LOAN AND SECURITY AGREEMENT by and among STATE BANK OF SLATER, as Agent THE HOLDERS FROM TIME TO TIME AS A PARTY HERETO, as Lenders SHOW ME ETHANOL, LLC, as Borrower DATED AS OF JUNE 5, 2008
by
and among
STATE
BANK OF ▇▇▇▇▇▇,
as Agent
THE
HOLDERS FROM TIME TO TIME
AS
A PARTY HERETO, as Lenders
SHOW
ME ETHANOL, LLC, as Borrower
DATED
AS OF JUNE 5, 2008
TABLE
OF CONTENTS
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Page
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1.
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1
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2.
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LOANS.
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5
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2.1.
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Repayments.
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5
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2.2.
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Notes.
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5
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3.
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INTEREST,
FEES AND CHARGES.
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5
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3.1.
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Interest
Rate-Revolving Loans.
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5
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3.2.
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Fees
And Charges.
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5
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3.3.
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Taxes.
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6
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3.4.
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Maximum
Interest.
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7
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4.
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COLLATERAL.
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8
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4.1.
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Grant
of Security Interest to Agent.
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8
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4.2.
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Leasehold
Deed of Trust.
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9
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4.3.
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Other
Security.
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9
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5.
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PRESERVATION
OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN.
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9
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5.1.
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Agent’s
Enforcement Rights with Respect to Accounts.
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10
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5.2.
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Application
of Proceeds.
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10
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5.3.
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Information.
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10
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6.
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REPRESENTATIONS
AND WARRANTIES.
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10
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6.1.
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Locations.
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11
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6.2.
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Organization,
Authority and No Conflict.
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11
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6.3.
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Names
and Trade Names.
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11
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6.4.
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Enforceability.
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11
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6.5.
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Solvency.
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12
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7.
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AFFIRMATIVE
COVENANTS.
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12
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7.1.
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Maintenance
of Records.
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12
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7.2.
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Notices.
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12
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7.3.
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Insurance.
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13
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7.4.
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Collateral.
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14
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7.5.
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Use
of Proceeds.
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14
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7.6.
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Taxes.
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14
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7.7.
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Intellectual
Property.
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15
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-i-
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7.8.
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Patriot
Act, Bank Secrecy Act and Office of Foreign Assets
Control.
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15
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8.
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DEFAULT.
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15
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8.1.
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Payment.
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15
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8.2.
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Breach
of this Agreement and the Other Loan Documents.
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15
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8.3.
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Breaches
of Other Obligations.
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15
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8.4.
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Breach
of Representations and Warranties.
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16
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8.5.
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Loss
of Collateral.
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16
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8.6.
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Levy,
Seizure or Attachment.
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16
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8.7.
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Bankruptcy
or Similar Proceedings.
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16
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8.8.
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Appointment
of Receiver.
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16
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8.9.
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Judgment.
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17
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8.10.
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Dissolution
of Borrower.
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17
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8.11.
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Material
Adverse Effect.
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17
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9.
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REMEDIES
UPON AN EVENT OF DEFAULT; APPLICATION OF
PROCEEDS.
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17
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9.1.
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Acceleration
of Liabilities.
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17
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9.2.
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Other
Rights and Remedies.
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17
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9.3.
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Rights
and Remedies Cumulative.
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18
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9.4.
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Application
of Proceeds.
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18
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10.
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SETTLEMENTS,
DISTRIBUTIONS AND APPORTIONMENT OF PAYMENTS.
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18
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10.1.
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Settlements.
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18
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10.2.
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Return
of Payments.
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19
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10.3.
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Sharing
of Payments.
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19
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11.
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AGENT.
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19
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11.1.
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Appointment
of Agent.
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19
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11.2.
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Nature
of Duties of Agent.
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20
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11.3.
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Delegation
of Duties.
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21
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11.4.
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Lack
of Reliance on Agent.
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21
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11.5.
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Certain
Rights of Agent.
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22
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11.6.
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Reliance
by Agent.
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22
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11.7.
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Indemnification
of Agent.
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23
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11.8.
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Holders
of Notes.
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23
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11.9.
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Successor
Agent.
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24
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11.10.
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Collateral
Matters.
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24
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11.11.
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Actions
with Respect to Defaults.
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26
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11.12.
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Restriction
on Actions by Lenders.
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26
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11.13.
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Delivery
of Information.
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26
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11.14.
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Demand.
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27
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11.15.
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Notice
of Default.
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27
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-ii-
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12.
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ASSIGNABILITY.
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27
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13.
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AMENDMENTS,
ETC.
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29
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14.
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NONLIABILITY
OF AGENT AND LENDERS.
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30
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15.
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INDEMNIFICATION.
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30
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16.
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NOTICE.
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31
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17.
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CHOICE
OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.
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32
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18.
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HEADINGS
OF SUBDIVISIONS.
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33
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19.
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POWER
OF ATTORNEY.
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33
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20.
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CONFIDENTIALITY.
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34
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21.
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COUNTERPARTS.
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34
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22.
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WAIVER
OF JURY TRIAL; OTHER WAIVERS.
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34
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23.
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STATUTORY
NOTICE.
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35
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-iii-
THIS
LOAN
AND SECURITY AGREEMENT (as amended, modified or supplemented from time to time,
this “Agreement”)
made
this fifth day of June, 2008 (the “Closing
Date”)
by and
among the State Bank of ▇▇▇▇▇▇ as agent (“Agent”)
and
all lenders from time to time a party hereto (“Lenders”),
and
Show
Me Ethanol, LLC,
having
its principal place of business at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(“Borrower”).
W
I T
N E S S E T H:
WHEREAS,
Borrower has requested Loans from the Lenders, and the parties wish to provide
for the terms and conditions upon which such Loans shall be made.
NOW,
THEREFORE, in consideration of any Loan (including any Loan by renewal or
extension) hereafter made to Borrower by Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Borrower, the parties agree as follows:
1.
DEFINITIONS.
“Account”
shall
have the meaning ascribed to such term in the UCC.
“Account
Debtor”
shall
have the meaning ascribed to such term in the UCC.
“Agent”
shall
mean the State Bank of ▇▇▇▇▇▇ in its capacity as agent on behalf of Lenders
pursuant to the terms hereof and any replacement or successor agent
hereunder.
“Assignment
and Acceptance”
shall
have the meaning in Section
12
hereof.
“Business
Day”
shall
mean any day other than a Saturday, a Sunday or any day on which banks in Kansas
City, Missouri are required or permitted to close.
“Chattel
Paper”
shall
have the meaning ascribed to such term in the UCC.
“Collateral”
shall
mean all of the property of Borrower described herein, together with all other
real or personal property of Borrower or any other Person now or hereafter
pledged to Agent, for the benefit of Agent and Lenders, to secure, either
directly or indirectly, repayment of any of the Liabilities.
“Deposit
Accounts”
shall
have the meaning ascribed to such term in the UCC.
“Documents”
shall
have the meaning ascribed to such term in the UCC.
“Environmental
Laws”
shall
mean all federal, state, district, local and foreign laws, rules, regulations,
ordinances, and consent decrees relating to health, safety, hazardous
substances, pollution and environmental matters, as now or at any time hereafter
in effect, applicable to Borrower’s business or facilities owned or operated by
Borrower, including laws relating to emissions, discharges, releases or
threatened releases of pollutants, contamination, chemicals, or hazardous,
toxic
or dangerous substances, materials or wastes into the environment (including,
without limitation, ambient air, surface water, ground water, land surface
or
subsurface strata) or otherwise relating to the generation, manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
“Equipment”
shall
have the meaning ascribed to such term in the UCC.
“Escrow
Agreement”
shall
mean the escrow agreement entered into the date hereof by and among the Lenders,
the Borrower and the State Bank of ▇▇▇▇▇▇, acting as Escrow
Agreement.
“Event
of Default”
shall
have the meaning specified in Section
8
hereof.
“Federal
Funds Rate”
shall
mean, for any day, a fluctuating interest rate equal, for each day during such
period, to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or if such day is not a Business
Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or
if such rate is not published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by Agent from
three
(3) Federal funds brokers or recognized standing selected by Agent, Agent’s
determination shall be conclusive absent manifest error.
“Fixtures”
shall
have the meaning ascribed to such term in the UCC.
“General
Intangibles”
shall
have the meaning ascribed to such term in the UCC.
“Goods”
shall
have the meaning ascribed to such term in the UCC.
“Hazardous
Materials”
shall
mean any hazardous, toxic or dangerous substance, materials and wastes,
including, without limitation, hydrocarbons (including naturally occurring
or
man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, biological substances,
polychlorinated biphenyls, pesticides, herbicides and any other kind and/or
type
of pollutants or contaminants (including, without limitation, materials which
include hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any other similar substances, materials, or wastes and including any
other substances, materials or wastes that are or become regulated under any
Environmental Law (including, without limitation any that are or become
classified as hazardous or toxic under any Environmental Law).
“Indemnified
Party”
shall
have the meaning specified in Section
15
hereof.
“Instruments”
shall
have the meaning ascribed to such term in the UCC.
2
“Inventory”
shall
have the meaning ascribed to such term in the UCC.
“Investment
Property”
shall
have the meaning ascribed to such term in the UCC.
“Leasehold
Dead of Trust”
shall
mean that Missouri Leasehold Deed of Trust, Assignment of Rents and Security
Agreement by and among the trustee named therein and Borrower as grantor, dated
the date hereof.
“Lenders”
shall
have the meaning set forth in the preamble hereto.
“Liabilities”
shall
mean any and all obligations, liabilities and indebtedness of Borrower to Agent
and each Lender or to any parent, affiliate or subsidiary of Agent and each
Lender of any and every kind and nature, howsoever created, arising or evidenced
and howsoever owned, held or acquired, whether now or hereafter existing,
whether now due or to become due, whether primary, secondary, direct, indirect,
absolute, contingent or otherwise (including, without limitation, obligations
of
performance), whether several, joint or joint and several, arising under the
Loan Documents including, without limitation, principal, interests, fees, costs,
expenses, Hedging Obligations and indemnification obligations (and including
the
payment of interest and other amounts which would accrue and become due during
a
proceeding under the United States Bankruptcy Code or any similar statute,
whether or not such amounts are allowed or allowable in whole or in part in
such
proceeding).
“Loan
Documents”
shall
mean this Agreement, the Leasehold Deed of Trust, the Notes, all Purchase
Agreements, the Escrow Agreement and all other agreements, instruments and
documents, including, without limitation, guaranties, mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements, leases, financing statements, bank account agreements, banking
and
related services or cash management agreements and all other writings
heretofore, now or from time to time hereafter executed by or on behalf of
Borrower or any other Person and delivered to Agent and/or any Lender or to
any
parent, Affiliate or subsidiary of Agent and/or any Lender in connection with
the transactions contemplated hereby, as each of the same may be amended,
modified or supplemented from time to time.
