EXHIBIT 10.27
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LOAN AND SECURITY AGREEMENT
DATED AS OF OCTOBER 9, 1995
BETWEEN
CONTEMPO DESIGN WEST, INC.
and
BANK OF AMERICA ILLINOIS
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND OTHER TERMS...............................................2
1.1 Definitions..................................................2
1.2 Other Definitional Provisions...............................13
1.3 Interpretation of Agreement.................................13
1.4 Compliance with Financial Restrictions......................14
2. LOANS; OTHER MATTERS.....................................................14
2.1 Loans.......................................................14
2.1.1 Revolving Loans......................................14
2.1.2 Reduction of Revolving Credit Amount.................14
2.1.3 Maximum Outstanding Loans............................15
2.1.4 Assumption...........................................15
2.2 Loan Account; Demand Deposit Account........................15
2.3 Interest and Fees...........................................16
2.3.1 Interest on Revolving Loans..........................16
2.3.2 Nonuse Fee...........................................16
2.3.3 Method of Calculating Interest and Fees..............16
2.3.4 Payment of Interest and Fees.........................16
2.4 Requests for Loans; Borrowing Base Certificates;
Other Information...........................................16
2.5 Notes.......................................................17
2.6 Overdraft Loans.............................................18
2.7 Over Advances...............................................18
2.8 All Loans One Obligation....................................19
2.9 Making of Payments; Application of Collections;
Charging of Accounts........................................19
2.10 Lender's Election Not to Enforce............................21
2.11 Reaffirmation...............................................21
2.12 Setoff......................................................21
2.13 Refinancing Fee.............................................21
2.14 Closing Fee.................................................22
3. COLLATERAL...............................................................22
3.1 Grant of Security Interest..................................22
3.2 Accounts Receivable.........................................23
3.3 Inventory...................................................27
3.4 Equipment...................................................28
3.5 Supplemental Documentation..................................28
4. REPRESENTATIONS AND WARRANTIES...........................................29
5. BORROWER COVENANTS.......................................................29
PAGE
6. DEFAULT..................................................................29
6.1 Event of Default....................................................29
(a) Non-Payment.........................................29
(b) Non-Payment of Other Indebtedness...................29
(c) Acceleration of Other Indebtedness..................30
(d) Other Obligations...................................30
(e) Insolvency..........................................30
(f) Pension Plans.......................................31
(g) Non-Compliance With This Agreement..................31
(h) Non-Compliance With Related
Agreements..........................................32
(i) Warranty...............................................32
(j) Litigation..........................................32
(k) Validity............................................32
(l) Conduct of Business.................................32
(m) Material Adverse Change.............................32
(n) Other Loan Agreements..................................33
6.2 Effect of Event of Default; Remedies........................33
7. ADDITIONAL PROVISIONS REGARDING COLLATERAL AND LENDER'S
RIGHTS...................................................................34
7.1 Notice of Disposition of Collateral.........................34
7.2 Application of Proceeds of Collateral.......................34
7.3 Care of Collateral..........................................34
7.4 Performance of Borrower's Obligations.......................35
7.5 Lender's Rights.............................................35
8. CONDITIONS PRECEDENT; DELIVERY OF DOCUMENTS AND OTHER
MATTERS..................................................................36
8.1 Conditions Precedent........................................36
8.1.1 Security Interest....................................36
8.1.2 Blocked Account; Lock Box............................36
8.1.3 Effect of Law........................................36
8.1.4 Other Loan Agreements................................36
8.1.5 Fees.................................................36
8.1.6 Documents............................................36
(a) Resolutions............................................36
(b) Incumbency Certificates................................37
(c) Borrower's Certificate..............................37
(d) Landlord's Consents.................................37
(e) Note...................................................37
(f) Other Documents.....................................37
8.2 Continuing Conditions Precedent to all Loans;
Certification...............................................37
(a) No Change in Condition..............................37
(b) Default.............................................38
(c) Insurance...........................................38
PAGE
(d) Warranties..........................................38
(e) Accounting Methods..................................38
9. INDEMNITY................................................................38
9.1 Environmental and Safety and Health Indemnity...............38
9.2 General Indemnity...........................................39
9.3 Capital Adequacy............................................39
9.4 Other Indemnities...........................................40
10. ADDITIONAL PROVISIONS....................................................40
11. GENERAL..................................................................40
11.1 Borrower Waiver.............................................40
11.2 Power of Attorney...........................................41
11.3 Expenses; Attorneys' Fees...................................42
11.4 Lender Fees and Charges.....................................42
11.5 Lawful Interest.............................................42
11.6 No Waiver by Lender; Amendments.............................42
11.7 Termination of Credit.......................................43
11.8 Notices.....................................................43
11.9 Assignments and Participations; Information.................44
11.10 Severability................................................44
11.11 Successors..................................................44
11.12 Construction................................................44
11.13 Consent to Jurisdiction.....................................45
11.14 Subsidiary Reference........................................45
11.15 WAIVER OF JURY TRIAL........................................45
11.16 Prior Actions...............................................45
LIST OF EXHIBITS
Exhibits:
Exhibit A Form of Borrowing Base Certificate (ss.2.5(c))
Exhibit B [Reserved]
Exhibit C Form of Revolving Note
Exhibit D [Reserved]
Exhibit E Form of Landlord's Consent
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (as from time to time amended,
modified or supplemented, this "Agreement") is made as of this 9th day of
October, 1995 by and between BANK OF AMERICA ILLINOIS (formerly Continental Bank
N.A.), an Illinois banking corporation having its principal office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lender"), and CONTEMPO DESIGN WEST,
INC., a Delaware corporation ("Borrower").
RECITALS
1. On January 16, 1991, Azimuth Corporation, a Delaware corporation
("Parent"), and Lender entered into an Amended and Restated Loan and Security
Agreement (such Amended and Restated Loan and Security Agreement, as amended to
the date hereof, being herein referred to as the "Original Loan Agreement"; and
the other capitalized terms used herein shall have the meanings set forth in
Section 1.1) pursuant to which Lender made loans to Parent.
2. Parent and Lender are, on the date hereof, amending and
restating the Original Loan Agreement.
3. As security for the loans made by Lender to Parent, (a) Borrower and
other Subsidiaries of Parent, Contempo Design, Inc., an Illinois corporation
("Contempo"), and Delaware Electro Industries, Inc., a Delaware corporation
("Delaware"), have granted Lender a lien on, and a security interest in, all of
their respective assets and (b) Borrower, Delaware and Contempo have executed a
guaranty whereby such companies jointly and severally guaranteed the full and
prompt payment and performance of all obligations of Parent to Lender in
connection with the Original Loan Agreement and all related documents.
4. In connection with the amendment and restatement of the Original
Loan Agreement, Borrower and other Subsidiaries of Parent are assuming a portion
of the "Liabilities" under and as defined in the Original Loan Agreement
representing "Revolving Loans" under and as defined in the Original Loan
Agreement, with the portion of such Liabilities assumed by Borrower to be
governed by the terms of this Agreement.
5. Lender has agreed to provide financial accommodations to Borrower in
addition to those assumed by Borrower as described in the immediately preceding
recital on the terms hereinafter set forth.
Accordingly, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, the parties hereto
agree, as follows:
1. DEFINITIONS AND OTHER TERMS.
1.1 Definitions. In addition to terms defined elsewhere in this
Agreement or any Supplement, Schedule or Exhibit hereto, when used herein, the
following terms shall have the following meanings (such meanings shall be
equally applicable to the singular and plural forms of the terms used, as the
context requires):
"Account Debtor" shall mean any Person who is or who may
become obligated to Borrower under, with respect to, or on account of an Account
Receivable, Contract Right, General Intangible or
other Collateral or Third Party Collateral.
"Account Receivable" shall mean any account of Borrower and
any other right of Borrower to payment, whether or not evidenced by an
instrument or chattel paper and whether or not yet earned by performance
(excluding any Contract Right).
"Accounts Receivable Availability" shall have the meaning
ascribed to such term in Supplement A.
"Assignee Deposit Account" shall have the meaning ascribed to
such term in Section 3.2(d).
"Assumed Liabilities" shall have the meaning ascribed to such
term in Section 2.1.4.
"Attorneys' Fees" shall mean the reasonable value of the
services (and reasonable costs, charges and expenses related thereto) of the
attorneys (and all paralegals, secretaries, accountants and other staff employed
by such attorneys) employed by Lender (including, but not limited to, attorneys
and paralegals who are employees of Lender) from time to time (i) in connection
with the negotiation, preparation, execution, delivery, administration and
enforcement of this Agreement, any Related Agreement, any Supplemental
Documentation and all other documents or instruments provided for herein or in
any thereof or delivered or to be delivered hereunder or under any thereof or in
connection herewith or with any thereof, (ii) to prepare documentation related
to the Loans made and other Liabilities incurred hereunder, (iii) to prepare any
amendment to or waiver under this Agreement or any Related Agreement and any
documents or instruments related thereto, (iv) to represent Lender in any
litigation, contest, dispute, suit or proceeding or to commence, defend or
intervene in any litigation, contest, dispute, suit or proceeding or to file a
petition, complaint, answer, motion or other pleading, or to take any other
action in or with respect to, any litigation, contest,
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dispute, suit or proceeding (whether instituted by Lender, Borrower or any other
Person and whether in bankruptcy or otherwise) in any way or respect relating to
the Collateral, any Third Party Collateral, this Agreement or any Related
Agreement, or Borrower's or any other Obligor's or any Subsidiary's affairs, (v)
to protect, collect, lease, sell, take possession of, or liquidate any of the
Collateral or any Third Party Collateral, (vi) to attempt to enforce any
security interest in any of the Collateral or any Third Party Collateral or to
give any advice with respect to such enforcement and (vii) to enforce any of
Lender's rights to collect any of the Liabilities.
"Banking Day" shall mean any day other than a Saturday, Sunday
or legal holiday on which banks are authorized or required to be closed for the
conduct of commercial banking business in Chicago, Illinois.
"Borrower" -- see Preamble.
"Borrowing Base" shall have the meaning ascribed to such term
in Supplement A.
"Borrowing Base Certificate" shall mean a certificate in
substantially the form of Exhibit A.
"Capitalized Lease" shall mean any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with GAAP.
"Closing Date" shall mean the date this Agreement becomes
effective pursuant to Section 8.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed to also refer to any successor
sections.
"Collateral" shall have the meaning ascribed to such term
in Section 3.1.
"Contempo" -- see Recitals.
"Contempo Amsterdam" shall mean Contempo Design Europe B.V., a
Dutch corporation 90% owned by Contempo and 10% owned by an employee thereof.
"Contract Right" shall mean any right of Borrower to payment
under a contract, which right is not yet earned by performance and not evidenced
by an instrument or chattel paper.
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"Credit" shall mean the facility established under this
Agreement pursuant to which Lender will make Revolving Loans to Borrower.
"Default" shall mean any event or condition which, with the
lapse of time or giving of notice to Borrower or both, would constitute an Event
of Default.
"Default Rate" shall mean, with respect to a Loan, the rate of
interest which is applicable to such Loan after any amount thereof is not paid
when due, whether by acceleration or otherwise, as determined pursuant to
Supplement A.
"Delaware" -- see Recitals.
"Demand Deposit Account" shall have the meaning ascribed to
such term in Section 2.2.
