Exhibit 10.1
LOAN AND SECURITY AGREEMENT
Dated as of February 7, 1997
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANKAMERICA BUSINESS CREDIT, INC.
as the Agent
and
MERCURY FINANCE COMPANY
and
CERTAIN OTHER BORROWERS,
as the Borrowers
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . 8
1.3 Interpretive Provisions . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 2
LOANS
2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 3
INTEREST AND FEES
3.1 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.2 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . 14
3.3 Closing and Arrangement Fees . . . . . . . . . . . . . . . . . 15
3.4 Unused Line Fee . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Termination or Extension of Facility . . . . . . . . . . . . . 15
4.3 Payments by the Borrowers . . . . . . . . . . . . . . . . . . . 16
4.4 Payments as Loans . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Apportionment, Application and Reversal of Payments . . . . . . 16
4.6 Indemnity for Returned Payments . . . . . . . . . . . . . . . . 17
4.7 Agent's and Lenders' Books and Records; Monthly Statements . . 17
ARTICLE 5
TAXES
5.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 Certificates of Lenders . . . . . . . . . . . . . . . . . . . . 18
5.3 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest . . . . . . . . . . . . . . . . . 19
6.2 Perfection and Protection of Security Interest . . . . . . . 19
6.3 Location of Collateral . . . . . . . . . . . . . . . . . . . 20
6.4 Title to, Liens on, and Sale and Use of Collateral . . . . . 20
6.5 Access and Examination; Confidentiality . . . . . . . . . . . 21
6.6 Collateral Reporting . . . . . . . . . . . . . . . . . . . . 22
6.7 Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . 22
6.8 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . 22
6.9 The Agent's and Lenders' Rights, Duties and Liabilities . . . 22
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
7.1 Books and Records . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Financial Information . . . . . . . . . . . . . . . . . . . . 23
7.3 Notices to the Lenders . . . . . . . . . . . . . . . . . . . 23
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
8.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents . . . . . . . . . . . . . . . . . . . 24
8.2 Validity and Priority of Security Interest . . . . . . . . . 24
8.3 Organization and Qualification . . . . . . . . . . . . . . . 25
8.4 Corporate Name; Prior Transactions . . . . . . . . . . . . . 25
8.5 Subsidiaries and Affiliates . . . . . . . . . . . . . . . . . 25
8.6 Trade Names . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.7 Restrictive Agreements . . . . . . . . . . . . . . . . . . . 25
8.8 Labor Disputes . . . . . . . . . . . . . . . . . . . . . . . 25
8.9 No Violation of Law . . . . . . . . . . . . . . . . . . . . . 25
8.10 Regulated Entities . . . . . . . . . . . . . . . . . . . . . 25
8.11 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . 25
8.12 Copyrights, Patents, Trademarks and Licenses, etc . . . . . . 26
8.13 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.14 Governmental Authorization . . . . . . . . . . . . . . . . . 26
8.15 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
9.1 Business Conducted . . . . . . . . . . . . . . . . . . . . . 26
9.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 New Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 26
9.4 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 26
9.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Closing Date . 27
10.2 Conditions Precedent to Each Loan . . . . . . . . . . . . . . 28
ARTICLE 11
DEFAULT; REMEDIES
11.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . 29
11.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 13
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 No Waivers Cumulative Remedies . . . . . . . . . . . . . . . . 32
13.2 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 32
13.3 Assignments; Participations . . . . . . . . . . . . . . . . . 33
ARTICLE 14
THE AGENT
14.1 Appointment and Authorization . . . . . . . . . . . . . . . . 34
14.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 35
14.3 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . 35
14.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . 35
14.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . 36
14.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . 36
14.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 36
14.8 Agent in Individual Capacity . . . . . . . . . . . . . . . . . 37
14.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . 37
14.10 Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . 37
14.11 Collateral Matters . . . . . . . . . . . . . . . . . . . . . 39
14.12 Restrictions on Actions by Lenders; Sharing of Payments . . . 39
14.13 Agency for Perfection . . . . . . . . . . . . . . . . . . . . 40
14.14 Payments by Agent to Lenders . . . . . . . . . . . . . . . . 40
14.15 Concerning the Collateral and the Loan Documents . . . . . . 40
14.16 Field Audit and Examination Reports; Disclaimer by Lenders . 40
14.17 Relation Among Lenders . . . . . . . . . . . . . . . . . . . 41
ARTICLE 15
MISCELLANEOUS
15.1 Cumulative Remedies; No Prior Recourse to Collateral . . . . . 41
15.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.3 Governing Law; Choice of Forum; Service of Process; Jury
Trial
Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 42
15.4 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 42
15.5 Survival of Representations and Warranties . . . . . . . . . . 43
15.6 Other Security and Guaranties . . . . . . . . . . . . . . . . 43
15.7 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . 43
15.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
15.9 Waiver of Notices . . . . . . . . . . . . . . . . . . . . . . 44
15.10 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 44
15.11 Indemnity of the Agent and the Lenders by the Borrowers . . . 44
15.12 Limitation of Liability . . . . . . . . . . . . . . . . . . . 45
15.13 Final Agreement . . . . . . . . . . . . . . . . . . . . . . . 45
15.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 45
15.15 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.16 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . 45
15.17 Joint and Several Liability . . . . . . . . . . . . . . . . . 90
EXHIBITS AND SCHEDULES
EXHIBIT A - NOTICE OF BORROWING
EXHIBIT B - FORM OF ASSIGNMENT AND ACCEPTANCE
AGREEMENT
EXHIBIT C - PLEDGE AGREEMENT
SCHEDULE 1 - OTHER BORROWERS
SCHEDULE 6.3 - LOCATIONS OF COLLATERAL
SCHEDULE 8.1 - CONSENTS
SCHEDULE 8.2 - EXISTING LIENS
SCHEDULE 8.4 - CORPORATE/FICTITIOUS NAMES; PRIOR TRANSACTIONS
SCHEDULE 8.5 - SUBSIDIARIES
SCHEDULE 8.6 - TRADE NAMES
SCHEDULE 8.8 - LABOR DISPUTES
SCHEDULE 15.8 - ADDRESSES FOR NOTICES
LOAN AND SECURITY AGREEMENT
Loan and Security Agreement, dated as of February 7, 1997, among the
financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as
the "Lenders"), BankAmerica Business Credit, Inc., a Delaware corporation
("BABC") with an office at Chicago, Illinois, as agent for the Lenders (in
its capacity as agent, the "Agent"), Mercury Finance Company, a Delaware
corporation ("MFC"), with offices at Lake Forest, Illinois, and, each
borrower listed in the attached Schedule 1 with offices at Lake Forest,
Illinois (together with MFC, the "Borrowers").