“Loans”
shall
mean all loans and advances made by Lenders to or on behalf of Borrower
hereunder.
“Material
Adverse Effect”
shall
mean (i) a material adverse change in, or a material adverse effect on the
business, property, assets, operations or prospects of Borrower as determined
by
Agent or Requisite Lenders in their sole discretion, determined in good faith,
(ii) a material impairment of the ability of Borrower to perform any of its
obligations under the Loan Documents as determined by Agent or Requisite Lenders
in their sole discretion, determined in good faith, (iii) a material adverse
effect upon the Collateral or its value as determined by Agent or Requisite
Lenders in their sole discretion, determined in good faith, or (iv) a material
impairment of the enforceability or priority of Agent’s liens upon the
Collateral or the legality, validity, binding effect or enforceability of the
Loan Documents as determined by Agent or Requisite Lenders in their sole
discretion, determined in good faith.
3
“Maturity
Date”
shall
mean the first business day two years after the Closing Date.
“Non-U.S.
Participant”
shall
have the meaning specified in subsection 3.3(b).
“Notes”
shall
mean the 9% subordinated secured notes issued by Borrower on the date
hereof.
“Other
Agreements”
shall
mean the Loan Documents.
“Person”
shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, entity, party or foreign or United States government
(whether federal, state, county, city, municipal or otherwise), including,
without limitation, any instrumentality, division, agency, body or department
thereof.
“Pro
Rata Share”
shall
mean at any time, with respect to any Lender, a fraction (expressed as a
percentage in no more than nine (9) decimal places) that represents the amount
owed to a specific Lender on a Note over amounts owed to all Lenders on the
Note(s).
“Proceeds”
shall
have the meaning ascribed to such term in the UCC.
“Purchase
Agreement” shall
mean that purchase agreement by and among Borrower as issuer of the Notes and
the investors thereto, executed on the date hereof.
“Register”
shall
have the meaning set forth in subsection
12(d)
hereof.
“Requisite
Lenders”
shall
mean, at any time, Lenders having Pro Rata Shares with respect to all Loans
aggregating at least one hundred percent (100%) at such time there are three
(3)
or fewer Lenders, and sixty-six and two-thirds percent (66 2/3%) at such time
there are four (4) or more Lenders.
“Senior
Loan Agreements”
shall
mean that certain Construction and Term Loan Agreement by and among Borrower,
FCS Financial, PCA, as administrative agent, and the banks named therein, dated
as of March 1, 2007 and that certain Revolving Credit Agreement by and between
Borrower and FCS Financial, PCA, dated November 6, 2007.
“Senior
Loan Documents”
shall
mean the Senior Loan Agreements, the promissory note evidencing the loan made
by
the Senior Loan Agreements, a deed of trust in support of the loan made under
the Senior Loan Agreement, and all other instruments and documents executed
and
delivered by Borrower, as amended from time to time, and any renewal and
extensions thereof.
4
“Subordination
Agreement”
shall
mean that Intercreditor/Subordination Agreement by and among FCS Financial,
PCA,
the Borrower and the Lenders dated the date hereof.
“Subsidiary”
shall
mean any corporation of which more than fifty percent (50%) of the outstanding
capital stock having ordinary voting power to elect a majority of the board
of
directors of such corporation (irrespective of whether at the time stock of
any
other class of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned by Borrower, or any partnership, joint venture or limited liability
company of which more than fifty percent (50%) of the outstanding equity
interests are at the time, directly or indirectly, owned by Borrower or any
partnership of which Borrower is a general partner.
“Supermajority
Lenders”
shall
mean, at any time, Lenders having Pro Rata Shares with respect to all Loans
aggregating at least seventy-five percent (75%).
“Supporting
Obligations”
shall
have the meaning ascribed to such term in the UCC.
“UCC”
shall
mean the Uniform Commercial Code as in effect in Missouri from time to
time.
2.
LOANS.
2.1. Repayments.
The
Liabilities shall be paid in accordance with the provisions of the Notes and
any
and all outstanding and unpaid Liabilities (including, but not limited to,
unpaid principal and all accrued and unpaid interest) shall be repaid in full
on
the Maturity Date.
Borrower
hereby authorizes Agent, in its sole discretion, to charge any of Borrower’s
accounts to make any payments of principal, interest, fees, costs or expenses
required to be made under this Agreement or the other Loan
Documents.
2.2. Notes.
The
Loans
shall be evidenced by the Notes.
3.
INTEREST,
FEES AND CHARGES.
3.1. Interest
Rate-Revolving Loans.
(a) Subject
to the terms and conditions set forth below, the Loans shall bear interest
at
nine percent (9%) per annum.
3.2. Fees
And Charges.
(a) Agent’s
Fees:
Borrower shall pay to Agent the fees of $25,000.00 plus all attorneys’ fees
incurred by Agent in connection with the negotiation, documentation and
consummation of this Agreement, the other Loan Documents and the transactions
contemplated under this Agreement. $10,000.00 of the foregoing $25,000.00 fee
is
fully earned by Agent upon Agent’s execution of this Agreement and the remaining
$15,000.00 portion of the foregoing $25,000.00 fee (the “Refundable Portion”) is
subject to refund to Borrower in accordance with the provisions of Section
11.9.
5
(b) Costs
and Expenses:
Borrower shall reimburse Agent for all costs and expenses, including, without
limitation, legal expenses and attorneys’ fees incurred by Agent in connection
with the (i) documentation and consummation of this transaction and any
other transactions among Borrower, Agent and Lenders, including, without
limitation, Uniform Commercial Code and other public record filings, overnight
courier or other express or messenger delivery, appraisal costs, surveys, title
insurance and environmental audit or review costs; (ii) collection,
protection or enforcement of any rights in or to the Collateral;
(iii) collection of any Liabilities; and (iv) administration and
enforcement of any of Agent’s and/or any Lender’s rights under this Agreement or
any of the other Loan Documents (including, without limitation, any costs and
expenses of any third party provider engaged by Agent for such purposes). All
such costs, expenses and charges owed to Agent or a Lender, shall constitute
Liabilities hereunder, shall be payable by Borrower to Agent on demand, and
until paid, shall bear interest at the highest rate then applicable to Loans
hereunder.
3.3. Taxes.
(a) All
payments made by Borrower hereunder or under any other Loan Document shall
be
made without setoff, counterclaim, or other defense. To the extent permitted
by
applicable law, all payments hereunder or under the Loan Documents (including
any payment of principal, interest, or fees) to, or for the benefit, of any
person shall be made by Borrower free and clear of and without deduction or
withholding for, or account of, any Taxes now or hereinafter imposed by any
taxing authority.
(b) (i)
To
the extent permitted by applicable law, each Lender that is not a United States
Person within the meaning of the Internal Revenue Code of 1986, as amended
(the
“Code”)
section 7701(a)(30) (a “Non-U.S.
Participant”)
shall
deliver to Borrower and Agent on or prior to the Closing Date (or in the case
of
a Lender that is an Assignee, on the date of such assignment to such Lender)
two
accurate and complete original signed copies of IRS Form W-8BEN, W-8ECI, or
W-8IMY (or any successor or other applicable form prescribed by the IRS)
certifying to such Lender’s entitlement to a complete exemption from, or a
reduced rate in, United States withholding tax on interest payments to be made
hereunder or any Loan. If a Lender that is a Non-U.S. Participant is claiming
a
complete exemption from withholding on interest pursuant to Sections 8711(h)
or
881(c) of the Code, the Lender shall deliver (along with two accurate and
complete original signed copies of IRS Form W-8BEN) a certificate in form and
substance reasonably acceptable to Agent (any such certificate, a “Withholding
Certificate”).
In
addition, each Lender that is a Non-U.S. participant agrees that from time
to
time after the Closing Date, (or in the case of a Lender that is an assignee,
after the date of the assignment to such Lender), when a lapse in time (or
change in circumstances occurs) renders the prior certificates hereunder
obsolete or inaccurate in any material respect, such Lender shall, to the extent
permitted under applicable law, deliver to Borrower and Agent two new and
accurate and complete original signed copies of an IRS Form W-8BEN, W-8ECI,
or
W-8IMY (or any successor other applicable forms prescribed by the Internal
Revenue Service (“IRS”)),
and
if applicable, a new Withholding Certificate, to confirm or establish the
entitlement of such Lender or Agent to an exemption from, or reduction in,
United States withholding tax on interest payments to be made hereunder or
any
Loan.
6
(ii) Each
Lender that is a Non-U.S. Participant (other than any such Lender which is
taxed
as a corporation for U.S. federal income tax purposes) shall provide two
properly completed and duly executed copies of IRS Form W-9 (or any successor
or
other applicable form) to Borrower and the Agent certifying that such Lender
is
exempt from United States backup withholding tax. To the extent that a form
provided pursuant to this Section
is
rendered obsolete or inaccurate in any material respects as result of change
in
circumstances with respect to the status of a Lender, such Lender shall, to
the
extent permitted by applicable law, deliver to the Borrower and the Agent
revised forms necessary to confirm or establish the entitlement to such Lender’s
or Agent’s exemption from United States backup withholding tax.
(iii) Borrower
shall not be required to pay additional amounts to a Lender, or indemnify any
Lender, under this Section to the extent that such obligations would not have
arisen but for the failure of such Lender to comply with the terms
hereof.
(iv) Each
Lender agrees to indemnify Agent and hold Agent harmless for the full amount
of
any and all present or future Taxes and related liabilities (including
penalties, interest, additions to tax and expenses, and any taxes imposed by
any
jurisdiction on amounts payable to Agent under this Section
which
are imposed on or with respect to principal, interest or fees payable to such
Lender hereunder and which are not paid pursuant to this Section,
whether
or not such Taxes or related liabilities were correctly or legally asserted.
This indemnification shall be made within 30 days from the date the Agent makes
written demand therefore.
3.4. Maximum
Interest.
It
is the
intent of the parties that the rate of interest and other charges to Borrower
under this Agreement and the other Loan Documents shall be lawful; therefore,
if
for any reason the interest or other charges payable under this Agreement are
found by a court of competent jurisdiction, in a final determination, to exceed
the limit which Agent or any Lender may lawfully charge Borrower, then the
obligation to pay interest and other charges shall automatically be reduced
to
such limit and, if any amount in excess of such limit shall have been paid,
then
such amount shall be refunded to Borrower.
