CREDIT AGREEMENT Dated as of January 4, 2008 between DOCUMENT SECURITY SYSTEMS, INC. as Borrower, and FAGENSON & CO, INC. as Agent for Lenders.
Dated
as
of January 4, 2008
between
DOCUMENT
SECURITY SYSTEMS, INC.
as
Borrower,
and
FAGENSON
& CO, INC.
as
Agent
for Lenders.
Credit
Agreement (“Agreement”), made January 4, 2008 by and between DOCUMENT SECURITY
SYSTEMS, INC. (the “Company”) and FAGENSON & CO, INC.
(“Agent”).
WITNESSETH:
WHEREAS,
the Agent has agreed to act as agent for those certain lenders listed on
Exhibit
A attached hereto (“Lenders”) to loan certain funds to the Company, and the
Company has agreed to borrow certain funds from Lenders, subject to the terms
and conditions set forth therein;
NOW
THEREFORE, in consideration of the terms and conditions contained herein,
and of
any loans or extensions of credit heretofore, now or hereafter made to or
for
the benefit of the Company by the Agent (all of said loans hereafter referred
to
as the “Loans”), the parties hereto hereby agree as follows:
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1.
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DEFINITIONS.
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1.1. General
Terms.
When
used herein, the following terms shall have the following meanings:
(i) “Acquisition”
means
any transaction, or any series of related transactions, consummated on or
after
the date of this Agreement, by which Company (i) acquires any going business
or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power
for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or
voting
power) of the outstanding partnership interests of a partnership.
(ii) “Affiliate”
shall
mean any Person (1) which directly or indirectly controls, or is controlled
by, or is under common control with the Company or a Subsidiary; (2) which
directly or indirectly beneficially owns or holds five percent (5%) or more
of
any class of voting stock of the Company or any Subsidiary; or (3) five
percent (5%) or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Company or a Subsidiary. The term “control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through
the
ownership of voting securities, by contract, or otherwise.
(iii) “Available
Principal Balance”
shall
mean an amount equal to the Maximum Revolving Facility the outstanding principal
balance of Revolving Credit Loans.
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(iv) “Business
Day”
means
any day other than a Saturday, Sunday, or other day on which commercial lenders
in New York, New York are authorized or required to close under the laws
of the
State of New York.
(v) “Capital
Lease”
means
all leases which have been or should be capitalized on the books of the lessee
in accordance with GAAP.
(vi) “Code”
means
the Internal Revenue Code of 1986, as amended from time to time, and the
regulations and published interpretations thereof.
(vii) “Debt”
means
(1) indebtedness or liability for borrowed money; (2) obligations evidenced
by
bonds, debentures, notes, or other similar instruments; (3) obligations for
the
deferred purchase price of property or services (including trade obligations);
(4) obligations as lessee under Capital Leases; (5) current liabilities in
respect of unfunded vested benefits under Plans covered by ERISA; (6)
obligations under letters of credit; (7) obligations under acceptance
facilities; (8) all guaranties, endorsements (other than for collection of
deposit in the ordinary course of business), and other contingent obligations
to
purchase, to provide funds for payment, to supply funds to invest in any
Person
or entity, or otherwise to assure a creditor against loss; and (9) obligations
secured by any Liens, whether or not the obligations have been
assumed.
(viii) “Default”
shall
mean the occurrence or existence of any one or more of the following
events.
(a) The
Company fails to pay any of its material “Liabilities” (as hereinafter
defined) when due and said failure continues for a period of thirty (30)
days
after written notice of same from the Agent to the Company;
(b) Company
fails or neglects to perform, keep or observe any of the covenants, conditions
or agreements contained in this Agreement (other than those as stated in
Sections 5.1, 5.2, 5.3 and 5.8, and all negative covenants contained in Section
6 hereof with respect to all of which no notice and cure period shall be
applicable; and those stated in Section 5.9 which shall not be considered
a
ground of Default unless the failure to comply with same continues for a
period
of fifteen (15) days after written notice of same from the Agent to the Company)
or in any of the other Loan Documents executed by Company and said failure
continues for a period of thirty (30) days after written notice of same from
the
Agent to the Company;
(c) Any
warranty or representation now or hereafter made by the Company in connection
with this Agreement or any of the other Loan Documents is untrue or incorrect
in
any material respect, or any schedule, certificate, statement, report, financial
data, notice, or writing furnished at any time by the Company to the Agent
is
untrue or incorrect in any material respect, on the date as of which the
facts
set forth therein are stated or certified;
(d) A
proceeding under any Bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed
against
Company which is not dismissed within sixty (60) days of its filing, or a
proceeding under any Bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed
by
Company or the Company makes an assignment for the benefit of creditors or
Company takes any corporate action to authorize any of the
foregoing;
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(e) Company
voluntarily or involuntarily dissolves or is dissolved, terminates or is
terminated;
(f) Company
becomes insolvent or fails generally to pay its debts as they become due,
including with access to the Available Principal Balance, and said failure
continues for a period of thirty (30) days after written notice of same from
the
Agent to the Company;
(g) A
default
under any of the other Transaction Documents;
(h) One
or
more judgments, decrees, or judicial orders for the payment of money which
in
the aggregate, in any fiscal year of Company, exceeds $250,000.00 shall be
rendered against the Company or any of its Subsidiaries, and such judgments,
decrees, or judicial orders shall continue unsatisfied and in effect for
a
period of thirty (30) consecutive days without being vacated, discharged,
satisfied, or stayed or appealed;
(ix) “GAAP”
means
generally accepted accounting principles in the United States.
(x) “Liabilities”
shall
mean all of Company’s liabilities, obligations, and indebtedness to Agent of any
and every kind and nature, whether heretofore, now or hereafter owing, arising,
due or payable and howsoever evidenced, created, incurred, acquired, or owing,
whether primary, secondary, direct, contingent, fixed or otherwise (including
obligations of performance and all Rate Hedging Obligations) whether arising
under or in accordance with the Transaction Documents or otherwise.
(xi) “LIBOR
Loan”
means
any Loan when and to the extent that the interest rate therefor is determined
by
reference to the one-year LIBOR Interest Rate.
