CREDIT AGREEMENT by and between BROOKRIDGE FUNDING SERVICES, LLC and MGM FUNDING, LLC Dated as of December 7, 2009
Exhibit
10.2 Senior
Credit Facility between the Company and MGM Funding LLC
Execution
Copy
by and
between
BROOKRIDGE
FUNDING SERVICES, LLC
and
MGM
FUNDING, LLC
________________
Dated as
of December 7, 2009
TABLE
OF CONTENTS
|
1.
|
AMOUNT
AND TERMS OF THE LOANS
|
1
|
|
1.01.
|
Loans
|
1
|
|
1.02.
|
Note
|
1
|
|
1.03.
|
Procedure
for Borrowing
|
2
|
|
1.04.
|
Termination,
Reduction or Increase of Maximum Amount
|
2
|
|
1.05.
|
Payments
of the Loans
|
3
|
|
1.06.
|
Treatment
and Application of Payments
|
3
|
|
1.07.
|
Use
of Proceeds
|
4
|
|
1.08.
|
Guarantee
|
4
|
|
1.09.
|
Security
Agreement
|
4
|
|
2.
|
INTEREST,
FEES, YIELD PROTECTIONS, ETC.
|
5
|
|
2.01.
|
Interest
Rate and Payment Dates
|
5
|
|
2.02.
|
Taxes;
Net Payments
|
6
|
|
2.03.
|
Lender's
Records
|
6
|
|
3.
|
REPRESENTATIONS
AND WARRANTIES
|
6
|
|
3.01.
|
Existence
and Power; Subsidiaries
|
6
|
|
3.02.
|
Authority
and Execution
|
7
|
|
3.03.
|
Binding
Agreement
|
7
|
|
3.04.
|
Absence
of Defaults; No Conflicting Agreements
|
7
|
|
3.05.
|
Consents
|
7
|
|
3.06.
|
Litigation
|
8
|
|
3.07.
|
Compliance
with Applicable Laws
|
8
|
|
3.08.
|
Taxes
|
8
|
|
3.09.
|
Governmental
Regulations
|
8
|
|
3.10.
|
Federal
Reserve Regulations; Use of Loan Proceeds
|
9
|
|
3.11.
|
Property
|
9
|
|
3.12.
|
Plans
|
9
|
|
3.13.
|
Environmental
Matters
|
10
|
|
3.14.
|
Security
Interests
|
10
|
|
3.15.
|
No
Misrepresentation
|
10
|
|
3.16.
|
Solvency
|
11
|
|
4.
|
CONDITIONS
TO EFFECTIVENESS AND RIGHT OF BORROWER TO REQUEST LOANS
|
11
|
|
4.01.
|
Conditions
Precedent to Effectiveness
|
11
|
|
4.02.
|
Certain
Conditions Precedent to Each Loan Request
|
15
|
|
5.
|
AFFIRMATIVE
COVENANTS
|
16
|
|
5.01.
|
Financial
and Other Information
|
16
|
|
5.02.
|
Existence,
Maintenance of Properties, Insurance, Licenses
|
18
|
|
5.03.
|
Payment
of Taxes, Indebtedness, etc.
|
19
|
|
5.04.
|
Maintenance
of Records; Inspection; Collateral Audit
|
19
|
|
6.
|
NEGATIVE
COVENANTS
|
19
|
|
6.01.
|
Indebtedness
|
19
|
|
6.02.
|
Liens
|
19
|
|
6.03.
|
Merger,
Sale of Assets, Nature of Business
|
21
|
|
6.04.
|
Investments
|
21
|
|
6.05.
|
Compliance
with ERISA
|
21
|
|
6.06.
|
Restricted
Payments
|
22
|
|
6.07.
|
Transactions
with Affiliates
|
22
|
|
6.08.
|
Amendment
of Material Agreements
|
22
|
|
6.09.
|
Use
of Proceeds
|
23
|
|
6.10.
|
Nature
of Business
|
23
|
|
7.
|
DEFAULT
|
23
|
|
7.01.
|
Events
of Default
|
23
|
|
7.02.
|
Remedies
|
26
|
|
8.
|
DEFINITIONS
AND PRINCIPLES OF CONSTRUCTION
|
26
|
|
8.01.
|
Definitions
|
26
|
|
8.02.
|
Principles
of Construction
|
26
|
|
9.
|
OTHER
PROVISIONS
|
27
|
|
9.01.
|
Amendments
and Waivers
|
27
|
|
9.02.
|
Notices
|
27
|
|
9.03.
|
Assignments
and Participations
|
28
|
|
9.04.
|
No
Waiver; Cumulative Remedies
|
29
|
|
9.05.
|
Survival
of Representations and Warranties and Certain Obligations
|
29
|
|
9.06.
|
Expenses
|
29
|
|
9.07.
|
Indemnity
|
31
|
|
9.08.
|
Limitation
of Liability
|
32
|
|
9.09.
|
Counterparts
|
32
|
|
9.10.
|
Set-off
|
33
|
|
9.11.
|
Construction
|
34
|
|
9.12.
|
Governing
Law
|
34
|
|
9.13.
|
Headings
Descriptive
|
34
|
|
9.14.
|
Severability
|
34
|
|
9.15.
|
Integration
|
35
|
|
9.16.
|
Consent
to Jurisdiction
|
35
|
|
9.17.
|
Service
of Process
|
36
|
|
9.18.
|
No
Limitation on Service or Suit
|
36
|
|
9.19.
|
WAIVER
OF TRIAL BY JURY
|
36
|
|
9.20.
|
USA
Patriot Act Notice
|
37
|
|
Annex
I
|
Definitions
|
|
Schedules
|
|
|
Schedule
6.02
|
Liens
in existence on the Effective Date
|
|
Exhibits
|
|
|
Exhibit
A
|
Form
of Note
|
|
Exhibit
B
|
Form
of Guarantee
|
|
Exhibit
C
|
Form
of Security Agreement
|
|
Exhibit
D
|
Form
of Borrowing Request
|
|
Exhibit
E
|
Form
of Borrowing Base Certificate
|
CREDIT
AGREEMENT, dated as of December 7, 2009 (this "Agreement"),
by and between BROOKRIDGE
FUNDING SERVICES, LLC, a North Carolina limited liability company (the
"Borrower")
and MGM FUNDING, LLC, a
North Carolina limited liability company (the "Lender").
AMOUNT AND TERMS OF THE
LOANS
Loans
Subject
to the terms and conditions of this Agreement, the Borrower may request that the
Lender to make loans (each a "Loan" and,
collectively, the "Loans") to
the Borrower from time to time during the Availability Period in an aggregate
principal amount at any one time outstanding not to exceed the lesser of the
Maximum Amount and the Borrowing Base. During the Availability
Period, the Borrower may request Loans, prepay Loans in whole or in part in
accordance with Section 1.05(a) and request additional Loans, all in accordance
with the terms and conditions hereof. The aggregate outstanding
principal balance of the Loans shall be due and payable in full on the Maturity
Date. Nothing herein shall constitute or be construed as an agreement
or commitment by Lender to make any Loans or otherwise extend credit pursuant to
this Agreement, the making of which Loans or other extensions of credit shall be
in the sole and absolute discretion of the Lender.
Note
The Loans shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A, with
appropriate insertions therein as to date and principal amount (as indorsed or
modified from time to time, including all replacements thereof and substitutions
therefor, the "Note"), payable to the order of the
Lender and representing the obligation of the Borrower to pay the aggregate
outstanding principal balance of the Loans, in each case with interest thereon
as prescribed in Section 2.01.
The
Lender is hereby authorized to record (i) the date and amount of each Loan made
by the Lender and (ii) the date and amount of each payment and prepayment of
principal of any Loans on the schedule (and any continuations thereof) annexed
to and constituting a part of the Note. No failure so to record or
any error in so recording shall affect the obligation of the Borrower to repay
the Loans, with interest thereon, as herein provided.
Procedure for
Borrowing
The
Borrower may request a Loan on any Business Day during the Availability Period,
provided that the Borrower shall notify the Lender in writing, which may be by
facsimile not later than (i) 1:100 a.m. on the same Business Day, in the case of
a request for a Loan in an a principal amount of $500,000 or less and
(ii) 1:00 p.m. two Business Days prior to the date of the requested Loan, in the
case of a request for a Loan in an a principal in excess of $500,000
specifying (A) the aggregate principal amount of Loans to be borrowed and (B)
the requested Borrowing Date. Such notice shall be irrevocable and
confirmed immediately by delivery to the Lender of a written Borrowing
Request.
Subject
to the satisfaction of the terms and conditions of this Agreement, as determined
by the Lender, the Lender shall disburse the proceeds of each Loan by wire
transfer to a bank account of the Borrower in the United States in accordance
with wire transfer instructions provided by the Borrower to the
Lender.
Termination, Reduction or
Increase of Maximum
Amount
The
Borrower shall have the right, upon at least three Business Days' prior written
notice to the Lender, at any time, to terminate this Agreement or from time to
time to permanently reduce the Maximum Amount, provided, however, that any such
reduction shall be in the amount of $100,000 or an integral multiple of $100,000
in excess thereof. Simultaneously with each reduction of the Maximum
Amount under this Section, the Borrower shall prepay the Loans as required by
Section 1.05(b).
