
in its capital structure or in its business or operations
in an amount in excess of Five Hundred Thousand Dollars
($500,000.00) which might adversely affect the repayment
of the Obligations;
6.2.2 Loans. Make advances, loans or extensions of
credit to, or invest in, any Person except as set forth in
the Schedule;
6.2.3 Dividends. Declare or pay cash dividends upon any
of its stock or distribute any of its property or redeem,
retire, purchase or acquire directly or indirectly any of
its stock;
6.2.4 Adverse Transactions. Enter into any transaction
which materially and adversely affects the Collateral or
its ability to repay the Obligations in full as and when
due;
6.2.5 Indebtedness of Others. Become directly or
contingently liable for the Indebtedness of any Person,
except by endorsement of instruments for deposit; and
except for the existing guarantees made by Borrower prior
to the date hereof, if any, which are set forth in the
Schedule
6.2.6 Repurchase. Make a sale to any customer on a ▇▇▇▇-
and-hold, guaranteed sale, sale and return, sale on
approval, consignment, or any other repurchase or return
basis;
6.2.7 Name. Use any corporate or fictitious name other
than its corporate name as set forth in its Articles or
Certificate of Incorporation on the date hereof or as set
forth in the Schedule;
6.2.8 Prepayment. Prepay any Indebtedness other than
trade payables and other than the Obligations;
6.2.9 Compensation. Pay total compensation, including
salaries, withdrawals, fees, bonuses, commissions, drawing
accounts and other payments, whether directly or
indirectly, in money or otherwise, during any fiscal year
to all of Borrower's executives, officers and directors
(or any relative thereof) in an amount in excess of the
amount set forth in the Schedule;
6.2.10 Capital Expenditure. Make or incur any Capital
Expenditure if, after giving effect thereto, the aggregate
amount of all Capital Expenditures by Borrower in any
fiscal year would exceed the amount set forth in the
Schedule;
6.2.11 Indebtedness. Create, incur, assume or permit to
exist any Indebtedness (including Indebtedness in
connection with Capital Leases) in excess of the amount
set forth in the Schedule, other than (i) the Obligations,
(ii) trade payables and other contractual obligations to
suppliers and customers incurred in the ordinary course of
business, and (iii) other Indebtedness existing on the
date of this Agreement and reflected in the Prepared
Financials (except Indebtedness paid on the date of this
Agreement from proceeds of the initial advances hereunder)
and (iv) Subordinated Debt;
6.2.12 Affiliate Transactions. Except as set forth
below, sell, transfer, distribute or pay any money or
property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any
stock or Indebtedness, or any property, of any Affiliate,
or become liable on any guaranty of the indebtedness,
dividends or other obligations of any Affiliate.
Notwithstanding the foregoing, if no Event of Default has
occurred, Borrower may engage in transactions with
Affiliates in the normal course of business, in amounts
and upon terms which are fully disclosed to TEXTRON and
which are no less favorable to Borrower than would be
obtainable in a comparable arm's length transaction with a
Person who is not an Affiliate;
6.2.13 Nature of Business. Enter into any new business
or make any material change in any of Borrower's business
objectives, purposes or operations;
6.2.14 TEXTRON's Name. Use the name of TEXTRON in
connection with any of Borrower's business or activities,
except in connection with internal business matters or as
required in dealings with governmental agencies and
financial institutions or with trade creditors of
Borrower, solely for credit reference purposes; or
6.2.15 Margin Security. Engage (and has not in the past)
engaged principally, or as one of its important
activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the
meaning of Regulation G or Regulation U issued by the
Board of Governors of the Federal Reserve System); use any
proceeds of any Loan or other advance to purchase or carry
any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock, or in
any manner which might cause such Loan or other advance or
the application of such proceeds to violate (or require
any regulatory filing under) Regulation G, Regulation T,
Regulation U, Regulation X or any other regulation of the
Board of Governors of the Federal Reserve System, in each
case as in effect on the date or dates of such Loan or
other advance and such use of proceeds; or use any
proceeds of any Loan or other advance to acquire any
security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934; or
6.2.16 Real Property. Purchase or acquire any real
property without TEXTRON's prior written consent, a
condition of which consent shall include delivery of
appropriate environmental reports and analysis, in form
and substance satisfactory to TEXTRON and its counsel.
6.2.17 Liens. Create, incur, assume or suffer to exist
any lien upon any of its Property, whether now owned or
hereafter acquired, except Permitted Liens.
6.2.18 Change in Fiscal Year; Auditors. Change or permit
any subsidiary to change the commencement or ending date
of its fiscal year or retain the independent public
auditors for purposes of preparing the Borrower's audited
financial statements which are different than those
retained by Borrower and its subsidiaries at the time of
the Closing Date, in each case, without receiving the
prior written consent of TEXTRON.