"Eligible Account Receivable" shall mean an Account Receivable
owing to Borrower which meets the following requirements:
(1) it is genuine and in all respects what it purports
to be;
(2) it arises from either (a) the performance of services by
Borrower, which services have been fully performed and, if applicable,
acknowledged and/or accepted by the Account Debtor with respect thereto
or (b) the sale or lease of goods by Borrower; and if it arises from
the sale or lease of goods, (i) such goods comply with such Account
Debtor's specifications (if any) and (except in the case of exhibits
manufactured by Borrower which are stored at the premises of Borrower
for a period of not more than 60 days after completion as an
accommodation to the applicable Account Debtor ("Temporarily Stored
Exhibits")) have been shipped to, or delivered to and accepted by, such
Account Debtor and (ii) Borrower has possession of, or if requested by
Lender has delivered to Lender, shipping and delivery receipts
evidencing such shipment, delivery and acceptance (except that no such
receipts shall be required in the case of an Account Receivable
relating to a Temporarily Stored Exhibit);
(3) it (a) is evidenced by an invoice rendered to the Account
Debtor with respect thereto which (i) is dated not earlier than the
date of shipment or performance (or, in the case of an Account
Receivable relating to a Temporarily Stored Exhibit, the date of
completion of such exhibit) and (ii) has payment terms not unacceptable
to Lender (in good faith and in the exercise of its reasonable
judgment) and (b) meets the
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Eligible Account Receivable requirements set forth in
Supplement A;
(4) it is not subject to any assignment, claim or Lien, other
than (a) a Lien in favor of Lender, (b) Liens consented to by Lender in
writing and (c) Liens described in Section 5.16(a) of the Parent Loan
Agreement;
(5) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor with respect thereto, and is not
subject to a claim for setoff, counterclaim, credit or allowance
(except (x) any credit or allowance which has been deducted in
computing the net amount of the applicable invoice as shown in the
original schedule or Borrowing Base Certificate furnished to Lender
identifying or including such Account Receivable or (y) as Lender in
its sole discretion may otherwise agree) or adjustment by the Account
Debtor with respect thereto, or to any claim by such Account Debtor
denying liability thereunder in whole or in part, and such Account
Debtor has not refused to accept any of the goods or services which are
the subject of such Account Receivable or offered or attempted to
return any of such goods;
(6) there are no proceedings or actions which are then
threatened or pending against the Account Debtor with respect thereto
or to which such Account Debtor is a party which proceedings or actions
would reasonably be expected to result in any material adverse change
in such Account Debtor's financial condition or in its ability to pay
any Account Receivable in full when due;
(7) it does not arise out of a contract or order which, by its
terms, forbids, restricts or makes void or unenforceable the assignment
by Borrower to Lender of the Account Receivable arising with respect
thereto;
(8) the Account Debtor with respect thereto is not a
Subsidiary or Obligor, or a director, officer, employee or agent of
Borrower, Parent, Delaware, Contempo, a Subsidiary or Obligor;
(9) the Account Debtor with respect thereto is a resident
or citizen of, and is located within, the United States of America,
unless the sale of goods giving rise to the Account Receivable is on
letter of credit, banker's acceptance or other credit support terms
reasonably satisfactory to Lender;
(10) it is not an Account Receivable arising from a "sale
on approval," "sale or return" or "consignment," or subject to
any other repurchase or return agreement;
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(11) except in the case of an Account Receivable relating to a
Temporarily Stored Exhibit, it is not an Account Receivable with
respect to which possession and/or control of the goods sold giving
rise thereto is held, maintained or retained by Borrower or any
Subsidiary, or other Obligor (or by any agent or custodian of Borrower,
any Subsidiary, or other Obligor) for the account of or subject to
further and/or future direction from the Account Debtor thereof;
(12) it is not an Account Receivable which in any way fails to
meet or violates any warranty, representation or covenant contained in
this Agreement or any Related Agreement relating directly or indirectly
to Borrower's Accounts Receivable;
(13) the Account Debtor thereunder is not located in the
States of Indiana, New Jersey or Minnesota; provided, however, that
such restriction shall not apply to an Account Receivable if at the
time the Account Receivable was created and at all times thereafter (a)
Borrower had filed and has maintained effective a current Notice of
Business Activities Report with the appropriate office or agency of the
State of Indiana, New Jersey or Minnesota, as applicable or (b)
Borrower was and has continued to be exempt from the filing of such
Report and has provided Lender with satisfactory evidence thereof;
(14) it arises in the ordinary course of business of
Borrower;
(15) if the Account Debtor is the United States of America or
any department, agency or instrumentality thereof, Borrower has
assigned its right to payment of such Account Receivable to Lender
pursuant to the Assignment of Claims Act of 1940, as amended;
(16) if Lender in good faith and in its reasonable judgment
has established a credit limit for an Account Debtor, the aggregate
dollar amount of Accounts Receivable due from such Account Debtor,
including such Account Receivable, does not exceed such credit limit
(it being understood that in establishing any such credit limit Lender
may rely on factors which, due to confidentiality restrictions or
otherwise, are not disclosed to Borrower); and
(17) if the Account Receivable is evidenced by chattel paper
or an instrument, (a) Lender shall have specifically agreed in writing
to include such Account Receivable as an Eligible Account Receivable,
(b) only payments then due and payable under such chattel paper or
instrument shall be included as an Eligible Account Receivable and (c)
the originals of such chattel paper or instruments have been
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endorsed and/or assigned and delivered to Lender in a manner
satisfactory to Lender.
An Account Receivable which is at any time an Eligible Account
Receivable, but which subsequently fails to meet any of the foregoing
requirements, shall forthwith cease to be an Eligible Account
Receivable. Further, with respect to any Account Receivable, if Lender
at any time or times hereafter determines in good faith and in its
reasonable judgment that the prospect of payment or performance by the
Account Debtor with respect thereto is or will be impaired for any
reason whatsoever, notwithstanding anything to the contrary contained
above, such Account Receivable shall forthwith cease to be an Eligible
Account Receivable.
"Environmental Laws" shall mean the Clean Air Act of 1970, as
amended, 42 U.S.C. ss.7401 et seq., the Clean Water Act, as amended, 33 U.S.C.
ss.1251 et seq., the Resource Conservation and Recovery Act of 1976, as amended,
42 U.S.C. ss.6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss.9601 et seq.,
any so-called "Superfund" or "Superlien" law, the Toxic Substances Control Act,
15 U.S.C. ss.2601 et seq., and any other federal, state or local statute, law,
ordinance, code, rule, regulation, order or decree or other written legal
requirement regulating, relating to, or imposing liability or standards of
conduct (including, but not limited to, permit requirements, emission or
effluent restrictions and other requirements relating to manufacturing,
processing, generation, distribution, use, treatment, storage, disposal,
clean-up, transport or handling) concerning any Hazardous Materials or any
hazardous, toxic or dangerous waste, substance or constituent, or any noise,
odor, waste, radiation, pollutant or contaminant or other substance, whether
solid, liquid or gas, as now or at any time hereafter in effect.
"Equipment" shall mean all equipment of every description,
including, without limitation, fixtures, furniture, vehicles and trade fixtures,
together with any and all accessions, parts and equipment attached thereto or
used in connection therewith, and any substitutions therefor and replacements
thereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, partnership, or
other trade or business (whether or not incorporated) that is, along with
Borrower, a member of a controlled group of corporations or a controlled group
of trades or
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businesses, as described in sections 414(b) and 414(c), respectively, of the
Code or section 4001 of ERISA, or a member of the same affiliated service group
within the meaning of section 414(m) of the Code.
"Event of Default" shall have the meaning ascribed to such
term in Section 6.1.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System or any successor thereto.
"Fiscal Quarter" shall mean any quarter of a Fiscal Year.
"Fiscal Year" shall mean any period of 12 consecutive calendar
months ending on the last day of December.
"Fixtures" shall mean all fixtures of Borrower of every
description and all substitutions and replacements of any thereof.
"GAAP" shall mean generally accepted accounting principles as
applied in the preparation of the audited financial statements of Parent
referred to in Section 4.6 of the Parent Loan Agreement.
"General Intangibles" shall mean all of Borrower's intangible
personal property, including things in action, causes of action and all other
personal property of Borrower of every kind and nature (other than accounts,
inventory, equipment, chattel paper, documents, instruments and money),
including, without limitation, corporate or other business records, inventions,
designs, patents, patent applications, trademarks, trademark applications, trade
names, trade secrets, goodwill, copyrights, registrations, licenses, franchises,
customer lists, tax refund claims, claims against carriers and shippers,
guarantee claims, security interests, security deposits or other security held
by or granted to Borrower to secure any payment from an Account Debtor, and any
rights to indemnification.
"Guaranteed Obligations" means all obligations of Borrower
under the Amended and Restated Guaranty Agreement of Borrower, Delaware and
Contempo dated as of the Closing Date.
"Hazardous Materials" shall mean any toxic substance,
hazardous substance, hazardous material, hazardous chemical or hazardous waste
defined or qualifying as such in (or for the purposes of) any Environmental Law,
or any pollutant or contaminant, and shall include, but not be limited to,
petroleum, including crude oil or any fraction thereof which is liquid at
standard conditions of temperature or pressure (60 degrees fahrenheit and 14.7
pounds per square inch absolute), any radioactive material, including, but not
limited to, any source,
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special nuclear or by-product material as defined at 42 U.S.C. Section2011 et
seq., as amended or hereafter amended, polychlorinated biphenyls and asbestos in
any form or condition.
"Indebtedness" of any Person shall mean, without duplication,
(i) any obligation of such Person for borrowed money, including, without
limitation, (a) any obligation of such Person evidenced by bonds, debentures,
notes or other similar debt instruments and (b) any obligation for borrowed
money which is non-recourse to the credit of such Person but which is secured by
a Lien on any asset of such Person, (ii) any obligation of such Person on
account of deposits or advances, (iii) any obligation of such Person for the
deferred purchase price of any property or services, except Trade Accounts
Payable, (iv) any obligation of such Person as lessee under a Capitalized Lease
and (v) any Indebtedness of another Person secured by a Lien on any asset of
such first Person, whether or not such Indebtedness is assumed by such first
Person. For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or joint venturer.
"Inventory" shall mean any and all goods of Borrower
(including, without limitation, goods in transit) wheresoever located, which are
or may at any time be leased to a lessee, held for sale or lease or furnished
under any contract of service by, or held as raw materials, work in process, or
supplies or materials used or consumed in the business of, Borrower or which are
held for use in connection with the manufacture, packing, shipping, advertising,
selling or finishing of such goods, and all goods the sale or other disposition
of which has given rise to an Account Receivable, Contract Right or General
Intangible and which are returned to and/or repossessed and/or stopped in
transit by Borrower or Lender or any agent or bailee of any of them, and all
documents of title or other documents representing the same.
"Landlord's Consent" shall mean a Landlord's Consent
substantially in the form of Exhibit E, with appropriate insertions, or such
other form as shall be acceptable to Lender, as it may be amended or modified
from time to time.
"Lender" -- see Preamble.
"Liabilities" shall mean all of the liabilities, obligations,
reimbursement obligations in connection with any letter of credit, and
indebtedness of Borrower, any Subsidiary or any other Obligor to Lender of any
kind or nature, however created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing or due or to become
due, and including but not limited to (i) Borrower's obligations under any Note,
(ii) Borrower's obligations under this Agreement, (iii)
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interest, charges, expenses, Attorneys' Fees and other sums chargeable to
Borrower by Lender under this Agreement or any Related Agreement, (iv) the
obligations of Borrower, any Subsidiary and any other Obligor under any Related
Agreement, including obligations of performance and (v) the Guaranteed
Obligations. "Liabilities" shall also include any and all amendments,
extensions, renewals, refundings or refinancings of any of the foregoing.
"Lien" shall mean any mortgage, pledge, hypothecation,
judgment lien or similar legal process, title retention lien, or other lien,
encumbrance or security interest, including, without limitation, the interest of
a vendor under any conditional sale or other title retention agreement and the
interest of a lessor under any Capitalized Lease.
"Loan" shall mean (i) the Revolving Loans made pursuant to
Section 2.1.1 and (ii) any other loan or advance made to Borrower by Lender
under or pursuant to this Agreement.
"Loan Account" shall have the meaning ascribed to such term in
Section 2.2.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA which is maintained for employees of
Borrower, any other Obligor or any ERISA Affiliate.
"Note" shall mean the Revolving Note and any other promissory
note of Borrower evidencing any loan or advance (including but not limited to
any Revolving Loans) made by Lender to Borrower pursuant to this Agreement.
"Obligor" shall mean Borrower and each other Person who is or
shall become primarily or secondarily liable on any of the Liabilities, or who
grants to Lender a Lien on any property of such Person as security for any of
the Liabilities.
"Occupational Safety and Health Law" shall mean the
Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. ss.651 et
seq., and any other federal, state or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to or imposing liability or
standards of conduct concerning employee health and/or safety.
"Original Loan Agreement" - see Recitals.
"Original Security Agreement" means the Amended and Restated
Security Agreement dated as of January 16, 1991 among Borrower, Delaware,
Contempo and Lender.
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"Other Loan Agreements" means the Loan and Security Agreement
dated as of the date hereof between Lender and Delaware and the Loan and
Security Agreement dated as of the date hereof between Lender and Contempo, as
the same may be amended, supplemented or otherwise modified from time to time,
and the Parent Loan Agreement.
"Over Advance" shall have the meaning ascribed to such term in
Section 2.7.
"Overdraft Loan" shall have the meaning ascribed to such term
in Section 2.6.
"Parent" -- see Recitals.
"Parent Loan Agreement" means the Second Amended and Restated
Loan and Security Agreement between Lender and Parent dated as of the date
hereof, as the same may be amended, supplemented or otherwise modified from time
to time.
"Participant" shall mean any Person, now or at any time or
times hereafter, participating with Lender in the Loans made to Borrower
pursuant to this Agreement or any Related Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Pension Plan" shall mean a "pension plan," as such term is
defined in Section 3(2) of ERISA, which is subject to the provisions of Title IV
of ERISA (other than a Multiemployer Plan) and to which Borrower, any other
Obligor or any ERISA Affiliate may have any liability, including any liability
by reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, or government (whether national, federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"Reference Rate" shall mean, at any time, the rate of interest
then most recently announced by Lender at Chicago, Illinois as its reference
rate (of which announcements Lender shall give notice promptly to Borrower).
Each change in the interest rate on any Loan shall take effect on the effective
date of the change in the Reference Rate.
"Refinancing Fee" shall have the meaning ascribed to such term
in Section 2.13.