The
Borrower shall have the right, upon at least three Business Days' prior written
notice to the Lender, at any time, to request that the Lender increase the
Maximum Amount by an amount of up to $1,000,000, provided, however, that the
determination as to whether to grant such request for an increase shall be made
by the Lender in its sole and absolute discretion.
Payments of the
Loans
Voluntary
Prepayments. The Borrower may, at its option, prepay the Loans without
premium or penalty in full at any time or in part from time to time by notifying
the Lender in writing not later than the date of such prepayment specifying the
principal amount of the Loans to be prepaid and the date of
prepayment. Each such notice shall be irrevocable and the amount
specified in each such notice shall be due and payable on the date
specified.
Mandatory Prepayments of
Loans. (i) Simultaneously with each reduction of the Maximum
Amount under Section 1.04, the Borrower shall prepay the outstanding Loans by
the amount, if any, by which the aggregate unpaid principal balance of the Loans
exceeds the Maximum Amount as so reduced.
(ii) If,
at any time, the sum of the aggregate outstanding principal balance of the Loans
exceeds the Borrowing Base, the Borrower shall immediately prepay the
outstanding Loans in an amount equal to such excess.
In General.
Simultaneously with each prepayment of the Loans, the Borrower shall prepay all
accrued interest on the amount prepaid through the date of
prepayment.
Treatment and Application of
Payments
Each
payment, including each prepayment, of principal and interest on the Loans shall
be made by the Borrower prior to 12:00 noon on the date such payment is due, at
the Lender's office set forth in Section 9.02, in lawful money of the United
States, in funds immediately available to the Lender and without set-off or
counterclaim. The failure of the Borrower to make any such payment by
such time shall not constitute a Default, provided that such payment is made on
such due date, but any such payment made after 12:00 noon on such due date shall
be deemed to have been made prior to12:00 noon on the next Business Day for the
purpose of calculating interest.
If
any payment shall be due and payable on a day which is not a Business Day, the
due date thereof shall be extended to the next Business Day and interest shall
be payable at the applicable rate specified herein during such extension, provided, however, that if
such next Business Day is after the Maturity Date, any such payment shall be due
on the immediately preceding Business Day.
Use of
Proceeds
The
Borrower agrees that the proceeds of the Loans shall be used solely, directly or
indirectly, (i) to finance a portion of the purchase price payable in connection
with the Acquisition, (ii) to fund accounts receivable and purchase orders in
the operation of its financing business and (iii) to pay the out-of-pocket fees
and expenses incurred by the Borrower in connection with the Loan
Documents. Notwithstanding anything to the contrary contained in any
Loan Document, the Borrower agrees that no part of the proceeds of the Loans
will be used, directly or indirectly, for a purpose which violates any law, rule
or regulation of any Governmental Authority, including, without limitation, the
provisions of Regulations T, U or X of the Board of Governors of the Federal
Reserve System, as amended.
Guarantee
Subject
to the limitations therein, all obligations of the Borrower hereunder shall be
jointly and severally guaranteed by ▇▇▇▇ ▇. ▇▇▇▇▇▇ III and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(the "Guarantors"),
pursuant to the terms of a Guarantee in the form of Exhibit B (as the same may
be amended, supplemented or otherwise modified from time to time, the "Guarantee").
Security
Agreement
All
obligations of the Borrower hereunder shall be secured pursuant to the terms of
a Security Agreement in the form of Exhibit C (as the same may be amended,
supplemented or otherwise modified from time to time, the "Security
Agreement"). The Guarantee shall be unsecured.
INTEREST, FEES, YIELD
PROTECTIONS, ETC.
Interest Rate and Payment
Dates
Prior to Maturity.
Except as otherwise provided in Section 2.01(b), prior to maturity, the
outstanding principal balance of the Loans shall bear interest at a rate per
annum equal to 20.00%.
Default Rate. If any
payment of principal and/or interest is not paid when due (whether at stated
maturity, by acceleration or otherwise) the unpaid principal balance of the
Loans shall bear interest at a rate per annum (whether before or after the entry
of a judgment thereon) equal to 4% above the rate which would otherwise be
applicable under Section 2.01(a) and any overdue interest or other amount
payable under the Loan Documents shall bear interest at a rate per annum equal
to 24.00%. All such interest shall be payable on demand.
In General. Interest
on all amounts due and payable hereunder shall be calculated on the basis of a
360-day year for the actual number of days elapsed. Except as
otherwise provided in Section 2.01(b), interest shall be payable monthly in
arrears on the first day of each month (commencing with the first such date to
occur after the making of the first Loan hereunder), and, as provided in Section
1.05(c), upon each prepayment of the Loans.
Highest Lawful Rate.
At no time shall the interest rate payable on the Loans, together with the Fees
and all other amounts payable under the Loan Documents to the Lender, to the
extent the same are construed to constitute interest, exceed the maximum rate of
interest that at any time may be contracted for, taken, charged or received by
the Lender under the Loan Documents under applicable law. If for any
period during the term of this Agreement, any amount paid to the Lender under
the Loan Documents, to the extent the same shall (but for the provisions of this
Section) constitute or be deemed to constitute interest, would exceed the
maximum amount of interest permitted during such period, then such excess amount
shall be applied or shall be deemed to have been applied as a prepayment of the
Loans in such order as the Lender shall determine.
Taxes; Net
Payments
All
payments made by the Borrower under the Loan Documents shall be made free and
clear of, and without reduction for or on account of, any Taxes required by law
to be withheld from any amounts payable under the Loan Documents. In
the event that the Borrower is prohibited by law from making payments under the
Loan Documents free of deductions or withholdings, the Borrower shall pay such
additional amounts to the Lender as may be necessary in order that the actual
amounts received by the Lender in respect of interest and any other amounts
payable under the Loan Documents after such deduction or withholding (and after
payment of any additional taxes or other charges due as a consequence of the
payment of such additional amounts) shall equal the amount which would have been
received if such deduction or withholding were not required.
The
Borrower agrees to pay any current or future stamp or documentary Taxes and any
other excise or property Taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or registration of, or
any amendment of, supplement to or modification of, or any waiver or consent
under or in respect of, the Loan Documents or otherwise with respect to, the
Loan Documents.
Lender's
Records
The
Lender's records with respect to the Loans, the interest rates applicable
thereto, each payment and prepayment by the Borrower of principal and interest
on the Loans and fees, expenses and any other amounts due and payable in
connection with this Agreement shall be presumed correct absent manifest
error.
REPRESENTATIONS AND
WARRANTIES
In order
to induce the Lender to enter into this Agreement and to make the Loans, the
Borrower makes the following representations and warranties to the
Lender:
Existence and Power;
Subsidiaries
The
Borrower is a duly formed and validly existing limited liability company, in
good standing under the laws of the State of North Carolina, has all requisite
power and authority to own its Property and to carry on its business as now
conducted, and is in good standing and authorized to do business in each
jurisdiction in which the nature of the business conducted therein or the
Property owned by it therein makes such qualification necessary, except where
such failure to qualify could not reasonably be expected to have a Material
Adverse Effect on the Borrower. As of the Effective Date, the
Borrower has no Subsidiaries.
Authority and
Execution
The
Borrower has full legal power and authority to enter into, execute, deliver and
perform the terms of the Loan Documents to which it is a party, all of which
have been duly authorized by all proper and necessary corporate or other
applicable action and are in full compliance with its Organizational
Documents. The Borrower has duly executed and delivered the Loan
Documents to which it is a party.
Binding
Agreement
The Loan
Documents (other than the Note) constitute, and the Note, when issued and
delivered pursuant hereto for value received, will constitute, the valid and
legally binding obligations of each Credit Party, in each case, to the extent it
is a party thereto, enforceable in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally.
Absence of Defaults; No
Conflicting Agreements
Neither
the Borrower, nor any other Credit Party, is in default under any mortgage,
indenture, contract or agreement to which it is a party or by which it or any of
its Property is bound. The execution, delivery and carrying out of
the terms of the Loan Documents will not (i)
constitute a default under any such mortgage, indenture, contract or agreement,
or result in the creation or imposition of, or obligation to create, any Lien
upon any Property of the Borrower or any other Credit Party, except for Liens
created pursuant to the Loan Documents, (ii) result in a breach of or require
the mandatory repayment of or other acceleration of payment under or pursuant to
the terms of any such mortgage, indenture, contract or agreement or (iii) result
in the violation of any statute, regulation, rule and order of any Governmental
Authority which is applicable to it.
Consents
No
consent, authorization or approval of, filing with, notice to, or exemption by,
any Governmental Authority or any other Person is required to authorize, or is
required in connection with the execution, delivery and performance of the Loan
Documents and the transactions contemplated thereby, or is required as a
condition to the validity or enforceability of the Loan Documents, except for
the filing of financing statements to perfect the Liens granted pursuant to the
Security Agreement.
Litigation
There are
no actions, suits or proceedings at law or in equity or by or before any
Governmental Authority pending or, to the knowledge of the Borrower, threatened
against any Credit Party, maintained by any Credit Party or which may affect the
Property of any Credit Party, which could reasonably be expected to have a
Material Adverse Effect on any Credit Party, which call into question the
validity or enforceability of, or otherwise seek to invalidate, any Loan
Document, or might, individually or in the aggregate, materially and adversely
affect any of the transactions contemplated by any Loan Document.
Compliance with Applicable
Laws
Neither
the Borrower, nor any other Credit Party, is in default with respect to any
judgment, order, writ, injunction, decree or decision of any Governmental
Authority. The Borrower, and each other Credit Party, is in
compliance in all material respects with all statutes, regulations, rules and
orders applicable to it, including, without limitation, Environmental
Laws.