6.2.19 THIS SECTION INTENTIONALLY LEFT BLANK.
7. DEFAULT AND REMEDIES.
7.1 Events of Default. Any one or more of the following
events shall constitute an Event of Default under this
Agreement:
(a) Borrower fails to pay when due and payable any
portion of the Obligations at stated maturity, upon
acceleration or otherwise;
(b) Borrower or any other Loan Party fails or neglects to
perform, keep, or observe in any material respect any
term, provision, condition, covenant or agreement
contained in any Loan Document to which Borrower or such
other Loan Party is a party;
(c) Any material adverse change occurs in Borrower's
business, assets, operations, prospects or condition,
financial or otherwise;
(d) The prospect of repayment of any portion of the
Obligations or the value or priority of TEXTRON's security
interest in the Collateral is materially impaired;
(e) Any material portion of Borrower's assets is seized,
attached, subjected to a writ or distress warrant, is
levied upon or comes into the possession of any judicial
officer unless such action is stayed and such attachment
is dismissed within thirty (30) days;
(f) Borrower shall generally not pay its debts as they
become due or shall enter into any agreement (whether
written or oral), or offer to enter into any agreement,
with all or a significant number of its creditors
regarding any moratorium or other indulgence with respect
to its debts or the participation of such creditors or
their representatives in the supervision, management or
control of the business of Borrower;
(g) Any bankruptcy or other insolvency proceeding is
commenced by Borrower, or any such proceeding is commenced
against Borrower and remains undischarged or unstayed for
forty-five (45) days;
(h) Any notice of lien, levy or assessment in an
aggregate amount is filed of record with respect to any of
Borrower's assets;
(i) Any judgments are entered against Borrower in an
aggregate amount exceeding the amount set forth in the
Schedule unless each such judgment is stayed and such each
such judgment is dismissed within thirty (30) days;
(j) Any default greater than Five Hundred Thousand
Dollars ($500,000.00) shall occur under (i) any material
agreement between Borrower and any third party including,
without limitation, any default which would result in a
right by such third party to accelerate the maturity of
any Indebtedness of Borrower to such third party; or (ii)
any Subordinated Debt;
(k) Any representation or warranty greater than Five
Hundred Thousand Dollars ($500,000.00) made or deemed to
be made by Borrower, any Affiliate or any other Loan Party
in any Loan Document or any other statement, document or
report made or delivered to TEXTRON in connection
therewith shall prove to have been misleading in any
material respect;
(l) Any Prohibited Transaction or Reportable Event shall
occur with respect to a Plan which could have a material
adverse effect on the financial condition of Borrower; any
lien upon the assets of Borrower in connection with any
Plan shall arise; Borrower or any of its ERISA Affiliates
shall fail to make full payment when due of all amounts
which Borrower or any of its ERISA Affiliates may be
required to pay to any Plan or any Multiemployer Plan as
one or more contributions thereto; Borrower or any of its
ERISA Affiliates creates or permits the creation of any
accumulated funding deficiency, whether or not waived; or
(m) If any of the Loans are guaranteed: (i) any Guarantor
revokes, terminates or attempts to revoke or terminate its
guaranty or any security therefor, or becomes subject to
any bankruptcy or other insolvency proceeding; (ii) any
Guarantor other than an individual Guarantor, is
dissolved, liquidated, merged, reorganized or terminated;
or (iii) any individual Guarantor dies or becomes
disabled; or
(n) THIS SECTION INTENTIONALLY LEFT BLANK.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
TEXTRONRESERVES THE RIGHT TO CEASE MAKING ANY ADVANCES OR
LOANS IF AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING.
7.2 Remedies. Upon the occurrence of an Event of
Default, TEXTRON may, at its option and in its Permitted
Discretion and in addition to all of its other rights
under the Loan Documents, terminate this Agreement and
declare all of the Obligations to be immediately payable
in full. TEXTRON shall also have all of its rights and
remedies under applicable law, including, without
limitation, the default rights and remedies of a secured
party under the Code and upon the occurrence of an Event
of Default Borrower hereby consents to the appointment of
a receiver by TEXTRON in any action initiated by TEXTRON
pursuant to this Agreement and to the jurisdiction and
venue set forth in Section 9.26, and Borrower waives
notice and posting of a bond in connection therewith.