W I T N E S E T H
WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans in an amount not to exceed
$50,000,000 which extensions of credit each of the Borrowers will use to
satisfy certain obligations due, to pay amounts due to certain affiliated
insurance companies in the approximate amount of $6,000,000 and for general
corporate purposes;
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrowers hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Account Debtor" means each Person obligated in any way on or in
connection with an Account.
"Accounts" means all of a Borrower's now owned or hereafter
acquired or arising accounts, and any other rights to payment for money
loaned to third parties or money due Borrower however evidenced (including
credit card receivables) or the sale or lease of goods or rendition of
services, whether or not they have been earned by performance.
"Affiliate" means, 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 or which owns, directly or indirectly, five
percent (5%) or more of the voting control of such Person. A Person shall be
deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.
"Agent" means BankAmerica Business Credit, Inc., solely in its
capacity as agent for the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.1(i).
"Agent's Liens" means the Liens granted to the Agent, for the
ratable benefit of the Lenders, BABC, and Agent pursuant to this Agreement
and the other Loan Documents.
"Agent-Related Persons" means the Agent and any successor agent,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agreement" means this Loan and Security Agreement, as the same may
be amended or otherwise modified from time to time.
"Assignee" has the meaning specified in Section 13.3(a).
"Assignment and Acceptance" has the meaning specified in Section
13.3(a).
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other external counsel engaged by the Agent,
the allocated cost of internal legal services of the Agent and all expenses
and disbursements of internal counsel of the Agent.
"BABC" means BankAmerica Business Credit, Inc.
"BABC Loan" and "BABC Loans" have the meanings specified in Section
2.1(h).
"Bank of America" means Bank of America National Trust and Savings
Association, a national banking association, or any successor entity thereto.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. Section 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by Bank of America in San
Francisco, California, as its "reference rate" (the "reference rate" being a
rate set by Bank of America based upon various factors including Bank of
America's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may
be priced at, above, or below such announced rate). Any change in the
reference rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such change.
Each Interest Rate based upon the Base Rate shall be adjusted simultaneously
with any change in the Base Rate.
"Borrower" and "Borrowers" have the meanings specified in the
introductory paragraph hereof.
"Borrowing" means a borrowing hereunder consisting of Loans made on
the same day by the Lenders to a Borrower (or by BABC in the case of a
Borrowing funded by BABC Loans) or by the Agent in the case of a Borrowing
consisting of an Agent Advance.
"Business Day" means any day that is not a Saturday, Sunday, or a
day on which banks in Chicago, Illinois, are required or permitted to be
closed.
"Chattel Paper" means a writing or writings which evidence both a
monetary obligation and a security interest in or a lease of specific goods,
but a charter or other contract involving the use or hire of a vessel is not
chattel paper. When a transaction is evidenced both by such a security
agreement or a lease and by an instrument or a series of instruments, the
group of writings taken together constitutes chattel paper.
"Closing Date" means the date of this Agreement.
"Closing Fee" has the meaning specified in Section 3.3(a).
"Collateral" has the meaning specified in Section 6.1(a).
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 13.3, as such
Commitment may be adjusted from time to time in accordance with the
provisions of Section 13.3, and "Commitments" means, collectively, the
aggregate amount of the commitments of all of the Lenders.
"Contract Rights" means, collectively, all of the Borrowers' rights
and remedies under, and all moneys and claims for money due or to become due
to any Borrower under all Contracts including, without limitation, all
rights and claims of a Borrower now or hereafter existing: (i) under any
insurance, indemnities, warranties and guarantees provided for or arising out
of or in connection with any Contracts; (ii) for any damages arising out of
or for breach or default under or in connection with any Contracts; (iii) to
all other amounts from time to time paid or payable under or in connection
with any Contracts; or (iv) to exercise or enforce any and all covenants,
remedies, powers and privileges thereunder.
"Contracts" means any contracts and other agreements, and any and
all amendments, supplements, extensions and renewals thereof.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section
2.1(g)(ii).
"Default Rate" means a fluctuating per annum interest rate at all
times equal to the lesser of (a) the sum of (i) the Base Rate plus (ii) two
percent (2%) and (b) the Maximum Rate described in Section 3.2. Each Default
Rate shall be adjusted simultaneously with any change in the applicable
Interest Rate.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"Environmental Laws" means all federal, state, local or other laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authority, in each case relating to environmental, health, safety and land
use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (1) any liability under any Environmental Laws, or (2) damages
arising from, or costs incurred by such Governmental Authority in response
to, a release or threatened release of a contaminant into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and regulations promulgated thereunder.
"Event of Default" has the meaning specified in Section 11.1.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate is
not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letter" means the letter agreement dated as of the date hereof
relating to closing and arrangement fees, as the same may be amended,
supplemented or otherwise modified from time to time.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles set forth
from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board
(or agencies with similar functions of comparable stature and authority
within the U.S. accounting profession), which are applicable to the
circumstances as of the Closing Date.
"General Intangibles" means all of each Borrower's now owned or
hereafter acquired general intangibles, choses in action and causes of action
and all other intangible personal property of each Borrower of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, Proprietary Rights, corporate or other business records, inventions,
designs, blueprints, plans, specifications, patents, patent applications,
trademarks, service marks, trade names, trade secrets, goodwill, copyrights,
computer software, customer lists, registrations, licenses, franchises, tax
refund claims, any funds which may become due to a Borrower in connection
with the termination of any Plan or other employee benefit plan or any rights
thereto and any other amounts payable to a Borrower from any Plan or other
employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds
thereof, property, casualty or any similar type of insurance and any proceeds
thereof, proceeds of insurance covering the lives of key employees on which a
Borrower is beneficiary, and any letter of credit, guarantee, claim, security
interest or other security held by or granted to a Borrower.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Interest Rate" means each or any of the interest rates, including
the Default Rate, set forth in Section 3.1.