7
4. COLLATERAL.
4.1. Grant
of Security Interest to Agent.
As
security for the payment of all Loans made by Lenders to Borrower hereunder,
and
for the payment or other satisfaction of all other Liabilities, Borrower hereby
assigns to Agent, for the benefit of Lenders, and grants to Agent, for the
benefit of Lenders, a continuing security interest in the following property
of
Borrower, whether now or hereafter owned, existing, acquired or arising and
wherever now or hereafter located:
(a) all
Accounts and all Goods whose sale, lease or other disposition by Borrower has
given rise to Accounts and have been returned to, or repossessed or stopped
in
transit by, Borrower;
(b) all
Chattel Paper, Instruments, Documents and General Intangibles (including,
without limitation, all patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, goodwill, copyrights, copyright
applications, registrations, licenses, software, franchises, customer lists,
tax
refund claims, claims against carriers and shippers, guarantee claims, contract
rights, payment intangibles, security interests, security deposits and rights
to
indemnification);
(c) all
Inventory;
(d) all
Goods
(other than Inventory), including, without limitation, Equipment, vehicles
and
Fixtures;
(e) all
Investment Property;
(f) all
Deposit Accounts, bank accounts, deposits and cash;
(g) Commercial
Tort Claims;
(h) All
Supporting Obligations;
(i) any
other
property of Borrower now or hereafter in the possession, custody or control
of
Agent or any Lender or any agent or any parent, affiliate or subsidiary of
Agent
or any Lender or any participant with any Lender in the Loans, for any purpose
(whether for safekeeping, deposit, collection, custody, pledge, transmission
or
otherwise); and
(j) all
additions and accessions to, substitutions for, and replacements, products
and
Proceeds of the foregoing property, including, without limitation, proceeds
of
all insurance policies insuring the foregoing property, and all of Borrower’s
books and records relating to any of the foregoing and to Borrower’s
business.
8
4.2. Leasehold
Deed of Trust.
In
addition to the foregoing Collateral, the Loans shall be secured by a Leasehold
Deed of Trust, as attached to the Purchase Agreement, to be executed, delivered
at the time of entry into this Agreement and filed of record by Borrower as
soon
as reasonably practicable thereafter.
4.3. Other
Security.
Agent,
in
its sole discretion, without waiving or releasing any obligation, liability
or
duty of Borrower under this Agreement or the other Loan Documents or any Event
of Default, may at any time or times hereafter, but shall not be obligated
to,
pay, acquire or accept an assignment of any security interest, lien, encumbrance
or claim asserted by any Person in, upon or against the Collateral. All sums
paid by Agent in respect thereof and all costs, fees and expenses including,
without limitation, reasonable attorney fees, all court costs and all other
charges relating thereto incurred by Agent shall constitute Liabilities, payable
by Borrower to Agent on demand and, until paid, shall bear interest at the
highest rate then applicable to Loans hereunder.
5.
RESERVATION
OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN.
Borrower
shall, at Agent’s request, at any time and from time to time, authenticate,
execute and deliver to Agent such financing statements, documents and other
agreements and instruments (and pay the cost of filing or recording the same
in
all public offices deemed necessary or desirable by Agent) and do such other
acts and things or cause third parties to do such other acts and things as
Agent
may deem necessary or desirable in its sole discretion in order to establish
and
maintain a valid, attached and perfected security interest in the Collateral
in
favor of Agent to secure payment of the Liabilities, and in order to facilitate
the collection of the Collateral. Borrower irrevocably hereby makes, constitutes
and appoints Agent (and all Persons designated by Agent for that purpose) as
Borrower’s true and lawful attorney and agent-in-fact to execute and file such
financing statements, documents and other agreements and instruments and do
such
other acts and things as may be necessary to preserve and perfect Agent’s
security interest in the Collateral. Borrower further ratifies and confirms
the
prior filing by Agent of any and all financing statements which identify
Borrower as debtor, Agent as secured party and any or all Collateral as
collateral. Borrower shall deliver to Agent any and all evidence of ownership
of
any of the Equipment including, without limitation, certificates of title and
applications of title and shall take all actions and execute all documents
required to cause the security interest of Agent hereunder to be noted upon
any
such certificates of title. Borrower shall indicate on its records concerning
the Collateral a notation, in form satisfactory to Agent, of the security
interest of Agent hereunder. Notwithstanding the foregoing, Borrower shall
not
be obligated to record the Agent on certificates of title for rolling stock
or
motor vehicles.
9
5.1. Agent’s
Enforcement Rights with Respect to Accounts.
Agent
may, at any time and from time to time after the occurrence and during the
continuance of an Event of Default, whether before or after notification to
any
Account Debtor and whether before or after the maturity of any of the
Liabilities, (i) enforce collection of any of each Borrower’s Accounts or
other amounts owed to such Borrower by suit or otherwise; (ii) exercise all
of Borrower’s rights and remedies with respect to proceedings brought to collect
any Accounts or other amounts owed to Borrower; (iii) surrender, release or
exchange all or any part of any Accounts or other amounts owed to Borrower,
or
compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder; (iv) sell or assign any
Account of Borrower or other amount owed to Borrower upon such terms, for such
amount and at such time or times as Agent deems advisable; (v) prepare,
file and sign Borrower’s name on any proof of claim in bankruptcy or other
similar document against any Account Debtor or other Person obligated to
Borrower; and (vi) do all other acts and things which are necessary, in
Agent’s sole discretion, to fulfill Borrower’s obligations under this Agreement
and the other Loan Documents and to allow Agent to collect the Accounts or
other
amounts owed to Borrower. In addition to any other provision hereof, Agent
may
at any time, after the occurrence and during the continuance of an Event of
Default, at Borrower’s expense, notify any parties obligated on any of the
Accounts to make payment directly to Agent of any amounts due or to become
due
thereunder.
5.2. Application
of Proceeds.
For
purposes of determining the amount of Loans available for borrowing purposes,
checks and cash or other immediately available funds from collections of items
of payment and Proceeds of any Collateral shall be applied in whole or in part
against the Liabilities, in such order as Agent shall determine in its sole
discretion, on the day of receipt, subject to actual collection.
5.3. Information.
Promptly
following request therefore by Agent, Borrower shall deliver to Agent such
business or financial data, reports, appraisals and projections as Agent may
reasonably request.
6.
REPRESENTATIONS
AND WARRANTIES.
Borrower
hereby represents and warrants to Agent and each Lender, which representations
and warranties (whether appearing in this Section
or
elsewhere) shall be true at the time of Borrower’s execution hereof and the
closing of the transactions described herein or related hereto, shall remain
true until the repayment in full and satisfaction of all the Liabilities and
termination of this Agreement, provided, that representations and warranties
made as of a particular date shall be true and correct as of such
date.
10
6.1. Locations.
The
offices where Borrower keeps its books, records and accounts (or copies thereof)
concerning the Collateral, Borrower’s principal place of business and all of
Borrower’s other places of business, locations of Collateral and post office
boxes and locations of bank accounts are as set forth in Exhibit
A.
The
Collateral, including, without limitation, the Equipment (except any part
thereof which Borrower shall have advised Agent in writing consists of
Collateral normally used in more than one state) is kept, or, in the case of
vehicles, based, only at the addresses set forth on Exhibit
A.
6.2. Organization,
Authority and No Conflict.
Borrower
is a duly organized, validly existing and in good standing in its state of
organization and duly qualified and in good standing in all states where the
nature and extent of the business transacted by it or the ownership of its
assets makes such qualification necessary or if Borrower is not so qualified,
Borrower may cure any such failure without losing any of its rights, incurring
any liens or material penalties, or otherwise affecting Agent’s rights.
Borrower’s state of organization, form of organization and organizational
identification number is set forth on Schedule
6.2
hereto.
Borrower has the right and power and is duly authorized and empowered to enter
into, execute and deliver this Agreement and the other Loan Documents and
perform its obligations hereunder and thereunder. Borrower’s execution, delivery
and performance of this Agreement and the other Loan Documents does not conflict
with the provisions of the organizational documents of Borrower, any statute,
regulation, ordinance or rule of law, or any agreement, contract or other
document which may now or hereafter be binding on Borrower, except for conflicts
with agreements, contracts or other documents which would not have a Material
Adverse Effect, and Borrower’s execution, delivery and performance of this
Agreement and the other Loan Documents shall not result in the imposition of
any
lien or other encumbrance upon any of Borrower’s property under any existing
indenture, mortgage, deed of trust, loan or credit agreement or other agreement
or instrument by which Borrower or any of its property may be bound or
affected.
6.3. Names
and Trade Names.
Borrower’s
name has always been as set forth on the first page of this Agreement and
Borrower uses no trade names, assumed names, fictitious names or division names
in the operation of its business.
6.4. Enforceability.
This
Agreement and the other Loan Documents to which Borrower is a party are the
legal, valid and binding obligations of such Borrower and are enforceable
against Borrower in accordance with their respective terms.
11
6.5. Solvency.
Borrower
is, after giving effect to the transactions contemplated hereby, solvent, able
to pay its debts as they become due, has capital sufficient to carry on its
business, now owns property having a value both at fair valuation and at present
fair saleable value greater than the amount required to pay its debts, and
will
not be rendered insolvent by the execution and delivery of this Agreement or
any
of the other Loan Documents or by completion of the transactions contemplated
hereunder or thereunder.
7.
AFFIRMATIVE
COVENANTS.
Until
payment and satisfaction in full of all Liabilities and termination of this
Agreement, unless Borrower obtains Requisite Lenders’ prior written consent
waiving or modifying any of such Borrower’s covenants hereunder in any specific
instance, Borrower covenants and agrees as follows:
7.1. Maintenance
of Records.
Borrower
shall at all times keep accurate and complete books, records and accounts with
respect to all of Borrower’s business activities, in accordance with sound
accounting practices and generally accepted accounting principles consistently
applied, and shall keep such books, records and accounts, and any copies
thereof, only at the addresses indicated for such purpose on Exhibit
A.
7.2. Notices.
Borrower
shall:
(a) Locations.
Promptly (but in no event less than ten (10) days prior to the occurrence
thereof) notify Agent of the proposed opening of any new place of business
or
new location of Collateral, the closing of any existing place of business or
location of Collateral, any change in the location of Borrower’s books, records
and accounts (or copies thereof), or, if any of the Collateral consists of
Goods
of a type normally used in more than one state, the use of any such Goods in
any
state other than a state in which Borrower has previously advised Agent that
such Goods will be used.
(b) Names
and Trade Names.
Notify
Agent within ten (10) days of the change of its name or the use of any trade
name, assumed name, fictitious name or division name not previously disclosed
to
Agent in writing.