Taxes
The
Borrower has filed or caused to be filed all tax returns required to be filed
and has paid, or has made adequate provision for the payment of, all taxes shown
to be due and payable on said returns or in any assessments made against it
(except such thereof as are being contested in good faith and by appropriate
proceedings diligently conducted, and for which adequate reserves have been set
aside in accordance with GAAP), and no tax Liens have been filed and no claims
are being asserted with respect to such taxes.
Governmental
Regulations
Neither
the Borrower, nor any Person controlled by, controlling, or under common control
with, the Borrower, is subject to regulation under the Federal Power Act, as
amended, or the Investment Company Act of 1940, as amended, or is subject to any
statute or regulation which prohibits or restricts the incurrence of
Indebtedness, including, without limitation, statutes or regulations relative to
common or contract carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.
Federal Reserve Regulations;
Use of Loan Proceeds
The
Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock. No part of the proceeds of the Loans will be used,
directly or indirectly, for a purpose that violates any law, rule or regulation
of any Governmental Authority, including, without limitation, the provisions of
Regulations T, U or X of the Board of Governors of the Federal Reserve System,
as amended. After giving effect to the making of the Loans, Margin
Stock will constitute less than 25% of the aggregate assets (as determined by
any reasonable method) of the Borrower.
Property
The
Borrower has (i) good and marketable title to all of its Property, title to
which is material to it, and (ii) a valid leasehold interest in all Property, a
leasehold interest in which is material to it, in each case subject to no Liens,
except Permitted Liens.
The
Borrower owns, or is entitled to use, all trademarks, trade names, copyrights,
patents and other intellectual property material to its business, and the use
thereof by the Borrower does not infringe upon the rights of any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.
Plans
Neither
the Borrower nor any of its ERISA Affiliates is a party to a multiemployer plan
as defined in Section 4001(a)(3) of ERISA. The Borrower and its ERISA
Affiliates have fulfilled all obligations under the minimum funding standards of
ERISA and the Code with respect to each Pension Plan established or maintained
by the Borrower or its ERISA Affiliates and with respect to each such Pension
Plan are not subject to any material liability to the PBGC under Title IV of
ERISA. With respect to each Employee Benefit Plan, the Borrower is in
compliance in all material respects with the currently applicable provisions of
ERISA and the Code.
Environmental
Matters
The
Borrower is in compliance in all material respects with the requirements of all
applicable Environmental Laws, the violation of which could have a Material
Adverse Effect on the Borrower.
No
hazardous substances have been generated or manufactured on, transported to or
from, treated at, stored at or discharged from any real property owned, leased
or operated by the Borrower except in compliance with all applicable
Environmental Laws.
The
Borrower has not received notice or otherwise learned of any claim, demand,
suit, action, proceeding, event, condition, report, directive, Lien, violation,
non-compliance or investigation indicating or concerning any potential or actual
liability or remedial action arising in connection with: (x) any non-compliance
with or violation of the requirements of any applicable Environmental Laws, or
(y) the presence of, or release or threatened release of any hazardous substance
on or from any real property owned, leased or operated by the Borrower or either
Company Guarantor.
Security
Interests
Subject
to the filing of UCC-1 financing statements in the applicable filing offices,
the payment of the fees in respect thereof and the filing of continuation
statements when required by applicable law, the security interests granted under
the Security Agreement constitute valid, binding and continuing duly perfected
first priority Liens in and to the Collateral, subject to no other Liens, other
than Permitted Liens.
No
Misrepresentation
No
representation or warranty contained in any Loan Document and no certificate or
report from time to time furnished by any Credit Party in connection with the
transactions contemplated thereby, contains or will contain a misstatement of
material fact, or, to the best knowledge of the Borrower, omits or will omit to
state a material fact required to be stated in order to make the statements
therein contained not misleading in the light of the circumstances under which
made, provided that any projections or pro-forma financial information contained
therein are good faith estimates based upon assumptions believed by the Borrower
to be reasonable at the time such estimates are made.
Solvency
After
giving effect to the Loans to be made on the Effective Date, the Borrower is
Solvent.
CONDITIONS TO EFFECTIVENESS
AND RIGHT OF BORROWER TO REQUEST LOANS
Conditions Precedent to
Effectiveness
The
effectiveness of this Agreement, and the willingness of the Lender to consider
making a Loan on the first Borrowing Date, is subject to the fulfillment of the
following conditions prior to or simultaneously therewith:
This
Agreement
The
Lender shall have received counterparts of this Agreement duly executed by an
Authorized Signatory of the Borrower.
Note
The
Lender shall have received the Note, duly executed by an Authorized Signatory of
the Borrower.
Security
Agreement
(i) The
Lender shall have received the Security Agreement, duly executed by an
Authorized Signatory of the Borrower, together with such financing statements
and other documents as the Lender may require in connection with the perfection
of its security interests therein.
(ii) The
Lender shall have received Uniform Commercial Code, tax and judgment lien search
reports with respect to each public office where Liens are or may be filed
disclosing that there are no Liens of record in such official's office covering
any Collateral or showing the Borrower as debtor thereunder (other than
Permitted Liens).
Guarantees
The
Lender shall have received the Guarantee, duly executed by the
Guarantors.
Evidence of
Action
The
Lender shall have received a certificate, dated the Effective Date, of the
managers of the Borrower:
attaching
a true and complete copy of the resolutions of its Managing Person and of all
documents evidencing all necessary company action (in form and substance
satisfactory to the Lender) taken by it to authorize the Loan Documents to which
it is a party and the transactions contemplated thereby,
attaching
a true and complete copy of its Organizational Documents,
attaching
a certificate of good standing of the Secretary of State of the State of North
Carolina and of the Secretary of State of the State of Connecticut, issued not
more than 10 days prior to the Effective Date, and
setting
forth the incumbency of its managers (or other analogous counterpart) who may
sign the Loan Documents to which it is a party, including therein a signature
specimen of each such manager (or other analogous counterpart).
Managers'
Certificate
The
Lender shall have received a certificate, in all respects satisfactory to the
Lender, of the managers of the Borrower, dated the Effective Date, certifying
that:
Absence of
Litigation. There is no injunction, writ, preliminary
restraining order or other order of any nature by which the Borrower is bound or
to which any of its Property is subject issued by any Governmental Authority in
any respect affecting the transactions provided for in the Loan Documents and no
action or proceeding by or before any Governmental Authority has been commenced
against the Borrower or is pending or, to the knowledge of the Borrower,
threatened against the Borrower, seeking to prevent or delay the transactions
contemplated by the Loan Documents or challenging any other terms and provisions
hereof or thereof or seeking any damages in connection therewith.
Approvals and
Consents. All approvals and consents of all Persons required
to be obtained in connection with the consummation by the Borrower of the
transactions contemplated by the Loan Documents have been obtained and are in
full force and effect, and all notices required to be given by the Borrower have
been given and all required waiting periods applicable to the Borrower have
expired.
Absence of Material Adverse
Change. No Material Adverse Change in the business, assets,
liabilities, financial condition or results of operations of the Borrower has
occurred since the date of the formation of the Borrower.
No Liens other than
Permitted Liens. Upon the making of the Loans on the Effective
Date, there exist no Liens on any Property of the Borrower other than Permitted
Liens.]
Borrowing Base
Certificate
The
Lender shall have received a duly completed and executed Borrowing Base
Certificate.
Participation
Agreements
The
Lender shall have received copies of all Participation Agreements to which the
Borrower is party, certified as true and complete by a manager of the Borrower,
which Participation Agreements shall be satisfactory in form and substance to
the Lender.
Subordination
Agreements
The
Lender shall have received with respect to each Participation Agreement a
Subordination Agreement executed by an Authorized Signatory of the Borrower and
the participant party to such Participation Agreement.
Acquisition
The
Lender shall have received a certificate, dated the Effective Date and signed by
the managers of the Borrower,
confirming
that the Acquisition has been consummated in accordance with the terms and
conditions of the Acquisition Agreement, which shall be in form and substance
reasonably satisfactory to the Lender and
attaching
(A) a true and complete copy of the Acquisition Agreement and all documents and
instruments executed and delivered in connection therewith and (B) any
information the Lender may reasonably require regarding the assets and
liabilities of the Borrower immediately after giving effect to the consummation
of the Acquisition.
Other
Documents
The
Lender shall have received such other documents, each in form and substance
reasonably satisfactory to the Lender, as the Lender shall reasonably require in
connection with the making of the Loans.
Certain Conditions Precedent
to Each Loan
Request
The
willingness of the Lender to consider making a Loan (including, without
limitation, the Loan on the first Borrowing Date) is subject to the satisfaction
of the following conditions precedent:
Compliance
On the
Borrowing Date after giving effect to the Loans to be made on such date, (i) the
Borrower shall be in compliance with all of the terms, covenants and conditions
of the Loan Documents to which it is a party, (ii) there shall exist no Default
or Event of Default, (iii) the representations and warranties contained in the
Loan Documents shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date, except to
the extent the same relate solely to an earlier date, (iv) no Material Adverse
Change shall have occurred with respect to any Credit Party and (v) and all
outstanding Loans plus the requested Loan shall not exceed the Borrowing
Base.