"Inventory" means all of each Borrower's now owned and hereafter
acquired inventory, goods and motor vehicles, including those repossessed and
held for disposition and sale, wherever located, to be furnished under any
contract of service or held for sale or lease, all returned goods, raw
materials, other materials and supplies of any kind, nature or description
and all documents of title or other documents representing them.
"Investment Property" has the meaning specified in the UCC as in
effect in the State of Illinois on the Closing Date.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of
any Agent Advance outstanding and BABC to the extent of any BABC Loan
outstanding; provided that no such Agent Advance or BABC Loan shall be taken
into account in determining any Lender's Pro Rata Share.
"Lien" means: (a) any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute, or contract, and
including without limitation, a security interest, charge, claim, or lien
arising from a mortgage, deed of trust, encumbrance, pledge, hypothecation,
assignment, deposit arrangement, agreement, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes; and (b) to the extent not included under clause (a), any
reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance
affecting property.
"Loan Account" means a loan account of the Borrowers, which account
shall be maintained by the Agent.
"Loan Documents" means this Agreement, Pledge Agreement, Fee Letter
and any other agreements, instruments, and documents heretofore, now or
hereafter evidencing, securing, guaranteeing or otherwise relating to the
Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement.
"Loans" has the meaning specified in Section 2.1 and includes each
Agent Advance and BABC Loan.
"Majority Lenders" means at anytime Lenders whose Pro Rata shares
aggregate more than 51% of the Commitments or, if no Commitments shall then
be in effect, Lenders who hold more than 51% of the aggregate principal
amount of the Loans then outstanding.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in,
or a material adverse effect upon, the operations, business, properties or
condition (financial or otherwise) of the Borrowers taken as a whole or any
material part of the Collateral; (b) a material impairment of the ability of
any Borrower to perform under any Loan Document and to avoid any Event of
Default; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Borrower of any Loan Document.
"Maximum Revolver Amount" means $50,000,000.
"MFC" has the meaning specified in the introductory paragraph
hereof.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit A.
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrowers
to the Agent, BABC and/or any Lender arising under or pursuant to this
Agreement or any of the other Loan Documents, whether or not evidenced by any
note, or other instrument or document, whether arising from an extension of
credit, loan, guaranty, indemnification or otherwise, whether direct or
indirect (including, without limitation, those acquired by assignment from
others, and any participation by the Agent and/or any Lender in the
Borrowers' debts owing to others), absolute or contingent, due or to become
due, primary or secondary, as principal or guarantor, and including, without
limitation, all principal, interest, charges, expenses, fees, attorneys'
fees, filing fees and any other sums chargeable to the Borrowers hereunder or
under any of the other Loan Documents.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other
Loan Documents.
"Participating Lender" means any Person who shall have been granted
the right by any Lender to participate in the financing provided by such
Lender under this Agreement, and who shall have entered into a participation
agreement in form and substance satisfactory to such Lender.
"Pending Loans" means, at any time, the aggregate principal amount
of all Loans requested in any Notice(s) of Borrowing received by the Agent
which have not yet been advanced.
"Permitted Liens" means:
(a) Liens for taxes not delinquent or statutory Liens for
taxes in an amount not to exceed $100,000 provided that the payment of such
taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on the books and records of the Borrower and a
stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) deposits under worker's compensation, unemployment
insurance, social security and other similar laws, or to secure the
performance of bids, tenders or contracts (other than for the repayment of
borrowed money) or to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure statutory obligations (other than
liens arising under ERISA or Environmental Liens) or surety or appeal bonds,
or to secure indemnity, performance or other similar bonds in the ordinary
course of business;
(d) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons, provided
that if any such Lien arises from the nonpayment of such claims or demands
when due, such claims or demands do not exceed $100,000 in the aggregate; and
(e) Judgment and other similar Liens arising in connection
with court proceedings to the extent the attachment or enforcement of such
Liens would not result in an Event of Default hereunder.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
Governmental Authority, or any other entity.
"Pledge Agreement" means a pledge agreement of MFC substantially in
the form of Exhibit C.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders.
"Proprietary Rights" means all of the Borrowers' now owned and
hereafter arising or acquired: licenses, franchises, permits, patents,
patent rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark and
service ▇▇▇▇ applications, and all licenses and rights related to any of the
foregoing, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of
any of the foregoing, and all rights to ▇▇▇ for past, present and future
infringement of any of the foregoing.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is
subject.
"Responsible Officer" means the chief executive officer or the
president of the Borrowers, or any other officer having substantially the
same authority and responsibility.
"Settlement" has the meaning specified in Section 2.1(l).
"Settlement Date" has the meaning specified in Section 2.1(l).
"Stated Termination Date" means March 10, 1997, as such date may be
extended pursuant to Section 4.2(b).
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture, limited liability company or other business
entity of which more than fifty percent (50%) of the voting stock or other
equity interests (in the case of Persons other than corporations), is owned
or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of MFC.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
each Lender's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Agent, as the case may
be, is organized or maintains a lending office.
"Termination Date" means the earliest to occur of (i) the Stated
Termination Date, (ii) the date the facility is terminated either by the
Borrowers pursuant to Section 4.2 or by the Majority Lenders pursuant to
Section 11.2, and (iii) the date this Agreement is otherwise terminated for
any reason whatsoever.
"UCC" means the Uniform Commercial Code (or any successor statute)
of the State of Illinois or of any other state the laws of which are required
by Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests.
"Unused Line Fee" has the meaning specified in Section 3.4.