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"Related Agreement" shall mean any agreement, instrument or
document (including, without limitation, notes, guarantees, mortgages, deeds of
trust, chattel mortgages, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, financing statements,
subordination agreements, trust account agreements and all other written matter)
heretofore, now, or hereafter delivered to Lender with respect to or in
connection with or pursuant to this Agreement or any of the Liabilities, and
executed by or on behalf of Borrower, Parent, Delaware, Contempo or any other
Obligor.
"Related Party" shall mean any Person (other than a
Subsidiary) (i) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, Borrower, (ii)
which beneficially owns or holds ten percent (10%) or more of the equity
interest of Borrower or (iii) ten percent (10%) or more of the equity interest
of which is beneficially owned or held by Borrower 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.
"Revolving Credit Amount" shall have the meaning ascribed to
such term in Supplement A.
"Revolving Loan" shall have the meaning ascribed to such term
in Section 2.1.1.
"Revolving Loan Availability" shall mean the lesser of (a) the
Revolving Credit Amount and (b) the Borrowing Base.
"Revolving Note" shall have the meaning ascribed to such term
in Section 2.5.
"Siemens" means an Account Debtor of the Borrower with one of
the following names (as derived from the books and records of the Borrower):
"Siemens Medical Systems, Electromedical", "Siemens Physiological Recording",
"Siemens ▇▇▇▇▇▇▇", "Siemens Electric Ltd.", "Siemens Hearing Instruments",
"Siemens Infusion Systems", "Siemens Medical Labs", "Siemens Medical Systems",
"Siemens Medical Systems - EM", "Siemens Medical Systems, Inc.", "Siemens
Medical Systems\Ultrasound", "Siemens Nuclear Group", "Siemens Oncology
Systems", "Siemens ▇▇▇▇▇▇ & Crane", "Siemens Quantum, Inc." or "Siemens Solar
Instruments".
"Subsidiary" shall mean any Person of which or in which
Borrower and its other Subsidiaries own directly or indirectly 50% or more of
(i) the combined voting power of all classes of stock having general voting
power under ordinary circumstances to elect a majority of the board of directors
of such Person, if it is a
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corporation, (ii) the capital interest or profits interest of such Person, if it
is a partnership, joint venture or similar entity or (iii) the beneficial
interest of such Person, if it is a trust, association or other unincorporated
organization.
"Supplemental Documentation" shall have the meaning ascribed
to such term in Section 3.5.
"Taxes" with respect to any Person shall mean taxes,
assessments or other governmental charges or levies imposed upon such Person,
its income or any of its properties, franchises or assets.
"Termination Date" shall mean August 31, 1996 or such later
date to which the Termination Date may be extended pursuant to Section 11.7.
"Third Party Collateral" shall mean any property of any Person
other than Borrower which secures payment or performance of any Liabilities.
"Trade Accounts Payable" of any Person shall mean trade
accounts payable of such Person with a scheduled maturity of not greater than 90
days incurred in the ordinary course of such Person's business.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of Illinois, and any successor statute, together with any regulations
thereunder, in each case as in effect from time to time. References to sections
of the UCC shall be construed to also refer to any successor sections.
1.2 Other Definitional Provisions. Unless otherwise defined or
the context otherwise requires, all financial and accounting terms used herein
or in any certificate or other document made or delivered pursuant hereto shall
be defined in accordance with GAAP. Unless otherwise defined therein, all terms
defined in this Agreement shall have the defined meanings when used in any Note
or in any certificate or other document made or delivered pursuant hereto. Terms
used in this Agreement which are defined in any Supplement or Exhibit hereto
shall, unless the context otherwise indicates, have the meanings given them in
such Supplement or Exhibit. Other terms used in this Agreement shall, unless the
context indicates otherwise, have the meanings provided for by the UCC to the
extent the same are used or defined therein.
1.3 Interpretation of Agreement. A Section, an Exhibit or a
Schedule is, unless otherwise stated, a reference to a section hereof, an
exhibit hereto or a schedule hereto, as the case may be. Section captions used
in this Agreement are for convenience only and shall not affect the construction
of this Agreement. The words
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"hereof," "herein," "hereto" and "hereunder" and words of similar import when
used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. Reference to "this Agreement" shall
include the provisions of Supplement A.
1.4 Compliance with Financial Restrictions. Compliance with
each of the financial ratios and restrictions contained herein shall, except as
otherwise provided herein, be determined in accordance with GAAP consistently
followed.
2. LOANS; OTHER MATTERS.
2.1 Loans.
2.1.1 Revolving Loans.
(a) Subject to the terms and conditions of this
Agreement and the Related Agreements, and in reliance upon the
warranties of Borrower set forth herein and in the Related
Agreements, Lender agrees to make such loans or advances
(individually each a "Revolving Loan" and collectively the
"Revolving Loans") from time to time before the Termination
Date to Borrower as Borrower may from time to time request, up
to but not in excess (at any one time outstanding) of the
Revolving Loan Availability. Revolving Loans made by Lender
may be repaid and, subject to the terms and conditions hereof,
reborrowed to but not including the Termination Date unless
the Credit extended under this Agreement is otherwise
terminated as provided in this Agreement.
(b) In the event the aggregate outstanding principal
balance of the Revolving Loans exceeds the Revolving Loan
Availability, Borrower shall, unless Lender shall otherwise
consent, without notice or demand of any kind, immediately
make such repayments of the Revolving Loans or take such other
actions as shall be necessary to eliminate such excess.
(c) All Revolving Loans hereunder shall be paid by
Borrower on the Termination Date, unless payable sooner
pursuant to the provisions of this Agreement, but may, at
Borrower's election, be repaid in whole or in part at any time
prior to such date without premium or penalty.
2.1.2 Reduction of Revolving Credit Amount. Borrower may, at
any time, on at least three (3) Banking Days' prior written notice
received by Lender, permanently reduce the Revolving Credit Amount;
provided, however, that concurrently with any such reduction, Borrower
shall pay to Lender the
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amount, if any, as is necessary to reduce the outstanding principal
balance of all Revolving Loans to such reduced Revolving Credit Amount.
2.1.3 Maximum Outstanding Loans. Notwithstanding any other
provision of this Agreement, the aggregate outstanding principal
balance of all Loans shall not exceed the Revolving Credit Amount;
provided, however, that the foregoing shall not limit the right of
Lender to advance Revolving Loans to Borrower pursuant to the
provisions of Section 5.5, 5.6 or 5.22 of the Parent Loan Agreement (as
incorporated herein by reference) or Section 3.2(c), 7.4, 11.3, 11.4 or
any other provision of this Agreement or any Related Agreement that
permits Lender to advance Loans to Borrower.
2.1.4 Assumption. Borrower and Lender agree that $340,469.00
of the principal balance of the "Revolving Loans" under and as defined
in the Original Loan Agreement outstanding as of the date hereof shall
constitute Revolving Loans hereunder as of the Closing Date. To the
extent of such loans, Borrower hereby absolutely and unconditionally
assumes and affirms all of the "Liabilities" of Parent under and as
defined in the Original Loan Agreement (the "Assumed Liabilities").
Borrower hereby agrees to pay and perform the Assumed Liabilities with
the same effect and to the same extent (as modified hereby) as if
Borrower had been the original primary obligor thereof. To the extent
of the Assumed Liabilities, this Agreement shall be deemed to be a
partial amendment and restatement of the terms and provisions of the
Original Loan Agreement. Nothing contained in this Agreement shall be
construed to release, cancel, terminate, impair the priority of or
otherwise affect adversely all or any part of the Indebtedness of
Parent assumed by Borrower hereunder or the Lien of Lender granted in
respect thereof. Nothing herein shall deem the Indebtedness of Parent
to have been paid, extinguished or novated and the Assumed Liabilities
shall remain outstanding and unpaid on the Closing Date.
2.2 Loan Account; Demand Deposit Account. Lender shall establish or
cause to be established on its books in Borrower's name one or more accounts
(each a "Loan Account") to evidence Loans made to Borrower. Lender will credit
or cause to be credited to a commercial account ("Demand Deposit Account")
maintained by Borrower at Lender's ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
office the amount of any sums advanced as Loans hereunder. Any amounts advanced
as Loans hereunder which are credited to Borrower's Demand Deposit Account,
together with any other amounts advanced to Borrower as a Loan pursuant to this
Agreement, will be debited to the applicable Loan Account and result in an
increase in the principal balance outstanding in such Loan Account in the amount
thereof.
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2.3 Interest and Fees.
2.3.1 Interest on Revolving Loans. The unpaid principal amount
of each Revolving Loan shall bear interest until maturity at the rates
applicable to Revolving Loans indicated in Supplement A. If any
Revolving Loan or portion thereof is not paid when due, whether by
acceleration or otherwise, the entire unpaid principal amount of the
Revolving Loans shall bear interest thereafter until such overdue
amount is paid in full at the Default Rate applicable to Revolving
Loans indicated in Supplement A. Until maturity, interest on the
Revolving Loans shall be paid by Borrower on the date(s) indicated in
Supplement A, and at such maturity. After maturity, whether by
acceleration or otherwise, accrued interest shall be payable on demand.
2.3.2 Nonuse Fee. Borrower agrees to pay to Lender a fee equal
to one-half of one percent (0.5%) per annum on the product of (x) the
daily average amount by which $5,400,000 exceeds the outstanding
principal balance of the Revolving Loans hereunder plus the outstanding
principal amount of the "Revolving Loans" under the Other Loan
Agreements times (y) .20. Such fee shall be payable in arrears on the
last day of each Fiscal Quarter, and on the date the Credit terminates,
in each case for the period then ended.
2.3.3 Method of Calculating Interest and Fees. Interest on the
unpaid principal amount of each Loan shall accrue from and including
the date such Loan is made to, but not including, the date such Loan is
paid. Interest and any fees shall be calculated on the basis of a year
consisting of 360 days and paid for actual days elapsed. All
determinations by Lender of the rate of interest applicable to any Loan
shall be rebuttable presumptive evidence of the applicable interest
rate for such Loan.
2.3.4 Payment of Interest and Fees. Lender may provide for the
payment of any unpaid accrued interest and any fees by charging the
Demand Deposit Account or any other bank account maintained by Borrower
with Lender.
2.4 Requests for Loans; Borrowing Base Certificates; Other
Information.
(a) Loans shall be requested in writing or by telephone,
except for Overdraft Loans and Revolving Loans made pursuant to the
provisions of Section 5.5, 5.6 or 5.22 of the Parent Loan Agreement (as
incorporated herein by reference) or Section 3.2(c), 7.4, 11.3 or 11.4
or any other provision of this Agreement (other than Section 2.1.1) or
any Related
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Agreement that permits Lender to advance Revolving Loans to Borrower.
(b) In the event that Borrower shall at any time, or from time
to time, (i) make a request for a Loan hereunder or (ii) be deemed to
have requested an Overdraft Loan, Borrower agrees to provide Lender
with such information, as soon as practicable after a request therefor,
at such frequency and in such format, as is reasonably required by
Lender, such information to be current as of the time such information
is provided.
(c) Borrower further agrees to provide to Lender a current
Borrowing Base Certificate at the end of each week and at such other
times as Lender may reasonably request. On each Borrowing Base
Certificate, determinations as to eligibility and ineligibility of
collateral shall be made as of the same time. Such Borrowing Base
Certificate shall be executed and certified as accurate by such
officers or employees of Borrower as Borrower shall designate in
writing to Lender pursuant to duly adopted resolutions of the
respective Board of Directors of each such company authorizing such
action.
(d) Borrower shall provide Lender with documentation
satisfactory to Lender indicating the names of those employees of
Borrower authorized by Borrower to sign Borrowing Base Certificates on
behalf of such companies and Borrower shall provide Lender with
documentation satisfactory to Lender indicating the names of the
employees of Borrower authorized by Borrower to make telephonic
requests for Loans, and/or to authorize disbursement of the proceeds of
Loans by wire transfer or otherwise, and Lender shall be entitled to
rely upon such documentation until notified in writing by Borrower of
any change(s) in the names of the employees so authorized. Lender shall
be entitled to act on the instructions of anyone identifying himself as
one of the persons authorized to request Loans or disbursements of Loan
proceeds by telephone and Borrower shall be bound thereby in the same
manner as if the person were actually so authorized. Borrower agrees to
indemnify and hold Lender harmless from and against any and all claims,
damages, liabilities, losses, costs and expenses (including Attorneys'
Fees) which may arise or be created by the acceptance of instructions
for making or paying Loans by wire transfer or telephone, except for
those claims, damages, liabilities, losses, costs and expenses arising
from Lender's gross negligence or willful misconduct.
2.5 Notes. The Revolving Loans shall be evidenced by a promissory note
(herein, as it may from time to time be supplemented, extended or replaced,
called the "Revolving Note") substantially in the form set forth in Exhibit C,
with appropriate
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insertions, dated the date hereof, payable to the order of Lender on the
Termination Date. Borrower hereby irrevocably authorizes Lender to make (or
cause to be made) appropriate notations on the grid attached to the Revolving
Note (or on a continuation of such grid attached to the Revolving Note and made
a part thereof), which notations, if made, shall evidence, inter alia, the date
and outstanding principal amount of all Revolving Loans evidenced thereby. Any
such notations on such grid (and on any continuation thereof) indicating the
outstanding principal amount of Revolving Loans shall be rebuttable presumptive
evidence of the principal amount thereof owing and unpaid, but the failure to
record any such amount on such grid (or on such continuation) shall not limit or
otherwise affect the obligations of Borrower hereunder or under the Revolving
Note to make payments of principal of or interest on such Revolving Loans when
due. Upon request by Borrower to Lender (but not more than once in any 90-day
period), Lender will furnish Borrower with a photocopy of the grid attached to
the Revolving Note.