Loan
Closings
All
documents required by the provisions of the Loan Documents to be executed or
delivered to the Lender on or before the applicable Borrowing Date shall have
been executed and shall have been delivered to the Lender on or before such
Borrowing Date.
Borrowing Request and
Borrowing Base Certificate
The
Lender shall have received a Borrowing Request and Borrowing Base Certificate,
duly executed by an Authorized Signatory of the Borrower.
Each
request for a Loan and the acceptance by the Borrower of the proceeds thereof
shall constitute a representation and warranty by the Borrower, as of the date
of the Loans comprising such borrowing, that the conditions specified in
Subsections 4.02(a) and (b) have been satisfied.
AFFIRMATIVE
COVENANTS
The
Borrower agrees that, so long as this Agreement is in effect, any Loan remains
outstanding and unpaid, or any other amount is owing under any Loan Document to
the Lender, the Borrower shall:
Financial and Other
Information
Maintain
a standard system of accounting in accordance with GAAP, and furnish to the
Lender:
As
soon as available, but in any event within (i) 20 days after the end of each
calendar month, a balance sheet of the Borrower as at the end of the prior
calendar month, together with the related statements of operations, members'
equity and cash flows for such month and (ii) 30 days after the end of each
fiscal year of the Borrower, a balance sheet of the Borrower as at the end of
such fiscal year, together with the related statements of operations, members'
equity and cash flows for such fiscal year, in each case prepared in accordance
with GAAP applied on a basis consistently maintained throughout the periods
involved and certified by a manager of the Borrower as being complete and
correct in all material respects and as presenting fairly the financial
condition and the results of operations of the Borrower (subject to normal
year-end adjustments) as at the dates and for the periods covered
thereby,
Concurrently
with the delivery of the financial statements required by Section 5.01(a), a
certificate of a manager of the Borrower certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto;
Prompt
written notice if: (i) any Indebtedness of any Credit Party is declared or shall
become due and payable prior to its stated maturity, or is called and not paid
when due, (ii) a default shall have occurred under any note (other than the
Note) or (iii) the holder of, or any obligee with respect to, any Indebtedness
of any Credit Party has the right to declare any such Indebtedness due and
payable prior to its stated maturity;
Prompt
written notice of: (i) any citation, summons, subpoena, order to show cause or
other document naming any Credit Party a party to any proceeding before any
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect on any Credit Party or that expressly calls into question the
validity or enforceability of any of the Loan Documents, (ii) any lapse or other
termination of any material license, permit, franchise or other authorization of
any Credit Party, or (iii) any refusal by any Person or Governmental Authority
to renew or extend any such material license, permit, franchise or other
authorization, which lapse, termination, refusal or dispute could reasonably be
expected to have a Material Adverse Effect on any Credit Party;
Prompt
written notice of: (i) any development in its business affairs which could
reasonably be expected to have a Material Adverse Effect on any Credit Party,
disclosing the nature thereof, and (ii) any information (coming to its
attention) which indicates that any financial statements which are the subject
of any representations contained in this Agreement, or which are furnished to
the Lender pursuant to this Agreement, fail, to a material extent, to present
fairly the financial condition and results of operations purported to be
presented therein, disclosing the nature thereof;
Prompt
written notice of the occurrence of an Event of Default or Default hereunder,
setting forth details of such Event of Default or Default and the action which
is proposed to be taken with respect thereto;
not
later than 30 calendar days after the last day of each calendar month, a
Borrowing Base Certificate indicating a computation of the Borrowing Base as of
the last day of such month executed by an Authorized Signatory of the
Borrower;
within
30 days after the last day of each calendar month, (i) an accounts receivable
aging report as of the last day of such month, organized by invoice date and
(ii) an accounts payable aging report as of the last day of such
month;
not
later then Tuesday of each week, a report with respect to the preceding week for
each account debtor on accounts that have been purchased, in form and substance
satisfactory to the Lender, itemizing gross funds employed thereon, applicable
client reserves and the amount of each related purchase order and receivable and
the aging thereof. The Borrower shall not grant any allowances or
credit to any account debtor without notice to and without prior written consent
of the Lender.
Such
other information as the Lender shall reasonably request from time to
time.
Existence, Maintenance of
Properties, Insurance,
Licenses
(a) At
all times preserve and keep in full force its corporate existence and rights;
(b) observe and comply in all material respects with all laws, rules and
regulations applicable to it, including, without limitation, ERISA and all
Environmental Laws; (c) at all times maintain and preserve all Property used or
necessary in the conduct of its affairs and keep the same in good repair,
working order and condition; (d) beginning 30 days after the Effective Date and
at all times thereafter, keep its insurable Properties adequately insured at all
times, by financially sound and reputable insurers, and maintain such insurance,
to such extent and against such risks, as is customary (including
self-insurance) in the case of comparable businesses or as may be required by
law; (e) conduct and operate its affairs in substantially the manner in which
they are presently conducted and operated; and (f) maintain, in full force and
effect, all material licenses, franchises, permits, authorizations and other
rights as are necessary for the conduct of its business. Not later
than 30 days after the Effective Date, the Borrower shall provide the lender
with evidence that all insurance policies have been indorsed to provide, in
respect of the interests of the Lender, that (i) the Lender shall be an
additional insured on liability coverage and loss payee on property coverage and
(ii) 30 days' prior written notice of any cancellation or modification thereof
or any reduction of amounts payable thereunder shall be given to the
Lender.
Payment of Taxes,
Indebtedness, etc.
Pay and
discharge when due (i) all taxes, assessments and governmental charges and
levies upon, or with respect to the Borrower and upon its Property prior to the
date penalties attach thereto, and (ii) all Indebtedness, obligations and claims
for labor, materials and supplies or otherwise which, if unpaid, might (x) have
a Material Adverse Effect on the Borrower, or (y) become a Lien upon any
Property, in each case, unless being contested by the Borrower in good faith by
appropriate proceedings, and the Borrower shall have set aside adequate reserves
therefor.
Maintenance of Records;
Inspection;
Collateral Audit
At all
times maintain proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its
business and activities and, at all reasonable times during normal business
hours and as often as the Lender may reasonably request upon reasonable notice,
permit any Lender representative to visit and inspect any of the properties of
the Borrower, and to make extracts from its books and to discuss its affairs,
finances and accounts with its managers and its independent certified public
accountants or other parties preparing statements for or on behalf of the
Borrower.
NEGATIVE
COVENANTS
The
Borrower agrees that, so long as this Agreement is in effect, any Loan remains
outstanding and unpaid, or any other amount is owing under any Loan Document to
the Lender, the Borrower shall not, directly or indirectly:
Indebtedness
Create,
incur, assume or permit to exist any Indebtedness, except: (i) Indebtedness
due under the Loan Documents, (ii) other Indebtedness to the Lender
(Indebtedness in respect of guarantees executed in favor of the Lender) and
(iii) Indebtedness of the Borrower pursuant to Participation Agreements
approved by the Lender.
Liens
Create,
incur, assume or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except: (i) Liens in favor of the Lender,
(ii) Liens for taxes, assessments or similar charges incurred in the
ordinary course of business which are not delinquent, (iii) Liens in
connection with workers' compensation, unemployment insurance or other social
security obligations (but not ERISA), (iv) Liens arising by operation of
law such as mechanics', materialmen's, carriers', and warehousemen's liens
incurred in the ordinary course of business which are not delinquent,
(v) judgment liens in existence less than 30 days after the entry thereof
or with respect to which execution has been stayed, (vi) unexercised
banker's Liens; (vii) Liens on assets securing Indebtedness permitted by
Section 6.01(iii), provided
that such Lien (A) attaches only to the assets which are the subject of
the Participation Agreement giving rise to such Indebtedness and (B) is
subordinated pursuant to a Subordination Agreement, (viii) any interest or
title of a licensor, sublicensor, lessor or sublessor with respect to any assets
under any license or lease agreement entered into in the ordinary course of
business; provided that
the same do not interfere in any material respect with the business of the
Borrower or materially detract from the value of the relevant assets of the
Borrower, (ix) Liens to the extent arising solely from the filing of
protective Uniform Commercial Code Financing Statements in respect of equipment
leased to the Borrower in the ordinary course of its business under true, as
opposed to finance, leases, (x) any interest or title of a lessor secured
by a lessor's interest under any lease permitted by the Loan Documents and
(xi) Liens in existence on the Effective Date as set forth on Schedule 6.02
(the foregoing, collectively, "Permitted
Liens").
Merger, Sale of Assets,
Nature of
Business
Consolidate
with, be acquired by, or merge into or with any Person, or liquidate, wind up or
dissolve or sell, lease or otherwise dispose of any of its Property, except in
the ordinary course of business, or materially change the nature of its business
as conducted on the Effective Date.
Investments
Make any
loan or advance to, or enter into any arrangement for the purpose of providing
funds or credit to, or make any other investment, by capital contribution or
otherwise, in or with any Person (each of the foregoing, an "Investment"),
except (i) any money market account maintained at the Lender or investment
account maintained at an affiliate of the Lender and (ii) the purchase of assets
in the ordinary course of the Borrower's business pursuant to Purchase
Agreements.
Compliance with
ERISA
(i)
Terminate, or permit any ERISA Affiliate to terminate, any Pension Plan so as to
result in any material liability to the Borrower, or (ii) permit, with respect
to any Employee Benefit Plan any prohibited transaction or prohibited
transactions under ERISA or the Code, resulting in any material liability to the
Borrower, or (iii) permit to exist any occurrence of any reportable event as
defined in Section 4043(c) of ERISA with respect to a Pension Plan if with
respect to such reportable event there is or would be any material liability of
the Borrower.