Further, TEXTRON may, at any time, take possession of the
Collateral and keep it on Borrower's premises, at no cost
to TEXTRON, or remove any part of it to such other
place(s) as TEXTRON may desire, or Borrower shall, upon
TEXTRON's demand, at Borrower's sole cost, assemble the
Collateral and make it available to TEXTRON at a place
reasonably convenient to TEXTRON. TEXTRON may sell and
deliver any Collateral at public or private sales, for
cash, upon credit or otherwise, at such prices and upon
such terms as TEXTRON deems advisable, at TEXTRON's
discretion, and may, if TEXTRON deems it reasonable,
postpone or adjourn any sale of the Collateral by an
announcement at the time and place of sale or of such
postponed or adjourned sale without giving a new notice of
sale. Borrower agrees that TEXTRON has no obligation to
preserve rights to the Collateral or ▇▇▇▇▇▇▇▇ any
Collateral for the benefit of any Person. TEXTRON is
hereby granted a license or other right to use, without
charge, Borrower's Trademarks, Copyrights, Licenses and
Patents or any similar property, in completing production,
advertising or selling any Collateral and Borrower's
rights under all licenses and all franchise agreements
shall inure to TEXTRON's benefit. Any requirement of
reasonable notice shall be met if such notice is mailed
postage prepaid to Borrower at its address set forth in
the heading to this Agreement at least five (5) days
before sale or other disposition. The proceeds of sale
shall be applied, first, to all attorneys fees and other
expenses of sale, and second, to the Obligations in such
order as TEXTRON shall elect, in its sole discretion.
TEXTRON shall return any excess to Borrower and Borrower
shall remain liable for any deficiency to the fullest
extent permitted by law. TEXTRON shall also have the
right to reduce the Total Facility amount, the Revolving
Loans Borrowing Base, the Floorplan Loans Borrowing Base,
or any portion of either borrowing base, or the advance
rates or to modify the terms and conditions upon which
TEXTRON is willing to consider making advances under the
Total Facility or to take additional reserves in the
Revolving Loans Borrowing Base or the Floorplan Loans
Borrowing Base for any reason.
7.3 Standards for Determining Commercial Reasonableness.
Borrower and TEXTRON agree that the following conduct by
TEXTRON with respect to any disposition of Collateral
shall conclusively be deemed commercially reasonable (but
other conduct by TEXTRON, including, but not limited to,
TEXTRON's use in its sole discretion of other or different
times, places and manners of noticing and conducting any
disposition of Collateral shall not be deemed
unreasonable): Any public or private disposition: (i) as
to which on no later than the fifth calendar day prior
thereto written notice thereof is mailed or personally
delivered to Borrower and, with respect to any public
disposition, on no later than the fifth calendar day prior
thereto notice thereof describing in general non-specific
terms, the Collateral to be disposed of is published once
in a newspaper of general circulation in the county where
the sale is to be conducted; (provided that no notice of
any public or private disposition need be given to the
Borrower if the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold
on a recognized market); (ii) which commences at any time
between 8:00 a.m. and 5:00 p.m. Without limiting the
generality of the foregoing, Borrower expressly agrees
that, with respect to any disposition of accounts,
instruments and general intangibles, it shall be
commercially reasonable for TEXTRON to direct any
prospective purchaser thereof to ascertain directly from
Borrower any and all information concerning the same,
including, but not limited to, the terms of payment, aging
and delinquency, if any, the financial condition of any
obligor or account debtor thereon or guarantor thereof,
and any collateral therefor.
8. EXPENSES AND INDEMNITIES.
8.1 Expenses. Borrower covenants that, so long as any
Obligation remains outstanding and this Agreement remains
in effect, it shall promptly reimburse TEXTRON for all
costs, fees and expenses incurred by TEXTRON in connection
with the negotiation, preparation, execution, delivery,
administration and enforcement of each of the Loan
Documents, including, but not limited to, the attorneys'
and paralegals' fees of in-house and outside counsel,
expert witness fees, lien, title search and insurance
fees, appraisal fees, all charges and expenses incurred in
connection with any and all environmental reports and
environmental remediation activities, and all other costs,
expenses, taxes and filing or recording fees payable in
connection with the transactions contemplated by this
Agreement, including without limitation all such costs,
fees and expenses as TEXTRON shall incur or for which
TEXTRON shall become obligated in connection with (i) any
inspection or verification of the Collateral, (ii) any
proceeding relating to the Loan Documents or the
Collateral, (iii) actions taken with respect to the
Collateral and TEXTRON's security interest therein,
including, without limitation, the defense or prosecution
of any action involving TEXTRON and Borrower or any third
party, (iv) enforcement of any of TEXTRON's rights and
remedies with respect to the Obligations or Collateral,
and (v) consultation with TEXTRON's attorneys and
participation in any workout, bankruptcy or other
insolvency or other proceeding involving any Loan Party or
any Affiliate, whether or not suit is filed. Borrower
shall also pay all TEXTRON charges in connection with bank
wire transfers, forwarding of loan proceeds, deposits of
checks and other items of payment, returned checks,
establishment and maintenance of lockboxes and other
Blocked Accounts, and all other bank and administrative
matters, in accordance with TEXTRON's schedule of bank and
administrative fees and charges in effect from time to
time.
8.2 Environmental Matters.
8.2.1 THIS SECTION INTENTIONALLY LEFT BLANK.
8.2.2 Covenants and Representations.
(a) Borrower represents and warrants that there have not
been during the period of Borrower's possession of any
interest in the Property and, to the best of its knowledge
after reasonable inquiry, there have not been at any other
times, any activities on the Property involving, directly
or indirectly, the use, generation, treatment, storage or
disposal of any Hazardous Substances except in compliance
with Applicable Law (i) under, on or in the land included
in the Property, whether contained in soil, tanks, sumps,
ponds, lagoons, barrels, cans or other containments,
structures or equipment, (ii) incorporated in the
buildings, structures or improvements included in the
Property, including any building material containing
asbestos, or (iii) used in connection with any operations
on or in the Property.