2.6 Overdraft Loans. Lender, in its sole and absolute discretion, and
subject to the terms hereof, may make a Revolving Loan to Borrower in an amount
equal to the amount of any overdraft which may from time to time exist with
respect to the Demand Deposit Account or any other bank account which Borrower
may now or hereafter have with Lender. The existence of any such overdraft shall
be deemed to be a request by Borrower for such Loan. Borrower acknowledges that
Lender is under no duty or obligation to make any Loan to Borrower to cover any
overdraft. Borrower further agrees that an overdraft shall constitute a separate
Loan under this Agreement (an "Overdraft Loan"), which shall bear, from the date
on which the overdraft occurred until paid, interest in an amount equal to the
greater of (x) 130% of the highest rate of interest then charged for Loans
(other than Overdraft Loans) made hereunder and (y) $50.00 per day. If Lender,
in its sole and absolute discretion, decides not to make a Loan to cover part or
all of any overdraft, Lender may return any check(s) which created such
overdraft.
2.7 Over Advances. Lender, in its sole and absolute discretion, may
make Revolving Loans to Borrower in amounts which cause the outstanding
principal balance of the Revolving Loans to exceed the Revolving Loan
Availability or otherwise permit the outstanding principal balance of the
Revolving Loans to at any time exceed the Revolving Loan Availability, and no
such event or occurrence shall cause or constitute a waiver by Lender of its
right to refuse to make any further Revolving Loans at any time that an Over
Advance exists or would result therefrom. During any period in which the
aggregate outstanding Revolving Loans exceeds the Revolving Loan Availability
(such excess Liabilities are herein referred to as "Over Advances"), the amount
of Over Advances shall
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bear interest at a rate equal to 130% of the highest rate of interest then
charged for Revolving Loans made hereunder.
2.8 All Loans One Obligation. The Revolving Loans and all other Loans
under this Agreement shall constitute one Loan, and all Indebtedness and other
Liabilities of Borrower to Lender under this Agreement and any of the Related
Agreements shall constitute one general obligation secured by Lender's Lien on
all of the Collateral and Third Party Collateral and by all other Liens
heretofore, now, or at any time or times hereafter granted by Borrower or any
other Obligor to Lender. Borrower agrees that all of the rights of Lender set
forth in this Agreement shall apply to any modification of or supplement to this
Agreement, any Supplements or Exhibits hereto, and the Related Agreements,
unless otherwise agreed in writing.
2.9 Making of Payments; Application of Collections; Charging
of Accounts.
(a) All payments hereunder shall be made without set-off or
counterclaim and shall be made to Lender in immediately available funds
(except as Lender may otherwise consent) prior to 12:30 p.m., Chicago
time, on the date due at its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as may be designated by
Lender to Borrower in writing. Any payments received after such time
shall be deemed received on the next Banking Day. Whenever any payment
to be made hereunder or under any Note shall be stated to be due on a
date other than a Banking Day, such payment shall be due on the next
succeeding Banking Day, and such extension of time shall be included in
the calculation of interest and any fees.
(b) Borrower authorizes Lender to, and Lender will, subject to
the provisions of this paragraph (b), apply the whole or any part of
any amounts received by Lender (whether deposited in the Assignee
Deposit Account of Borrower or otherwise received by Lender) from the
collection of items of payment and proceeds of any Collateral or Third
Party Collateral (whether received upon any sale or other distribution
of Collateral or Third Party Collateral by Lender or otherwise),
against the principal of and/or interest on any Loans made hereunder
and/or any other Liabilities, whether or not then due, in such order of
application as Lender may determine, unless such payments or proceeds
are, in Lender's sole and absolute discretion, released to Borrower;
provided, however, so long as no Event of Default exists and is
continuing, any such amounts received by Lender shall be applied as
follows: first, to payment of amounts then due with respect to fees
(including Attorneys' Fees), charges and expenses for which Borrower or
any other Obligor is liable
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pursuant to this Agreement and the Related Agreements; second, to
payment of amounts then due with respect to interest on the Loans;
third, to payment of amounts then due with respect to principal of the
Loans; fourth, to repayment of the Revolving Loans; and fifth, to
payment of the Guaranteed Obligations then due and owing; and provided,
further, that no checks, drafts or other instruments received by Lender
shall constitute final payment to Lender unless and until such item of
payment has actually been collected. All items or amounts which are
delivered to Lender by or on behalf of Borrower or any Obligor or any
Account Debtor on account of partial or full payment or otherwise as
proceeds of any of the Collateral or Third Party Collateral (including
any items or amounts which may have been deposited to the Assignee
Deposit Account) may from time to time in Lender's sole and absolute
discretion be released to Borrower or be applied by Lender towards
payment of the Liabilities, whether or not then due, in accordance with
the preceding sentence. Notwithstanding anything to the contrary
herein, (i) solely for purposes of determining the occurrence of an
Event of Default, all cash, checks, instruments and other items of
payment shall be deemed received upon actual receipt by Lender, unless
the same is subsequently dishonored for any reason whatsoever, (ii) for
purposes of determining whether, under Section 2.1, there is
availability for Loans, all cash, checks, instruments and other items
of payment shall be applied against the Liabilities on the first
Banking Day after receipt thereof by Lender and (iii) solely for
purposes of interest calculation hereunder, all cash, checks,
instruments and other items of payment shall be deemed to have been
applied against the Liabilities on the second Banking Day after receipt
by Lender of available funds with respect thereto.
(c) Borrower hereby authorizes Lender to, and Lender may, in
its sole and absolute discretion, charge to Borrower at any time when
due all or any portion of any of the Liabilities including but not
limited to any Attorneys' Fees and other costs and expenses of Lender
for which Borrower or any other Obligor is liable pursuant to the terms
of this Agreement or any Related Agreement, by charging Borrower's
Demand Deposit Account or any other bank account of Borrower with
Lender; provided, however, that the provisions of this Section 2.9(c)
shall not affect the obligation of Borrower or any other Obligor to pay
when due all amounts payable by such Person under this Agreement, any
Note or any Related Agreement, whether or not there are sufficient
funds therefor in the Demand Deposit Account or any such other bank
account of Borrower. So long as no Event of Default or Default exists,
Lender shall use reasonable efforts to give Borrower prompt notice of
Liabilities paid by charging such Demand Deposit Account or other
account (but failure to give such
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notice shall not impose any liability on Lender or relieve
Borrower of any of its obligations).
2.10 Lender's Election Not to Enforce. Notwithstanding any term or
condition of this Agreement to the contrary, Lender, in its sole and absolute
discretion, at any time and from time to time, may suspend or refrain from
enforcing any or all of the restrictions imposed in this Section 2, but no such
suspension or failure to enforce shall impair any right or power of Lender under
this Agreement, including, without limitation, any right of Lender to refrain
from making a Loan if all conditions precedent to Lender's obligation to making
such Loan have not been satisfied.
2.11 Reaffirmation. Each Loan requested by Borrower pursuant to this
Agreement shall constitute an automatic certification by Borrower to Lender that
(i) all of the representations and warranties of Borrower, Parent and each other
Obligor in this Agreement and each of the Related Agreements are true and
correct on the date of such request to the same extent as if made on such date,
except for such changes as are specifically permitted hereunder (or under such
Related Agreement) and (ii) immediately before and after making the requested
Loan, no Event of Default or Default then exists or would result therefrom.
2.12 Setoff. In addition to and not in limitation of all other rights
and remedies (including other rights of offset or banker's lien) that Lender or
any other holder of any Note may have under applicable law, Lender or such other
holder shall, upon the occurrence of any Event of Default described in Section
6.1 and during the continuance thereof, or upon the occurrence of any Default
described in Section 6.1(e) and during the continuance thereof, have the right
to appropriate and apply to the payment of the Liabilities (whether or not then
due), in such order of application as Lender or such other holder may elect, any
and all balances, credits, deposits (general or special, time or demand,
provisional or final), accounts or moneys of Borrower then or thereafter with
Lender or such other holder. Lender shall use reasonable efforts to give
Borrower prompt notice of any appropriation and application pursuant to the
preceding sentence (but failure to give such notice shall not impose any
liability on Lender or relieve Borrower of any of its obligations).
2.13 Refinancing Fee. Borrower shall pay Lender a Refinancing Fee (as
hereinafter defined) from time to time if Borrower shall obtain any Indebtedness
or equity contributions (other than from any other Obligor or Contempo Amsterdam
except if such Indebtedness or equity contribution is funded with funds obtained
by such other Obligor or Contempo Amsterdam from a non- Obligor (other than
Lender)) after the date hereof and Borrower shall at any time cause the
Revolving Credit Amount to be permanently reduced with the proceeds of such
Indebtedness or
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equity contributions. As used in this Section, "Refinancing Fee" shall mean an
amount equal to the amount of the reduction in the Revolving Credit Amount
caused with such proceeds, multiplied by .0125.
2.14 Closing Fee. Borrower agrees to pay to Lender a closing
fee of $15,000 on the Closing Date. With Lender's consent, the
amount of such closing fee due may be advanced to Borrower as a
Revolving Loan.
3. COLLATERAL.
3.1 Grant of Security Interest. As security for the payment of all
Loans now or hereafter made by Lender to Borrower hereunder or under any Note,
as security for the payment or other satisfaction of all other Liabilities,
Borrower hereby confirms the continued effectiveness of the grant of a security
interest contained in the Original Security Agreement and hereby further grants
to Lender a security interest in and to the following property of Borrower,
whether now owned or existing, or hereafter acquired or coming into existence,
wherever now or hereafter located (all such property is hereinafter referred to
collectively as the "Collateral"):
(a) Accounts Receivable;
(b) Equipment and Fixtures;
(c) Inventory;
(d) General Intangibles (including all rights of
Borrower with respect to all amounts now or hereafter from
time to time loaned or advanced by Borrower to any
Subsidiary);
(e) Contract Rights and documents of title;
(f) All chattel paper and instruments evidencing, arising out
of or relating to any obligation to Borrower for goods sold or leased
or services rendered, or otherwise arising out of or relating to any
property described in clauses (a) through (e) above;
(g) Any and all balances, credits, deposits (general or
special, time or demand, provisional or final), accounts or monies of
or in the name of Borrower now or hereafter with Lender, any agent or
bailee for Lender, or any Participant, and any and all property of
every kind or description of or in the name of Borrower now or
hereafter, for any reason or purpose whatsoever, in the possession or
control of, or in
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transit to, or standing to Borrower's credit on the books of,
Lender, any agent or bailee for Lender, or any Participant;
(h) All interest of Borrower in any goods the sale or lease of
which shall have given or shall give rise to, and in all guaranties and
other property securing the payment of or performance under, any
Accounts Receivable, General Intangibles, Contract Rights, or any
chattel paper or instru-
ments referred to in clause (f) above;
(i) Any and all other property of Borrower, of any kind or
description (including but not limited to real estate of Borrower),
including, without limitation, any property of Borrower subject to a
separate mortgage, pledge or security interest in favor of Lender or in
which Lender now or hereafter has or acquires a security interest
securing any Liabilities pursuant to an agreement or instrument other
than this Agreement;
(j) All replacements, substitutions, additions or
accessions to or for any of the foregoing;
(k) To the extent related to the property described in clauses
(a) through (j) above, all books, correspondence, credit files,
records, invoices and other papers and documents, including, without
limitation, to the extent so related, all tapes, cards, computer runs,
computer programs and other papers and documents in the possession or
control of Borrower or any computer bureau from time to time acting for
Borrower, and, to the extent so related, all rights in, to and under
all policies of insurance, including claims of rights to payments
thereunder and proceeds therefrom, including any credit insurance; and
(l) All products and proceeds (including but not limited to
any Accounts Receivable or other proceeds arising from the sale or
other disposition of any Collateral, any returns of any Equipment or
Inventory sold by Borrower, and the proceeds of any insurance covering
any of the Collateral) of any of the foregoing.
3.2 Accounts Receivable.
(a) If requested by Lender, Borrower shall advise Lender promptly of
any Inventory returned by or repossessed from any Account Debtor, or otherwise
recovered, shall receive such Inventory in trust and, unless instructed to
deliver such Inventory to Lender, shall resell it for Lender. If requested by
Lender, Borrower shall notify Lender immediately of all disputes and claims by
any Account Debtor and settle or adjust them at no expense to Lender. If Lender
directs after the occurrence and during the
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continuance of an Event of Default or a Default, no discount or credit allowance
shall be granted thereafter by Borrower to any Account Debtor. All Account
Debtor payments and all net amounts received by Lender in settlement, adjustment
or liquidation of any Account Receivable may be applied by Lender to the
Liabilities or credited to Borrower's Demand Deposit Account (subject to
collection) with Lender, as Lender may deem appropriate, in either case in
accordance with Section 2.9. If requested by Lender, Borrower will make proper
entries in its books and records disclosing the assignment of Accounts
Receivable to Lender.