1.2 Accounting Terms. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given in accordance with GAAP, and all financial computations hereunder shall
be computed, unless otherwise specifically provided herein, in accordance
with GAAP as consistently applied and using the same method for inventory
valuation as used in the preparation of the Financial Statements.
1.3 Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision
of this Agreement; and Subsection, Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and
other writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including,"
the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications are
not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending, replacing, supplementing or
interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and
shall each be applied in accordance with their terms.
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agent,
the Borrowers and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the Agent
merely because of the Agent's or Lenders' involvement in their preparation.
ARTICLE 2
LOANS
2.1 Loans. (a) Amounts. Subject to the satisfaction of the
conditions precedent set forth in Article 10, each Lender severally agrees,
upon a Borrower's request from time to time on any Business Day during the
period from the Closing Date to the Termination Date, to make revolving loans
(the "Loans") to such Borrower, in amounts not to exceed (except for BABC
with respect to BABC Loans or Agent Advances) such Lender's Pro Rata Share of
the Maximum Revolver Amount.
(b) Procedure for Borrowing. (1) Each Borrowing shall be made
upon a Borrower's irrevocable written notice delivered to the Agent in the
form of a Notice of Borrowing which must be received by the Agent prior to
11:00 a.m. (Cherry Hill, New Jersey time) on the requested Funding Date
specifying:
(A) the amount of the Borrowing; and
(B) the requested Funding Date, which shall be a
Business Day.
(2) In lieu of delivering the above-described Notice of
Borrowing the Borrower may give the Agent telephonic notice of such request
by the required time, with such telephonic notice to be confirmed in writing
within 24 hours of the giving of such notice but Agent shall be entitled to
rely on the telephonic notice in making such Loans.
(c) Reliance upon Authority. On or prior to the Closing Date and
thereafter prior to any change with respect to any of the information
contained in the following clauses (i) and (ii), the Borrowers shall deliver
to the Agent a writing setting forth (i) the account of the Borrowers to
which the Agent is authorized to transfer the proceeds of the Loans requested
pursuant to this Section 2.1, and (ii) the names of the officers authorized
to request Loans on behalf of each Borrower, and shall provide the Agent with
a specimen signature of each such officer. The Agent shall be entitled to
rely conclusively on such officer's authority to request Loans on behalf of a
Borrower, the proceeds of which are to be transferred to any of the accounts
specified by a Borrower pursuant to the immediately preceding sentence, until
the Agent receives written notice to the contrary. The Agent shall have no
duty to verify the identity of any individual representing him or herself as
one of the officers authorized by a Borrower to make such requests on its
behalf.
(d) No Liability. The Agent shall not incur any liability to the
Borrowers as a result of acting upon any notice referred to in Sections
2.1(b) and (c), which notice the Agent believes in good faith to have been
given by an officer duly authorized by a Borrower to request Loans on its
behalf or for otherwise acting in good faith under this Section 2.1, and the
crediting of Loans to a Borrower's deposit account, or transmittal to such
Person as a Borrower shall direct, shall conclusively establish the
obligation of each Borrower to repay such Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 2.1(b) shall be irrevocable
(unless otherwise agreed by the Agent) and the Borrowers shall be bound to
borrow the funds requested therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof) pursuant to Section 2.1(b),
the Agent shall elect, in its discretion, (i) to have the terms of Section
2.1(g) apply to such requested Borrowing, or (ii) to request BABC to make a
BABC Loan pursuant to the terms of Section 2.1(h) in the amount of the
requested Borrowing; provided, however, that if BABC declines in its sole
discretion to make a BABC Loan pursuant to Section 2.1(h), the Agent shall
elect to have the terms of Section 2.1(g) apply to such requested Borrowing.
(g) Making of Loans. (i) In the event that the Agent shall elect
to have the terms of this Section 2.1(g) apply to a requested Borrowing as
described in Section 2.1(f), then promptly after receipt of a Notice of
Borrowing or telephonic notice pursuant to Section 2.1(b), the Agent shall
notify the Lenders by telecopy, telephone or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount
of such Lender's Pro Rata Share of the requested Borrowing available to the
Agent in same day funds, to such account of the Agent as the Agent may
designate, not later than noon (Cherry Hill, New Jersey time) on the Funding
Date applicable thereto. After the Agent's receipt of the proceeds of such
Loans, upon satisfaction of the applicable conditions precedent set forth in
Article 10, the Agent shall make the proceeds of such Loans available to the
requesting Borrower on the applicable Funding Date by transferring same day
funds equal to the proceeds of such Loans received by the Agent to the
account of a Borrower, designated in writing by a Borrower and acceptable to
the Agent.
(ii) Unless the Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any Borrowing after the Closing Date, at
least one Business Day prior to the date of such Borrowing, that such Lender
will not make available as and when required hereunder to the Agent for the
account of the applicable Borrower the amount of that Lender's Pro Rata Share
of the Borrowing, the Agent may assume that each Lender has made such amount
available to the Agent in immediately available funds on the Funding Date and
the Agent may (but shall not be so required), in reliance upon such
assumption, make available to such Borrower on such date a corresponding
amount. If and to the extent any Lender shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Borrower such amount, that Lender
shall on the Business Day following such Funding Date make such amount
available to the Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Agent submitted to any Lender
with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
the Agent shall constitute such Lender's Loan on the date of Borrowing for
all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Funding Date, the Agent will notify
the Borrowers of such failure to fund and, upon demand by the Agent, the
Borrowers shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing. The failure of any Lender to
make any Loan on any Funding Date (any such Lender, prior to the cure of such
failure, being hereinafter referred to as a "Defaulting Lender") shall not
relieve any other Lender of any obligation hereunder to make a Loan on such
Funding Date, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on any Funding Date.