(b) Without limiting the generality of the foregoing and
to the extent not included within the scope of this
Section 8.2.2, Borrower represents and warrants that it is
in full compliance with Applicable Law and has received no
notice from any person or any governmental agency or other
entity of any violation by Borrower or its Affiliates of
any Applicable Law.
(c) Borrower shall be solely responsible for and agrees
to indemnify TEXTRON, protect and defend TEXTRON with
counsel reasonably acceptable to TEXTRON, and hold TEXTRON
harmless from and against any claims, actions,
administrative proceedings, judgments, damages, punitive
damages, penalties, fines, costs, liabilities (including
sums paid in settlements of claims), interest or losses,
attorneys' fees (including any fees and expenses incurred
in enforcing this indemnity), consultant fees, expert
fees, and other out-of-pocket costs or expenses actually
incurred by TEXTRON(collectively, the "Environmental
Costs"), that may, at any time or from time to time, arise
directly or indirectly from or in connection with: (i)
the presence, suspected presence, release or suspected
release of any Hazardous Substance whether into the air,
soil, surface water or groundwater of or at the Property,
or any other violation of Applicable Law, or (ii) any
breach of the foregoing representations and covenants;
except to the extent any of the foregoing result from the
actions of TEXTRON, its employees, agents and
representatives. All Environmental Costs incurred or
advanced by TEXTRON shall be deemed to be made by TEXTRON
in good faith and shall constitute Obligations hereunder.
9. MISCELLANEOUS.
9.1 Examination of Records; Financial Reporting.
(a) Examinations. TEXTRON shall at all reasonable times
have full access to and the right to examine, audit, make
abstracts and copies from and inspect Borrower's records,
files, books of account and all other documents,
instruments and agreements relating to the Collateral and
the right to check, test and appraise the Collateral.
Borrower shall deliver to TEXTRON any instrument necessary
for TEXTRON to obtain records from any service bureau
maintaining records for Borrower. All instruments and
certificates prepared by Borrower showing the value of any
of the Collateral shall be accompanied, upon TEXTRON's
request, by copies of related purchase orders and
invoices. TEXTRON may, at any time after the occurrence
of an Event of Default, remove from Borrower's premises
Borrower's books and records (or copies thereof) or
require Borrower to deliver such books and records or
copies to TEXTRON. If originals are removed, TEXTRON
shall permit Borrower to make copies prior to such
removal. TEXTRON may, without expense to TEXTRON, use
Borrower's personnel, supplies and premises as may be
reasonably necessary for examining the Collateral or for
maintaining or enforcing TEXTRON's security interest.
(b) Reporting Requirements. Borrower shall furnish
TEXTRON, upon request, such information and statements as
TEXTRON shall request from time to time regarding
Borrower's business affairs, financial condition and the
results of its operations. Without limiting the
generality of the foregoing, Borrower shall provide
TEXTRON with:
(i) upon each loan advance request and no less frequently
than weekly, TEXTRON's standard form collateral and loan
report, together with accounts receivable certifications
and notice of assignment documents on a daily basis or as
described in the Schedule, together with cash receipt and
revenue reports;
(ii) and upon TEXTRON's request, copies of sales journals,
cash receipt journals, and deposit slips, copies of
invoices, customer statements and credit memoranda issued,
remittance advices and reports, evidence of billing and
copies of shipping and delivery documents;
(iii) within five (5) days of the date due (or earlier
if available) all cost reports (interim and annual) from
all Governmental Authorities or other Persons, as
applicable;
(iv) within ten (10) days after the end of each month, (1)
monthly agings (aged from service date) and
reconciliations of Receivables (with listings of
concentrated accounts), (2) monthly agings (aged from
invoice date) of accounts payable, with outstanding and
held check registers, and (3) monthly perpetual inventory
reports for the Inventory valued on a first in, first out
basis at the lower of cost or market (in accordance with
GAAP);
(v) THIS SECTION INTENTIONALLY LEFT BLANK
(Intentionally left blank.