(b) Borrower warrants that: (i) to the best of Borrower's knowledge all
of the Accounts Receivable are and will continue to be bona fide existing
obligations created by the sale of goods, the rendering of services, or the
furnishing of other good and sufficient consideration to Account Debtors in the
regular course of business and (ii) to the best of Borrower's knowledge all
shipping or delivery receipts and other documents furnished or to be furnished
to Lender in connection therewith are and will be genuine.
(c) Lender is hereby authorized and empowered (which authorization and
power, being coupled with an interest, shall be irrevocable until the later to
occur of termination of this Agreement and the final payment and performance in
full of all of the Liabilities) at any time in its sole and absolute discretion:
(1) To request, in Borrower's name or, after the occurrence
and during the continuance of an Event of Default or a Default, in
Lender's name or the name of a third party, confirmation from any
Account Debtor or party obligated under or with respect to any
Collateral of the amount shown by the Accounts Receivable or other
Collateral to be payable, or any other matter stated therein;
(2) To endorse in Borrower's name and to collect any chattel
paper, checks, notes, drafts, instruments or other items of payment
tendered to or received by Lender in payment of any Account Receivable
or other obligation owing to Borrower;
(3) To notify, in Borrower's name or, after the occurrence and
during the continuance of an Event of Default or a Default, in Lender's
name, and/or to require Borrower to notify, any Account Debtor or other
Person obligated under or in respect of any Collateral, of the fact of
Lender's Lien thereon and of the collateral assignment thereof to
Lender;
(4) To direct, in Borrower's name or, after the occurrence and
during the continuance of an Event of Default or a Default, in Lender's
name, and/or to require Borrower to
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direct, any Account Debtor or other Person obligated under or in
respect of any Collateral to make payment directly to Lender of any
amounts due or to become due thereunder or with respect thereto; and
(5) After the occurrence and during the continuance of an
Event of Default, to demand, collect, surrender, release or exchange
all or any part of any Collateral or any amounts due thereunder or with
respect thereto, or compromise or extend or renew for any period
(whether or not longer than the initial period) any and all sums which
are now or may hereafter become due or owing upon or with respect to
any of the Collateral, or enforce, by suit or otherwise, payment or
performance of any of the Collateral either in Lender's own name or in
the name of Borrower.
Under no circumstances shall Lender be under any duty to act in regard to any of
the foregoing matters. The costs relating to any of the foregoing matters,
including Attorneys' Fees and reasonable out-of-pocket expenses, and the cost of
any Assignee Deposit Account or other bank account or accounts which may be
required hereunder, shall be borne solely by Borrower whether the same are
incurred by Lender or Borrower, and Lender may advance same to Borrower as a
Revolving Loan.
(d) Unless otherwise consented to by Lender, Borrower will, forthwith
upon receipt by Borrower of all checks, drafts, cash and other remittances in
payment or as proceeds of, or on account of, any of the Accounts Receivable or
other Collateral, deposit the same in a special bank account (the "Assignee
Deposit Account") with Lender or such other bank or financial institution as
Lender shall consent, over which Lender alone has power of withdrawal, and will,
to the extent required by Lender, designate with each such deposit the
particular Account Receivable or other item of Collateral upon which the
remittance was made. Borrower acknowledges that the maintenance of the Assignee
Deposit Account is solely for the convenience of Lender in facilitating its own
operations and Borrower does not and shall not have any right, title or interest
in the Assignee Deposit Account or in the amounts at any time appearing to the
credit thereof. Said proceeds shall be deposited in precisely the form received
except for Borrower's endorsement where necessary to permit collection of items,
which endorsement Borrower agrees to make. Pending such deposit, Borrower agrees
not to commingle any such checks, drafts, cash and other remittances with any of
its funds or property, but will hold them separate and apart therefrom and upon
an express trust for Lender until deposit thereof is made in the Assignee
Deposit Account. Upon the full and final liquidation of all Liabilities, Lender
will pay over to Borrower any excess amounts received by Lender as payment or
proceeds of Collateral, whether received by
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Lender as a deposit in the Assignee Deposit Account or received by Lender as a
direct payment on any of the sums due hereunder.
(e) Borrower appoints Lender, or any Person whom Lender may from time
to time designate, as Borrower's attorney and agent-in- fact with power: (i)
after the occurrence and during the continuance of an Event of Default, to
notify the post office authorities to change the address for delivery of
Borrower's mail to an address designated by Lender; (ii) after the event
described in the foregoing clause (i), to receive, open and dispose of all mail
addressed to Borrower; (iii) to send, in Borrower's name or, after the
occurrence and during the continuance of an Event of Default or a Default, in
Lender's name or the name of a third party, requests for verification of
Accounts Receivable or other Collateral to Account Debtors; (iv) to open an
escrow account or Assignee Deposit Account under Lender's sole control for the
collection of Accounts Receivable or other Collateral, if not required
contemporaneously with the execution hereof; and (v) to do all other things
which Lender is permitted to do under this Agreement or any Related Agreement or
which are reasonably necessary to carry out this Agreement and the Related
Agreements. Neither Lender nor any of its directors, officers, employees or
agents will be liable for any acts of commission or omission nor for any error
in judgment or mistake of fact or law, unless the same shall have resulted from
gross negligence or willful misconduct. The foregoing appointment and power,
being coupled with an interest, shall be irrevocable until all Liabilities under
this Agreement are finally paid and performed in full and this Agreement is
terminated. Borrower expressly waives presentment, demand, notice of dishonor
and protest of all instruments and any other notice to which it might otherwise
be entitled.
(f) If any Account Receivable, Contract Right or General Intangible
arises out of a contract with the United States or any department, agency, or
instrumentality thereof, Borrower will, unless Lender shall otherwise agree,
immediately notify Lender in writing and execute any instruments and take any
steps required by Lender in order that all monies due and to become due under
such contract shall be assigned to Lender and notice thereof given to the
government under the Federal Assignment of Claims Act of 1940, as amended, or
other applicable laws or regulations; provided, however, that unless Lender
otherwise requests, until an Event of Default or a Default shall have occurred
and be continuing, Borrower need not take any of the steps contemplated in this
paragraph with respect to any contract with a value of less than $10,000.
(g) If any Account Receivable or Contract Right is evidenced by chattel
paper or promissory notes, trade acceptances, or other instruments for the
payment of money, Borrower will, unless Lender shall otherwise agree, deliver
the originals of same to Lender,
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appropriately endorsed to Lender's order and, regardless of the form of such
endorsement, Borrower hereby expressly waives presentment, demand, notice of
dishonor, protest and notice of protest and all other notices with respect
thereto.
3.3 Inventory.
(a) Unless Lender shall otherwise agree, if Borrower sells Inventory
for cash, all full and partial payments therefor shall be immediately (and, in
any event, not later than the end of the day received) delivered by Borrower to
Lender in their original form for deposit in the Assignee Deposit Account or for
other application to reduction of the Liabilities, in either case in accordance
with Section 2.9. Pending such delivery, all such cash shall be held by Borrower
in trust for Lender.
(b) Lender shall not be liable or responsible in any way for the
safekeeping of any Inventory delivered to it, to any bailee appointed by or for
it, to any warehouseman, or under any other circumstances, except for Lender's
gross negligence or willful misconduct. Lender shall not be responsible for
collection of any proceeds or for losses in collected proceeds held by Borrower
in trust for Lender. Any and all risk of loss for any or all of the foregoing
shall be upon Borrower, except for such loss as shall result from Lender's gross
negligence or willful misconduct.
(c) If requested by Lender, Borrower shall, upon acquiring an interest
in any Inventory, deliver to Lender a description of such Inventory, together
with supplier's invoices, warranties, production, cost and other records as
Lender may request. If requested by Lender, Borrower shall deliver to Lender
schedules of the sale of any Inventory immediately upon its sale. Any material
change in the value or condition of any Inventory, and any errors discovered in
any schedule or description delivered to Lender, shall be reported to Lender
immediately. Borrower confirms that the warranties and representations in this
Agreement shall apply to each schedule. Borrower represents and warrants that,
as to each schedule and description of Inventory delivered to Lender:
(1) The descriptions, origins, sizes, qualities, quantities,
weights, and markings of all goods stated thereon, or on any attachment
thereto, are true and correct in all material respects;
(2) None of the goods are defective, of second quality,
used, or goods returned after shipment, except where described
as such; and
(3) All Inventory not included on such schedule or
description has been previously scheduled or described.
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(d) If requested by Lender, Borrower will notify Lender immediately if
Borrower obtains possession (by return, repossession or otherwise) of any
Inventory which has been sold, and will inform Lender of the identity of the
returned or repossessed Inventory, the applicable Account Debtor and the amount
of the applicable Account Receivable.
3.4 Equipment.
(a) Borrower shall at all times keep, and cause each Subsidiary to
keep, its Equipment in good operating condition and repair, ordinary wear and
tear excepted, and neither Borrower nor any Subsidiary shall, without the prior
written consent of Lender, sell, lease, or otherwise dispose of any of its
Equipment, or any part thereof or interest therein; provided, however, that
without Lender's consent (but with notice to Lender) Borrower or any Subsidiary
may dispose of obsolete or unuseful Equipment in the ordinary course provided
all Equipment so disposed of by Parent and its Subsidiaries in any Fiscal Year
has an aggregate market value of $50,000 or less.
(b) In the event any Equipment is sold, transferred or otherwise
disposed of by Borrower or any Subsidiary, unless Lender shall agree otherwise,
Borrower or the applicable Subsidiary shall deliver all of the proceeds of any
such sale, transfer or disposition to Lender, which proceeds shall be deposited
in the Assignee Deposit Account or otherwise applied to the repayment of the
Liabilities, in either case in accordance with Section 2.9.
(c) Borrower will, upon request of Lender, submit to Lender a current
listing of all Equipment of Borrower and its Subsidiaries, which listing shall
indicate the type, model, serial number and location of such Equipment.
3.5 Supplemental Documentation. At Lender's request, Borrower shall
execute and/or deliver to Lender, at any time or times hereafter, such
agreements, documents, financing statements, warehouse receipts, bills of
lading, notices of assignment of Accounts Receivable, schedules of Accounts
Receivable assigned, and other written matter necessary or reasonably requested
by Lender to perfect and maintain perfected Lender's security interest in the
Collateral (all the above is hereinafter referred to as the "Supplemental
Documentation"), in form and substance acceptable to Lender, and pay all taxes,
fees and other reasonable costs and expenses associated with any recording or
filing of the Supplemental Documentation. Borrower hereby irrevocably makes,
constitutes and appoints Lender (and all Persons designated by Lender for that
purpose) as Borrower's true and lawful attorney (and agent-in-fact) (which
appointment and power, being coupled with an interest, shall be irrevocable
until the later to occur of termination of this Agreement and final payment and
performance in
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full of all of the Liabilities) to sign the name of Borrower on any of the
Supplemental Documentation and to deliver any of the Supplemental Documentation
to such Persons as Lender, in its sole and absolute discretion, may elect.
Borrower agrees that a carbon, photographic, photostatic, or other reproduction
of this Agreement or of a financing statement is sufficient as a financing
statement.
4. REPRESENTATIONS AND WARRANTIES. To induce Lender to make Loans to Borrower
under this Agreement, Borrower hereby represents and warrants to Lender the
truth and accuracy of all matters contained in Section 4 of the Parent Loan
Agreement as from time to time in effect (or, if the Parent Loan Agreement has
been terminated, as in effect immediately prior to such termination), insofar as
the representations and warranties contained therein are applicable to Borrower,
each such representation and warranty (insofar as applicable as aforesaid) and
all other terms of the Parent Loan Agreement to which reference is made therein,
being incorporated herein by reference as though specifically set forth herein.
5. BORROWER COVENANTS. From the date of this Agreement and thereafter until the
Credit is terminated and all Liabilities are finally paid in full, Borrower
agrees that, unless Lender shall otherwise consent in writing, it will perform,
comply with and be bound by all of the agreements, covenants and obligations set
forth in Section 5 of the Parent Loan Agreement as from time to time in effect
(or, if the Parent Loan Agreement has been terminated, as in effect immediately
prior to such termination) which are applicable to Borrower, each such
agreement, covenant and obligation and all other terms of the Parent Loan
Agreement to which reference is made therein being incorporated herein by
reference as though specifically set forth herein. Without limiting the
foregoing, to the extent that Sections 5.5, 5.6 and 5.22 of the Parent Loan
Agreement provide that Lender may advance loans to Parent in certain
circumstances, it is agreed that Lender may make advances to Borrower in such
circumstances if such circumstances exist with respect to Borrower, with such
advances to be Revolving Loans hereunder.
6. DEFAULT.
6.1 Event of Default. Each of the following shall constitute
an Event of Default under this Agreement:
(a) Non-Payment. Default in the payment, when due or
declared due, of any of the Liabilities.