(c) Default;
Material Adverse Effect.
Promptly advise Agent of the occurrence of or any event which has a Material
Adverse Effect on Borrower, the occurrence of any Event of Default hereunder
or
the occurrence of any event which, if uncured, will become an Event of Default
after notice or lapse of time (or both).
12
7.3. Insurance.
Borrower
shall:
(a) Keep
the
Collateral properly housed and insured for the full insurable value thereof
against loss or damage by fire, theft, explosion, sprinklers, collision (in
the
case of motor vehicles) and such other risks as are customarily insured against
by Persons engaged in businesses similar to that of Borrower, and shall maintain
business interruption insurance policies. Original (or certified) copies of
such
policies of insurance have been or shall be, within ninety (90) days of the
date
hereof, delivered to Agent, together with evidence of payment of all premiums
therefore, and shall contain an endorsement, in form and substance acceptable
to
Agent, showing loss under such insurance policies payable to Agent, for the
benefit of Agent and Lenders. Such endorsement, or an independent instrument
furnished to Agent, shall provide that the insurance company shall give Agent
at
least thirty (30) days written notice before any such policy of insurance is
altered or canceled and that no act, whether willful or negligent, or default
of
Borrower or any other Person shall affect the right of Agent to recover under
such policy of insurance in case of loss or damage. In addition, Borrower shall
cause to be executed and delivered to Agent an assignment of proceeds of its
business interruption insurance policies. Borrower hereby directs all insurers
under all policies of insurance to pay all proceeds payable thereunder directly
to Agent. Borrower irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent) as Borrower’s true and lawful
attorney (and agent-in-fact) for the purpose of making, settling and adjusting
claims under such policies of insurance, endorsing the name of Borrower on
any
check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and making all determinations and decisions with respect
to such policies of insurance, provided however, that if no Event of Default
shall have occurred and is continuing, Borrower may make, settle and adjust
claims involving less than $50,000.00 in the aggregate without Agent’s
consent.
(b) Maintain,
at its expense, such public liability and third party property damage insurance
as is customary for Persons engaged in businesses similar to that of Borrower
with such companies and in such amounts, with such deductibles and under
policies in such form as shall be satisfactory to Agent and original (or
certified) copies of such policies have been or shall be, within ninety (90)
days after the date hereof, delivered to Agent, together with evidence of
payment of all premiums therefore; each such policy shall contain an endorsement
showing Agent on behalf of Lenders as additional insured thereunder and
providing that the insurance company shall give Agent at least thirty (30)
days
written notice before any such policy shall be altered or canceled.
If
Borrower at any time or times hereafter shall fail to obtain or maintain any
of
the policies of insurance required above or to pay any premium relating thereto,
then Agent, without waiving or releasing any obligation or default by Borrower
hereunder, may (but shall be under no obligation to) obtain and maintain such
policies of insurance and pay such premiums and take such other actions with
respect thereto as Agent deems advisable upon notice to Borrower. Such
insurance, if obtained by Agent, may, but need not, protect Borrower’s interests
or pay any claim made by or against Borrower with respect to the Collateral.
Such insurance may be more expensive than the cost of insurance Borrower may
be
able to obtain on its own and may be cancelled only upon Borrower providing
evidence that it has obtained the insurance as required above. All sums
disbursed by Agent in connection with any such actions, including, without
limitation, court costs, expenses, other charges relating thereto and reasonable
attorneys’ fees, shall constitute Loans hereunder, shall be payable on demand by
Borrower to Agent and, until paid, shall bear interest at the highest rate
then
applicable to Loans hereunder. At or prior to closing of this Agreement,
Borrower shall deliver to Agent, certificates (in form and substance acceptable
to Agent), or such other evidence as may be satisfactory to Agent, evidencing
the fact that the insurance required by this Section
is in
existence.
13
7.4. Collateral.
Borrower
shall keep the Collateral in good condition, repair and order and shall make
all
necessary repairs to the Equipment and replacements thereof so that the
operating efficiency and the value thereof shall at all times be preserved
and
maintained in all material respects. Borrower shall permit Agent and Lenders
to
examine any of the Collateral at any time and wherever the Collateral may be
located and, Borrower shall, immediately upon request therefore by Agent,
deliver to Agent any and all evidence of ownership of any of the Equipment
including, without limitation, certificates of title and applications of title.
Borrower shall, at the request of Agent, indicate on its records concerning
the
Collateral a notation, in form satisfactory to Agent, of the security interest
of Agent hereunder.
7.5. Use
of Proceeds.
All
Loans
and other proceeds obtained by Borrower from Lenders pursuant to this Agreement
shall be used solely for business purposes of Borrower.
7.6. Taxes.
Borrower
shall file all required tax returns and pay all of its taxes when due, subject
to any extensions granted by the applicable taxing authority, including, without
limitation, taxes imposed by federal, state or municipal agencies, and shall
cause any liens for taxes to be promptly released; provided, that Borrower
shall
have the right to contest the payment of such taxes in good faith by appropriate
proceedings so long as (a) the amount so contested is shown on Borrower’s
financial statements; (b) the contesting of any such payment does not give
rise to a lien for taxes; (c) Borrower keeps on deposit with Agent (such
deposit to be held without interest) or a reserve is maintained against
Borrower’s availability to borrow money pursuant to the Notes referenced in
Section 2.2,
in
either case an amount of money which, in the sole judgment of Agent, is
sufficient to pay such taxes and any interest or penalties that may accrue
thereon; and (d) if Borrower fails to prosecute such contest with
reasonable diligence, Agent may apply the money so deposited in payment of
such
taxes. If Borrower fails to pay any such taxes and in the absence of any such
contest by Borrower, Agent may (but shall be under no obligation to) advance
and
pay any sums required to pay any such taxes and/or to secure the release of
any
lien therefore, and any sums so advanced by Agent shall constitute Liabilities
hereunder, shall be payable by Borrower to Agent on demand, and, until paid,
shall bear interest at the highest rate then applicable to Loans
hereunder.
14
7.7. Intellectual
Property.
Borrower
shall maintain adequate licenses, patents, patent applications, copyrights,
service marks, trademarks, trademark applications, trade styles and trade names
to continue its business as heretofore conducted by it or as hereafter conducted
by it unless the failure to maintain any of the foregoing could not reasonably
be expected to have a Material Adverse Effect.
7.8. Patriot
Act, Bank Secrecy Act and Office of Foreign Assets
Control.
As
required by federal law and the Agent’s and each Lender’s policies and
practices, the Agent, and each Lender may need to obtain, verify and record
certain customer identification information and documentation in connection
with
opening or maintaining accounts, or establishing or continuing to provide
services.
8.
DEFAULT.
The
occurrence of any one or more of the following events shall constitute an
“Event of Default”
by
Borrower hereunder:
8.1. Payment.
The
failure of Borrower to pay when due or declared due any of the
Liabilities.
8.2. Breach
of this Agreement and the Other Loan Documents.
The
failure of Borrower to perform, keep or observe any of the covenants,
conditions, promises, agreements or obligations of Borrower under this Agreement
and such failure shall continue for fifteen (15) days; provided that such
fifteen (15) day period shall not apply in the event that (i) such failure
is not capable of being cured within such fifteen (15) day period, (ii)
such failure was the subject of a prior failure within six (6) months prior
to
the current failure or (iii) such failure was the result of an intentional
breach by Borrower, or (b) under any of the other provisions of this Agreement
or any of the other Loan Documents.
8.3. Breaches
of Other Obligations.
The
failure of Borrower to perform, keep or observe (after any applicable notice
and
cure period) any of the covenants, conditions, promises, agreements or
obligations of Borrower under the Senior Loan Documents or any other failure
of
Borrower to perform, keep or observe (after any applicable notice and cure
period) any of the covenants, conditions, promises, agreements or obligations
of
Borrower under any other agreement with any Person if such failure might have
a
Material Adverse Effect.
15
8.4. Breach
of Representations and Warranties.
The
making or furnishing by Borrower to Agent or any Lender of any representation,
warranty, certificate, schedule, report or other communication within or in
connection with this Agreement or the other Loan Documents or in connection
with
any other agreement between Borrower and Agent or any Lender, which is untrue
or
misleading in any material respect as of the date made.
8.5. Loss
of Collateral.
The
loss,
theft, damage or destruction of, or (except as permitted hereby) sale, lease
or
furnishing under a contract of service other than in the ordinary course of
Borrower’s business of, any of the Collateral having a value in excess of
$250,000 in the aggregate for all such events during any year prior to the
Maturity Date.
8.6. Levy,
Seizure or Attachment.
The
making or any attempt by any Person to make any levy, seizure or attachment
upon
any of the Collateral.
8.7. Bankruptcy
or Similar Proceedings.
The
commencement of any proceedings in bankruptcy by or against Borrower or for
the
liquidation or reorganization of Borrower, or alleging that Borrower is
insolvent or unable to pay its debts as they mature, or for the readjustment
or
arrangement of Borrower’s debts, whether under the United States Bankruptcy Code
or under any other law, whether state or federal, now or hereafter existing,
for
the relief of debtors, or the commencement of any analogous statutory or
non-statutory proceedings involving Borrower; provided, however, that if such
commencement of proceedings against a Borrower is involuntary, such action
shall
not constitute an Event of Default unless such proceedings are not dismissed
within forty-five (45) days after the commencement of such
proceedings.
8.8. Appointment
of Receiver.
The
appointment of a receiver or trustee for Borrower, for any of the Collateral
or
for any substantial part of Borrower’s assets or the institution of any
proceedings for the dissolution, or the full or partial liquidation, or the
merger or consolidation, of Borrower; provided, however, that if such
appointment or commencement of proceedings against Borrower is involuntary,
such
action shall not constitute an Event of Default unless such appointment is
not
revoked or such proceedings are not dismissed within forty-five (45) days
after the commencement of such proceedings.
16
8.9. Judgment.
The
entry
of any judgment or order against Borrower involving in excess of $250,000 in
the
aggregate which remains unsatisfied or undischarged and in effect for thirty
(30) days after such entry without a stay of enforcement or execution or if
any
such judgment or order provides equitable relief that has a Material Adverse
Effect on such Borrower.
8.10. Dissolution
of Borrower.
The
dissolution of Borrower.
8.11. Material
Adverse Effect.
The
occurrence of a Material Adverse Effect.
9.
REMEDIES
UPON AN EVENT OF DEFAULT; APPLICATION OF PROCEEDS.
9.1. Acceleration
of Liabilities.
Upon
the
occurrence and during the continuance of an Event of Default, all of the
Liabilities shall immediately and automatically become due and payable, without
notice of any kind.