(iii) The Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by the Borrowers to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts payable to a Defaulting Lender shall instead
be paid to or retained by the Agent. The Agent may hold and, in its
discretion, re-lend to Borrowers the amount of all such payments received or
retained by it for the account of such Defaulting Lender. Any amounts so
re-lent to the Borrowers shall bear interest at the rate applicable to Loans
and for all other purposes of this Agreement shall be treated as if they were
Loans; provided, however, that for purposes of voting or consenting to
matters with respect to the Loan Documents and determining Pro Rata Shares,
such Defaulting Lender shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero (-0-). Until a Defaulting Lender cures
its failure to fund its Pro Rata Share of any Borrowing (1) such Defaulting
Lender shall not be entitled to any portion of the Unused Line Fee and (2)
the Unused Line Fee shall accrue in favor of the Lenders which have funded
their respective Pro Rata Shares of such requested Borrowing, shall be
allocated among such performing Lenders ratably based upon their relative
Commitments, and shall be calculated based upon the average amount by which
the aggregate Pro Rata Shares of the Maximum Revolver Amount of such
performing Lenders exceeds the outstanding Loans. This section shall remain
effective with respect to such Lender until such time as the Defaulting
Lender shall no longer be in default of any of its obligations under this
Agreement. The terms of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, or relieve or excuse the
performance by any Borrower of its duties and obligations hereunder.
(h) Making of BABC Loans. (i) In the event the Agent shall elect,
with the consent of BABC, to have the terms of this Section 2.1(h) apply to a
requested Borrowing as described in Section 2.1(f), BABC shall make a Loan in
the amount of such Borrowing (any such Loan made solely by BABC pursuant to
this Section 2.1(h) being referred to as a "BABC Loan" and such Loans being
referred to collectively as "BABC Loans") available to the requesting
Borrower on the Funding Date applicable thereto by transferring same day
funds to an account of a Borrower, designated in writing by a Borrower and
reasonably acceptable to the Agent. Each BABC Loan is a Loan hereunder and
shall be subject to all the terms and conditions applicable to other Loans
except that all payments thereon shall be payable to BABC solely for its own
account (and for the account of the holder of any participation interest with
respect to such Loan). The Agent shall not request BABC to make any BABC
Loan if the Agent shall have received written notice from any Lender, or
otherwise has actual knowledge, that one or more of the applicable conditions
precedent set forth in Article 10 will not be satisfied on the requested
Funding Date for the applicable Borrowing. BABC shall not otherwise be
required to determine whether the applicable conditions precedent set forth
in Article 10 have been satisfied.
(ii) The BABC Loans shall be secured by the Collateral, shall
constitute Loans and Obligations hereunder, and shall bear interest at the
rate applicable to the Loans from time to time.
(i) Agent Advances. (i) Subject to the limitations set forth in
the provisos contained in this Section 2.1(i), the Agent is hereby authorized
by the Borrowers and the Lenders, from time to time in the Agent's sole
discretion, (1) after the occurrence of a Default or an Event of Default, or
(2) at any time that any of the other applicable conditions precedent set
forth in Article 10 have not been satisfied, to make Loans to the Borrower on
behalf of the Lenders which the Agent, in its reasonable business judgment,
deems necessary or desirable (A) to preserve or protect the Collateral, or
any portion thereof, (B) to enhance the likelihood of, or maximize the amount
of, repayment of the Loans and other Obligations, or (C) to pay any other
amount chargeable to the Borrowers pursuant to the terms of this Agreement,
including, without limitation, costs, fees and expenses as described in
Section 15.7 (any of the advances described in this Section 2.1(i) being
hereinafter referred to as "Agent Advances"); provided, that the Majority
Lenders may at any time revoke the Agent's authorization contained in this
Section 2.1(i) to make Agent Advances, any such revocation to be in writing
and to become effective prospectively upon the Agent's receipt thereof.
(ii) The Agent Advances shall be secured by the Collateral, shall
constitute Loans and Obligations hereunder, and shall bear interest at the
rate applicable to the Loans from time to time. The Agent shall notify each
Lender in writing of each such Agent Advance.
(j) Notation. The Agent shall record on its books the principal
amount of the Loans owing to each Lender, including the BABC Loans owing to
BABC, and the Agent Advances owing to the Agent, from time to time. In
addition, each Lender is authorized, at such Lender's option, to note the
date and amount of each payment or prepayment of principal of such Lender's
Loans in its books and records, including computer records. The Agent's and
the Lenders' books and records shall constitute rebuttable presumptive
evidence, absent manifest error, of the accuracy of the information contained
therein.
(k) Lenders' Failure to Perform. All Loans (other than BABC Loans
and Agent Advances) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (a) no Lender
shall be responsible for any failure by any other Lender to perform its
obligation to make any Loans hereunder, nor shall any Commitment of any
Lender be increased or decreased as a result of any failure by any other
Lender to perform its obligation to make any Loans hereunder, (b) no failure
by any Lender to perform its obligation to make any Loans hereunder shall
excuse any other Lender from its obligation to make any Loans hereunder, and
(c) the obligations of each Lender hereunder shall be several, not joint and
several.
(l) Settlement. It is agreed that each Lender's funded portion of
the Loans is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of the outstanding Loans. Notwithstanding such
agreement, the Agent, BABC, and the other Lenders agree (which agreement
shall not be for the benefit of or enforceable by the Borrowers) that in
order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Loans, the BABC Loans and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) The Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis, or on a more frequent basis if so determined by
the Agent, (1) on behalf of BABC, with respect to each outstanding BABC Loan,
(2) for itself, with respect to each Agent Advance, and (3) with respect to
collections received, in each case, by notifying the Lenders of such
requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 11:00 a.m. (Cherry
Hill, New Jersey time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than BABC, in the case of BABC Loans)
shall make the amount of such Lender's Pro Rata Share of the outstanding
principal amount of the BABC Loans and Agent Advances with respect to which
Settlement is requested available to the Agent, for itself or for the account
of BABC, in same day funds, to such account of the Agent as the Agent may
designate, not later than 1:00 p.m. (Cherry Hill, New Jersey time), on the
Settlement Date applicable thereto, regardless of whether any conditions
precedent set forth in Article 10 have then been satisfied. Such amounts
made available to the Agent shall be applied against the amounts of the
applicable BABC Loan or Agent Advance and, together with the portion of such
BABC Loan or Agent Advance representing BABC's Pro Rata Share thereof, shall
constitute Loans of such Lenders. If any such amount is not made available
to the Agent by any Lender on the Settlement Date applicable thereto, the
Agent shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Federal Funds Rate for the first three
(3) days from and after the Settlement Date and thereafter at the Interest
Rate then applicable to the Loans.