Restricted
Payments
Declare
or pay any dividends in cash or otherwise, or set apart any sum for the payment
of dividends on, or make any other distribution by reduction of capital or
otherwise in respect of any shares of its stock of any class or any other equity
interest or warrant or right, other than (i) dividends and distributions paid in
cash by the Borrower to its members, in the manner and to the extent provided by
the Borrower's operating agreement, for the sole purpose of paying ongoing
estimated and actual federal, state and local income tax liabilities, if any, of
such members resulting solely from the inclusion of the Borrower's net income in
such members' taxable income, (ii) dividends and distributions payable by the
Borrower to Anchor Funding Services, Inc. pursuant to Section 3.3 of the
operating agreement of the Borrower as in effect on the date hereof and (iii)
dividends and distributions to which the Lender shall have given its prior
written consent.
Transactions with
Affiliates
Enter
into any transactions, including without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any Affiliate except
(i) the Loan Documents, (ii) transactions in the ordinary course of and pursuant
to the reasonable requirements of its business and upon fair and reasonable
terms no less favorable to the Borrower as would obtain in any arm's-length
transaction with a Person not an Affiliate and (iii) transactions to which the
Lender has given its prior written consent.
Amendment of Material
Agreements
Amend,
modify or waive any of its rights under (i) its articles of formation or
operating agreement, other than immaterial amendments, modifications or waivers
that would not reasonably be expected to adversely affect the Lender or
(ii) any Purchase Agreement without the prior written consent of the
Lender.
Use of
Proceeds
Use the
proceeds of the Loans any purpose other than the purposes set forth in Section
1.07.
Nature of
Business
Engage in
any business or business activity other than the businesses and business
activities conducted by the Borrower as of the Effective Date and activities
reasonably similar, complementary, ancillary or related thereto.
DEFAULT
Events of
Default
Each of
the following shall constitute an "Event of Default"
hereunder:
The
failure of the Borrower to make any payment of principal on the Loans on the
date when due and payable; or
The
failure of the Borrower to make any payment of interest, expenses or other
amounts payable under any Loan Document; or
The
failure of the Borrower to observe or perform any covenant or agreement
contained in Section 1.07, 5.01(a), (b), (g), (h) or (i), or Article 6;
or
The
failure of any Credit Party to observe or perform any other term, covenant, or
agreement contained in any Loan Document to which it is a party, which failure
shall have continued unremedied for a period of 5 days after the occurrence
thereof; or
Any
representation, warranty, certification or statement made by the Borrower (or
any of its managers) in any Loan Document to which it is a party, or in any
certificate, financial statement or other document delivered or to be delivered
by it pursuant thereto, shall prove to have been incorrect or misleading in any
material respect when made or deemed made; or
(i)
Any Indebtedness of the Borrower (other than its obligations hereunder) in an
amount in excess of $100,000, whether as principal, guarantor, surety or other
obligor (x) shall become or shall be declared to be due and payable prior to the
expressed maturity thereof, or (y) shall not be paid when due or within any
grace period for the payment thereof, or (ii) any holder of any obligation
referred to in clause (i) of this Subsection (f) shall have the right to declare
such obligation due and payable prior to the expressed maturity thereof;
or
The
Borrower or any Guarantor shall (i) suspend or discontinue its business,
(ii) make an assignment for the benefit of creditors, (iii) generally
not be paying its debts as such debts become due, (iv) admit in writing its
inability to pay its debts as they become due, (v) file a voluntary
petition in bankruptcy, (vi) become insolvent (however such insolvency
shall be evidenced), (vii) file any petition or answer seeking for itself
any reorganization, arrangement, composition, readjustment of debt, liquidation
or dissolution or similar relief under any present or future statute, law or
regulation of any jurisdiction, (viii) petition or apply to any tribunal
for any receiver, custodian or any trustee for any substantial part of its
Property, (ix) be the subject of any such proceeding filed against it which
remains undismissed for a period of 45 days, (x) file any answer admitting
or not contesting the material allegations of any such petition filed against it
or any order, judgment or decree approving such petition in any such proceeding,
(xi) seek, approve, consent to, or acquiesce in, any such proceeding, or in
the appointment of any trustee, receiver, sequestrator, custodian, liquidator,
or fiscal agent for it, or any substantial part of its Property, or an order is
entered appointing any such trustee, receiver, custodian, liquidator or fiscal
agent and such order remains in effect for 45 days, or (xii) take any
formal action for the purpose of effecting any of the foregoing or looking to
the liquidation or dissolution of the Borrower or any Guarantor; or
(1)
An order for relief is entered under the United States bankruptcy laws, or (2)
any other decree or order is entered by a court having jurisdiction
(i) adjudging the Borrower or any Guarantor bankrupt or insolvent,
(ii) approving as properly filed a petition seeking reorganization,
liquidation, arrangement, adjustment or composition of or in respect of the
Borrower or any Guarantor under the United States bankruptcy laws or any other
applicable Federal or state law, (iii) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of the
Borrower or any Guarantor or of any substantial part of the Property thereof, or
(iv) ordering the winding up or liquidation of the affairs of the Borrower
or any Guarantor, and any such decree or order under this clause (2) continues
unstayed and in effect for a period of 45 days; or
Judgments
or other orders for the payment of money aggregating in excess of $50,000 or
nonmonetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on the Borrower shall
be rendered against the Borrower and shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days; provided, however, that any such
judgment or order shall not give rise to an Event of Default under this Section
7.01(i) if and for so long as (A) the amount of such judgment or order is
covered by a valid and binding policy of insurance between the defendant and the
insurer, which shall be rated at least "A" by A.M. Best Company, covering full
payment thereof and (B) such insurer has been notified, and has not disputed the
claim made for payment, of the amount of such judgment or order; or
Any
Loan Document shall cease, for any reason, to be in full force and effect, or
the Borrower or any obligor thereunder shall so assert in writing or shall
disavow any of its obligations thereunder or hereunder; or
(i)
Any Termination Event shall occur; (ii) any accumulated funding deficiency as
defined in Section 302 of ERISA, whether or not waived, shall exist with respect
to any Pension Plan; (iii) any Person shall engage in any prohibited transaction
involving any Employee Benefit Plan; (iv) the Borrower shall fail to pay when
due an amount which is payable by it to the PBGC or to a Pension Plan under
Title IV of ERISA; (v) the imposition of any tax under Section 4980(B)(a) of the
Code; (vi) the assessment of a civil penalty with respect to any Employee
Benefit Plan under Section 502(c) of ERISA; or (vii) any other event or
condition shall occur or exist with respect to an Employee Benefit Plan which
would have a Material Adverse Effect on any Credit Party; or
the
Lender, for any reason in its sole and absolute discretion, deems itself
insecure with respect to the repayment or performance of the Loans and the other
Obligations;
A
Material Adverse Change shall have occurred with respect to any Credit Party;
or
A
Change in Management shall have occurred.
Remedies
Upon the
occurrence of an Event of Default or at any time thereafter during the
continuance thereof, (a) if such event is an Event of Default specified in
Section 7.01(g) or 7.01(h), (i) the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents shall immediately
become due and payable, (ii) the right of the Borrower to request Loans shall
immediately terminate and the Lender shall have no obligation to consider
requests for the making of any additional Loans hereunder, and (iii) the Lender
may exercise any and all remedies and other rights provided in the Loan
Documents, and (b) if such event is any other Event of Default, any or all of
the following actions may be taken: (i) the Lender may by notice to the
Borrower, (x) declare the Loans, all accrued and unpaid interest thereon and all
other amounts owing under any Loan Documents to be due and payable, whereupon
the same shall immediately become due and payable, and (y) declare the right of
the Borrower to request Loans to be immediately terminated, whereupon the Lender
shall have no obligation to consider requests for the making of additional Loans
hereunder, and (ii) the Lender may exercise any and all remedies and other
rights provided in the Loan Documents, presentment, demand, protest and all
other notices of any kind being in each case hereby expressly waived by the
Borrower.
DEFINITIONS AND PRINCIPLES
OF CONSTRUCTION
Definitions
In
addition to terms defined elsewhere in the Loan Documents, capitalized terms
appearing in this Agreement are used as defined in Annex I hereto
Principles of
Construction
All
terms defined in a Loan Document shall have the meanings given such terms
therein when used in the other Loan Documents or any certificate, opinion or
other document made or delivered pursuant thereto, unless otherwise defined
therein.
The
words "hereof",
"herein",
"hereto" and
"hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, Subsection,
schedule and exhibit references contained therein shall refer to Sections or
Subsections thereof or schedules or exhibits thereto unless otherwise expressly
provided therein.
The
phrase "may
not" is prohibitive and not permissive.
Unless
the context otherwise requires, words in the singular number include the plural,
and words in the plural include the singular.
Unless
specifically provided in a Loan Document to the contrary, any reference to a
time shall refer to such time in New York City.
Unless
specifically provided in a Loan Document to the contrary, in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding".