(xii) “Lien”
means
any mortgage, deed of trust, pledge, security interest, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
or
preference, priority, or other security agreement or preferential arrangement,
charge, or encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the New York Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of
the
foregoing).
(xiii) “Maximum
Revolving Commitment”
shall
mean $3,000,000.00.
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(xiv) “Permitted
Liens”
shall
mean (i) Liens securing the payment of taxes, either not yet due or the
validity amount or imposition of which is being contested in good faith by
appropriate proceedings, (ii) the Liens and security interests in favor of
the Agent, (iii) currently existing Liens as of the date of the Agreement,
(iv)
Liens securing the repayment of indebtedness of the Company to ▇▇▇▇▇▇▇ ▇▇▇▇▇,
(v) purchase money liens to third parties in connection with new equipment
purchases or Capital Leases provided the aggregate purchase price for said
equipment and total lease payments under any Capital Leases does not exceed
$150,000 in any fiscal year of Company.
(xv) “Person”
shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, institution, entity,
party, or government (whether national, federal, state, provincial, county,
city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
(xvi) “Principal
Office”
means
the Agent’s office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
(xvii) “Rate
Hedging Obligations”
shall
mean any and all obligations of the Company or any Subsidiary, whether absolute
or contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements designed to protect
the Company or any Subsidiary from the fluctuations of interest rates, exchange
rates or forward rates applicable to such party’s assets, liabilities or
exchange transactions, including, but not limited to: interest rate swap
agreements, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap, floor
or
collar agreements, forward rate currency agreements or agreements relating
to
interest rate options, puts and warrants, and (ii) any and all agreements
relating to cancellations, buy backs, reversals, terminations or assignments
of
any of the foregoing.
(xviii) “Regulation
D”
means
Regulation D of the Board of Governors of the Federal Reserve System as amended
or supplemented from time to time.
(xix) “Revolving
Credit Loans”
shall
have the meaning assigned to such term in Section 2.1.
(xx) “Revolving
Note”
shall
mean that certain Three Million and No/100 Dollar ($3,000,000.00) note dated
of
even date herewith substantially in the form of Exhibit B
hereto
executed by Company and made payable to the order of Agent.
(xxi) “Security
Agreement”
shall
mean a security agreement encumbering all of the stock of the Company’s wholly
owned Plastic Printing Professionals, Inc. subsidiary to secure the Company’s
obligations hereunder, substantially in the form of Exhibit
A
hereto.
(xxii) “Subsidiary”
shall
mean, as to the Company, a corporation of which shares of stock having ordinary
voting power (other than stock having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation are at the time owned, or the management of
which
is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by the Company.
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(xxiii) “Termination
Date”
shall
mean January 4, 2010.
(xxiv) “Transaction
Document(s)”
means
this Agreement, the Revolving Note, and the Pledge and Security
Agreement.
1.2. Accounting
Terms.
Any
accounting terms used in this Agreement which are not specifically defined
herein shall have the meanings customarily given them in accordance with
GAAP.
1.3. Others
Defined in New York Uniform Commercial Code.
All
other terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings provided by the Uniform
Commercial Code of the State of New York (the “Commercial Code”) to the extent
the same are used or defined therein.
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2.
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CREDIT.
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2.1. Revolving
Loan.
If a
Default does not exist, and subject to the provisions of Article 3 below,
the Agent shall, until but not after the Termination Date, advance to the
Company on behalf of the Lenders, on a revolving credit basis loans (the
“Revolving Credit Loans”), in an amount not to exceed at any time the Available
Principal Balance. Subject to Section 2.2, each Revolving Credit Loan to
the Company shall, on the day of such advance be deposited, in immediately
available funds, in such account as the Company may, from time to time,
designate. The indebtedness of Company under all Revolving Credit Loans shall
be
evidenced by the Revolving Note. Each Revolving Credit Loan shall be in an
amount not less than Twenty-Five Thousand and No/100 ($25,000.00) Dollars.
Within the terms of this Agreement, the Company may borrow, repay pursuant
to
Section 2.6, and reborrow under this Section 2.1.
2.2. Maximum
Principal Balance of Revolving Loan.
The
aggregate outstanding principal balance of all Revolving Credit Loans shall
at
no time exceed the Maximum Revolving Commitment. The aggregate outstanding
principal balance of the Revolving Credit Loans at any time shall be the
amounts
advanced from time to time to Company and not repaid under Section 2.6. The
Company agrees that if at any time any such excess shall arise, the Company
shall upon written request of Agent immediately pay to the Agent such amount
as
may be necessary to eliminate such excess.
2.3. Notice
and Manner of Borrowing.
The
Company shall give the Agent written (including via e-mail) or telefax notice
(effective upon receipt) of any Revolving Credit Loans under this Agreement,
at
least three (3) Business
Days before any Revolving Credit Loan specifying: (1) the date of such Loan;
and
(2) the amount of such Loan. Not later than 1:00 P.M. New York City time
on the
date of such Revolving Credit Loan and upon fulfillment of the applicable
conditions set forth herein, the Agent will make such Revolving Credit Loan
available to the Company in immediately available funds by crediting the
amount
thereof to the applicable account of the Company.
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2.4. Interest.
The
Company shall pay interest to the Agent for the account of the Lenders on
the
outstanding and unpaid principal amount of the Revolving Credit Loans made
under
this Agreement at a rate of two percent (2%) in excess of the then in effect
one-year LIBOR rate per annum. Interest shall be calculated on the basis
of a
year of 360 days for the actual number of days elapsed. The Company shall
pay
interest quarterly in arrears no later than the tenth day of each calendar
quarter commencing with the first calendar quarter following the disbursement
of
any Revolving Credit Loan. Any principal amount not paid when due (at maturity,
by acceleration or otherwise) shall bear interest thereafter until paid in
full,
payable on demand, at a rate per annum equal to four (4%) percent over the
then
applicable interest rate due under each Loan (the “Default Rate”).