(ii) Notwithstanding the foregoing, not more than one (1) Business
Day after demand is made by the Agent (whether before or after the occurrence
of a Default or an Event of Default and regardless of whether (x) the Agent
has requested a Settlement with respect to a BABC Loan or Agent Advance, or
(y) any conditions precedent set forth in Article 10 have then been
satisfied), each other Lender shall irrevocably and unconditionally purchase
and receive from BABC or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such BABC Loan or Agent
Advance to the extent of such Lender's Pro Rata Share thereof by paying to
the Agent, in same day funds, an amount equal to such Lender's Pro Rata Share
of such BABC Loan or Agent Advance. If such amount is not in fact made
available to the Agent by any Lender, the Agent shall be entitled to recover
such amount on demand from such Lender together with interest thereon at the
Federal Funds Rate for the first three (3) days from and after such demand
and thereafter at the Interest Rate then applicable to the Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any BABC Loan or Agent
Advance pursuant to subsection (ii) above, the Agent shall promptly
distribute to such Lender at such address as such Lender may request in
writing, such Lender's Pro Rata Share of all payments of principal and
interest and all proceeds of Collateral received by the Agent in respect of
such BABC Loan or Agent Advance.
(iv) Between Settlement Dates, the Agent, to the extent no Agent
Advances or BABC Loans are outstanding, may pay over to BABC any payments
received by Agent, which in accordance with the terms of this Agreement would
be applied to the reduction of the Loans, for application to BABC's other
outstanding Loans. If, as of any Settlement Date, collections received since
the then immediately preceding Settlement Date have been applied to BABC's
other outstanding Loans other than to BABC Loans or Agent Advances, as
provided for in the previous sentence, BABC shall pay to the Agent for the
accounts of the Lenders, to be applied to the outstanding Loans of such
Lenders, an amount such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the Loans and BABC's
other Loans shall be deemed to be reinstated in the amount so paid to the
Agent for the account of the Lenders. During the period between Settlement
Dates, BABC with respect to BABC Loans, the Agent with respect to Agent
Advances, and each Lender with respect to the Loans other than BABC Loans and
Agent Advances, shall be entitled to interest at the applicable rate or rates
payable under this Agreement on the actual average daily amount of funds
employed by BABC, the Agent and the other Lenders.
ARTICLE 3
INTEREST AND FEES
3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a fluctuating per annum rate equal to the Base
Rate. Each change in the Base Rate shall be reflected in the interest rate
described in above as of the effective date of such change. All interest
charges shall be computed on the basis of a year of 360 days and actual days
elapsed (which results in more interest being paid than if computed on the
basis of a 365-day year). Interest accrued on all Loans will be payable in
arrears on the first day of each month hereafter.
(b) Default Rate. Notwithstanding the provisions of Section
3.1(a), if any Default or Event of Default occurs and is continuing and the
Majority Lenders in their discretion so elect, then, while any such Default
or Event of Default is outstanding, all of the Obligations shall bear
interest at the Default Rate applicable thereto.
3.2 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable by the
Lenders under applicable law for loans of the type provided for hereunder
(the "Maximum Rate"). If, for any period, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
such period shall be the Maximum Rate, and, if in future periods, that
interest rate would otherwise be less than the Maximum Rate, then that
interest rate shall remain at the Maximum Rate until such time as the amount
of interest paid hereunder equals the amount of interest which would have
been paid if the same had not been limited by the Maximum Rate. In the event
that, upon payment in full of the Obligations, the total amount of interest
paid or accrued under the terms of this Agreement is less than the total
amount of interest which would, but for this Section 3.2, have been paid or
accrued if the interest rates otherwise set forth in this Agreement had at
all times been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Agent, for the account of the Lenders, an amount
equal to the difference between (a) the lesser of (i) the amount of interest
which would have been charged if the Maximum Rate had, at all times, been in
effect or (ii) the amount of interest which would have accrued had the
interest rates otherwise set forth in this Agreement, at all times, been in
effect and (b) the amount of interest actually paid or accrued under this
Agreement. In the event that a court determines that the Agent and/or any
Lender has received interest and other charges hereunder in excess of the
Maximum Rate, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations other than interest and
if there are no Obligations outstanding, the Agent and/or such Lender shall
refund to the Borrowers such excess.
3.3 Closing and Arrangement Fees. (a) The Borrowers shall pay the
Agent, for the account of the Lenders party to this Agreement on the Closing
Date, in accordance with their respective Pro Rata Share on the Closing Date
the closing fee (the "Closing Fee") specified in the Fee Letter, which
Closing Fee shall be fully earned by the Lenders on the Closing Date.
(b) The Borrowers shall pay the Agent for its own account on the Closing
Date an arrangement fee ("Arrangement Fee") specified in the Fee Letter,
which Arrangement Fee shall be earned by the Agent on the Closing Date.
3.4 Unused Line Fee. Until the Obligations have been paid in full and
this Agreement terminated, the Borrowers agree to pay, on the first day of
each month after the date hereof and on the Termination Date, to the Agent,
for the ratable account of the Lenders, an unused line fee equal to one
fourth of one percent (0.25%) per annum on the average daily amount by which
the Maximum Revolver Amount exceeded the average daily outstanding amount of
Loans during the immediately preceding month or shorter period if calculated
on the Termination Date. The unused line fee shall be computed on the basis
of a 360-day year for the actual number of days elapsed.
ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 Loans. The Borrowers shall repay the outstanding principal balance
of the Loans, plus all accrued but unpaid interest thereon, on the
Termination Date. The Borrowers may prepay Loans at any time, and reborrow
subject to the terms of this Agreement.
4.2 Termination or Extension of Facility. (a) The Borrowers may
terminate this Agreement upon at least fifteen (15) Business Days' notice to
the Agent and the Lenders, upon (i) the payment in full of all outstanding
Loans, together with accrued interest thereon, and (ii) the payment in full
in cash of all other Obligations together with accrued interest thereon.