OTHER
PROVISIONS
Amendments and
Waivers
No
amendment or waiver of any provision of this Agreement or any Loan Document
shall in any event be effective unless the same shall be in writing and signed
by all parties, and such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
Notices
All
notices, requests and demands to or upon the respective parties to the Loan
Documents to be effective shall be in writing and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (i) when
delivered by hand, (ii) five days after having been deposited with the United
States Postal Service as certified or registered mail, return receipt requested,
with first-class postage and fees prepaid, (iii) on the next Business Day after
being consigned, for next business day delivery, to Federal Express or another
comparable overnight courier service, or (iv) when sent by facsimile
transmission upon electronic confirmation of receipt, addressed as
follows:
The
Borrower:
Brookridge
Funding Services, LLC
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Attention:
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Brookridge
Funding Services, LLC
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Attention:
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The
Lender:
MGM
Funding, LLC
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Attention:
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Fax: (▇▇▇)
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except
that any notice by the Borrower to the Lender pursuant to Section 1.03 shall not
be effective until received. Any party to a Loan Document may change
its address for notices by giving notice to each of the other parties as
provided in this Section, but such notice shall not be effective against any
such party until actually received. Any party to a Loan Document may
rely on signatures thereon which are transmitted by fax or other electronic
means as fully as if manually signed.
Assignments and
Participations
This
Agreement, the Note and the other Loan Documents to which the Borrower is a
party shall be binding upon and inure to the benefit of the Borrower and the
Lender, all future holders of the Note and their respective successors and
assigns, provided, however, that the Borrower may neither delegate its
liabilities and obligations, nor assign its rights and benefits, under any Loan
Document to any Person. The Lender shall have the right at any time,
upon written notice to the Borrower, to sell, assign, transfer or negotiate, or
grant participations in, all or any part of the Lender's rights with respect to
the Loans to one or more banks, insurance companies, financial institutions,
pension funds or mutual funds, provided, however, the
Borrower shall not, at any time, be obligated to pay any participant hereunder
any sum pursuant to Section 2.02 in excess of the sum which the Borrower would
have been obligated to pay to the Lender in respect of such interest had the
Lender not sold such participation. The Lender may at any time
assign all or any part of its rights under the Loan Documents to a Federal
Reserve Lender, without notice to the Borrower, provided that any such
assignment shall not release the Lender from its obligations
thereunder.
No Waiver; Cumulative
Remedies
No
failure to exercise and no delay in exercising, on the part of the Lender, any
right, remedy, power or privilege under any Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege under any Loan Document preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges under the Loan
Documents are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
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Survival of
Representations and Warranties and Certain
Obligations
|
All
representations and warranties made under the Loan Documents and in any
document, certificate or statement delivered pursuant thereto or in connection
therewith shall survive the execution and delivery of the Loan
Documents.
The
obligations of the Borrower under Sections 2.03 9.06 and 9.07 shall survive the
payment of the Loans and all other amounts payable under the Loan
Documents. The Lender's determination of any amount or amounts owed
by the Borrower to it under any such Section shall be presumed correct absent
manifest error.
Expenses
The
Borrower agrees, promptly upon presentation of a statement or invoice therefor,
and whether or not any Loans are made, (i) to pay or reimburse the Lender for
all its out-of-pocket costs and expenses reasonably incurred in connection with
the development, preparation and execution of, the Loan Documents and any
amendment, supplement or modification thereto (whether or not executed or
effective), any documents prepared in connection therewith and the consummation
of the transactions contemplated thereby, including, without limitation, the
reasonable fees and disbursements of the Lender's counsel, (ii) to pay or
reimburse the Lender for all of its costs and expenses, including, without
limitation, reasonable fees and disbursements of counsel, incurred in connection
with (A) any Default or Event of Default and any enforcement or collection
proceedings resulting therefrom or in connection with the negotiation of any
restructuring or "work-out" (whether consummated or not) of the obligations of
the Borrower under any of the Loan Documents and (B) the enforcement of this
Section, and (iii) to pay, indemnify and hold the Lender and each of its
managers, officers, directors and employees harmless from and against any and
all other liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable counsel fees and
disbursements) with respect to the enforcement and performance of the Loan
Documents, the use of the proceeds of the Loans and the enforcement and
performance of the provisions of any subordination agreement involving the
Lender, and, if and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Borrower agrees to make the maximum payment
not prohibited under applicable law; provided, however, that the Borrower shall
have no obligation to pay any of the liabilities set forth in this Section to
the Lender arising from the finally adjudicated gross negligence or willful
misconduct of the Lender or claims between one indemnified party and another
indemnified party.
Indemnity
The
Borrower agrees to indemnify and hold harmless the Lender and its Affiliates,
managers, directors, officers, employees, attorneys and agents (each an "Indemnified
Person") from and against any loss, cost, liability, damage or expense
(including the reasonable fees and disbursements of counsel of such Indemnified
Person, including all local counsel hired by any such counsel) incurred by such
Indemnified Person in investigating, preparing for, defending against, or
providing evidence, producing documents or taking any other action in respect
of, any commenced or threatened litigation, administrative proceeding or
investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise, which is alleged
to arise out of or is based upon (i) any untrue statement or alleged untrue
statement of any material fact by any Credit Party in any document or schedule
executed or filed with any Governmental Authority by or on behalf of such Credit
Party; (ii) any omission or alleged omission to state any material fact required
to be stated in such document or schedule, or necessary to make the statements
made therein, in light of the circumstances under which made, not misleading;
(iii) any acts, practices or omissions or alleged acts, practices or omissions
of the Borrower or its agents relating to the use of the proceeds of the Loans,
or in violation of any federal securities law or of any other statute,
regulation or other law of any jurisdiction applicable thereto; or (iv) any
acquisition or proposed acquisition by any Credit Party of all or a portion of
the stock, or all or a portion of the assets, of any Person whether such
Indemnified Person is a party thereto. The indemnity set forth herein
shall be in addition to any other obligations or liabilities of the Borrower to
each Indemnified Person under this Agreement or any other Loan Document or at
common law or otherwise, and shall survive any termination of this Agreement or
any other Loan Document and the payment of all indebtedness of the Borrower
under the Loan Documents, provided that the Borrower shall have no obligation
under this Section to an Indemnified Person with respect to any of the foregoing
to the extent determined in a final judgment of a court having jurisdiction to
have resulted primarily out of the gross negligence or willful misconduct of
such Indemnified Person.
Limitation of
Liability
No claim
may be made by the Borrower or any other Person against the Lender or any
managers, directors, officers, employees or agents of the Lender for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by any Loan Document, or any act, omission or
event occurring in connection therewith, and the Borrower hereby waives,
releases and agrees not to ▇▇▇ upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its
favor.
Counterparts
Each Loan
Document (other than the Note) may be executed by one or more of the parties
thereto on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan
Document to produce or account for more than one counterpart signed by the party
to be charged. A counterpart of any Loan Document, and of any an
amendment, modification, consent or waiver to or of any Loan Document,
transmitted by telecopy shall be deemed to be an originally executed
counterpart. A set of the copies of the Loan Documents signed by all
the parties thereto shall be deposited with the Borrower and the
Lender. Any party to a Loan Document may rely upon the signatures of
any other party thereto which are transmitted by telecopy or other electronic
means to the same extent as if originally signed.
Set-off
In
addition to any rights and remedies of the Lender provided by law, upon the
occurrence of an Event of Default and the acceleration of the obligations owing
in connection with the Loan Documents, or at any time upon the occurrence and
during the continuance of an Event of Default under Section 7.01(a) or 7.01(b),
the Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent not prohibited by
applicable law, to set-off and apply against any indebtedness, whether matured
or unmatured, of the Borrower to the Lender, any amount owing from the Lender to
the Borrower, at, or at any time after, the happening of any of the
above-mentioned events. To the extent not prohibited by applicable
law, the aforesaid right of set-off may be exercised by the Lender against the
Borrower or against any trustee in bankruptcy, custodian, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment or
attachment creditor of the Borrower or against anyone else claiming through or
against the Borrower or such trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by the Lender prior to the making, filing
or issuance, or service upon the Lender of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or
warrant. The Lender agrees promptly to notify the Borrower after any
such set-off and application made by the Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and
application.
Construction
The
Borrower represents that it has been represented by counsel in connection with
the Loan Documents and the transactions contemplated thereby and that the
principle that agreements are to be construed against the party drafting the
same shall be inapplicable.
Governing
Law
The Loan
Documents and the rights and obligations of the parties thereunder shall be
governed by, and construed and interpreted in accordance with, the internal laws
of the State of North Carolina, without regard to conflicts or choice-of-law
principles thereof.
Headings
Descriptive
Section
headings have been inserted in the Loan Documents for convenience only and shall
not be construed to be a part thereof.
Severability
Every
provision of the Loan Documents is intended to be severable, and if any term or
provision thereof shall be invalid, illegal or unenforceable for any reason, the
validity, legality and enforceability of the remaining provisions thereof shall
not be affected or impaired thereby, and any invalidity, illegality or
unenforceability in any jurisdiction shall not affect the validity, legality or
enforceability of any such term or provision in any other
jurisdiction.
Integration
All
exhibits to a Loan Document shall be deemed to be a part thereof. The
Loan Documents embody the entire agreement and understanding between the
Borrower and the Lender with respect to the subject matter thereof and supersede
all prior agreements and understandings between the Borrower and the Lender with
respect to the subject matter thereof.