9.2. Other
Rights and Remedies.
Upon
the
occurrence and during the continuance of an Event of Default, Agent may exercise
from time to time any rights and remedies available to it under the Uniform
Commercial Code and any other applicable law in addition to, and not in lieu
of,
any rights and remedies expressly granted in this Agreement or in any of the
other Loan Documents. In particular, but not by way of limitation of the
foregoing, Agent may, without notice, demand or legal process of any kind,
take
possession of any or all of the Collateral (in addition to Collateral of which
it already has possession), wherever it may be found, and for that purpose
may
pursue the same wherever it may be found, and may enter onto any of Borrower’s
premises where any of the Collateral may be, and search for, take possession
of,
remove, keep and store any of the Collateral until the same shall be sold or
otherwise disposed of, and Agent shall have the right to store the same at
any
of Borrower’s premises without cost to Agent or Lenders. At Agent’s request,
Borrower shall, at Borrower’s expense, assemble the Collateral and make it
available to Agent at one or more places to be designated by Agent and
reasonably convenient to Agent and Borrower. Borrower recognizes that if
Borrower fails to perform, observe or discharge any of its Liabilities under
this Agreement or the other Loan Documents, no remedy at law will provide
adequate relief to Agent and Lenders, and agrees that Agent and Lenders shall
be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages. Any notification of intended
disposition of any of the Collateral required by law will be deemed to be a
reasonable authenticated notification of disposition if given at least ten
(10)
days prior to such disposition and such notice shall (i) describe Agent and
Borrower, (ii) describe the Collateral that is the subject of the intended
disposition, (iii) state the method of the intended disposition,
(iv) state that Borrower is entitled to an accounting of the Liabilities
and state the charge, if any, for an accounting and (v) state the time and
place of any public disposition or the time after which any private sale is
to
be made. Agent and Lenders may disclaim any warranties that might arise in
connection with the sale, lease or other disposition of the Collateral and
has
no obligation to provide any warranties at such time.
17
9.3. Rights
and Remedies Cumulative.
The
rights and remedies of Agent and Lenders under this Agreement and the other
Loan
Documents shall be cumulative. Agent and Lenders shall have all other rights
and
remedies not inconsistent herewith as provided in the UCC or the Uniform
Commercial Code as in effect in any other applicable jurisdiction, by applicable
law, or in equity. No exercise by Agent or any Lender of one right or remedy
shall be deemed an election, and no waiver by Agent or any Lender of any Event
of Default shall be deemed a continuing waiver. No delay by Agent or Lenders
shall constitute a waiver, election or acquiescence by Agent and
Lenders.
9.4. Application
of Proceeds.
Notwithstanding
anything to the contrary contained in this Agreement, upon the occurrence and
during the continuance of an Event of Default, (i) Agent shall have the
continuing and exclusive right to apply and to reapply any and all payments
received at any time or times after the occurrence and during the continuance
of
an Event of Default against the Liabilities in such manner as Agent may deem
advisable notwithstanding any previous application by Agent and (ii) as between
the Agent and the Lenders, the proceeds of any sale of, or other realization
upon, all or any party of the Collateral shall be applied: first, to all fees,
costs and expenses incurred by or owing to Agent and any Lender with respect
to
this Agreement, the other Loan Documents or the Collateral; second, to accrued
and unpaid interest (including any interest which but for the provisions of
the
United States Bankruptcy Code, would have accrued on such amounts) on the
Liabilities; third, to the principal amount of the Liabilities outstanding;
and
fourth to any other Liabilities. Any balance remaining shall be delivered to
Borrower or to whomever may be lawfully entitled to receive such balance or
as a
court of competent jurisdiction may direct.
10.
SETTLEMENTS,
DISTRIBUTIONS AND APPORTIONMENT OF PAYMENTS.
10.1. Settlements.
Upon
payment of amounts due hereunder by Borrower, Agent shall provide each Lender
with a statement of the outstanding balance of the Liabilities and the current
balance of the Loans funded by each Lender. In addition, subject to Agent’s
right, under Section
11.7
below,
to deduct and retain amounts from payments and other amounts actually collected
or received by Agent, amounts actually received by Agent in payment of the
Liabilities shall be distributed by Agent to Lenders as follows:
18
(a) Within
five (5) Business Days of receipt thereof by Agent, payments to be applied
to
interest on the Loans shall be paid to each Lender in proportion to its Pro
Rata
Share of such Loans; and
(b) Within
five (5) Business Day of receipt thereof by Agent, payment to be applied to
any
costs and expenses of Lenders, to the extent reimbursable pursuant to the terms
of this Agreement, shall be paid to each Lender in proportion to its Pro Rata
Share of the Loans.
10.2. Return
of Payments.
(a)If
Agent
pays an amount to a Lender under this Agreement in the belief or expectation
that a related payment has been or will be received by Agent from Borrower
and
such related payment is not received by Agent, then Agent will be entitled
to
recover such amount from such Lender on demand without setoff, counterclaim
or
deduction of any kind, together with interest accruing on a daily basis at
the
Federal Funds Rate.
(b)If
Agent
determines at any time that any amount received by Agent under this Agreement
or
any other Loan Documents must be returned to Borrower or any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent will
not
be required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent
has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
10.3. Sharing
of Payments.
If
any
Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) on account of any Loan
in
excess of its Pro Rata Share of payments entitled pursuant to the provisions
of
this Section,
such
Lender shall return such excess amount to Agent as shall be necessary to cause
such Lender to share the excess payment or other recovery ratably with each
of
them.
11.
AGENT.
11.1. Appointment
of Agent.
(a) Each
Lender hereby designates Agent, as agent on behalf of each Lender, to act as
herein specified. Each Lender hereby irrevocably authorizes Agent to take such
action on each such Lender’s behalf under the provisions of this Agreement and
the notes and any other instruments and agreements referred to herein and to
exercise such powers and to perform such duties hereunder and thereunder as
are
specifically delegated to or required of Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto. Except as otherwise
provided herein, Agent shall hold all Collateral and all payments of principal,
interest, fees, charges and expenses received pursuant to this Agreement or
any
of the other Loan Documents for the benefit of all Lenders. Agent may perform
any of its duties hereunder by or through its agents or employees.
19
(b) The
provisions of this Section
11
are
solely for the benefit of Agent and Lenders, and Borrower shall have no right
as
a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Agent shall act solely as agent
of
Lenders and does not assume and shall not be deemed to have assumed any
obligation or duty toward or relationship of agency or trust with or for
Borrower.
11.2. Nature
of Duties of Agent.
(a) Agent
shall not have duties, obligations or responsibilities except those expressly
set forth in this Agreement and the other Loan Documents; provided, however,
that Agent shall have no duties, obligations or responsibilities hereunder
or
under the other Loan Documents nor any obligation or duty to act or refrain
from
acting under this Agreement or the other Loan Documents, unless and until such
time as Agent has received the Agent’s Fee described in Section
3.2(a),
it
being acknowledged and agreed that such Agent’s Fee is due and payable to Agent
upon Agent’s execution of this Agreement. Neither Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or
their
gross negligence or willful misconduct. The duties of Agent shall be mechanical,
ministerial and administrative in nature; Agent shall not have by reason of
this
Agreement or the other Loan Documents a fiduciary relationship in respect of
any
Lender; and nothing in this Agreement or the other Loan Documents, expressed
or
implied, is intended to or shall be so construed as to impose upon Agent any
obligations or duties in respect of this Agreement or the other Loan Documents
except as expressly set forth herein. Notwithstanding any provision in this
Agreement or the other Loan Documents to the contrary, Agent shall have no
obligation to prepare, complete, fill out, delivery or supply any tax forms
or
other tax reports or documents relating to the Loans, the payments received
under this Agreement and the other Loan Documents from Borrower or the other
transactions contemplated under this Agreement and the other Loan Documents
and
each Lender shall be responsible for any such tax forms, reports and documents
that might be required in connection with the Loans, the payments received
under
this Agreement and the other Loan Documents from Borrower or the other
transactions contemplated under this Agreement and the other Loan Documents.
Each Lender acknowledges and agrees that in no event shall Agent be responsible
for any incidental or consequential damages and each Lender hereby waives any
right or claim against Agent for any such damages.
20
(b) Wherever
Agent’s judgment, consent, approval, determination or discretion is required
under this Agreement or the other Loan Documents or Agent shall have an option,
election, or right of determination or requirement or any other power to decide
or require any matter relating to the terms of this Agreement or the other
Loan
Documents, including any right to determine that something is satisfactory
or
not (“Decision
Power”),
such
Decision Power shall be exercised in the sole and absolute discretion of Agent
except as may be otherwise expressly and specifically provided
herein.
11.3. Delegation
of Duties.
Agent
may
execute any of its duties under this Agreement or any other Loan Document by
or
through agents, employees or attorneys in fact. Agent shall not be responsible
for the gross negligence or willful misconduct of any agent or attorney in
fact
that it selects so long as such selection was made without gross negligence
or
willful misconduct.
11.4. Lack
of Reliance on Agent.
(a) Independently
and without reliance upon Agent, each Lender, to the extent it deems
appropriate, has made and shall continue to make (A) its own independent
investigation of the financial or other condition and affairs of Agent and
Borrower in connection with the taking or not taking of any action in connection
herewith and (B) its own appraisal of the creditworthiness of Agent and
Borrower, and, except as expressly provided in this Agreement, Agent shall
not
have any duty or responsibility, either initially or on a continuing basis,
to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any
time
or times thereafter.
(b) Agent
shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility,
priority or sufficiency of this Agreement or the other Loan Documents or any
notes or the financial or other condition of Borrower. Agent shall not be
required to make any inquiry concerning any of the foregoing or for either
the
performance or observance of any of the terms, provisions or conditions of
this
Agreement or the other Loan Documents, or the financial condition of Borrower,
or the existence or possible existence of any Event of Default.
(c) Each
Lender hereby acknowledges and agrees that Lender has not made any
representations or warranties with respect to or regarding this Agreement,
the
other Loan Documents, the Loans, the Borrower, the Collateral, any liens or
security interests on or in the Collateral, any of the transactions contemplated
under this Agreement and the other Loan Documents or otherwise and that each
such Lender has relied, to the extent it deems appropriate, upon its own
independent review and investigation of this Agreement, the other Loan
Documents, the Borrower, the Collateral and the other facts and circumstances
relating to the subject matter of this Agreement and the transactions
contemplated under this Agreement and the other Loan Documents, in becoming
a
Lender under this Agreement.
21
11.5. Certain
Rights of Agent.