(vi) within forty five (45) days after the end of each
quarter, unaudited financial statement with respect to the
prior quarter prepared on a basis consistent with such
statements prepared in prior quarters and otherwise in
accordance with GAAP;
(vii) audited annual consolidated and consolidating
financial statements, prepared in accordance with GAAP
applied on a basis consistent with the most recent
Prepared Financials provided to TEXTRON by Borrower,
including balance sheets, income and cash flow statements,
accompanied by the unqualified report thereon of
independent certified public accountants acceptable to
TEXTRON, together with the management letter , in the form
provided to the auditors and shareholders of Borrower, as
soon as available, and in any event, within ninety (90)
days (120 days for the management letter) after the end of
each of Borrower's fiscal years;
(viii) within forty five (45) days prior to the end of
each fiscal year of Borrower annual operating budgets
(including income statement, balance sheets and cash flow
statements, by month) for the upcoming fiscal year of
Borrower; and
(ix) such certificates relating to the foregoing as
TEXTRON may request, including, without limitation, a
quarterly certificate from the president and the chief
financial officer of Borrower ("Compliance Certificate")
showing Borrower's compliance with each of the financial
covenants set forth in this Agreement, and stating whether
any Event of Default has occurred or event which, with
giving of notice or the passage of time, or both, would
constitute an Event of Default, and if so, the steps being
taken to prevent or cure such Event of Default, and such
other certificates relating to the reporting requirements
set forth in this Section 9.1 as TEXTRON shall request..
All reports or financial statements submitted by Borrower
shall be in reasonable detail and shall be certified by
the principal financial officer of Borrower as being
complete and correct.
(c) Confidentiality. All confidential information
provided by Borrower or by any Loan Party to TEXTRON shall
be kept confidential and shall only be used by TEXTRON
and/or its counsel in connection herewith.
(d) Guarantor's Financial Statements and Tax Returns. If
any of the Loans are guaranteed, Borrower shall cause each
of the Guarantors to deliver to TEXTRON such Guarantor's
annual financial statement (in form acceptable to TEXTRON)
and a copy of such Guarantor's federal income tax return
with respect to the corresponding year, in each case on
the date when such tax return is due or, if earlier, on
the date when available.
9.2 Term; Termination.
(a) Term. The term of this Agreement shall be as set
forth in the Schedule (the "Term"), unless earlier
terminated as provided herein.
(b) Prior Notice. Each party shall have the right to
terminate this Agreement at the end of the Term by giving
the other party written notice not less than sixty (60)
days prior to the effective date of such termination,
provided, however, that TEXTRON may terminate the
Floorplan Credit Line at any time, with or without notice
to Borrower, as set forth in Section 2.4 hereof.
(c) Payment in Full. Upon the effective date of
termination, the Obligations shall become immediately due
and payable in full in cash.
(d) Early Termination; Termination Fee. In addition to
the procedure set forth in Section 9.2(b), Borrower may
terminate this Agreement at any time but only upon ninety
(90) days' prior written notice and prepayment of the
Obligations. Upon any such early termination by Borrower
(or any voluntary prepayment of any Term Loan) or any
termination of this Agreement by TEXTRON upon the
occurrence of an Event of Default, then, and in any such
event, Borrower shall pay to TEXTRON upon the effective
date of such termination a fee (the "Termination Fee") in
an amount equal to the amount shown on the Schedule.
9.3 Recourse to Security; Certain Waivers. All
Obligations shall be payable by Borrower as provided for
herein and, in full, at the termination of this Agreement;
recourse to security shall not be required at any time.
Borrower waives presentment and protest of any instrument
and notice thereof, notice of default and, to the extent
permitted by applicable law, all other notices to which
Borrower might otherwise be entitled.
9.4 No Waiver by TEXTRON. Neither TEXTRON's failure to
exercise any right, remedy or option under this Agreement,
any supplement, the Loan Documents or other agreement
between TEXTRON and Borrower nor any delay by TEXTRON in
exercising the same shall operate as a waiver. An Event
of Default shall exist or continue or be continuing until
such Event of Default is waived in writing by TEXTRON as
herein provided. No waiver by TEXTRON shall be effective
unless in writing and then only to the extent stated. No
waiver by TEXTRON shall affect its right to require strict
performance of this Agreement. TEXTRON's rights and
remedies shall be cumulative and not exclusive.
9.5 Binding on Successor and Assigns. All terms,
conditions, promises, covenants, provisions and warranties
shall inure to the benefit of and bind TEXTRON's and
Borrower's respective representatives, successors and
assigns.
9.6 Severability. If any provision of this Agreement
shall be prohibited or invalid under applicable law, it
shall be ineffective only to such extent, without
invalidating the remainder of this Agreement.
9.7 Amendments; Assignments. This Agreement may not be
modified, altered or amended, except by an agreement in
writing signed by Borrower and TEXTRON. Borrower may not
sell, assign or transfer any interest in this Agreement or
any other Loan Document, or any portion thereof,
including, without limitation, any of Borrower's rights,
title, interests, remedies, powers and duties hereunder or
thereunder. Borrower hereby consents to TEXTRON's
participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this
Agreement and any of the other Loan Documents, or of any
portion hereof or thereof, including, without limitation,
TEXTRON's rights, title, interests, remedies, powers and
duties hereunder or thereunder. In connection therewith,
TEXTRON may disclose all documents and information which
TEXTRON now or hereafter may have relating to Borrower or
Borrower's business. To the extent that TEXTRON assigns
its rights and obligations hereunder to a third party,
TEXTRON shall thereafter be released from such assigned
obligations to Borrower and such assignment shall effect a
novation between Borrower and such third party.