2.5. Prepayments.
The
Company may prepay any Loan upon at least two (2) Business Days’ notice to the
Agent in whole or in part with accrued interest to the date of such prepayment
on the amount prepaid.
2.6. Method
of Payment.
The
Company shall make each payment under this Agreement and under the Revolving
Note not later than 2:00 P.M. New York time on the date when due in lawful
money
of the United States to the Agent at its Principal Office in immediately
available funds. The Company hereby authorizes the Agent, if and to the extent
payment is not made when due under this Agreement or under the Revolving
Note,
to offset from any funds of the Company in any capacity with the Agent any
amount so due. Whenever any payment to be made under this Agreement or under
the
Revolving Note shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of interest, as the case may be.
2.7.
Use
of Proceeds.
The
Company will use the proceeds of the Loans in accordance with a current
operating budget as provided to Agent or as otherwise approved by Agent.
The
Company will not use any of the proceeds of the Loans to purchase or carry
any
“margin stock” (as defied in Regulation U of the Board of Governors of the
Federal Reserve System) or to make any Acquisition without the consent of
the
Agent. The Company’s use of the proceeds of any advances and readvances made by
the Agent to the Company pursuant to this Agreement are, and will continue
to
be, legal and proper corporate uses (duly authorized by its Board of Directors,
if necessary pursuant to applicable corporate law, rule or regulation) and
such
uses are and will be consistent with all applicable laws and statutes, as
in
effect as of the date hereof.
2.8. Illegality.
Notwithstanding any other provision in this Agreement, if the Agent reasonably
determines that any applicable law, rule, or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by the Agent with
any
request or directive (whether or not having the force of law) of any such
authority, central bank, or comparable agency shall make it unlawful or
impossible for the Agent to maintain its commitment under this Agreement,
then
upon notice to the Company by the Agent the commitment of the Agent under
this
Agreement shall terminate; and the outstanding principal amount of the Loans,
together with interest accrued thereon, and any other amounts payable to
the
Agent on behalf of Lenders under this Agreement shall be repaid (a) immediately
upon demand of the Agent if such change or compliance with such request,
in the
judgment of the Agent, requires immediate repayment; or (b) at the conclusion
of
the last calendar month before the effective date of any such change or
request.
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2.9. Increased
Cost.
The
Company shall pay to the Agent from time to time such reasonable amounts
as the
Agent may determine to be necessary to compensate the Agent for any costs
incurred by the Agent which Agent determines are attributable to its making
or
maintaining any Loans on behalf of the Lenders hereunder or its obligation
to
make any such Loans on behalf of the Lenders hereunder, or any reduction
in any
amount receivable by the Agent under this Agreement or the Revolving Note
in
respect of any such loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called “Additional Costs”),
resulting from any change after the date of this Agreement in U.S. federal,
state, municipal, or foreign laws or regulations (including Regulation D
and any
applicable currency reserve requirements), or the adoption or making after
such
date of any interpretations, directives, or requirements applying to a class
of
Agents including the Agent of or under any U.S. federal, state, municipal,
or
any foreign laws or regulations (whether or not having the force of law)
by any
court or governmental or monetary authority charged with the interpretation
or
administration thereof (“Regulatory Change”), which: (1) changes the basis of
taxation of any amounts payable to the Agent under this Agreement or the
Revolving Note in respect of any of such Loans (other than taxes imposed
on the
overall net income of the Agent for any of such Loans by the jurisdiction
where
the Principal Office is located); or (2) imposes or modifies any reserve,
special deposit, compulsory loan, or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, the Agent; or (3) imposes any other conditions affecting
this
Agreement or the Revolving Note (or any of such extensions of credit or
liabilities). The Agent will notify the Company in writing of any event
occurring after the date of this Agreement which will entitle the Agent to
compensation pursuant to this Section 2.9 as promptly as practicable after
it
obtains knowledge thereof and determines to request such
compensation.
Reasonable
determinations by the Agent for purposes of this Section 2.9 of the effect
of
any Regulatory Change on its costs of making or maintaining Loans or on amounts
receivable by it in respect of Loans, and of the additional amounts required
to
compensate the Agent in respect of any Additional Costs, shall be conclusive,
provided that such determinations are made on a reasonable basis, are not
subject to manifest error and the written basis for said determinations are
given to Company.
2.10. Risk-Based
Capital.
In the
event the Agent determines that (1) compliance with any judicial,
administrative, or other governmental interpretation of any law or regulation
or
(2) compliance by Agent or any corporation controlling the Agent with any
guideline or request from any central lender or other governmental authority
(whether or not having the force of law) has the effect of requiring an increase
in the amount of capital required or expected to be maintained by the Agent
or
any corporation controlling the Agent, and the Agent determines that such
increase is based upon its obligations hereunder, and other similar obligations,
the Company shall pay to the Agent such additional amount as shall be certified
by the Agent to be the amount allocable to the Agent’s obligations to the
Company hereunder. The Agent will notify the Company in writing of any event
occurring after the date of this Agreement that will entitle the Agent to
compensation pursuant to this Section 2.10 as promptly as practicable after
it
obtains knowledge thereof and determines to request such
compensation.
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Determinations
by the Agent for purposes of this Section 2.10 of the effect of any increase
in
the amount of capital required to be maintained by the Agent and of the amount
allocable to the Agent’s obligations to the Company hereunder shall be
conclusive, provided that such determinations are made on a reasonable basis,
are not subject to manifest error and the written basis for said determinations
are given to Company.
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3.
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CONDITIONS
OF ADVANCES.
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Notwithstanding
any other provisions contained in this Agreement, the making of any advance
in
connection with any Revolving Loan shall be conditioned upon the
following:
3.1. Representations
and Warranties
(i) The
following statements shall be true on and as of the date of each advance
as
though made on and as of such date; and
(ii) No
Default has occurred and is continuing, or would result from such advance;
and
(iii) The
Agent
shall have received the executed Transaction Documents in a form and content
reasonably acceptable to Agent; and
(iv) The
Agent
shall have received such other approvals, opinions, or documents as the Agent
may reasonably request including but not limited to an opinion of counsel
to
Company, in a form and content acceptable to Agent; and tax, judgment, pending
litigation and Uniform Commercial Code searches showing no matters objectionable
to Agent.