(b) The Borrower may extend the Stated Termination Date to a date no
later than June 30, 1997 upon the written request of MFC and delivery to the
Agent of evidence satisfactory to the Agent in its sole discretion of all
waivers and consents of lenders necessary to prevent such extension from
conflicting with other agreements, including the consents of all insurance
company lenders.
4.3 Payments by the Borrowers. (a) All payments to be made by the
Borrowers shall be made without set-off, recoupment or counterclaim. Except
as otherwise expressly provided herein, all payments by the Borrowers shall
be made to the Agent for the account of the Lenders at the Agent's address
set forth in Section 15.8, and shall be made in Dollars and in immediately
available funds, no later than 11:00 a.m. (Cherry Hill, New Jersey time) on
the date specified herein. Any payment received by the Agent later than
11:00 a.m. (Cherry Hill, New Jersey time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or
fees, as the case may be.
(c) Unless the Agent receives notice from the Borrowers prior to the
date on which any payment is due to the Lenders that the Borrowers will not
make such payment in full as and when required, the Agent may assume that the
Borrowers have made such payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the extent the
Borrowers have not made such payment in full to the Agent, each Lender shall
repay to the Agent on demand such amount distributed to such Lender, together
with interest thereon at the Federal Funds Rate for each day from the date
such amount is distributed to such Lender until the date repaid.
4.4 Payments as Loans. All payments of principal, interest,
reimbursement obligations in connection with fees and other sums payable
hereunder, including all reimbursement for expenses pursuant to Section 15.7,
may, at the option of the Agent, in its sole discretion, subject only to the
terms of this Section 4.4, be paid from the proceeds of Loans made hereunder,
whether made following a request by a Borrower pursuant to Section 2.1 or a
deemed request as provided in this Section 4.4. Each Borrower hereby
irrevocably authorizes the Agent to charge the Loan Account for the purpose
of paying principal and interest on Loans requested by it, fees, premiums and
other sums payable hereunder, including reimbursing expenses pursuant to
Section 15.7, and agrees that all such amounts charged shall constitute Loans
(including BABC Loans and Agent Advances) and that all such Loans so made
shall be deemed to have been requested by such Borrower pursuant to Section
2.1.
4.5 Apportionment, Application and Reversal of Payments. Aggregate
principal and interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Loans to which such
payments relate held by each Lender) and shall be identified by a Borrower as
to Loans requested by a particular Borrower. Payments of the fees shall, as
applicable, be apportioned ratably among the Lenders. All payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay
any fees, indemnities or expense reimbursements then due to the Agent from
the Borrowers; second, to pay any fees or expense reimbursements then due to
the Lenders from the Borrowers; third, to pay interest due in respect of all
Loans, including BABC Loans and Agent Advances; fourth, to pay or prepay
principal of the BABC Loans and Agent Advances; fifth, to pay or prepay
principal of the Loans (other than BABC Loans and Agent Advances); and sixth,
to the payment of any other Obligation due to the Agent or any Lender by the
Borrowers. The Agent shall promptly distribute to each Lender, pursuant to
the applicable wire transfer instructions received from each Lender in
writing. The Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments
to any portion of the Obligations.
4.6 Indemnity for Returned Payments. If, after receipt of any payment
of, or proceeds applied to the payment of, all or any part of the
Obligations, the Agent or any Lender is for any reason compelled to surrender
such payment or proceeds to any Person, because such payment or application
of proceeds is invalidated, declared fraudulent, set aside, determined to be
void or voidable as a preference, impermissible setoff, or a diversion of
trust funds, or for any other reason, then the Obligations or part thereof
intended to be satisfied shall be revived and continue and this Agreement
shall continue in full force as if such payment or proceeds had not been
received by the Agent or such Lender, and the Borrowers shall be liable to
pay to the Agent, and hereby do indemnify the Agent and the Lenders and hold
the Agent and the Lenders harmless for, the amount of such payment or
proceeds surrendered. The provisions of this Section 4.6 shall be and remain
effective notwithstanding any contrary action which may have been taken by
the Agent or any Lender in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to
the Agent's and the Lenders' rights under this Agreement and shall be deemed
to have been conditioned upon such payment or application of proceeds having
become final and irrevocable. The provisions of this Section 4.6 shall
survive the termination of this Agreement.
4.7 Agent's and Lenders' Books and Records; Monthly Statements. The
Borrowers agree that the Agent's and each Lender's books and records showing
the Obligations and the transactions pursuant to this Agreement and the other
Loan Documents shall be admissible in any action or proceeding arising
therefrom, and shall constitute rebuttably presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note
or other instrument. The Agent will provide to the Borrowers a monthly
statement of Loans, payments, and other transactions pursuant to this
Agreement. Such statement shall be deemed correct, accurate, and binding on
the Borrowers and an account stated (except for reversals and reapplications
of payments made as provided in Section 4.5 and corrections of errors
discovered by the Agent), unless a Borrower notifies the Agent in writing to
the contrary within thirty (30) days after such statement is rendered. In
the event a timely written notice of objections is given by a Borrower, only
the items to which exception is expressly made will be considered to be
disputed by the Borrowers.
ARTICLE 5
TAXES
5.1 Taxes. (a) Any and all payments by the Borrowers to each Lender or
the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In
addition, the Borrowers shall pay all Other Taxes.
(b) Subject to Section 14.10, the Borrowers agree to indemnify and
hold harmless each Lender and the Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section) paid by the Lender or the Agent and any
liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this indemnification
shall be made within 30 days after the date a Lender or the Agent makes
written demand therefor.
(c) If the Borrowers shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to
any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section)
such Lender or the Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been made;
(ii) the Borrowers shall make such deductions and
withholdings;
(iii) the Borrowers shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
(iv) the Borrowers shall also pay to each Lender or the Agent
for the account of such Lender, at the time interest is paid, all additional
amounts which the respective Lender specifies as necessary to preserve the
after-tax yield the Lender would have received if such Taxes or Other Taxes
had not been imposed.