Agent
shall have the right to request instructions from Requisite Lenders or all
Lenders, as applicable, pursuant to this Agreement, by notice to each Lender.
If
Agent shall request instructions from Requisite Lenders or all Lenders, as
applicable, with respect to any act or action (including the failure to act)
in
connection with this Agreement, any such request for may include as part of
any
such request, a request for an advance against Agent’s anticipated costs and
expenses in connection with any such act or action, in such amount as Agent
may
determine in its reasonable discretion (each an “Expense Advance”). Agent shall
be entitled to refrain from such act or taking such action unless and until
Agent shall have received instructions and the Expense Advance from Requisite
Lenders or all Lenders, as applicable, and Agent shall not incur liability
to
any Person by reason of so refraining. If at any time Agent incurs costs and
expenses in connection with any such act or action that is in excess of the
remaining amount of any Expense Advance that Agent has received that has not
been applied toward Agent’s costs and expenses, if any, or Agent anticipates
that it will incur costs and expenses in connection with any such act or action
that will be in excess of the remaining amount of any Expense Advance that
Agent
has received that has not been applied toward Agent’s costs and expenses, if
any, then Agent may request an Expense Advance or additional Expense Advance
and
Agent shall be entitled to refrain from taking or continuing any such act or
action unless and until Agent shall have received the requested Expense Advance
from Requisite Lenders or all Lenders, as applicable, and Agent shall not incur
liability to any Person by reason of so refraining. In any event, Lenders’
acknowledge and agree that Agent shall be entitled to recover all costs and
expenses incurred by Agent in taking any such acts or actions and that Lender’s
shall pay these costs and expenses, to the extent they have not been promptly
collected from Borrower and Agent shall be entitled to refrain from taking
or
continuing any acts or actions under this Agreement or the other Loan Documents
unless and until Agent shall have received the payment of its costs and expenses
incurred and Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right
of
action or any claim whatsoever against Agent as a result of Agent acting or
refraining from acting hereunder in accordance with the foregoing provisions
or
in accordance with the instructions of Requisite Lenders or all Lenders, as
applicable and notwithstanding the instructions of Requisite Lenders (or all
Lenders, if applicable), Agent shall have no obligation to take any action
it
believes, in good faith, would violate applicable law or expose Agent to any
liability for which it has not received satisfactory indemnification in
accordance with this Agreement.
11.6. Reliance
by Agent.
Agent
shall be under no duty to examine, inquire into, or pass upon the validity,
effectiveness or genuineness of this Agreement, any of the other Loan Documents
or any instrument, document or communication furnished pursuant hereto or
thereto or in connection herewith or therewith. Agent shall be entitled to
rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order, electronic mail or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper person. Agent may consult
with legal counsel (including counsel for Borrower with respect to matters
concerning Borrower), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken by
it
in good faith in accordance with the advice of such counsel, accountants or
experts.
22
11.7. Indemnification
of Agent.
To
the
extent Agent is not promptly reimbursed and indemnified by Borrower, each Lender
will reimburse and indemnify Agent, in proportion to its Pro Rata Share of
the
Liabilities, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against Agent in
performing its duties hereunder, in any way relating to or arising out of this
Agreement or the acts or actions that Agent is requested or instructed to take
pursuant to this Agreement; provided, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent’s gross
negligence or willful misconduct. If any indemnity or Expense Advance furnished
to Agent for any purpose shall, in the opinion of Agent, be insufficient or
become impaired, Agent may call for additional indemnities or Expense Advances
and cease to do, or not commence, the acts to be indemnified against or for
which the Expense Advance is to cover, even if so directed by Requisite Lenders
or all Lenders, as applicable, until such additional indemnification or Expense
Advance is provided. The obligations of Lenders under this Section
11.7
shall
survive the payment in full of the Liabilities and the termination of this
Agreement. Agent is authorized and directed to set-off against and to deduct
and
retain sufficient amounts from the payments and amounts that it receives or
collects under this Agreement or the other Loan Documents (including any amounts
that Agent receives from collections of proceeds of Collateral of Borrower
received by Agent) to reimburse Agent for any costs and expenses incurred by
Agent to which Agent is entitled to reimbursement pursuant to the terms of
this
Agreement or the other Loan Documents or to reimburse Agent for any such
indemnified obligations, costs and expenses, all prior to distributions to
Lenders.
11.8. Holders
of Notes.
Agent
may
deem and treat the payee of any promissory note as the owner and the holder
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with Agent (along with
a
copy of the actual written assignment). Any request, authority or consent of
any
Person who, at the time of making such request or giving such authority or
consent, is the owner and holder of any promissory note, shall be conclusive
and
binding on any subsequent owner, holder, transferee or assignee of such
promissory note or of any promissory note or notes issued in exchange
therefore.
23
11.9. Successor
Agent.
(a) Agent
may, upon five (5) Business Days’ notice to Lenders and Borrower, resign at any
time for any reason whatsoever (effective upon the appointment of a successor
Agent pursuant to the provisions of this Section
11.9
or
thirty (30) days after the retiring Agent’s giving of notice of resignation,
whichever occurs first) by giving written notice thereof to Lenders and
Borrower. After providing the resignation notice, Agent shall not have any
obligation or duty to take any further act or action or incur any cost or
expense in connection with this Agreement or the other Loan Documents and Agent
shall be entitled to refrain from taking or continuing any such acts or actions
and Agent shall not incur liability to any Person by reason of so refraining.
Upon any such resignation, Requisite Lenders shall have the right, upon five
(5)
days’ notice, to appoint a successor Agent. If no successor Agent shall have
been so appointed by Requisite Lenders and accepted such appointment, within
thirty (30) days after the retiring Agent’s giving of notice of resignation,
then, Agent’s resignation shall be come effective and Agent shall have no
further liabilities, obligations or duties under this Agreement or the other
Loan Documents. Lenders shall be responsible for and shall pay or reimburse
retiring Agent all costs and expenses incurred by retiring Agent in connection
with its resignation or appointment of a successor Agent. If the Agent resigns
prior to an Event of Default, the Agent shall refund to the Borrower a pro
rata
portion of the Refundable Portion of the fees established in Section
3.2
for the
period left until the Maturity Date of the Loans, upon the effectiveness of
such
Agent’s resignation.
(b) Upon
the
acceptance of any appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and shall have no further liability or obligation under this Agreement or the
other Loan Documents other than as set forth in Section
11.9(a).
After
any retiring Agent’s resignation hereunder as Agent, the provisions of this
Section
shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was an Agent under this Agreement.
11.10. Collateral
Matters.
(a) Each
Lender authorizes and directs Agent to enter into the other Loan Documents
for
the benefit of Lenders. Each Lender hereby agrees that, except as otherwise
set
forth herein, any action taken by Agent (whether in accordance with the
instructions of Requisite Lenders or otherwise) in accordance with the
provisions of this Agreement or the other Loan Documents, and the exercise
by
the Agent of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all Lenders. Agent is hereby authorized (but not obligated) on behalf
of
all Lenders, without the necessity of any notice to or further consent from
any
Lender, to take any action with respect to any Collateral or other Loan
Documents which may be necessary or advisable, in Agent’s sole and absolute
discretion, to perfect and maintain perfected the security interest in and
liens
upon the Collateral granted pursuant to this Agreement and the other Loan
Documents.
24
(b) Agent
will not, without the verbal consent of all Lenders, which consent shall (i)
be
confirmed promptly thereafter in writing and (ii) not be unreasonably withheld
or delayed, execute any release of Agent's security interest in any Collateral
except for releases relating to dispositions of Collateral (x) permitted by
this
Agreement and (y) in connection with the repayment in full of all of the
Liabilities by Borrower and the termination of all obligations of Agent and
Lenders under this Agreement and the other Loan Documents; provided,
that
with the consent of (1) Supermajority Lenders, Agent may release its liens
on
less than all or substantially all of the Collateral and (2) Requisite Lenders,
Agent may release its liens on Collateral having a book value not greater than
ten percent (10%) of the total book value of all Collateral, as determined
by
Agent (in its sole and absolute discretion), either in a single transaction
or
series of related transactions, not to exceed twenty percent (20%) of the book
value of all Collateral in any Fiscal Year. Agent shall not be required to
execute any such release on terms which, in Agent's opinion, would expose Agent
to liability or create any obligation or entail any consequence other than
the
release of such liens without recourse or warranty. In the event of any sale
or
transfer of any of the Collateral, Agent shall be authorized to deduct all
of
the expenses reasonably incurred by Agent from the proceeds of any such sale
or
transfer.
(c) Lenders
hereby agree that the lien granted to Agent in any property sold or disposed
of
in accordance with the provisions of the Agreement shall be automatically
released; provided,
however
that
Agent’s lien shall attach to and continue for the benefit of Agent and Lenders
in the proceeds and products of such property arising from any such sale or
disposition.
(d) To
the
extent, pursuant to the provisions of this Section,
Agent’s
execution of a release is required to release its lien upon any sale and
transfer of Collateral which is consented to in writing by Requisite Lenders
or
all Lenders, as applicable, and upon at least five (5) business days’ prior
written request by Borrower, Agent shall (and is hereby irrevocably authorized
by Lenders to) execute such documents as may be necessary to evidence the
release of the liens granted to Agent for the benefit of Lenders herein or
pursuant hereto upon the Collateral that was sold or transferred.
(e) Notwithstanding
anything in this Agreement or the other Loan Documents to the contrary, Agent
shall not have any obligation whatsoever to Lenders or to any other Person
to
assure that the Collateral exists or is owned by Borrower or is cared for,
protected or insured or that the liens granted to Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
or to continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted or
available to Agent in this Section,
elsewhere in this Agreement or in any of the other Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission
or
event related thereto, Agent may act in any manner it may deem appropriate,
in
its sole discretion and that Agent shall have no duty or liability whatsoever
to
Lenders, except for its gross negligence or willful misconduct.
25
(f) In
the
event that any Lender receives any Proceeds of any Collateral by setoff,
exercise of any banker’s lien or otherwise, in an amount in excess of such
Lender’s Pro Rata Share of such Proceeds, such Lender shall turn the same over
to Agent, in kind, and with such endorsements as may be required to negotiate
the same to Agent or, in immediately available funds, as applicable, for the
account of all Lenders and for application to the Liabilities in accordance
with
the terms of this Agreement. No Lender shall exercise any right of set off
or
banker’s lien without the prior written consent of Agent.
11.11. Actions
with Respect to Defaults.