3.2. Financial
Condition.
No
material adverse change, as determined by Agent in its reasonable discretion,
in
the financial condition or operations of the Company, shall have occurred
and be
continuing at any time or times subsequent to, as applicable the most recent
financial statement provided by the Company. In no event shall Agent’s agreement
to continue to honor requests for advances be deemed to constitute a waiver
by
the Agent of its absolute right at any time in the future to notify the Company
of a material adverse change in the financial condition or operations of
the
Company, based upon information in the possession of Agent prior to any advance
of funds hereunder.
3.3. Security
Agreement.
The
Security Agreement shall be duly executed and delivered by the Company, and
shall be validly enforceable in accordance with its terms.
3.4. No
Default.
No
Default shall have occurred and be continuing under this Agreement or any
of the
Transaction Documents.
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3.5. Completeness
of Representations.
The
representations and warranties set forth in the Transaction Documents shall,
as
of the date hereof, be true, correct and complete in all respects.
3.6. Maximum
Quarterly Advances.
Unless
the Company and Agent otherwise mutually agree, the Agent shall not advance
to
the Company pursuant to the Revolving Credit Loans an amount that exceeds
$400,000 per calendar quarter; provided, however, that the Company shall
be
advanced up to an aggregate of $600,000 to pay for bills related directly
or
indirectly to attorneys’ fees and costs and expenses related to current or
future patent litigation in Europe (collectively, “Legal Fees”) and such advance
to pay Legal Fees shall not be included in the calculation of such $400,000
per
calendar quarter maximum.
3.7. Other
Requirements.
Agent
shall have received, in form and substance reasonably satisfactory to Agent,
all
certificates, orders, authorities, consents, affidavits, schedules, instruments,
security agreements, financing statements, mortgages, financial statements
including any other documents which carry out the purposes of this Agreement
and
which are provided for hereunder, or which Agent may at any time reasonably
request.
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4.
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REPRESENTATIONS
AND WARRANTIES.
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The
Company represents and warrants that as of the date of the execution of this
Agreement, and continuing so long as any Liabilities remain outstanding,
and
(even if there shall be no Liabilities outstanding) so long as this Agreement
remains in effect:
4.1. Corporate
Existence.
The
Company is a corporation duly organized and in good standing under the laws
of
the state of its incorporation or such other state as may be permitted under
this Agreement. The Company is duly qualified as a foreign corporation and
in
good standing in all other states or jurisdictions, whether foreign or domestic,
where the nature and extent of the business transacted by it or the ownership
of
its assets makes such qualification necessary.
4.2. Corporate
Authority.
The
execution and delivery by the Company of this Agreement and of all of the
other
Transaction Documents by Company to which it is a party and the performance
of
the Company’s obligations hereunder and of Company’s obligations thereunder:
(i) are within the Company’s corporate powers; (ii) are duly
authorized by the Company’s Board of Directors and, if necessary, the Company’s
stockholders; (iii) are not in contravention of the terms of the Company’s
Articles of Incorporation, Charter, or By-Laws, or any other organizational
documents or of any indenture, agreement or undertaking to which the Company
is
a party or by which the Company or any of its property is bound; (iv) do
not, as of the execution hereof, require any governmental consent, registration
or approval; (v) to the best of the Company’s knowledge, do not contravene
any contractual or governmental restriction binding upon the
Company.
4.3. Financial
Data.
The
financial statements to be furnished to the Agent will be in accordance with
the
books and records of the Company and will fairly present the financial condition
of the Company at the dates thereof and the results of operations for the
periods indicated (subject, in the case of unaudited financial statements,
to
normal year-end adjustments), and such financial statements will be prepared
in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved. All information, reports and other papers
and
data furnished to the Agent are or will be, at the time the same are so
furnished to the Agent, accurate, correct and complete in all material
respects.
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4.4. Collateral.
Except
for Permitted Liens, all of the property of Company is and will continue
to be
owned by the Company, has been fully paid for (except for Debt relating to
Permitted Liens) and is free and clear of all security interests, liens,
claims,
and encumbrances.
4.5. Solvency.
After
taking into account the funds available under this Agreement, the Company
is
solvent, is able to pay its debts as they become due and has capital sufficient
to carry on its businesses and all business in which it is about to engage.
The
Company will not be rendered insolvent by the execution and delivery of this
Agreement or any of the Loan Documents to which it is a signatory or by the
transactions contemplated hereunder or thereunder.
4.6. Chief
Place of Business.
As of
the execution hereof, the principal place of business of the Company is located
at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. If any change in
such
location occurs, the Company shall promptly notify the Agent thereof. As
of the
execution hereof, the books and records of the Company and all chattel paper
and
all records of account are located at the aforesaid office of the Company
and if
any change in such location occurs, the Company shall promptly notify the
Agent
thereof.
4.7. Other
Corporate Names.
As of
the date hereof, the Company is not using any corporate or fictitious names
other than the corporate name shown on the Company’s Articles of Incorporation
or other applicable charter or organizational documents.
4.8. Tax
Liabilities.
The
Company will file and will cause any Subsidiary to file all federal, state
and
local tax reports and returns required by any US or other applicable law
or
regulation to be filed by it or said Subsidiary, except for extensions duly
obtained, and has either duly paid all taxes, duties and charges indicated
due
on the basis of such returns and reports, or made adequate provision for
the
payment thereof, and the assessment of any material amount of additional
taxes
in excess of those paid and reported is not reasonably expected. The Company
believes that the reserves for taxes reflected on the balance sheets of Company
submitted to Agent in accordance with this Agreement will be adequate in
amount
for the payment of all liabilities for all taxes (whether or not disputed)
of
the Company accrued through the date of such balance sheet. There are no
material unresolved questions or claims concerning any tax liability of the
Company.
4.9. Contingent
Obligations.
Except
as specifically referenced in the financial statements described in this
Agreement and delivered to Agent prior to the date hereof or other than as
permitted by this Agreement, the Company has not guaranteed the obligation
of
any other Person.