(b) Non-Payment of Other Indebtedness. Default in the
payment when due, whether by acceleration or otherwise
(subject to any applicable grace period), of any Indebtedness
of, or guaranteed by, Borrower, any other Obligor or any
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Subsidiary (other than (i) any Indebtedness under this Agreement and
any Notes, (ii) any Indebtedness of Parent or any Subsidiary of Parent
to Borrower or to any other Subsidiary of Parent, (iii) any
Indebtedness of Borrower to Parent or any other Subsidiary of Parent or
(iv) Indebtedness under the Other Loan Agreements); provided that the
aggregate amount of Indebtedness so affected shall equal or exceed
$25,000.
(c) Acceleration of Other Indebtedness. Any event or condition
shall occur which results in the acceleration of the maturity of any
Indebtedness of, or guaranteed by, Borrower, any other Obligor or any
Subsidiary (other than (i) any Indebtedness of Parent or any Subsidiary
of Parent to Borrower or to any other Subsidiary of Parent, (ii) the
Indebtedness under this Agreement and any Notes, (iii) any Indebtedness
of Borrower to Parent or any other Subsidiary of Parent or (iv)
Indebtedness under the Other Loan Agreements) or enables the holder or
holders of such other Indebtedness or any trustee or agent for such
holders (any required notice of default having been given and any
applicable grace period having expired) to accelerate the maturity of
such other Indebtedness; provided that the aggregate amount of
Indebtedness with respect to which such event or condition shall have
occurred shall equal or exceed $25,000.
(d) Other Obligations. Default in the payment when due,
whether by acceleration or otherwise, or in the performance or
observance (subject to any applicable grace period or waiver of such
default) of (i) any obligation or agreement of Borrower, any other
Obligor or any Subsidiary to or with Lender (other than any obligation
or agreement of Borrower hereunder and under any Related Agreement); or
(ii) any material obligation or agreement of Borrower, any other
Obligor or any Subsidiary to or with any other Person (other than (x)
any such material obligation or agreement constituting or related to
Indebtedness, (y) Trade Accounts Payable and (z) any material
obligation or agreement of any Subsidiary to Borrower or to any other
Subsidiary), except only to the extent that the existence of any such
default is being contested by Borrower, such other Obligor or such
Subsidiary, as the case may be, in good faith and by appropriate
proceedings and Borrower, such other Obligor or such Subsidiary, as
applicable, shall have set aside on its books such reserves or other
appropriate provisions therefor as may be required by GAAP.
(e) Insolvency. Borrower, any other Obligor or any
Subsidiary becomes insolvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they
mature, or applies for, consents to, or acquiesces in the
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appointment of a trustee, receiver or other custodian for Borrower,
such other Obligor or such Subsidiary, or for a substantial part of the
property of Borrower, such other Obligor or such Subsidiary, or makes a
general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for Borrower, any other Obligor or any
Subsidiary, or for a substantial part of the property of Borrower, any
other Obligor or any Subsidiary and is not discharged or dismissed
within 60 days; or any bankruptcy, reorganization, debt arrangement or
other proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding, is instituted by or against
Borrower, any other Obligor or any Subsidiary and, solely in the case
where such proceeding shall have been instituted against Borrower, such
Obligor or such Subsidiary, such proceeding shall not have been
dismissed within 60 days or an order for relief shall have been
entered; or any warrant of attachment or similar legal process is
issued against any substantial part of the property of Borrower, any
other Obligor or any Subsidiary.
(f) Pension Plans. The institution by Borrower or any ERISA
Affiliate of steps to terminate any Pension Plan if, in order to
effectuate such termination, Borrower or any ERISA Affiliate would be
required to make a contribution to such Pension Plan, or would incur a
liability or obligation to such Pension Plan, in excess of $50,000; the
institution by the PBGC of steps to terminate any Pension Plan and the
continuation of either such condition after notice thereof from Lender;
or a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
(g) Non-Compliance With This Agreement. Default in the
performance of any of Borrower's agreements set forth in Section 2,
3.2, 3.3 or 3.4 hereof or Section 5.3, 5.5, 5.6 or 5.12 through 5.30 of
the Parent Loan Agreement (and not, in each case, constituting an Event
of Default under any of the other subsections of this Section 6.1), and
continuance of such default after written notice thereof to Borrower
from Lender; or default in the performance of any of Borrower's
agreements set forth in Section 6 of Supplement A or Section 5.2 of the
Parent Loan Agreement (and not, in each case, constituting an Event of
Default under any of the other subsections of this Section 6.1), and
continuance of such default for three (3) Banking Days after notice
thereof to Borrower from Lender; or default in the performance of any
of Borrower's other agreements herein set forth (and not constituting
an Event of Default under any of the other subsections of this Section
6.1), and continuance of such default
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for thirty (30) days after written notice thereof to Borrower from
Lender.
(h) Non-Compliance With Related Agreements. Default in the
performance by Borrower, any other Obligor or any Subsidiary of any of
its agreements set forth in any Related Agreement (and not constituting
an Event of Default under any of the other subsections of this Section
6.1), and continuance of such default after notice from Lender and the
expiration of the grace period (if any) set forth therein.
(i) Warranty. Any warranty made by Borrower or any other
Obligor herein or in any Related Agreement is untrue or misleading in
any material respect when made or deemed made; any schedule, statement,
report, notice, certificate or other writing furnished by Borrower or
any other Obligor to Lender is untrue or misleading in any material
respect on the date as of which the facts set forth therein are stated
or certified; or any certification made or deemed made by Borrower or
any other Obligor to Lender is untrue or misleading in any material
respect on or as of the date made or deemed made.
(j) Litigation. There shall be entered against any one of
Borrower, any other Obligor or any Subsidiary one or more judgments or
decrees in excess of $50,000 in the aggregate at any one time
outstanding, excluding those judgments or decrees (i) that shall have
been outstanding less than 30 calendar days from the entry thereof or
(ii) for and to the extent which Borrower, such Subsidiary or such
Obligor, as applicable, is insured and with respect to which the
insurer has assumed responsibility in writing or for and to the extent
which Borrower, such Subsidiary or such Obligor, as applicable, is
otherwise indemnified if the terms of such indemnification are
satisfactory to Lender.
(k) Validity. If the validity or enforceability of this
Agreement or any Related Agreement shall be challenged by Borrower, any
other Obligor or any other Person acting through, or on behalf of,
Borrower or any other Obligor, or shall fail to remain in full force
and effect.
(l) Conduct of Business. If Borrower, any other Obligor or any
Subsidiary is enjoined, restrained or in any way prevented by court
order, which has not been dissolved or stayed within five (5) business
days, from conducting all or any material part of its business affairs.
(m) Material Adverse Change. Lender shall have
determined in good faith that (i) a material adverse change
has occurred in the business, operations or financial
condition of Borrower, any other Obligor or any Subsidiary,
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(ii) Lender's interest in any material Collateral or Third Party
Collateral has been adversely affected or impaired, or the value
thereof to Lender has been diminished to a material extent or (iii) the
prospect of payment or performance of any obligation or agreement of
Borrower or any other Obligor hereunder or under any Related Agreement
is materially impaired, and the condition giving rise to such
determination does not constitute an Event of Default under any of the
other subsections of this Section 6.1 and continues to exist unremedied
for a period of thirty (30) days after written notice of such
determination by Lender to Borrower.
(n) Other Loan Agreements. The existence of any other
"Event of Default" under and as defined in the Other Loan
Agreements.
6.2 Effect of Event of Default; Remedies.
(a) In the event that one or more Events of Default described in
Section 6.1(e) shall occur, then Lender's commitment and the Credit extended
under this Agreement shall terminate and all Liabilities hereunder and under any
Notes shall be immediately due and payable without demand, notice or declaration
of any kind whatsoever.
(b) In the event an Event of Default other than one described in
Section 6.1(e) shall occur, then Lender may declare its commitment terminated
and/or all Liabilities hereunder and under any Notes immediately due and payable
without demand or notice of any kind whatsoever, whereupon the Credit extended
under this Agreement shall terminate and all Liabilities hereunder and under any
Notes shall be immediately due and payable. Lender shall promptly advise
Borrower of any such declaration, but failure to do so shall not impair the
effect of such declaration.
(c) If any Event of Default exists and is continuing, Lender
may exercise any one or more or all of the following remedies, all
of which are cumulative and non-exclusive:
(1) Any remedy contained in this Agreement or in any of
the Related Agreements or any Supplemental Documentation;
(2) Any rights and remedies available to Lender under
the UCC and any other applicable law;
(3) To the extent permitted by applicable law, Lender may,
without notice, demand or legal process of any kind, take possession of
any or all of the Collateral and Third Party Collateral (in addition to
Collateral and Third Party Collateral which it may already have in its
possession), wherever it may be found, and for that purpose may pursue
the
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same wherever it may be found, and may enter into any premises where
any of the Collateral or Third Party Collateral may be or is supposed
to be, and search for, take possession of, remove, keep and store any
of the Collateral or Third Party Collateral until the same shall be
sold or otherwise disposed of, and Lender shall have the right to store
the same in any of Borrower's premises without cost to Lender;
(4) At Lender's request, Borrower will (and will cause its
Subsidiaries to), at Borrower's (or such Subsidiaries') expense,
assemble the Collateral and Third Party Collateral and make it
available to Lender at a place or places to be designated by Lender
which is reasonably convenient to Lender and Borrower; and
(5) Lender at its option, and pursuant to notification given
to Borrower (or any other applicable Obligor) as provided for below,
may sell any Collateral or Third Party Collateral actually or
constructively in its possession at public or private sale and apply
the proceeds thereof as provided below.
7. ADDITIONAL PROVISIONS REGARDING COLLATERAL AND LENDER'S RIGHTS.
7.1 Notice of Disposition of Collateral. Any notification of intended
disposition of any of the Collateral required by law shall be deemed reasonably
and properly given if given at least ten (10) calendar days before such
disposition.
7.2 Application of Proceeds of Collateral. Any proceeds of any
disposition by Lender of any of the Collateral may be applied by Lender to the
payment of expenses in connection with the taking possession of, storing,
preparing for sale, and disposition of Collateral, including Attorneys' Fees and
legal expenses, and any balance of such proceeds may be applied by Lender toward
the payment of such of the Liabilities, and in such order of application, as
Lender may from time to time elect.
7.3 Care of Collateral. Lender shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if it takes such action for that purpose as Borrower requests in
writing, but failure of Lender to comply with such request shall not, of itself,
be deemed a failure to exercise reasonable care, and no failure of Lender to
preserve or protect any rights with respect to such Collateral against prior
parties, or to do any act with respect to the preservation of such Collateral
not so requested by Borrower, shall be deemed a failure to exercise reasonable
care in the custody or preservation of such Collateral.
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7.4 Performance of Borrower's Obligations. Lender shall have the right,
but shall not be obligated, to discharge any claims against or Liens, and any
Taxes at any time levied or placed upon any or all Collateral, including,
without limitation, those arising under statute or in favor of landlords, taxing
authorities, government, public and/or private warehousemen, common and/or
private carriers, processors, finishers, draymen, coopers, dryers, mechanics,
artisans, laborers, attorneys, courts, or others. Lender may also pay for
maintenance and preservation of Collateral. Lender may, but is not obligated to,
perform or fulfill any of Borrower's responsibilities under this Agreement which
Borrower has failed to perform or fulfill. Lender may advance to Borrower as a
Revolving Loan any payment made or expense incurred by Lender under this Section
7.4.
7.5 Lender's Rights. None of the following shall affect the obligations
of Borrower to Lender under this Agreement or Lender's right with respect to the
remaining Collateral or any Third Party Collateral (any or all of which actions
may be taken by Lender at any time, whether before or after an Event of Default,
at its sole and absolute discretion and without notice to Borrower):
(a) acceptance or retention by Lender of other property or
interests in property as security for the Liabilities, or acceptance or
retention of any Obligor(s), in addition to Borrower, with respect to
any of the Liabilities;
(b) release of its security interest in, or the surrender or
release of, or the substitution or exchange of or for, all or any part
of the Collateral or any Third Party Collateral or any other property
securing any of the Liabilities (including but not limited to any
property of any Obligor other than Borrower), or any extension or
renewal for one or more periods (whether or not longer than the
original period), or release, compromise, alteration or exchange, of
any obligations of any guarantor or other Obligor with respect to any
Collateral, any Third Party Collateral or any such property;
(c) extension or renewal for one or more periods (whether or
not longer than the original period), or release, compromise,
alteration or exchange of any of the Liabilities, or release or
compromise of any obligation of any Obligor with respect to any of the
Liabilities; or
(d) failure by Lender to resort to other security or pursue
any Person liable for any of the Liabilities before resorting to the
Collateral or Third Party Collateral.
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8. CONDITIONS PRECEDENT; DELIVERY OF DOCUMENTS AND OTHER MATTERS.