Consent to
Jurisdiction
Each of
the Borrower and the Lender hereby irrevocably submits to the jurisdiction of
any North Carolina State or Federal court sitting in Mecklenburg County, North
Carolina over any suit, action or proceeding arising out of or relating to the
Loan Documents. Each of the Borrower and the Lender hereby
irrevocably waives, to the fullest extent permitted or not prohibited by law,
any objection which it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding brought in such a court and any claim that
any such suit, action or proceeding brought in such a court has been brought in
an inconvenient forum. Each of the Borrower and the Lender hereby
agrees that a final judgment in any such suit, action or proceeding brought in
such a court, after all appropriate appeals, shall be conclusive and binding
upon it.
Service of
Process
Each of
the Borrower and the Lender hereby irrevocably consents to the service of
process in any suit, action or proceeding by sending the same by first class
mail, return receipt requested or by overnight courier service, to the address
of such party set forth in Section 9.02. Each of the Borrower and the
Lender hereby agrees that any such service (i) shall be deemed in every respect
effective service of process upon it in any such suit, action, or proceeding,
and (ii) shall to the fullest extent enforceable by law, be taken and held to be
valid personal service upon and personal delivery to it.
No Limitation on Service or
Suit
Nothing
in the Loan Documents or any modification, waiver, consent or amendment thereto
shall affect the right of the Lender to serve process in any manner permitted by
law or limit the right of the Lender to bring proceedings against the Borrower
in the courts of any jurisdiction or jurisdictions in which the Borrower may be
served.
WAIVER OF TRIAL BY
JURY
EACH OF
THE BORROWER AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, THE BORROWER HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE LENDER, OR COUNSEL TO THE
LENDER, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN
THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL
PROVISION. THE BORROWER ACKNOWLEDGES THAT THE LENDER HAS BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF
THIS SECTION.
USA Patriot Act
Notice
In the
event the Lender is subject to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot
Act"), the Lender hereby notifies the Borrower that, pursuant to the
requirements of the Patriot Act, the Lender is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow it to
identify the Borrower in accordance with the Patriot Act.
[THE
REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK.]
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Credit
Agreement as of the day and year first written above.
| BROOKRIDGE FUNDING SERVICES, LLC | |||
|
|
By:
|
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ III | |
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ III | |||
| Title: Manager | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: Manager | |||
| MGM FUNDING, LLC | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: Managing Member | |||
ANNEX
I
DEFINITIONS
"Accounts":
Purchased Accounts and Purchased Invoices.
"Acquisition":
the purchase by the Borrower of certain assets of Brookridge Funding, LLC
pursuant to the Acquisition Agreement.
"Acquisition
Agreement": The Asset Purchase Agreement dated as of December 4, 2009, by
and among the Borrower, as purchaser, Brookridge Funding, LLC, a Delaware
limited liability company, as seller, Anchor Funding Services, Inc., a Delaware
corporation, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual and ▇▇▇▇ ▇. ▇▇▇▇▇▇ III, an
individual.
"Affiliate":
as to any Person, any other Person which, directly or indirectly, is in control
of, is controlled by, or is under common control with, such
Person. For purposes of this definition, control of a Person shall
mean the power, direct or indirect, (i) to vote 5% or more of the securities or
other interests having ordinary voting power for the election of directors or
other managing Persons thereof or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
"Agreement":
this Credit Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
"Authorized
Signatory": as to (i) any Person which is a corporation, the chairman of
the board, the president, any vice president, the chief financial officer or any
other officer (acceptable to the Lender) of such Person and (ii) any Person
which is not a corporation, the general partner or other Managing Person thereof
or a duly authorized representative of such Managing Person (acceptable to the
Lender).
"Availability
Period": the period commencing on the Effective Date and ending on the
Business Day immediately preceding the Maturity Date.
"Borrowing
Availability": on the date of any Loan request, the excess of (i) the
lesser of (a) the Borrowing Base and the (b) the Maximum Amount, each computed
at such date, over (ii) the outstanding principal amount of the Loans computed
at such date prior to giving effect to the requested Loan.
"Borrowing
Base": on any date, shall mean the "Calculated Loan Availability" defined
and computed as of such date in accordance with the Borrowing Base Certificate,
based on the Eligible Accounts as of such date.
"Borrowing Base
Certificate": a certificate substantially in the form of Exhibit E
hereto, duly completed and executed by an authorized signatory of the
Borrower.
"Borrowing
Date": any date upon which a Loan is made hereunder.
"Borrowing
Request": a request in the form of Exhibit D, duly completed and executed
by an authorized signatory of the Borrower.
"Business
Day": any day other than a Saturday, a Sunday or a day on which
commercial banks located in North Carolina are authorized or required by law or
other governmental action to close.
"Capital
Stock": as to any Person, all shares, interests, partnership interests,
limited liability company membership interests, participations, rights in or
other equivalents (however designated) of such Person's equity (however
designated) and any rights, warrants or options exchangeable for or convertible
into such shares, interests, participations, rights or other
equity.
"Change in
Management": that at any time each of ▇▇▇▇ ▇. ▇▇▇▇▇▇ III and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ shall cease (whether due to retirement, disability, death or otherwise)
to hold the office, serve in the capacity or exercise the managerial
policy-making responsibilities which on the date hereof he holds, serves in or
exercises with or on behalf of the Borrower, unless he is replaced within 6
months by another individual or individuals reasonably acceptable to the
Lender.
"Code": the
Internal Revenue Code of 1986, as the same may be amended from time to time, or
any successor thereto, and the rules and regulations issued thereunder, as from
time to time in effect.
"Collateral": the Property in which a
security interest has been granted to the Lender pursuant to the Security
Agreement.
"Credit
Party": the Borrower, the Guarantors and each other party (other than the
Lender) to a Loan Document.
"Default":
any event or condition which constitutes an Event of Default or which, with the
giving of notice, the lapse of time, or any other condition, would, unless cured
or waived, become an Event of Default.
"Effective
Date": December 7, 2009.
"Eligible
Accounts " shall mean Accounts subject to a fully perfected first
priority security interest in favor of the Lender pursuant to the Security
Agreement and which conform to the representations and warranties contained in
the Security Agreement, reduced by the amount of any returns, discounts, claims,
credits and allowances of any nature and less reserves for other matters
affecting the creditworthiness of account debtors owing the Purchased Accounts
and Purchased Invoices, but specifically excluding the following:
(1)
Purchased Accounts outstanding 90 days or more after the invoice date
thereof,
(2)
Purchased Invoices outstanding 150 days or more after the purchase order date
thereof,
(3) all
Accounts due from (i) any Affiliate of the Borrower or (ii) from an account
debtor which is the subject of any reorganization, bankruptcy, receivership,
custodianship, insolvency or other analogous condition,
(4) all
Accounts subject to a purchase money security interest or other Lien in favor of
any person, except a Lien granted in connection with a Participation Agreement
and subject to a Subordination Agreement,
(5)
Accounts from any government (federal, state, local or foreign) or any agency,
bureau or department thereof,
(6)
contra accounts,
(7)
Accounts subject to any dispute, setoff, counterclaim or other claim or defense
on the part of the account debtor denying liability in whole or in
part,
(8)
Accounts not payable in U.S. Dollars or which are not evidenced by an invoice or
purchase order or which are evidenced by an instrument or chattel
paper,
(9)
Accounts due from a customer of a client of the Borrower 25% or more of whose
Accounts (by dollar amount) due to the client consist of Purchased Accounts
outstanding 90 days or more after the invoice date thereof and/or Purchased
Invoices outstanding 150 days or more after the purchase order date
thereof,
(11)
Accounts due from an account debtor with no regular place of business in the
United States (unless such Accounts are secured by clean letters of credit in
favor of the Borrower and in which the Lender has a fully perfected first
priority security interest, are secured by letters of credit in favor of the
Lender or which are assigned to the Lender (provided that in each of the
foregoing situations the letter of credit is (x) in form and substance
acceptable to the Lender and (y) issued by a bank or insurance company, as
applicable, doing business in the United States and acceptable to the
Lender).]
"Employee Benefit
Plan": an employee benefit plan within the meaning of Section 3(3) of
ERISA maintained, sponsored or contributed to by the Borrower.
"Environmental
Laws": any and all federal, state and local laws relating to the
environment, the use, storage, transporting, manufacturing, handling, discharge,
disposal or recycling of hazardous substances, materials or pollutants or
industrial hygiene and including, without limitation, (i) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 ▇▇▇▇
§▇▇▇▇ et seq.; (ii) the
Resource Conservation and Recovery Act of 1976, as amended, 42 ▇▇▇▇ §▇▇▇▇ et seq.; (iii) the Toxic
Substance Control Act, as amended, 15 ▇▇▇▇ §▇▇▇▇ et. seq.; (iv) the Water
Pollution Control Act, as amended, 33 ▇▇▇▇ §▇▇▇▇ et. seq.; (v) the Clean
Air Act, as amended, 42 ▇▇▇▇ §▇▇▇▇ et seq.; (vi) the Hazardous Materials
Transportation Authorization Act of 1994, 49 ▇▇▇▇ §▇▇▇▇ et seq. and (viii) all
rules, regulations judgments decrees injunctions and restrictions thereunder and
any analogous state law.
"ERISA":
the Employee Retirement Income Security Act of 1974, as amended, and the rules
and regulations issued thereunder.
"ERISA
Affiliate": with respect to a Pension Plan, ERISA, the PBGC or a
provision of the Code pertaining to employee benefit plans, any Person that is a
member of any group of organizations within the meaning of Section 414 of the
Code of which the Borrower or any Subsidiary of the Borrower is a
member.