4.10. Margin
Security.
The
Company’s execution and delivery of this Agreement and each of the Loan
Documents to which it is a party does not directly or indirectly violate
or
result in a violation of Section 7 of the Securities Exchange Act of 1934,
as
amended, or any regulations issued pursuant thereto, including without
limitation, Regulation U, G, T or X of the Board of Governors of the Federal
Reserve System (12 CFR 221, 207, 220 and 224, respectively; “Regulation U”,
“Regulation G”, “Regulation T” and “Regulation X”, respectively) and Company
does not own or intend to purchase or carry any “margin security,” as defined in
Regulations U, G, T or X.
11
4.11. Survival
of Warranties.
All
representations and warranties contained in this Agreement or any of the
other
Loan Documents shall survive the execution and delivery of this
Agreement.
4.12. Litigation
and Proceedings.
Other
than as disclosed in the Company’s filings with the Securities and Exchange
Commission, there are no judgments outstanding against the Company or any
Subsidiary and, there is no pending or, to the Company’s knowledge, threatened
litigation, contested claim, or governmental proceeding by or against the
Company which would have a materially adverse effect on the financial condition
or operation of the Company.
4.13. Other
Agreements.
The
Company is not in default under any material contract, lease, loan, mortgage,
or
indenture to which it is a party or by which it or its property is bound
which
would have a materially adverse effect on the financial condition or operation
of the Company.
4.14. Compliance
with Laws and Regulations.
The
execution and delivery by the Company of this Agreement and the execution
and
delivery by the Company of all of the other Loan Documents to which it is
a
signatory and the performance of the Company’s obligations hereunder and the
Company’s obligations thereunder are not in contravention of any law or laws.
The Company is in material compliance with all laws, orders, regulations
and
ordinances of all federal, foreign, state and local governmental authorities
relating to the business operations and the assets of the Company.
4.15. Patents,
Trademarks and Licenses.
The
Company possesses adequate assets, licenses, patents, patent applications,
copyrights, service marks, trademarks and trade names to continue to conduct
its
businesses as heretofore conducted by it.
4.16. Enforceable
Agreement.
This
Agreement is, and each of the other Loan Documents when delivered under this
Agreement will be, legal, valid, and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except to the extent that such enforcement may be limited by applicable
Bankruptcy, insolvency, and other similar laws affecting creditors’ rights
generally.
4.17. Material
Adverse Change.
There
has been no material and adverse change in the assets, liabilities or financial
or other condition of the Company since the date of any of the Financial
Statements delivered to Agent under this Agreement.
|
5.
|
AFFIRMATIVE
COVENANTS.
|
The
Company covenants and agrees that so long as any Liabilities remain outstanding,
and (even if there shall be no Liabilities outstanding) so long as this
Agreement remains in effect:
5.1. Financial
Statements.
The
Company shall keep and cause each Subsidiary to keep proper books of record
and
account in which full and true entries will be made of all dealings or
transactions of or in relation to the businesses and affairs of the Company
in
accordance with GAAP consistently applied.
12
5.2. Inspection.
The
Agent, or any Person designated by Agent in writing, shall have the right,
from
time to time hereafter, to call at the Company’s place or places of business
during reasonable business hours upon three (3) days prior notice, and, without
hindrance or delay, (i) to inspect, audit, check and make copies of and
extracts from the Company’s and Subsidiary’s respective books, records,
journals, orders, receipts and any correspondence and other data relating
to the
Company’s and any Subsidiary’s businesses or to any transactions between the
parties hereto, and (ii) to discuss the respective affairs, finances and
businesses of the Company and any Subsidiary with any of the respective
officers, employees or directors of the Company or Subsidiary.
5.3. Conduct
of Business.
The
Company shall maintain its corporate existence, shall maintain in full force
and
effect all licenses, bonds, franchises, leases, trademarks, patents, contracts
and other rights necessary or reasonably desirable to the profitable conduct
of
its businesses, shall continue in, and limit its operations to, the same
general
type of business as that presently conducted by it and shall comply in all
material respects with all applicable laws and regulations of any federal,
state
or local governmental authority.
5.4. Claims
and Taxes.
The
Company agrees to indemnify and hold the Agent harmless from and against
any and
all claims, demands, liabilities, losses, damages, penalties, costs, and
expenses (including reasonable attorneys’ fees) relating to or in any way
arising out of the possession, use, operation or control of any of the Company’s
assets. The Company shall pay or cause to be paid all license fees, bonding
premiums and related taxes and charges, and shall pay or cause to be paid
all
taxes, assessments and government charges or levies on it or its properties,
at
such times and in such manner as to prevent any penalty from accruing or
any
lien or charge from attaching to such property, provided that the Company
shall
have the right to contest in good faith, by an appropriate proceeding promptly
initiated and diligently conducted, the validity, amount or imposition of
any
such tax, assessment, charge or levy.
5.5. Agent’s
Closing Costs and Expenses.
The
Company shall reimburse the Agent on demand for all reasonable expenses and
fees
paid or incurred in connection with the documentation, negotiation and closing
of the transactions described herein, including, without limitation, filing
and
recording fees and reasonable attorneys’ fees of Agent’s counsel.
5.6. Maintain
Property.
The
Company will maintain its property in good condition (reasonable wear and
tear
excepted) and make all necessary renewals, repairs, replacements, additions,
betterments and improvements thereto.
5.7. Company’s
Property and Liability Insurance.
The
Company shall at its expense, keep and maintain its assets insured against
loss
or damage by fire, theft, explosion, spoilage and all other hazards and risks
ordinarily insured against by other owners or users of such properties in
similar businesses in an amount reasonably acceptable to Agent. All such
policies of insurance shall be in form and substance satisfactory to Agent.
In
addition, Company shall maintain adequate liability insurance in an amount,
form
and content reasonably acceptable to Agent.
5.8. Notice
of Suit or Adverse Change in Business.