9.8 Integration. This Agreement, together with the
Schedule (which is a part hereof) and the other Loan
Documents, reflect the entire understanding of the parties
with respect to the transactions contemplated hereby.
9.9 Survival. All of the representations and warranties
of Borrower contained in this Agreement shall survive the
execution, delivery and acceptance of this Agreement by
the parties. No termination of this Agreement or of any
guaranty of the Obligations shall affect or impair the
powers, obligations, duties, rights, representations,
warranties or liabilities of the parties hereto and all
shall survive any such termination.
9.10 Evidence of Obligations. Each Obligation may, in
TEXTRON's Permitted Discretion, be evidenced by notes or
other instruments issued or made by Borrower to TEXTRON.
If not so evidenced, such Obligation shall be evidenced
solely by entries upon TEXTRON's books and records.
9.11 Loan Requests. Each oral or written request for a
loan by any Person who purports to be any employee,
officer or authorized agent of Borrower shall be made to
TEXTRON on or prior to 11:00 a.m., Pennsylvania time, on
the Business Day on which the proceeds thereof are
requested to be paid to Borrower and shall be conclusively
presumed to be made by a Person authorized by Borrower to
do so and the crediting of a loan to Borrower's operating
account shall conclusively establish Borrower's obligation
to repay such loan. Unless and until Borrower otherwise
directs TEXTRON in writing, all loans shall be wired to
Borrower's operating account set forth on the Schedule.
9.12 Notices. Any written notice, consent or other
communication provided for in this Agreement shall be
delivered personally (effective upon delivery), via
facsimile (effective upon confirmation of transmission),
via overnight courier (effective the next business day
after dispatch if instructed to deliver on next business
day) or via U.S. Mail (effective 3 days after ailing,
postage prepaid, first class) to each party at its
address(es) and/or facsimile number(s) set forth below its
signature, or to such other address as either party shall
specify to the other in writing from time to time.
9.13 Brokerage Fees. Borrower represents and warrants to
TEXTRON that, with respect to the financing transaction
herein contemplated, no Person is entitled to any
brokerage fee or other commission and Borrower agrees to
indemnify and hold TEXTRON harmless against any and all
such claims.
9.14 Disclosure. No representation or warranty made by
Borrower in this Agreement, or in any financial statement,
report, certificate or any other document furnished in
connection herewith contains any untrue statement of a
material fact or omits to state any material fact
necessary to make the statements herein or therein not
misleading. There is no fact known to Borrower or which
reasonably should be known to Borrower which Borrower has
not disclosed to TEXTRON in writing with respect to the
transactions contemplated by this Agreement which
materially and adversely affects the business, assets,
operations, prospects or condition (financial or
otherwise), of Borrower.
9.15 Publicity. Upon the notification and written
approval of one another, TEXTRON and Borrower are hereby
authorized to issue appropriate press releases and to
cause a tombstone to be published announcing the
consummation of this transaction and the aggregate amount
thereof.
9.16 Captions. The Section titles contained in this
Agreement are without substantive meaning and are not part
of this Agreement.
9.17 Injunctive Relief. Borrower recognizes that, in the
event Borrower fails to perform, observe or discharge any
of its Obligations under this Agreement, any remedy at law
may prove to be inadequate relief to TEXTRON. Therefore,
TEXTRON, if it so requests, shall be entitled to temporary
and permanent injunctive relief in any such case without
the necessity of proving actual damages.
9.18 Counterparts; Facsimile Execution. This Agreement
may be executed in one or more counterparts, each of which
taken together shall constitute one and the same
instrument, admissible into evidence. Delivery of an
executed counterpart of this Agreement by telefacsimile
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
telefacsimile shall also 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.
9.19 Construction. The parties acknowledge that each
party and its counsel have reviewed this Agreement and
that the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
9.20 Time of Essence. Time is of the essence for the
performance by Borrower of the Obligations set forth in
this Agreement.
9.21 Limitation of Actions. Borrower agrees that any
claim or cause of action by Borrower against TEXTRON, or
any of TEXTRON's directors, officers, employees, agents,
accountants or attorneys, based upon, arising from, or
relating to this Agreement, or any other present or future
agreement, or any other transaction contemplated hereby or
thereby or relating hereto or thereto, or any other
matter, cause or thing whatsoever, whether or not relating
hereto or thereto, occurred, done, omitted or suffered to
be done by TEXTRON, or by TEXTRON's directors, officers,
employees, agents, accountants or attorneys, whether
sounding in contract or in tort or otherwise, shall be
barred unless asserted by Borrower by the commencement of
an action or proceeding in a court of competent
jurisdiction by the filing of a complaint within one year
after the first act, occurrence or omission upon which
such claim or cause of action, or any part thereof, is
based and service of a summons and complaint on an officer
of TEXTRON or any other person authorized to accept
service of process on behalf of TEXTRON, within 30 days
thereafter. Borrower agrees that such one-year period of
time is a reasonable and sufficient time for Borrower to
investigate and act upon any such claim or cause of
action. The one-year period provided herein shall not be
waived, tolled, or extended except by a specific written
agreement of TEXTRON. This provision shall survive any
termination of this Loan Agreement or any other agreement.