In
addition to Agent’s right to take actions on its own accord as permitted under
this Agreement, Agent shall take such action with respect to an Event of Default
as shall be directed by Requisite Lenders or all Lenders, as applicable, under
this Agreement; provided, that until Agent shall have received such directions
and any Expense Advance that may be required by Agent, Agent may (but shall
not
be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default as it shall deem advisable and in the best
interests of Lenders. No Lender shall have any right individually to enforce
or
seek to enforce this Agreement or any other Loan Documents or to realize upon
any Collateral, unless instructed to do so by Agent.
11.12. Restriction
on Actions by Lenders.
Each
Lender agrees that it shall not, without the express written consent of Agent,
and shall, upon the written request of Agent (to the extent it is lawfully
entitled to do so), set off against the Liabilities, any amounts owing by such
Lender to Borrower. Each of the Lenders further agrees that it shall not, unless
specifically requested to do so in writing by Agent, take or cause to be taken,
any action, including the commencement of any legal or equitable proceedings
to
foreclose any loan or otherwise enforce any security interest in any of the
Collateral or to enforce all or any part of this Agreement or the other Loan
Documents.
11.13. Delivery
of Information.
Agent
shall not be required to deliver to any Lender originals or copies of any
documents, instruments, notices, communications or other information received
by
Agent from Borrower, Requisite Lenders, any Lender or any other Person under
or
in connection with this Agreement or any other Loan Document except (i) as
specifically provided in this Agreement or any other Loan Document and (ii)
as
specifically requested from time to time in writing by any Lender with respect
to a specific document, instrument, notice or other written communication
received by and in the possession of Agent at the time of receipt of such
request and then only in accordance with such specific request.
26
11.14. Demand.
Subject
to the terms of this Agreement, Agent shall make demand for repayment by
Borrower of all Liabilities owing by Borrower hereunder, after the occurrence
of
an Event of Default, upon the written request of Requisite Lenders and the
delivery to Agent of any Expense Advance required by Agent in connection with
such demand. Agent shall make such demand in such manner, as it deems
appropriate, in its sole discretion, to effectuate the request of the Requisite
Lenders. Nothing contained herein shall limit the discretion of Agent to take
reserves,
or to
exercise any other discretion granted to Agent in this Agreement.
11.15. Notice
of Default.
Agent
shall not be deemed to have knowledge or notice of the occurrence of any Event
of Default or any event which, with passage of time or giving of notice, could
become an Event of Default, except with respect to Events of Default arising
as
a result of Borrower’s failure to pay principal, interest or fees required to be
paid to Agent for the benefit of Lenders, unless Agent shall have received
written notice from a Lender or Borrower describing such Event of Default or
event which, with the passage of time or giving of notice, could become an
Event
of Default, and which identifies such event as a “notice of default”. Upon
receipt of any such notice or Agent becoming aware of Borrower’s failure to pay
principal, interest or fees required to be paid to Agent for the benefit of
Lenders, Agent will notify each Lender of such receipt or event.
12.
ASSIGNABILITY.
(a) Borrower
shall not have the right to assign this Agreement or any interest therein except
with the prior written consent of Agent and Requisite Lenders.
(b) Each
Lender may, with the consent of Agent and, so long as no Event of Default is
then continuing, the consent of Borrower, which consent shall not be
unreasonably withheld or delayed, but without the consent of any other Lender,
assign to one or more Person all, but not less than all, of its rights and
obligations under this Agreement and the other Loan Documents; provided,
that
(i) for each such assignment, the parties thereto shall execute and deliver
to Agent, for its acceptance and recording in the Register (as defined below),
an Assignment and Acceptance Agreement in a form acceptable to Borrower and
Agent (the “Assignment
and Acceptance”),
and a
processing and recordation fee of Two Thousand Five Hundred and No/100 Dollars
($2,500) to be paid by the assignee (the “Assignment
Fee”),
and
(ii) no such assignment shall be for less than all of such Holder’s Loan
then outstanding. Upon such execution and delivery of the Assignment and
Acceptance to Agent, from and after the date specified as the effective date
in
the Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto, and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, such assignee shall
have the rights and obligations of a Lender hereunder and (y) the assignor
thereunder shall, to the extent that rights and obligations hereunder have
been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement and such Lender shall
cease to be a party hereto).
27
(c) By
executing and delivering an Assignment and Acceptance, the assignee thereunder
confirms and agrees as follows: (i) other than as provided in such
Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement
and
the other Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the other Loan
Documents, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of its obligations under
this Agreement and the other Loan Documents, (iii) such assignee confirms
that it has received a copy of this Agreement and the other Loan Documents,
and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such assignee will, independently and without reliance upon Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own
credit decisions in taking or not taking action under this Agreement,
(v) such assignee appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to Agent by the terms hereof, together with such powers as are
reasonably incidental thereto and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms
of this Agreement are required to be performed by it as a Lender.
(d) Agent
shall maintain at its address a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of Lenders and, and principal amount of the Loans owing to, each
Lender from time to time (the “Register”).
The
entries in the Register shall be conclusive and binding for all purposes, absent
error, and Borrower, Agent and Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register and copies of each Assignment and Acceptance shall
be
available for inspection by Borrower, Agent or any Lender at any reasonable
time
and from time to time upon reasonable prior notice.
(e) Upon
its
receipt of an Assignment and Acceptance executed by an assigning Lender and
the
Assignment Fee, Agent shall, if such Assignment and Acceptance has been
completed and Assignment Fee received (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to Borrower. Within five (5) Business
Days after its receipt of such notice, Borrower shall execute and deliver to
Agent in exchange for the surrendered promissory note or notes, a new promissory
note or notes to the order of the assignee in amounts equal to such assignee’s
outstanding Loans. Such new promissory note or notes shall re-evidence the
indebtedness outstanding under the old promissory note or notes and shall be
in
the aggregate principal amount of such surrendered promissory note or notes,
shall be dated of even date herewith and shall otherwise be in substantially
the
form of the promissory note or notes subject to such
assignment.
28
(f) Each
Lender agrees that, without the prior written consent of Borrower and Agent,
it
will not make any assignment hereunder in any manner or under any circumstances
that would require registration or qualification of, or filings in respect
of,
any Loan or other Liabilities under the securities laws of the United States
of
America or of any jurisdiction.
(g) In
connection with the efforts of any Lender to assign its rights or obligations,
such Lender may disclose any information in its possession regarding
Borrower.
13.
AMENDMENTS,
ETC.
No
amendment or waiver of any provision of this Agreement or any of the other
Loan
Documents, nor consent to any departure by Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by Requisite
Lenders, or if Lenders shall not be parties thereto, by the parties thereto
and
consented to by Requisite Lenders, and each such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, that no amendment, waiver or consent shall, unless
in
writing and signed by all Lenders, do any of the following: (i) reduce the
principal of, or interest on, the Loans (other than as expressly permitted
herein) or any fees hereunder, (ii) postpone any date fixed for any payment
in respect of principal of, or interest on, the Loan or any fees hereunder,
(iii) change the Pro Rata Shares of Lenders, or any minimum requirement
necessary for Lenders or Requisite Lenders to take any action hereunder,
(iv) amend or waive this Section,
or
change the definition of Requisite Lenders, (v) except in connection with
the financing, refinancing, sale or other disposition of any asset of Borrower
permitted under this Agreement (or to the extent Requisite Lender approval
only
is required with any such release), release or subordinate any liens in favor
of
Agent, for the benefit of Agent and Lenders, on any of the Collateral and
provided further, that no amendment, waiver or consent affecting the rights
or
duties of Agent under this Agreement or any other Loan Document shall in any
event be effective, unless in writing and signed by Agent in addition to Lenders
required hereinabove to take such action.
In
the
event that any consent, waiver or amendment requiring the agreement of all
Lenders as set forth above is agreed to by the Requisite Lenders, but not all
Lenders, Agent may, in its sole discretion, cause any non-consenting Lender
to
assign its rights and obligations under this Agreement and the other Loan
Documents to one or more new Lenders or existing Lenders in the manner and
according to the terms set forth in Section
12
of this
Agreement; provided, that (i) no Lender may be required to assign its
rights and obligations to a new Lender because such lender is unwilling to
increase its own loan commitments, (ii) such new Lender must be willing to
consent to the proposed amendment, waiver or consent and (iii) in
connection with such assignment the new Lender pays the assigning Lender an
amount equal to the Liabilities owing to such assigning Lender, including all
principal, accrued and unpaid interest and accrued and unpaid fees to the date
of assignment. Such assignment shall occur within thirty (30) days of notice
by
Agent to such non-consenting Lender of Agent’s intent to cause such
non-consenting Lender to assign its interests hereunder.
29
In
the
event that any consent, waiver or amendment relating to an Event of Default
requiring the agreement of the Requisite Lenders as set forth above is not
agreed to by the Requisite Lenders, Agent may, in its sole discretion, cause
any
non-consenting Lender to assign its rights and obligations under this Agreement
and the other Loan Documents to one or more new Lenders or existing Lenders
in
the manner and according to the terms set forth in Section
12
of this
Agreement; provided, that (i) such new Lender must be willing to consent to
the
proposed amendment, waiver or consent and (ii) in connection with such
assignment the new Lender pays the assigning Lender an amount equal to the
Pro
Rata Share of Liabilities owing to such assigning Lender, including all
principal, accrued and unpaid interest and accrued and an unpaid fees to the
date of assignment other than any pre-payment fee or early termination fee
arising as a result of the assignment. Such assignment shall occur within thirty
(30) days of notice by Agent to such non-consenting Lender of Agent’s intent to
cause such non-consenting Lender to assign its interests hereunder.
14.
NONLIABILITY
OF AGENT AND LENDERS.
The
relationship between Borrower and Lenders shall be solely that of borrower
and
lender and the role of Agent is merely the role of custodial agent for the
Lenders. Neither Agent nor any Lender shall have any fiduciary responsibilities
to Borrower. Neither Agent nor any Lender undertakes any responsibility to
Borrower to review or inform Borrower of any matter in connection with any
phase
of Borrower’s business or operations. Borrower
agrees, that neither the Agent nor any Lender shall have liability to Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by
Borrower in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence
or
willful misconduct of the party from which recovery is sought. Borrower
acknowledges that it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents to which it is
a
party. No joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Agent, the Lenders or among Borrower, Agent and the Lenders.