The
Company shall, as soon as possible, and in any event within fifteen (15)
days
after it learns of the following, give written notice to the Agent of
(i) any material proceeding(s) being instituted by or against the Company
or any Subsidiary, in any federal, state, local or foreign court or before
any
commission or other regulatory body (federal, state, local or foreign), and
(ii) any material adverse change in the business, assets or condition,
financial or otherwise, of the Company. For purposes of this Section 5.8,
any
information filed with the Securities and Exchange Commission shall satisfy
the
requirement of providing written notice to the Agent.
13
5.9. Reporting
Requirements.
The
Company shall furnish to the Agent (for purposes of this Agreement, any
information filed with the Securities and Exchange Commission shall be
considered furnished to the Agent as of the date of such filing):
(i) Quarterly
Financial Statements.
As soon
as available and in any event within forty-five (45) days after the end of
each
fiscal quarter balance sheets of the Company as of the end of such quarter,
statements of income and retained earnings of the Company for the period
commencing at the end of the previous quarter and ending with the end of
such
quarter, and statements of changes in financial position of the Company,
all in
reasonable detail and stating in comparative form the respective figures
for the
year to date and all prepared in accordance with generally accepted accounting
principles consistently applied and certified by the chief financial officer
of
the Company.
(ii) Annual
Financial Statements.
As soon
as available and in any event within one hundred twenty (120) days after
the end
of each fiscal year of the Company, balance sheets of the Company as of the
end
of such fiscal year, and statements of income and retained earnings of the
Company for such fiscal year, and statements of changes in financial position
of
the Company for such fiscal year, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period
in
the prior fiscal year and all prepared on an audited basis, and in accordance
with generally accepted accounting principles consistently applied by an
accounting firm acceptable to the Agent.
(iii) Notice
of Litigation.
Promptly after the commencement thereof, notice of all actions, suits, and
proceedings before any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign affecting the Company
which, if determined adversely to the Company, would have a material adverse
effect on the financial condition, properties, or operations of the
Company.
(iv) Notice
of Defaults and Events of Default.
As soon
as reasonably possible and in any event within five (5) days after the
occurrence of each Default, a written notice setting forth the details of
such
Default and the action which is proposed to be taken by the Company, with
respect thereto.
(v) General
Information.
Such
other information respecting the condition or operations, financial or
otherwise, of the Company as the Agent may from time to time reasonably request
including without limitation customer lists including addresses of account
debtors. Agent agrees to hold any confidential information which it may receive
from Company pursuant to this Agreement in confidence except for disclosure
on a
need to know basis (i) to affiliates of Agent or any participants in the
Loans,
(ii) to legal counsel, accountants and other professional advisors to Agent,
(iii) to regulatory officers, or (iv) to any Person as requested pursuant
to or as required by law, regulation or legal process.
14
|
6.
|
NEGATIVE
COVENANTS.
|
The
Company covenants and agrees that so long as any Liabilities remain outstanding,
and (even if there shall be no Liabilities outstanding) so long as this
Agreement remains in effect (unless the Agent shall give its prior written
consent thereto):
6.1. Encumbrances.
Except
for the Permitted Liens, the Company will not create, incur, assume, or suffer
to exist, any mortgage, deed of trust, pledge, lien, security interest,
hypothecation, assignment, deposit arrangement, or other preferential
arrangement, charge, or encumbrance (including, without limitation, any
conditional sale, or other title retention agreement, or finance lease) of
any
nature, upon or with respect to any of its properties, now owned or hereafter
acquired, or sign or file, or permit any Subsidiary to sign or file, under
the
Uniform Commercial Code of any jurisdiction a financing statement (other
than
financing statements related to Permitted Liens and financing statements
required to be executed by lessors under operating leases entered into by
Company or any Subsidiary with said lessors) which names the Company as a
debtor, or sign any security agreement authorizing any secured party thereunder
to file such financing statement.
6.2. Disposal
of Property.
The
Company shall not nor allow any Subsidiary to sell, assign, transfer or
otherwise dispose of any of its respective equipment to any Person without
the
Agent’s prior written consent other than in the normal course of business in
connection with the sale of obsolete or no longer used equipment of Company
or
any Subsidiary.
6.3. Amendment
of Certificate of Incorporation or By-Laws.
Company
shall not amend its Articles of Incorporation or By-Laws, charter or other
organizational documents without the Agent’s prior written consent.
6.4. Transactions
with Affiliates.
Company
will not, without the prior written consent of the Agent, enter into any
transaction including, without limitation, the lending or borrowing of monies,
the purchase, sale or exchange of property or the rendering of any service
to
any Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of Company’s business and upon fair and reasonable terms no less
favorable to Company than would be obtained in a comparable arm’s length
transaction with an unaffiliated person or corporation.
6.5. Acquisitions.
The
Company shall not directly or indirectly acquire or merge with any other
Person
without the prior written consent of Agent.
6.6. Debt.
Company
shall not incur any further Debt from any other Person other than (i) Debt
owed
by Company to the Lenders or (ii) Debt to the Persons disclosed to Agent
in the
financial statements of Company delivered to Agent prior to the date hereof
or
(iii) accounts payable incurred in the ordinary course of business to trade
creditors for goods or services or (iv) current operating liabilities incurred
in the ordinary course of business (other than for borrowed money) or (v)
Debt
in connection with purchase money financing and Capital Leases but not exceeding
the amount as set forth in Section 1.1(xx) or (vi) Debt owed to ▇▇▇▇▇▇▇ ▇▇▇▇▇
under a Credit Agreement secured by the accounts receivable of the
Company.
15
6.7. Dividends.
Company
may not pay any dividends or make any distributions to any shareholder of
Company at any time that Revolving Loans are outstanding.
6.8. Mergers,
Etc.
The
Company shall not wind up, liquidate or dissolve itself, reorganize, merge
or
consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise
dispose of (whether in one transaction or in a series of transactions) all
or
substantially all of its assets (whether now owned or hereafter acquired)
to any
Person.