9.22 Liability. Neither TEXTRON nor any TEXTRON
Affiliate shall be liable for any indirect, special,
incidental or consequential damages in connection with any
breach of contract, tort or other wrong relating to this
Agreement or the Obligations or the establishment,
administration or collection thereof (including without
limitation damages for loss of profits, business
interruption, or the like), whether such damages are
foreseeable or unforeseeable, even if TEXTRON has been
advised of the possibility of such damages. Neither
TEXTRON, nor any TEXTRON Affiliate shall be liable for any
claims, demands, losses or damages, of any kind
whatsoever, made, claimed, incurred or suffered by the
Borrower through the ordinary negligence of TEXTRON, or
any TEXTRON Affiliate. "TEXTRON Affiliate" shall mean
TEXTRON's directors, officers, employees, agents,
attorneys or other person or entity affiliated with or
representing TEXTRON.
9.23 Notice of Breach by TEXTRON. Borrower agrees to
give TEXTRON written notice of (i) any action or inaction
by TEXTRON or any attorney of TEXTRON in connection with
any Loan Documents that may be actionable against TEXTRON
or any attorney of TEXTRON or (ii) any defense to the
payment of the Obligations for any reason, including, but
not limited to, commission of a tort or violation of any
contractual duty or duty implied by law. Borrower agrees
that unless such notice is fully given as promptly as
possible (and in any event within ninety (90) days after
Borrower has knowledge, or with the exercise of reasonable
diligence should have had knowledge, of any such action,
inaction or defense, Borrower shall not assert, and
Borrower shall be deemed to have waived, any claim or
defense arising therefrom.
9.24 Withholding and Other Tax Liabilities: TEXTRON
shall have the right to refuse to make any advances from
time to time unless Borrower shall, at TEXTRON's request,
have given to TEXTRON evidence, reasonably satisfactory to
TEXTRON, that Borrower has properly deposited or paid, as
required by law, all withholding taxes and all federal,
state, city, county or other taxes due up to and including
the date of the advance. Until all of Borrower's
liabilities and obligations to TEXTRON have been paid in
full (and notwithstanding any termination or expiration of
this Agreement), TEXTRON shall be entitled to continue to
hold any and all of the Collateral until Borrower has
given to TEXTRON evidence, reasonably satisfactory to
TEXTRON, that Borrower has properly deposited or paid, as
required by law, all federal withholding taxes due up to
and including the date of such expiration or termination.
Copies of validated deposit slips showing payment shall
likewise constitute satisfactory evidence for such
purpose. In the event that any lien, assessment or tax
liability against Borrower shall arise in favor of any
taxing authority, whether or not notice thereof shall be
filed or recorded as may be required by law, TEXTRON shall
have the right (but shall not be obligated, nor shall
TEXTRON hereby assume the duty) upon reasonable prior
notice to Borrower to pay any such lien, assessment or tax
liability by virtue of which such charge shall have
arisen; provided, however, that TEXTRON shall not pay any
such tax, assessment or lien if the amount, applicability
or validity thereof is being contested in good faith and
by appropriate proceedings by Borrower and further
provided that Borrower's title to and its right to use,
the Collateral are not materially adversely affected and
TEXTRON's lien and priority in the Collateral are not
affected, altered or impaired thereby. In order to pay
any such lien, assessment or tax liability, TEXTRON shall
not be obliged to wait until said lien, assessment or tax
liability is filed before taking such action permitted
hereby. Any sum or sums which TEXTRON shall have paid for
the discharge of any such lien shall constitute an
Obligation and shall be added to the Revolving Loans and
shall be paid by Borrower to TEXTRON with interest
thereon, upon demand, and TEXTRON shall be subrogated to
all rights of such taxing authority against Borrower.
TEXTRON may establish reserves against the Revolving Loans
Borrowing Base for any amounts paid by TEXTRON pursuant to
this paragraph or for any amounts being contested in good
faith under this paragraph.