8.1 Conditions Precedent. The effectiveness of this Agreement (and the
obligation of Lender to make any Loan hereunder on the date of this Agreement)
is subject to satisfaction of the following conditions precedent (in addition to
those provided in Section 8.2):
8.1.1 Security Interest. The security interest in the
Collateral granted under this Agreement and the Related Agreements, and
in any Third Party Collateral and all other Liens granted to Lender to
secure the Liabilities, shall be a senior, perfected Lien except as
otherwise agreed by Lender, and all financing statements and other
documents relating to Collateral and Third Party Collateral shall have
been filed or recorded, as appropriate.
8.1.2 Blocked Account; Lock Box. Borrower and its Subsidiaries
shall have entered into blocked account and/or lock box agreements with
Lender for the collection and remittance to Lender of cash proceeds of
Collateral and Third Party Collateral.
8.1.3 Effect of Law. No law or regulation affecting Lender's
entering into this Agreement shall impose upon Lender any material
obligation, fee, liability, loss, cost, expense or damage.
8.1.4 Other Loan Agreements. The Other Loan Agreements
shall have become effective in accordance with their terms.
8.1.5 Fees. Lender shall have received the closing fee
referred to in Section 2.14 and any other fees then due and payable by
Borrower or any other Person hereunder or in connection herewith.
8.1.6 Documents. Lender shall have received all of the
following, each duly executed where appropriate and dated as of the
Closing Date (or such other date as shall be satisfactory to Lender),
in form and substance satisfactory to Lender:
(a) Resolutions. A copy, duly certified by the secretary or an
assistant secretary of Borrower and each Subsidiary party to a Related
Agreement, of: (1) resolutions of the Board of Directors of Borrower
and each such Subsidiary authorizing (A) the borrowings by Borrower
hereunder, (B) the execution, delivery and performance by Borrower and
each such Subsidiary of this Agreement and each other Related Agreement
to which Borrower and each such Subsidiary is a party or by which it is
bound and (C) certain officers or employees (i) of
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Borrower to request borrowings by telephone and (ii) of Borrower to
execute Borrowing Base Certificates; (2) all documents evidencing any
other necessary corporate action with respect to this Agreement and the
Related Agreements; and (3) all approvals or consents, if any, with
respect to this Agreement and the Related Agreements;
(b) Incumbency Certificates. A certificate of the secretary of
Borrower and each Subsidiary party to a Related Agreement certifying
the names of the officers of Borrower and each such Subsidiary
authorized to sign this Agreement and each other Related Agreement to
which Borrower and each such Subsidiary is a party or by which any of
them is bound, and all other documents and certificates to be delivered
by any of them hereunder, together with samples of the true signatures
of such officers;
(c) Borrower's Certificate. The certificate of the President
or Chief Executive Officer of Borrower certifying to the fulfillment of
all conditions precedent to closing and funding the secured financing
transaction contemplated by this Agreement and to the truth and
accuracy, as of such date, of the representations and warranties of
Borrower and each Subsidiary party to a Related Agreement contained in
this Agreement and each other Related Agreement to which Borrower or
such Subsidiary is a party or by which it is bound;
(d) Landlord's Consents. A Landlord's Consent, duly executed
by the owner of each leased premises identified on Schedule 4.12, 4.13
or 4.15 to the Parent Loan Agreement where Collateral or Third Party
Collateral is located other than ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇;
(e) Note. The Revolving Note in the form of Exhibit C;
and
(f) Other Documents. Such other documents as Lender shall
determine to be necessary or desirable, including but not limited to
documents described in paragraphs (a) and (b) of this Section 8.1.6
with respect to any Obligor other than Borrower and its Subsidiaries.
8.2 Continuing Conditions Precedent to all Loans; Certifi-
cation. The obligation of Lender to make any Loan hereunder is
subject to satisfaction of the following conditions precedent in
addition to those provided in Section 8.1:
(a) No Change in Condition. No change in the condition
or operations, financial or otherwise, of Borrower, any
Subsidiary or any other Obligor shall have occurred which
change, in the reasonable credit judgment of Lender, would
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reasonably be expected to have a material adverse effect on Borrower,
such Subsidiary or such other Obligor, or on any Collateral or Third
Party Collateral (which Collateral or Third Party Collateral Lender
deems in its sole discretion to be material);
(b) Default. Before and after giving effect to such
Loan, no Event of Default or Default shall have occurred and
be continuing;
(c) Insurance. There shall have been no material change, or
notice of prospective material change (whether such notice is formal or
informal), in the nature, extent, scope or cost of the insurance
policies of Borrower or any Subsidiary listed on Schedule 4.7 to the
Parent Loan Agreement which change would have a material adverse effect
on the financial condition of Borrower, any Subsidiary or Borrower and
its Subsidiaries taken as a whole, or would significantly adversely
affect Borrower's ability to perform its obligations under this
Agreement, the Notes or any Related Agreement to which it is a party or
by which it is bound;
(d) Warranties. Before and after giving effect to such
Loan, the warranties in Section 4 shall be true and correct as
though made on the date of such Loan, except for such changes
as are specifically permitted hereunder; and
(e) Accounting Methods. Borrower shall not have made
any material (as reasonably determined by Lender) change in
its accounting methods or principles except as required by
GAAP.
Each request for a Loan hereunder made or deemed to have been made by
Borrower shall be deemed to be a certificate of Borrower as to the matters set
out in the foregoing provisions of this Section 8.2.
9. INDEMNITY.
9.1 Environmental and Safety and Health Indemnity. Borrower hereby
indemnifies Lender and agrees to hold Lender harmless from and against any and
all losses, liabilities, damages, injuries, costs, expenses and claims of any
and every kind whatsoever (including, without limitation, court costs and
Attorneys' Fees) which at any time or from time to time may be paid, incurred or
suffered by, or asserted against, Lender for, with respect to, or as a direct or
indirect result of the violation by Parent or any of its Subsidiaries of any
Environmental Law or Occupational Safety and Health Law, or with respect to, or
as a direct or indirect result of, (i) the presence on or under, or the escape,
seepage, leakage, spillage, disposal, discharge, emission or release from,
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properties utilized by Parent and/or any Subsidiary of Parent into or upon any
land, the atmosphere, or any watercourse, body of water, groundwater or wetland,
of any Hazardous Material or other hazardous, toxic or dangerous waste,
substance or constituent, or other substance (including, without limitation, any
losses, liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law) or (ii) the existence of any unsafe or
unhealthful condition on or at any premises utilized by Parent and/or any
Subsidiary of Parent in the conduct of its business. The provisions and
undertakings of indemnification set out in this Section 9.1 shall survive
satisfaction and payment of the Liabilities and termination of this Agreement.
9.2 General Indemnity. In addition to the payment of expenses pursuant
to Section 11.3, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to indemnify, pay and hold Lender and any holder of
any Note, and the officers, directors, employees, agents, and affiliates of
Lender and such holders (collectively, the "Indemnitees"), harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for any of such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not any of such Indemnitees shall be designated a party thereto) that
may be imposed on, incurred by, or asserted against any Indemnitee, in any
manner relating to or arising out of this Agreement, any Related Agreement or
any other agreements executed and delivered by Borrower or any other Obligor in
connection herewith, the statements contained in any commitment letter delivered
by Lender, Lender's agreement to make the Loans hereunder, or the use or
intended use of the proceeds of any of the Loans hereunder (the "indemnified
liabilities"); provided that Borrower shall have no obligation to an Indemnitee
hereunder with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of such Indemnitee. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it violates any law or public policy,
Borrower shall contribute the maximum portion that it is permitted to pay under
applicable law to the payment and satisfaction of all indemnified liabilities
incurred by the Indemnitees or any of them. The provisions and undertakings of
indemnification set out in this Section 9.2 shall survive satisfaction and
payment of the Liabilities and termination of this Agreement.
9.3 Capital Adequacy. If Lender shall reasonably determine
that the application or adoption of any law, rule, regulation,
directive, interpretation, treaty or guideline regarding capital
adequacy, or any change therein or in the interpretation or
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administration thereof, whether or not having the force or law (including,
without limitation, application of changes to Regulation H and Regulation Y of
the Federal Reserve Board issued by the Federal Reserve Board on January 19,
1989 and regulations of the Comptroller of the Currency, Department of the
Treasury, 12 CFR Part 3, Appendix A, issued by the Comptroller of the Currency
on January 27, 1989) increases the amount of capital required or expected to be
maintained by Lender or any Person controlling Lender, and such increase is
based upon the existence of Lender's obligations hereunder and other commitments
of this type, then from time to time, within ten (10) days after demand from
Lender, Borrower shall pay to Lender such amount or amounts as will compensate
Lender or such controlling Person, as the case may be, for such increased
capital requirement. The determination of any amount to be paid by Borrower
under this Section 9.3 shall take into consideration the policies of Lender or
any Person controlling Lender with respect to capital adequacy and shall be
based upon any reasonable averaging, attribution and allocation methods. A
certificate of Lender setting forth the amount or amounts as shall be necessary
to compensate Lender as specified in this Section 9.3 shall be delivered to
Borrower and shall be conclusive in the absence of manifest error. The
provisions and undertakings of indemnification set out in this Section 9.3 shall
survive satisfaction and payment of the Liabilities and termination of this
Agreement.
9.4 Other Indemnities. Notwithstanding anything to the contrary
elsewhere in this Agreement, all other indemnities of Borrower in favor of
Lender contained in this Agreement shall survive satisfaction and payment of the
Liabilities and termination of this Agreement.
10. ADDITIONAL PROVISIONS. Additional provisions are set forth in
Supplement A.
11. GENERAL.
11.1 Borrower Waiver. Except as otherwise provided for in this
Agreement, Borrower waives (i) presentment, demand and protest and notice of
presentment, protest, default, non-payment, maturity, release, compromise,
settlement, one or more extensions or renewals of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Lender on which Borrower may in any way be liable and,
assuming Lender has acted in a commercially reasonable manner, hereby ratifies
and confirms whatever Lender may do in this regard; (ii) all rights to notice
and a hearing prior to Lender's taking possession or control of, or Lender's
relevy, attachment or levy on or of, the Collateral or any bond or security
which might be required by any court prior to allowing Lender to exercise any of
Lender's remedies; and (iii) the benefit of all valuation,
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appraisement and exemption laws. Borrower acknowledges that it has been advised
by counsel of its choice with respect to this Agreement and the transactions
evidenced by this Agreement.
11.2 Power of Attorney. Borrower appoints Lender, or any Person whom
Lender may from time to time designate, as Borrower's attorney and agent-in-fact
with power (which appointment and power, being coupled with an interest, shall
be irrevocable until all Liabilities are finally paid and performed in full and
this Agreement is terminated), without notice to Borrower, to:
(a) At such time or times hereafter as Lender or said agent,
in its sole and absolute discretion, may determine in Borrower's or
Lender's name (i) endorse Borrower's name on any checks, notes, drafts
or any other items of payment relating to and/or proceeds of the
Collateral which come into the possession of Lender or under Lender's
control and apply such payment or proceeds to the Liabilities in
accordance with the terms hereof; (ii) endorse Borrower's name on any
chattel paper, document, instrument, invoice, freight ▇▇▇▇, ▇▇▇▇ of
lading or similar document or agreement in Lender's possession relating
to Accounts Receivable, Inventory or any other Collateral; (iii) use
the information recorded on or contained in any data processing
equipment and computer hardware and software to which Borrower has
access relating to Accounts Receivable, Inventory and/or other
Collateral; (iv) use Borrower's stationery and sign the name of
Borrower to verification of Accounts Receivable and notices thereof to
Account Debtors; and (v) if not done by Borrower, do all acts and
things determined by Lender to be necessary, to fulfill Borrower's
obligations under this Agreement; and
(b) At such time or times after the occurrence and during the
continuance of an Event of Default, as Lender or said agent, in its
sole and absolute discretion, may determine, in Borrower's or Lender's
name: (i) demand payment of the Accounts Receivable; (ii) enforce
payment of the Accounts Receivable, by legal proceedings or otherwise;
(iii) exercise all of Borrower's rights and remedies with respect to
the collection of the Accounts Receivable and other Collateral; (iv)
settle, adjust, compromise, extend or renew the Accounts Receivable;
(v) settle, adjust or compromise any legal proceedings brought to
collect the Accounts Receivable; (vi) if permitted by applicable law,
sell or assign the Accounts Receivable and/or other Collateral upon
such terms for such amounts and at such time or times as Lender may
deem advisable; (vii) discharge and release the Accounts Receivable
and/or other Collateral; (viii) prepare, file and sign Borrower's name
on any proof of claim in bankruptcy or similar document against any
Account Debtor; (ix) prepare, file and sign Borrower's name on any
notice of lien, assignment or
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satisfaction of lien or similar document in connection with the
Accounts Receivable and/or other Collateral; and (x) do all acts and
things necessary, in Lender's sole and absolute discretion, to obtain
repayment of the Liabilities and to fulfill Borrower's other
obligations under this Agreement.