30
15. INDEMNIFICATION.
Borrower
agrees to defend (with counsel satisfactory to Agent), protect, indemnify and
hold harmless Agent and each Lender, each affiliate or subsidiary of Agent
and
each Lender, and each of their respective shareholders, members, officers,
directors, managers, employees, attorneys and agents (each an “Indemnified Party”)
from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind
or nature (including, without limitation, the disbursements and the reasonable
fees of counsel for each Indemnified Party in connection with any investigative,
administrative or judicial proceeding, whether or not the Indemnified Party
shall be designated a party thereto), which may be imposed on, incurred by,
or
asserted against, any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal, state or local laws or
regulations, including, without limitation, securities laws and regulations,
Environmental Laws and commercial laws and regulations, under common law or
in
equity, or based on contract or otherwise) in any manner relating to or arising
out of this Agreement or any other Loan Documents, or any act, event or
transaction related or attendant thereto, the making or issuance and the
management of the Loans or the use or intended use of the proceeds of the Loans;
provided, however, that Borrower shall not have any obligation hereunder to
any
Indemnified Party with respect to matters caused by or resulting from the
willful misconduct or gross negligence of such Indemnified Party. To the extent
that the undertaking to indemnify set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower
shall satisfy such undertaking to the maximum extent permitted by applicable
law. Any liability, obligation, loss, damage, penalty, cost or expense covered
by this indemnity shall be paid to each Indemnified Party on demand, and,
failing prompt payment, shall, together with interest thereon at the highest
rate then applicable to Loans hereunder from the date incurred by each
Indemnified Party until paid by Borrower, be added to the Liabilities and be
secured by the Collateral. The provisions of this Section
shall
survive the satisfaction and payment of the other Liabilities and the
termination of this Agreement.
16.
NOTICE.
All
notices, demands and other communications relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements
and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt request), overnight courier, electronic mail
(at such email addresses as Borrower, Agent or Lender, as applicable, may
designate to each other in accordance herewith), or telecopy, as the case may
be, at its address set forth below:
|
If
to Borrower:
|
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
General Manager
E-mail:
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
|
31
|
with
copies to:
|
▇▇▇▇▇
▇▇▇▇ LLP
3500
One Kansas City Place
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇. Alt
Fax
No.: ▇▇▇-▇▇▇-▇▇▇▇
E-mail:
▇▇▇▇▇▇.▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
|
|
|
If
to Agent on Behalf of Lenders:
|
State
Bank of ▇▇▇▇▇▇
▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. "Bud" ▇▇▇▇▇▇▇
|
|
|
with
copies to:
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Polsinelli
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Suelthaus PC
▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Direct:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
|
Each
party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
parties. All notices or demands sent in accordance with this Section,
other
than notices by Agent in connection with enforcement rights against the Borrower
or Collateral under the provisions of the Uniform Commercial Code, shall be
deemed received (i) with respect to notices sent by first-class, registered
or
certified mail, on the date of actual receipt (or refusal), (ii) with respect
to
notices sent by overnight courier, on the date of actual receipt or refusal
and
(iii) with respect to notices sent by electronic mail or telecopy, upon
confirmation of receipt thereof. Borrower acknowledges and agrees that notices
sent by Agent in connection with exercise of enforcement rights against
Collateral under the provisions of the Uniform Commercial Code shall be deemed
sent when deposited in the mail or personally delivered, or, where permitted
by
law, transmitted by telecopy or any other method set forth above.
17.
CHOICE
OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.
This
Agreement and the other Loan Documents are submitted by Borrower to Agent and
Lenders for their acceptance or rejection at Agent’s principal place of business
as an offer by Borrower and the other Borrowers for Borrower to borrow monies
from Lenders now and from time to time hereafter, and shall not be binding
upon
Agent or any Lender or become effective until accepted by Agent on behalf of
Lenders, in writing, at said place of business. If so accepted by Agent and
Lenders, this Agreement and the other Loan Documents shall be deemed to have
been made at said place of business. THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED AND CONTROLLED BY
THE
INTERNAL LAWS OF THE STATE OF MISSOURI AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT
LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, BUT EXCLUDING
PERFECTION OF THE SECURITY INTERESTS IN COLLATERAL LOCATED OUTSIDE OF THE STATE
OF MISSOURI, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT
JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED.
If any
provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or remaining provisions of this Agreement.
32
To
induce
Agent and Lenders to accept this Agreement, Borrower irrevocably agrees that,
subject to Agent’s sole and absolute election, ALL
ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM
OR
RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE COLLATERAL SHALL
BE
LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF KANSAS CITY, STATE OF
MISSOURI. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL,
STATE OR FEDERAL COURTS LOCATED WITHIN SAID CITY AND STATE. BORROWER
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH FOR
NOTICE IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS
AFTER THE SAME HAS BEEN POSTED.
BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT AGAINST BORROWER BY
AGENT FOR LENDERS IN ACCORDANCE WITH THIS SECTION.
18.
HEADINGS
OF SUBDIVISIONS.
The
headings of subdivisions in this Agreement are for convenience of reference
only, and shall not govern the interpretation of any of the provisions of this
Agreement.
19.
POWER
OF ATTORNEY.
Borrower
acknowledges and agrees that its appointment of Agent as its attorney and
agent-in-fact for the purposes specified in this Agreement is an appointment
coupled with an interest and shall be irrevocable until all of the Liabilities
are satisfied and paid in full and this Agreement is terminated.
33
20. CONFIDENTIALITY.
Borrower,
Agent and each Lender hereby agrees to use commercially reasonable efforts
to
assure that any and all information relating to Borrower which is
(i) furnished by Borrower to Agent or any Lender (or to any affiliate of
Agent or any Lender); and (ii) non-public, confidential or proprietary in
nature, shall be kept confidential by Agent and such Lender or such affiliate
in
accordance with applicable law; provided, however, that such information and
other credit information relating to Borrower may be distributed by such party
to such party’s directors, officers, employees, attorneys, affiliates,
assignees, participants, auditors, agents and regulators, to Agent and any
other
Lender and upon the order of a court or other governmental agency having
jurisdiction over Agent or such Lender or such affiliate, to any other party.
In
addition such information and other credit information may be distributed by
Agent or any Lender to potential assignees of any portion of the Liabilities,
provided, that such potential assignee agrees to follow the confidentiality
requirements set forth herein. Borrower, Agent and each Lender further agree
that this provision shall survive the termination of this
Agreement.
21.
COUNTERPARTS.
This
Agreement, any of the other Loan Documents and any amendments, waivers, consents
or supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all of which counterparts together
shall constitute but one agreement.
22.
WAIVER
OF JURY TRIAL; OTHER WAIVERS.
(a) BORROWER,
AGENT AND EACH LENDER EACH HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS AGREEMENT,
ANY OF THE OTHER LOAN DOCUMENTS, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED
TORTUOUS CONDUCT BY BORROWER, AGENT OR SUCH LENDER OR WHICH, IN ANY WAY,
DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP AMONG
BORROWER, AGENT AND LENDERS. IN NO EVENT SHALL AGENT OR ANY LENDER BE LIABLE
FOR
LOST PROFITS OR OTHER SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
(b) Borrower
hereby waives demand, presentment, protest and notice of nonpayment, and further
waives the benefit of all valuation, appraisal and exemption laws.
(c) Borrower
hereby waives the benefit of any law that would otherwise restrict or limit
Agent or any Lender or any affiliate of Agent or any Lender in the exercise
of
its right, which is hereby acknowledged and agreed to, to set-off against the
Liabilities, without notice at any time hereafter, any indebtedness, matured
or
unmatured, owing by Agent or any Lender or such affiliate of Agent or any Lender
to Borrower, including, without limitation, any Deposit Account at Agent or
any
Lender or such affiliate.
34
(d) BORROWER
HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE
BY AGENT OR LENDER OF ITS RIGHTS TO REPOSSESS THE COLLATERAL OF BORROWER WITHOUT
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON SUCH COLLATERAL, PROVIDED,
THAT IN THE EVENT THAT AGENT SEEKS TO ENFORCE ITS RIGHTS HEREUNDER BY JUDICIAL
PROCESS OR SELF HELP, AGENT SHALL PROVIDE BORROWER WITH SUCH NOTICES AS ARE
REQUIRED BY LAW.
(e) Agent’s
and/or Lenders’ failure, at any time or times hereafter, to require strict
performance by Borrower of any provision of this Agreement or any of the other
Loan Documents shall not waive, affect or diminish any right of Agent or any
Lender thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by Agent or any Lender of an Event of Default under this
Agreement or any default under any of the other Loan Documents shall not
suspend, waive or affect any other Event of Default under this Agreement or
any
other default under any of the other Loan Documents, whether the same is prior
or subsequent thereto and whether of the same or of a different kind or
character. No delay on the part of Agent or any Lender in the exercise of any
right or remedy under this Agreement or any other Loan Documents shall preclude
other or further exercise thereof or the exercise of any right or remedy. None
of the undertakings, agreements, warranties, covenants and representations
of
Borrower contained in this Agreement or any of the other Loan Documents and
no
Event of Default under this Agreement or default under any of the other Loan
Documents shall be deemed to have been suspended or waived by Agent and/or
Lenders unless such suspension or waiver is in writing, signed by a duly
authorized officer of Agent, Requisite Lenders or all Lenders, as required
herein, and directed to Borrower specifying such suspension or
waiver.
23.
STATUTORY
NOTICE.
ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWERS) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
[Signature
page follows]
35
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the
date first written above.
|
BORROWER:
|
|
|
limited
liability company
|
|
|
By
|
|
|
Print Name:
|
|
|
Title
|
|
|
STATE
BANK OF ▇▇▇▇▇▇
|
|
|
By
|
|
2
EXHIBIT
A — BUSINESS AND COLLATERAL LOCATIONS
Attached
to and made a part of that certain Loan and Security Agreement of even date
herewith among SHOW ME ETHANOL, LLC, a Missouri limited liability company
(“Borrower”)
and
the State Bank of ▇▇▇▇▇▇ as Agent and all Lenders from time to time a party
hereto.
|
A.
|
Business
locations (please indicate which location is the principal place
of
business and at which locations originals and all copies of books,
records
and accounts are kept).
|
1.
Show
Me Ethanol, LLC, P. O. Box 9, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇
|
B.
|
Other
locations of Collateral (including, without limitation, warehouse
locations, processing locations, consignment locations) and all post
office boxes. Please indicate the relationship of such location to
Borrower (i.e. public warehouse, processor,
etc.).
|
1. Borrower: N/A
|
C.
|
Bank
Accounts:
|
|
Bank
(with address)
|
Account
Number
|
Type
of Account
|
||||
|
1. Borrower:
|
FCS
Financial
▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
|
1178302700
|
DDA
|
|||
|
(i)
|
Bank
Midwest, NA
▇▇▇▇
▇▇▇▇ ▇▇
▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
|
5406000673
|
DDA
|
SCHEDULE
6.2
|
Form
of organization:
|
Limited
liability company
|
|
|
Organizational
identification number:
|
LC0712521
|