6.9. Investments.
The
Company shall not make, or permit any Subsidiary to make, any loan or advance
to
any Person, or purchase or otherwise acquire, or permit any Subsidiary to
purchase or otherwise acquire, any capital stock, assets, obligations, or
other
securities of, make any capital contribution to, or otherwise invest in or
acquire any interest in any Person, or participate as a partner or joint
venturer with any other Person, except: (1) direct obligations of the United
States or any agency thereof with maturities of one year or less from the
date
of acquisition; (2) commercial paper of a domestic issuer rated at least
“A-1”
by Standard & Poor’s Corporation or “P-1” by ▇▇▇▇▇’▇ Investors Service, Inc.
at the time of said investment; (3) certificates of deposit with maturities
of
one year or less from the date of acquisition issued by any commercial Agent
having capital and surplus in excess of Four Hundred Million and No/100 Dollars
($400,000,000.00) at the time of said investment; (4) stock, obligations,
or
securities received in settlement of debts (created in the ordinary course
of
business) owing to the Company or any Subsidiary; and (5) repurchase
agreements or eurodollar currency deposit investments with any commercial
Agent
which meets the financial requirements of subsection (3) hereof at the time
of
said investment.
|
7.
|
DEFAULT,
RIGHTS AND REMEDIES OF THE LENDER.
|
7.1. Liabilities.
If a
Default shall exist or occur and be continuing, and upon the expiration of
any
applicable cure period, the Agent may without notice declare all of the
Liabilities immediately due and payable.
7.2. Rights
and Remedies Generally.
If a
Default shall exist or occur and be continuing, and upon the expiration of
any
applicable cure period, the Agent shall have, in addition to any other rights
and remedies contained in this Agreement and the Transaction Documents, all
of
the rights and remedies under applicable laws, all of which rights and remedies
shall be cumulative, and none exclusive, to the extent permitted by
law.
7.3. Termination
of Agreements.
Upon
the occurrence of any Default, Agent may also, with or without proceeding
with
sale or foreclosure or demanding payment of the Liabilities, without notice,
terminate Agent’s further performance under this Agreement or any other
agreement or agreements between Agent and Company and in addition may suspend
Agent’s obligation to make any further advances hereunder during any cure period
without further liability or obligation by Agent, and may also, upon the
occurrence of any Default, appropriate and apply on any Liabilities any and
all
balances, credits, deposits, accounts, reserves, indebtedness, or other monies
due or owing to Company or held by Agent hereunder or under any such financing
agreement or otherwise, whether accrued or not. Neither such termination,
nor
the termination of this Agreement by lapse of time, the giving of notice,
or
otherwise, shall absolve, release, or otherwise affect the liability of Company
in respect of transactions had prior to such termination, nor affect any
of the
liens, security interests, rights, powers and remedies of Agent, but they
shall,
in all events, continue until all indebtedness and Liabilities of Company
to
Agent are satisfied. Agent shall not, in any manner, be liable to Company
for
any failure to make or continue to make any Loans or advances to Company
hereunder as a result of Agent refusal to so make said Loans or advances
in
accordance with the terms of this paragraph.
16
7.4. Waiver
of Demand.
Demand,
presentment, protest and notice of nonpayment are hereby waived by the Company.
The Company also waives the benefit of all valuation, appraisal and exemption
laws.
|
8.
|
MISCELLANEOUS.
|
8.1. Waiver.
The
Agent’s failure, at any time or times hereafter, to require strict performance
by the Company of any provision of this Agreement shall not waive, affect
or
diminish any right of the Agent thereafter to demand strict compliance and
performance therewith. Any suspension or waiver by the Agent of a Default
under
this Agreement shall not suspend, waive or affect any other Default under
this
Agreement, whether the same is prior or subsequent thereto and whether of
the
same or of a different kind or character. None of the undertakings, agreements,
warranties, covenants and representations of the Company contained in this
Agreement and no Default under this Agreement shall be deemed to have been
suspended or waived by the Agent unless such suspension or waiver is in writing
signed by an officer of the Agent, and directed to the Company specifying
such
suspension or waiver. If requested in writing by Company, Agent shall give
written confirmation to Company of any suspension or waiver by Agent as
described in this Section.
8.2. Costs
and Attorneys’ Fees.
If at
any time or times hereafter the Agent employs counsel in connection with
any matters contemplated by or arising out of this Agreement, whether
(a) to commence, defend, or intervene in any litigation or to file a
petition, complaint, answer, motion or other pleadings, (b) to take any
other action in or with respect to any suit or proceeding (Bankruptcy or
otherwise), (c) to consult with officers of the Agent to advise the Agent,
or (d) enforce any rights of the Agent to collect any of the Liabilities,
then in any of such events, all of the reasonable attorneys’ fees arising from
such services, and any expenses, costs and charges relating thereto, including,
without limitation, all fees of all paralegals, together with interest at
the
Default Rate described in Section 2.6 above then in effect, shall be part
of the Liabilities, payable on demand.
8.3. Expenditures
by the Agent.
In the
event Company shall fail to pay taxes, insurance, assessments, costs or expenses
which the Company is, under any of the terms hereof, required to pay, the
Agent
may, in its sole discretion, make expenditures for any or all of such purposes,
and the amount so expended, together with interest thereon at the Default
Rate
described in Section 2.6 above, shall be part of the Liabilities, payable
on
demand.
8.4. Reliance
by the Agent.
All
covenants, agreements, representations and warranties made herein by the
Company, shall, notwithstanding any investigation by the Agent, be deemed
to be
material to, and to have been relied upon by, the Agent.
17
8.5. Parties.
Whenever in this Agreement there is reference made to any of the parties
hereto,
such reference shall be deemed to include, wherever applicable, a reference
to
the respective successors and assigns of each of the Company, and the
Agent.
8.6. Applicable
Law; Severability.
This
Agreement shall be construed in all respects in accordance with, and governed
by, the internal laws (as opposed to conflicts of law provisions) of the
State
of New York. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law,
but if any provision of this Agreement shall 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 provisions
or the remaining provisions of this Agreement.
8.7. Cumulative
Effect.