"Event of
Default": any of the events specified in Section 7.01, provided that any
requirement for the giving of notice, the lapse of time or any other condition
has been satisfied.
"GAAP":
generally accepted accounting principles in the United States as in effect from
time to time.
"Governmental
Authority": any court, or any federal or foreign, state, municipal or
other governmental department, commission, board, bureau, agency, authority,
instrumentality, or any arbitrator.
"Guarantees"
and "Guarantors":
as defined in Section 1.08.
"Indebtedness":
as to any Person, at a particular time, all items which constitute, without
duplication, (i) indebtedness for borrowed money or the deferred purchase price
of Property (other than trade payables incurred in the ordinary course of
business), (ii) indebtedness evidenced by notes, bonds, debentures or similar
instruments, (iii) obligations with respect to any conditional sale or title
retention agreement, (iv) indebtedness arising under acceptance and letter of
credit facilities and the amount available to be drawn under all letters of
credit issued for the account of such Person, (v) all liabilities secured by any
Lien on any Property owned by such Person (other than carriers', warehousemen's,
mechanics', repairmen's or other like non-consensual statutory Liens arising in
the ordinary course of business with respect to obligations which are not past
due), (vi) all guarantees or other liabilities with respect to any Indebtedness
of any other Person and (vii) all lease obligations which are required to be
capitalized under GAAP.
"Lien": any
mortgage, pledge, hypothecation, assignment, deposit or preferential
arrangement, encumbrance, lien (statutory or other), or other security agreement
or security interest of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement and any
capital or financing lease having substantially the same economic effect as any
of the foregoing.
"Loan
Documents": collectively, this Agreement, the Note, the Guarantee, the
Security Agreement and any other document delivered pursuant to this
Agreement.
"Loans": as
defined in Section 1.01.
"Managing
Person": with respect to any Person that is (i) a corporation, its board
of directors, (ii) a limited liability company, its board of control, managing
member or members, (iii) a limited partnership, its general partner, (iv) a
general partnership or a limited liability partnership, its managing partner or
executive committee or (v) any other Person, the managing body thereof or other
Person analogous to the foregoing.
"Margin
Stock": any "margin stock", as defined in Regulation U of the Board of
Governors of the Federal Reserve System, as the same may be amended or
supplemented from time to time.
"Material Adverse
Change; Material Adverse Effect": with respect to any Person, a material
adverse change in, or effect on, as the case may be (i) the financial condition,
operations, business or Property of such Person, (ii) the ability of such Person
to perform its obligations under the Loan Documents or (iii) the ability of the
Lender to enforce the Loan Documents.
"Maturity
Date": the date occurring on the first anniversary of the Effective Date,
such earlier date on which all outstanding Loans shall become due and payable,
whether by acceleration or otherwise or such later date to which the maturity of
the Loan may be extended by the Lender, provided that the Maturity
Date shall be deemed to be automatically extended on each anniversary of the
original Maturity Date if (i) no Default exists on such date and (ii) the Lender
has not notified the Borrower of its intention to terminate this Agreement as of
such date.
"Maximum
Amount": $3,700,000, as such figure may be increased or reduced from time
to time pursuant to Section 1.04.
"Note": as
defined in Section 1.02.
"Obligations":
(a) the due and punctual payment of (i) the principal of and premium, if any,
and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations, including fees, commissions,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of each Credit
Party to the Lender under the Loan Documents and (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of each
Credit Party pursuant to the Loan Documents.
"Organizational
Documents": as to any Person which is (i) a corporation, the certificate
or articles of incorporation and by-laws of such Person, (ii) a limited
liability company, the articles of organization and limited liability company
agreement or similar agreement of such Person, (iii) a partnership, the
partnership agreement or similar agreement of such Person, or (iv) any other
form of entity or organization, the organizational documents analogous to the
foregoing.
"Participation
Agreement": an agreement between the Borrower and another Person (the
"Participant") pursuant to which the participant acquires a participation
interest in the Borrower's financing relationship with a client.
"PBGC": the
Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title
IV of ERISA, or any Governmental Authority succeeding to the functions
thereof.
"Pension
Plan": at any date of determination, any Employee Benefit Plan (including
a multiemployer plan as defined in Section 4001(a)(3) of ERISA), the funding
requirements of which (under Section 302 of ERISA or Section 412 of the Code)
are, or at any time within the six years immediately preceding such date, were
in whole or in part, the responsibility of the Borrower or any ERISA
Affiliate.
"Permitted
Liens": as defined in Section 6.02.
"Person":
an individual, a partnership, a corporation, a limited liability company, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture, a Governmental Authority or any other entity of whatever
nature.
"Property":
all types of real, personal, tangible, intangible or mixed
property.
"Purchase
Agreements": (i) purchase order purchase agreements pursuant to
which the Borrower purchases purchase orders issued to its clients by customers
of such clients in connection with the purchases of inventory by such customers
from such clients and (ii) accounts receivable purchase agreements pursuant
to which the Borrower purchases accounts receivable of its clients arising from
transactions in the ordinary course of business between such clients and their
customers, each such agreement to be in the form delivered to and approved by
the Lender.
"Purchased
Accounts": accounts receivable of clients of the Borrower arising from
transactions in the ordinary course of business between such clients and their
customers and purchased by the Borrower pursuant to Purchase
Agreements.
"Purchased
Invoices": purchase orders issued to clients of the Borrower by customers
of such clients in connection with the purchases of inventory by such customers
from such clients and purchased by the Borrower pursuant to Purchase
Agreements.
"Security
Agreement": as defined in Section 1.09.
"Solvent":
means, with respect to any Person on a particular date, that on such date
(a) the fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured,
(c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small
capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that would reasonably be expected
to become an actual or matured liability.
"Subordination
Agreement": an agreement among the Borrower, the Lender and a participant
party to a Participation Agreement subordinating to the Lien of the Lender any
Liens granted to such participant in connection with such Participation
Agreement.
"Subsidiary":
any corporation or other Person, at least a majority of the outstanding Capital
Stock of which is owned (either directly or indirectly) by the
Borrower.
"Taxes":
any and all present or future taxes, levies, imposts, duties, charges, fees,
deductions or withholdings of any nature and whatever called, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental
Authority.
"Termination
Event": with respect to any Pension Plan, (i) a reportable event set
forth in Section 4043(c), 4063(a) or 4068(f) of ERISA or an event requiring
security to a Pension Plan under Section 401(a)(29) of the Code, (ii) the
termination of a Pension Plan, the filing of a notice of intent to terminate a
Pension Plan, or the treatment of a Pension Plan amendment as a termination
under Section 4041(c) of ERISA, (iii) the institution of proceedings to
terminate a Pension Plan under Section 4042 of ERISA, or (iv) the appointment of
a trustee to administer any Pension Plan under Section 4042 of
ERISA.
Exhibit
A
NOTE
$3,700,000 December
7, 2009
Charlotte,
North Carolina
For Value
Received, BROOKRIDGE FUNDING
SERVICES, LLC, a North Carolina limited liability company (the "Borrower"),
hereby promises to pay to the order of MGM FUNDING, LLC (the "Lender")
on the Maturity Date, the lesser of THREE MLILION SEVEN HUNDRED THOUSAND and
00/100 DOLLARS ($3,700,000.00), or the outstanding principal balance of the
Loans made by the Lender, and to pay interest from the date hereof on the
principal balance thereof from time to time outstanding, at the rate or rates,
and at the times, set forth in the Credit Agreement, of even date herewith, by
and between the Borrower and the Lender (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), in each case at the office of the Lender located at ▇▇▇▇ ▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other place as the Lender
may specify from time to time, in lawful money of the United States of America
in immediately available funds.
Capitalized
terms used herein which are not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement.
The Loans
evidenced by this Note are prepayable in the amounts and under the
circumstances, and the maturity is subject to acceleration upon the terms, set
forth in the Credit Agreement. This Note is the Note under, and as
such term is defined in, the Credit Agreement, and is subject to, and should be
construed in accordance with, the provisions thereof, and is entitled to the
benefits and security set forth in the Loan Documents.
The
Lender is hereby authorized to record on the schedule annexed hereto, and any
continuation sheets which the Lender may attach hereto, the (i) date and amount
of each Loan made by the Lender and (ii) date and amount of each payment or
prepayment of principal of, any Loan. No failure so to record or any
error in so recording shall affect the obligation of the Borrower to repay the
Loans, together with interest thereon, as provided in the Credit Agreement, and
the outstanding principal balance of the Loans as set forth in such schedule
shall be presumed to be correct absent manifest error.
Except as
specifically otherwise provided in the Credit Agreement, the Borrower hereby
waives presentment, demand, notice of dishonor, protest, notice of protest and
all other demands, protests and notices in connection with the execution,
delivery, performance, collection and enforcement of this Note.
This Note
may be amended only by an instrument in writing executed pursuant to the
provisions of Section 9.01 of the Credit Agreement.
THIS NOTE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NORTH CAROLINA.
| BROOKRIDGE FUNDING SERVICES, LLC | |||
|
|
By:
|
/s/ | |
| Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ III | |||
| Title: Manager | |||
| By: | |||
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Title: Manager | |||
SCHEDULE
to
NOTE
|
Date
|
Amount of Advance
|
Amount
of principal paid or
prepaid
|
Notation Made
By
|