11.3 Expenses; Attorneys' Fees. Borrower agrees, whether or not any
Loan is made hereunder, to pay upon demand all Attorneys' Fees and all other
reasonable expenses incurred by Lender in connection with (i) [intentionally
left blank], (ii) the preparation of any and all amendments to this Agreement or
any of the Related Agreements and all other instruments or documents provided
for therein or delivered or to be delivered thereunder or in connection
therewith, (iii) the collection or enforcement of Borrower's or any other
Obligor's obligations hereunder or under any Related Agreement, and (iv) the
collection or enforcement of any of Lender's rights in or to any Collateral or
Third Party Collateral. Lender may advance all such amounts to Borrower as a
Revolving Loan. Borrower also agrees, (v) to indemnify and hold Lender harmless
from any loss or expense which may arise or be created by the acceptance of
telephonic or other instructions for making Loans except for losses and expenses
arising from Lender's gross negligence or willful misconduct, and (vi) to pay,
and save Lender harmless from all liability for, any stamp or other taxes which
may be payable with respect to the execution or delivery of this Agreement, or
any Related Agreement or Supplemental Documentation, or the issuance of any Note
or of any other instruments or documents provided for herein or to be delivered
hereunder or in connection herewith. Borrower's foregoing obligations shall
survive any termination of this Agreement.
11.4 Lender Fees and Charges. Borrower agrees to pay Lender on demand
the customary fees and charges of Lender for maintenance of accounts with Lender
or for providing other services to Borrower. Lender may, in its sole and
absolute discretion, provide for such payment by advancing the amount thereof to
Borrower as a Revolving Loan.
11.5 Lawful Interest. In no contingency or event whatsoever shall the
interest rate charged pursuant to the terms of this Agreement exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final determination, deem applicable hereto. In the event that such a court
determines that Lender has received interest hereunder in excess of the highest
applicable rate, Lender shall promptly refund such excess interest to Borrower.
11.6 No Waiver by Lender; Amendments. No failure or delay on
the part of Lender in the exercise of any power or right, and no
course of dealing between Borrower and Lender shall operate as a
waiver of such power or right, nor shall any single or partial
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exercise of any power or right preclude other or further exercise thereof or the
exercise of any other power or right. The remedies provided for herein are
cumulative and not exclusive of any remedies which may be available to Lender at
law or in equity. No notice to or demand on Borrower not required hereunder
shall in any event entitle Borrower to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the right of Lender to
any other or further action in any circumstances without notice or demand. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement or any Related Agreement shall in any event be effective
unless the same shall be in writing and signed and delivered by Lender and
Borrower. Any waiver of any provision of this Agreement, and any consent to any
departure by Borrower from the terms of any provision of this Agreement, shall
be effective only in the specific instance and for the specific purpose for
which given.
11.7 Termination of Credit.
(a) Unless the Termination Date is extended pursuant to clause
(b) of this Section 11.7, the Credit shall terminate on the
then-scheduled Termination Date. Borrower may terminate the Credit at
any time prior to the Termination Date upon notice to Lender and
payment in full of the outstanding principal balance of the Loans and
all other Liabilities. All of Lender's rights and remedies, the liens
and security interests of Lender in the Collateral and the Third Party
Collateral and all of Borrower's duties and obligations under this
Agreement shall survive termination of the Credit extended to Borrower
hereunder until all of the Liabilities have been finally paid and
performed in full. The termination or cancellation of the Credit shall
not affect or impair the liabilities and obligations of Borrower or any
one or more of the Obligors to Lender or Lender's rights with respect
to any Loans and advances made and other Liabilities incurred prior to
such termination or with respect to the Collateral or any Third Party
Collateral.
(b) Borrower may, not more than 90 days nor less than 75 days
prior to any scheduled Termination Date, request that Lender extend the
Credit for an additional one-year period to the next anniversary of
such date. Unless Lender, in the exercise of its sole and complete
discretion, notifies Borrower of its willingness to extend the Credit
for such additional one-year period, the Credit shall terminate on the
then scheduled Termination Date (and all Loans and other Liabilities
shall be thereupon due and payable).
11.8 Notices. Except as otherwise expressly provided herein,
any notice hereunder to Borrower or Lender shall be in writing
(including telegraphic, telex, or facsimile communication) and
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shall be given to Borrower or Lender at its address, telex number or facsimile
number set forth on the signature pages hereof or at such other address, telex
number or facsimile number as Borrower or Lender may, by written notice,
designate as its address, telex number or facsimile number for purposes of
notices hereunder. All such notices shall be deemed to be given when transmitted
by telex and the appropriate answerback is received, transmitted by facsimile,
delivered to the telegraph office, delivered by courier, personally delivered
or, in the case of notice by mail, three (3) Banking Days following deposit in
the United States mails, properly addressed as herein provided, with proper
postage prepaid; provided, however, that notice to Lender of Borrower's intent
to terminate the Credit shall not be effective until actually received by
Lender.
11.9 Assignments and Participations; Information. Borrower hereby
consents to Lender's grant of participations in or sale, assignment, transfer or
other disposition, at any time and from time to time hereafter, of this
Agreement or any Related Agreement, or of any portion of any thereof, including
without limitation Lender's rights, titles, interests, remedies, powers and/or
duties. Lender may furnish any information concerning Borrower in the possession
of Lender from time to time to assignees of the rights and/or obligations of
Lender hereunder and to Participants in any Loan (including prospective
assignees and Participants) and may furnish information in response to credit
inquiries consistent with general banking practice. Lender shall promptly notify
Borrower of Lender's grant of any participation in or sale, assignment, transfer
or other disposition of this Agreement or any Related Agreement, or of any
portion of any thereof. Borrower shall use its reasonable efforts to assist
Lender in its efforts to sell assignments and participations.
11.10 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
11.11 Successors. This Agreement shall be binding upon Borrower and
Lender and their respective successors and assigns, and shall inure to the
benefit of Borrower and Lender and the successors and assigns of Lender.
Borrower shall not assign its rights or duties hereunder without the consent of
Lender.
11.12 Construction. Borrower acknowledges that this Agreement shall not
be binding upon Lender until and unless accepted by Lender in writing. If so
accepted by Lender, this Agreement and the Related Agreements and Supplemental
Documentation shall, unless otherwise expressly provided therein, be deemed to
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have been negotiated and entered into in, and shall be governed and controlled
by the laws of, the State of Illinois as to interpretation, enforcement,
validity, construction, effect, choice of law, and in all other respects,
including, but not limited to, the legality of the interest rate and other
charges, but excluding perfection of security interests and liens which shall be
governed and controlled by the laws of the relevant jurisdiction.
11.13 Consent to Jurisdiction. To induce Lender to accept this
Agreement, Borrower irrevocably agrees that, subject to Lender'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 RELATED AGREEMENTS, THE
SUPPLEMENTAL DOCUMENTATION OR THE COLLATERAL SHALL BE LITIGATED IN COURTS HAVING
SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS. BORROWER HEREBY CONSENTS
AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED
WITHIN SAID CITY AND STATE AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON BORROWER, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS STATED ON THE SIGNATURE PAGE
HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT
THEREOF.
11.14 Subsidiary Reference. Any reference herein to a Subsidiary or
Subsidiaries of Borrower, and any financial definition, ratio, restriction or
other provision of this Agreement which is stated to be applicable to "Borrower
and its Subsidiaries" or which is to be determined on a "consolidated" or
"consolidating" basis, shall apply only to the extent Borrower has any
Subsidiaries and, where applicable, to the extent any such Subsidiaries are
consolidated with Borrower for financial reporting purposes.
11.15 WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
(i) UNDER THIS AGREEMENT OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR (ii) ARISING FROM ANY BANKING RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Initials of ▇▇▇▇▇▇ ▇. ▇▇▇▇, President of Borrower:
.
11.16 Prior Actions. Borrower hereby waives, releases and forever
discharges Lender, its officers, employees and agents, from any and all rights,
claims, demands or causes of action against Lender, in law or in equity, arising
out of Lender's past actions or omissions with respect to the Original Loan
Agreement, any other agreements or documents, or any lien or collateral securing
any Liabilities under and as defined in the Original Loan Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
CONTEMPO DESIGN WEST, INC.
By:_______________________________
Title:____________________________
Address: c/o Azimuth Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA ILLINOIS
By:_______________________________
Title:____________________________
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile number: 312/828-3889
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SUPPLEMENT A
to
LOAN AND SECURITY AGREEMENT
Dated as of October 9, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ("Lender") and CONTEMPO DESIGN WEST, INC. ("Borrower")
1. Loan Agreement Reference. This Supplement A, as it may be amended or modified
from time to time, is a part of the Loan and Security Agreement dated as of
October 9, 1995 between Borrower and Lender (together with all amendments,
modifications and supplements thereto, the "Loan Agreement"). Terms used herein
which are defined in the Loan Agreement shall have the meaning ascribed to them
therein unless the context requires otherwise.
2. Revolving Credit Amount; Borrowing Base.
2.1 Revolving Credit Amount. The maximum amount of Revolving Loans
which Lender will make available to Borrower (such amount is herein called the
"Revolving Credit Amount") is (i) FIVE MILLION FOUR HUNDRED THOUSAND DOLLARS
($5,400,000) (unless such amount is increased by Lender in its sole discretion)
less (ii) the principal amount of "Revolving Loans" (under and as defined in
each Other Loan Agreement) outstanding under each Other Loan Agreement.
2.2 Borrowing Base. The term "Borrowing Base", as used
herein, shall mean:
(i) an amount (the "Accounts Receivable Availability") equal
to 80% of the net amount (after deduction of such reserves and
allowances as Lender deems proper and necessary in good faith
and in the exercise of its reasonable judgment) of the
Eligible Accounts Receivable of Borrower; plus
(ii) an amount (the "Additional Availability") equal to (A)(1)
from the Closing Date to the one year anniversary thereof,
$300,000 and (2) thereafter, zero less (B) the principal
amount of "Revolving Loans" under and as defined in the Other
Loan Agreements then outstanding under the Other Loan
Agreements in excess of the "Accounts Receivable Availability"
and "Inventory Availability" under and as defined in each
Other Loan Agreement.
2.3 Availability Adjustments.
None.
2.4 Lender's Rights. Borrower agrees that nothing contained in this
Supplement A (i) shall be construed as Lender's agreement to resort or look to a
particular type or item of Collateral as security for any specific Loan or
advance or in any way limit Lender's right to resort to any or all of the
Collateral as security for any of the Liabilities, (ii) shall be deemed to limit
or reduce any lien on or any security interest in or upon any portion of the
Collateral or other security for the Liabilities or (iii) shall supersede
Section 2.8 of the Loan Agreement.
3. Interest.
3.1
(a) Interest to Maturity. The outstanding principal balance of
the Revolving Loans (other than Overdraft Loans and Over
Advances) shall bear interest to maturity at the Reference
Rate in effect from time to time plus one and one-half percent
(1.5%) per annum.
(b) Default Rate. If any amount of the Revolving
Loans is not paid when due, whether by acceleration or
otherwise, the outstanding principal balance of the Revolving
Loans (other than Overdraft Loans and Over Advances) shall
bear interest until paid at a rate per annum equal to the
greater of the (a) the Reference Rate from time to time in
effect plus two and one-half percent (2.5%) or (b) two and
one-half percent (2.5%) above the Reference Rate in effect at
the time such amount became due.
3.2 Overdraft Loans; Over Advances. Overdraft Loans and Over
Advances shall bear interest at the rate(s) determined pursuant to Section 2.6
or Section 2.7 of the Loan Agreement, as applicable.
3.3 Computation. Interest shall be calculated on the basis of a year
consisting of 360 days and paid for actual days elapsed. Changes in any interest
rate provided for herein which are due to changes in the Reference Rate shall
take effect on the date of the change in the Reference Rate.
3.4 Payment. Until maturity, interest on the Loans shall be payable
monthly in arrears on the last day of each calendar month at maturity. After
maturity, whether by acceleration or otherwise, accrued interest shall be
payable on demand.
4. Eligible Account Receivable Data. Each Account Receivable of Borrower must be
due and payable within 90 days of the date of the invoice evidencing such
Account Receivable (180 days in the case of Accounts Receivable owing from
Siemens), and must not be unpaid on the date that is 91 days after the date of
such invoice (181 days in the case of Accounts Receivable owing from Siemens);
provided,
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however, that Lender, in its sole discretion, may extend the date on which such
invoice must be due and payable to a date which is not more than 120 days from
the date of invoice. If invoices representing 10% or more of the unpaid net
amount of all Accounts Receivable of Borrower and Contempo from any one Account
Debtor are unpaid more than 90 days after the date of such invoices (180 days in
the case of Accounts Receivable owing from Siemens) (or such longer period as
Lender, in its sole discretion, may agree to from time to time), then all
Accounts Receivable relating to such Account Debtor shall cease to be Eligible
Accounts Receivable.
5. Information. Borrower agrees that, until the Credit is terminated, it shall
furnish to Lender in form reasonably satisfactory to Lender, within fifteen (15)
days after the end of each month, an aging of all Accounts Receivable of
Borrower and an aging of all accounts payable of Borrower.
Borrower's Initials: ______________
Lender's Initials: ______________
Date: October 9, 1995
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