All
covenants, conditions, provisions, warranties, guaranties, indemnities and
other
undertakings of the Company contained in this Agreement, or in the Loan
Documents or in any schedule given to Agent or contained in any other agreement
between Agent and the Company, heretofore, concurrently, or hereafter entered
into, shall be deemed cumulative to and not in derogation or substitution
of any
of the terms, covenants, conditions or agreements of the Company herein
contained. The failure or delay of Agent to exercise or enforce any rights,
liens, powers or remedies hereunder or under the Loan Documents or the other
aforesaid agreements or other documents or against any security or collateral
shall not operate as a waiver of such liens, rights, powers and remedies,
but
all such liens, rights powers and remedies shall continue in full force and
effect until all Liabilities shall have been fully satisfied, and all liens,
rights, powers and remedies herein provided for are cumulative and none are
exclusive.
8.8. Amendments,
Etc.
No
amendment, modification, termination, or waiver of any provision of the
Agreement, any Loan Document, nor consent to any departure by any of the
parties
from any Loan Document to which it is a party, shall in any event be effective
unless the same shall be in writing and signed by the Agent, and then such
waiver or consent shall be effective only in the specific instance and for
the
specific purpose for which given.
8.9. Integration.
This
Agreement and the Loan Documents contain the entire agreement between the
parties relating to the subject matter hereof and supersedes all oral statements
and prior writings with respect thereto.
8.10. Indemnity.
The
Company hereby agrees to defend, indemnify, and hold the Agent harmless from
and
against any and all claims, damages, judgments, penalties, costs and expenses
(including attorney fees and court costs now or hereafter arising from the
aforesaid enforcement of this clause) arising directly or indirectly from
the
activities of the Company and its Subsidiaries, its predecessors in interest,
or
third parties with whom it has a contractual relationship, or arising directly
or indirectly from the violation of any environmental protection, health,
or
safety law, whether such claims are asserted by any governmental agency or
any
other Person. This indemnity shall survive termination of this
Agreement.
18
8.11. Submission
to Jurisdiction; Waiver of Jury Trial.
TO
INDUCE THE AGENT TO MAKE THE LOANS ON BEHALF OF THE LENDERS EVIDENCED BY
THIS
AGREEMENT, THE COMPANY, IRREVOCABLY AGREES THAT, ALL ACTIONS ARISING DIRECTLY
OR
INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS AGREEMENT OR ANY OTHER
AGREEMENT WITH THE LENDER SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS
HAVING SITUS IN THE CITY OF ROCHESTER, NEW YORK, AND THE COMPANY HEREBY CONSENTS
TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED
AND HAVING ITS SITUS IN SAID CITY, AND WAIVES ANY OBJECTION BASED ON FORUM
NONCONVENIENS, AND THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL
PROCESS, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE COMPANY AT THE ADDRESSES
INDICATED IN THE LENDER’S RECORDS IN THE MANNER PROVIDED BY APPLICABLE STATUTE,
LAW, RULE OF COURT OR OTHERWISE.
THE AGENT
AND THE COMPANY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY,
THE
RIGHT IT MAY HAVE TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
OR
ANY OF THE OTHER OBLIGATIONS OR ANY AGREEMENT, EXECUTED OR CONTEMPLATED TO
BE
EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT OR COURSE OF DEALING,
IN WHICH THE LENDER AND THE COMPANY, OR ANY ONE OF THEM, ARE ADVERSE PARTIES.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GRANTING ANY FINANCIAL
ACCOMMODATION TO THE COMPANY. ALL WAIVERS HEREIN ARE MADE ONLY TO THE EXTENT
PERMITTED BY APPLICABLE LAW.
8.12. Application
of Payments.
Notwithstanding any contrary provision contained in this Agreement, the Company
irrevocably waives the right to direct the application of any and all payments
at any time or times hereafter received by the Agent from or on behalf of
the
Company, and the Company does hereby irrevocably agree that the Agent shall
have
the continuing exclusive right to apply and reapply any and all payments
received at any time or times hereafter, against the Liabilities in such
manner
as the Agent may deem advisable, notwithstanding any entry by the Agent upon
any
of its books and records.
8.13. Marshalling;
Payments Set Aside.
The
Agent shall be under no obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the
Company or any other party or against or in payment of any or all of the
Liabilities. To the extent that the Company makes a payment or payments to
the
Agent or Agent enforces its security interests or exercises its rights of
setoff, and such payment or payments or the proceeds of such enforcement
or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any Bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made
or
such enforcement or setoff had not occurred.
8.14. Section
Titles.
The
section titles contained in this Agreement shall be without substantive meaning
or content of any kind whatsoever and are not a part of the agreement between
the parties.
19
8.15. Continuing
Effect.
This
Agreement shall continue in full force and effect so long as any Liabilities
shall be owed to the Agent, and (even if there shall be no Liabilities
outstanding) so long as this Agreement has not been terminated in accordance
with its terms.
8.16. Notices.
Except
as otherwise expressly provided herein, any notice required or desired to
be
served, given or delivered hereunder shall be in writing, and shall be deemed
to
have been validly served, given, delivered and/or received when
(i) presented personally, or (ii) on the second business day next
following deposit in the United States mails, with proper postage prepaid,
registered or certified, return receipt requested, or (iii) on the first
business day next following the day of delivery to Federal Express for delivery
to the addressee, addressed to the party to be notified as follows:
|
(i)
|
If
to the Agent:
|
FAGENSON
& CO., INC.
▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
(ii)
|
If
to Company:
|
DOCUMENT
SECURITY SYSTEMS, INC.
▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention: Chief
Executive Office
or
to
such other address as each party designates to the other in the manner herein
prescribed.
8.17. Equitable
Relief.
Company
recognizes that, in the event Company fails to perform, observe or discharge
any
of its obligations or liabilities under this Agreement, Agent’s remedy at law
may prove to be inadequate relief to Agent; therefore, Company agrees that
Agent, if Agent so requests, shall be entitled to temporary and permanent
injunctive relief if Agent proves its entitlement to such equitable
relief.
20
IN
WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year
first above written.
|
DOCUMENT
SECURITY SYSTEMS, INC.
|
||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
||
| Title: Chief Executive Officer | ||
| FAGENSON & CO., INC. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ |
||
| Title: President | ||
21
Exhibit
A
Lenders
22