9.25 Power of Attorney. Borrower appoints TEXTRON and
its designees as Borrower's attorney, with the power to
endorse Borrower's name on any checks, notes, acceptances,
money orders or other forms of payment or security that
come into TEXTRON's possession; after the occurrence of
any Event of Default, to sign Borrower's name on any
invoice or ▇▇▇▇ of lading relating to any Receivable, on
drafts against customers, on assignments of Receivables,
on notices of assignment, financing statements and other
public records, on verifications of accounts and on
notices to customers or account debtors; to send requests
for verification of Receivables to customers or account
debtors; after the occurrence of any Event of Default, to
notify the post office authorities to change the address
for delivery of Borrower's mail to an address designated
by TEXTRON and to open and dispose of all mail addressed
to Borrower; and to do all other things TEXTRON deems
necessary or desirable to carry out the terms of this
Agreement. Borrower hereby ratifies and approves all acts
of such attorney. Neither TEXTRON nor any of its
designees shall be liable for any acts or omissions nor
for any error of judgment or mistake of fact or law while
acting as Borrower's attorney. This power, being coupled
with an interest, is irrevocable until the Obligations
have been fully satisfied and TEXTRON's obligation to
provide loans hereunder shall have terminated.
9.26 GOVERNING LAW; WAIVERS. THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION ENFORCEMENT OF THE OBLIGATIONS, SHALL
BE INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS (AND
NOT THE CONFLICT OF LAWS RULES) OF THE STATE OF NEW YORK
GOVERNING CONTRACTS TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE. BORROWER HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN
THE STATE OF NEW YORK OR, AT THE SOLE OPTION OF TEXTRON,
IN ANY OTHER COURT IN WHICH TEXTRON SHALL INITIATE LEGAL
OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. BORROWER
WAIVES ANY OBJECTION OF FORUM NON CONVENIENS AND VENUE.
BORROWER WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY MESSENGER, CERTIFIED MAIL OR REGISTERED MAIL
DIRECTED TO BORROWER AT THE ADDRESS SET FORTH BELOW ITS
SIGNATURE HERETO AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR THREE (3)
DAYS AFTER THE SAME SHALL HAVE BEEN POSTED TO BORROWER'S
ADDRESS.. BORROWER FURTHER WAIVES ANY RIGHT IT MAY
OTHERWISE HAVE TO COLLATERALLY ATTACK ANY JUDGMENT ENTERED
AGAINST IT.
9.27 MUTUAL WAIVER OF RIGHT TO JURY TRIAL. TEXTRONAND
BORROWER EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN
ANY WAY RELATING TO: (i) THIS AGREEMENT; (ii) ANY OTHER
PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN
TEXTRONAND BORROWER; OR (iii) ANY CONDUCT, ACTS OR
OMISSIONS OF TEXTRONOR BORROWER OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH TEXTRONOR BORROWER; IN EACH OF THE
FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
9.28 Lien Termination. In recognition of TEXTRON's right
to have all of its attorneys' fees and other expenses
incurred in connection with this Agreement secured by the
Collateral, notwithstanding the payment in full of the
Obligations, TEXTRON shall not be required to execute or
record any terminations or satisfactions of any of its
liens on the Collateral unless and until Borrower has
executed and delivered to TEXTRON general releases of all
claims, in form and substance satisfactory to TEXTRON in
its sole discretion.
------------------------------------------------------------------------
Executed under Seal by:
MICROS-TO-MAINFRAMES, INC. PTI CORPORATION/ PIVOT
TECHNOLOGY, INC.
By: (Corporate Seal) By: (Corporate Seal)
s/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & CEO
s.s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & CEO
Fed. Tax ID: ▇▇-▇▇▇▇▇▇▇ Fed. Tax ID: ▇▇-▇▇▇▇▇▇▇
▇▇▇▇.▇▇▇ RESULTS, INC. MTM ADVANCED TECHNOLOGY, INC.
By: (Corporate Seal) By: (Corporate Seal)
s/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & CEO
s/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President & CEO
Fed. Tax ID: ▇▇-▇▇▇▇▇▇▇ Fed. Tax ID: ▇▇-▇▇▇▇▇▇▇
Borrower's address for notices:
Attn: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Facsimile: 845-268-1789
State of New York
County of Rockland_
The foregoing instrument was acknowledged before me this
17th day of January,2002, by ▇. ▇▇▇▇▇▇▇ of Micros to Mainframes, Inc
a corporation duly organized under the State of New York, on behalf
of the corporation.
s/s ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title or rank:Notary Public (Notary Public Seal)
Serial number, if any 01SE6040120
TEXTRON FINANCIALCORPORATION
By:S/S ▇▇▇▇▇▇▇ ▇▇▇▇▇ (SEAL)
Title:VP -CREDIT
TEXTRON's address for notices:
Textron Financial Corporation
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Attn: VP Portfolio Manager
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With a copy to:
Textron FinancialCorporation
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Loan and Security Agreement
Borrower: MICROS-TO-MAINFRAMES, INC.
Date: 1-17-2002
EXHIBIT A
FLOORPLAN LOAN TERMS
Manufacturer or Vendor Invoice Due Date Terms
Dell Computer Corporation Net 30 days
Tech Data Corporation Net 30 days
▇▇▇▇▇▇ Micro, Inc. Net 30 days OR NET 45 DAYS
Any approved Manufactureres Net 30 days
or Vendors Added by TEXTRON