(d) Within 30 days after the date of any payment by the Borrowers
of Taxes or Other Taxes, the Borrowers shall furnish the Agent the original
or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
(e) If the Borrowers are required to pay additional amounts to any
Lender or the Agent pursuant to Section 5.1 (b), then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its lending office so as to eliminate any such
additional payment by the Borrowers which may thereafter accrue, if such
change in the judgment of such Lender is not otherwise disadvantageous to
such Lender.
5.2 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article 5 shall deliver to the Borrower (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
5.3 Survival. The agreements and obligations of the Borrowers in this
Article 5 shall survive the payment of all other Obligations.
ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest. (a) As security for all present and
future Obligations, each Borrower hereby grants to the Agent, for the ratable
benefit of the Agent, BABC and the Lenders, a continuing security interest
in, lien on, and right of set-off against, all of the following property of
such Borrower, whether now owned or existing or hereafter acquired or
existing, regardless of where located:
(i) all Accounts;
(ii) all Inventory, including, without limitation, repossessed
motor vehicles;
(iii) all letters of credit, Contracts, Contract Rights, Chattel
Paper, instruments, notes, documents, and documents of title;
(iv) all General Intangibles;
(v) all deposit accounts, credits and balances with and other
claims against the Agent or any Lender or any of its affiliates or any other
financial institution in which such Borrower maintains deposits;
(vi) all money, Investment Property, securities and any other
property of any kind of such Borrower;
(vii) all accessions to, substitutions for and replacements,
products and proceeds of any of the foregoing, including, but not limited to,
proceeds of any insurance policies, claims against third parties, and
condemnation or requisition payments with respect to all or any of the
foregoing; and
(viii) all books, records and other property related to or
referring to any of the foregoing, including, without limitation, books,
records, account ledgers, data processing records, computer software and
other property and General Intangibles at any time evidencing or relating to
any of the foregoing.
All of the foregoing, and all other property of any Borrower in which the
Agent or any Lender may at any time be granted a Lien to secure the
Obligations, is herein collectively referred to as the "Collateral."
(b) All of the Obligations shall be secured by all of the
Collateral.
6.2 Perfection and Protection of Security Interest. (a) The Borrowers
shall, at their expense, perform all steps requested by the Agent at any time
to perfect, maintain, protect, and enforce the Agent's Liens, including,
without limitation: (i) delivering to the Agent the originals of all
instruments, documents, and Chattel Paper, and all other Collateral of which
the Agent determines it should have physical possession in order to perfect
and protect the Agent's security interest therein, duly pledged, endorsed or
assigned to the Agent without restriction; (ii) delivering to the Agent
warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued; (iii) when an Event
of Default exists, transferring Inventory to warehouses designated by the
Agent; (iv) placing notations on the Borrowers' books of account to disclose
the Agent's security interest; (v) delivering to the Agent all letters of
credit on which either Borrower is named beneficiary; and (vi) taking such
other steps as are deemed necessary or desirable by the Agent to maintain and
protect the Agent's Liens. To the extent permitted by applicable law, the
Agent may file, without either Borrower's signature, one or more financing
statements disclosing the Agent's Liens. The Borrowers agree that a carbon,
photographic, photostatic, or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement.
(b) If any Collateral is at any time in the possession or control
of any warehouseman, bailee or any of the Borrowers' agents or processors,
then the Borrowers shall notify the Agent thereof and shall notify such
Person of the Agent's security interest in such Collateral and, upon the
Agent's request, instruct such Person to hold all such Collateral for the
Agent's account subject to the Agent's instructions and the Borrowers shall
obtain such documents relating thereto as the Agent shall request. If at any
time any Collateral is located on any operating facility of a Borrower which
is not owned by such Borrower, then such Borrower shall, at the request of
the Agent, obtain written waivers, in form and substance satisfactory to the
Agent, of all present and future Liens to which the owner or lessor of such
premises may be entitled to assert against the Collateral.
(c) From time to time, each Borrower shall, upon the Agent's
request, execute and deliver confirmatory written instruments pledging to the
Agent, for the ratable benefit of the Agent, BABC and the Lenders, the
Collateral with respect to such Borrower, but such Borrower's failure to do
so shall not affect or limit the Agent's security interest or the Agent's
other rights in and to the Collateral with respect to such Borrower. So long
as this Agreement is in effect and until all Obligations have been fully
satisfied, the Agent's Liens shall continue in full force and effect in all
Collateral.
6.3 Location of Collateral. The Borrowers represent and warrant to
the Agent and the Lenders that: (a) each Borrower's chief executive office
is at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the location of each
Borrower's books and records is at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, the locations of the Collateral are listed in Schedule 6.3, and the
locations of all of its other places of business are listed in Schedule 6.3;
and (b) Schedule 6.3 correctly identifies any of such facilities and
locations that are not owned by a Borrower. Each Borrower covenants and
agrees that it will not (i) maintain any Collateral at any location other
than those locations listed for such Borrower on Schedule 6.3, (ii) otherwise
change or add to any of such locations, or (iii) change the location of its
chief executive office from the location identified in Schedule 6.3, unless
it executes any and all financing statements and other documents that the
Agent requests in connection therewith.
6.4 Title to, Liens on, and Sale and Use of Collateral. Each Borrower
represents and warrants to the Agent and the Lenders and agrees with the
Agent and the Lenders that: (a) all of the Collateral of such Borrower is and
will continue to be owned by such Borrower free and clear of all Liens
whatsoever, except for Permitted Liens; (b) the Agent's Liens in the
Collateral will not be subject to any prior Lien; (c) such Borrower will use,
store, and maintain the Collateral with all reasonable care and will use such
Collateral for lawful purposes only; and (d) such Borrower will not, without
the Agent's prior written approval, sell, or dispose of or permit the sale or
disposition of any of the Collateral except for sales of Inventory in the
ordinary course of business. The inclusion of proceeds in the Collateral
shall not be deemed to constitute the Agent's or any Lender's consent to any
sale or other disposition of the Collateral except as expressly permitted
herein.
6.5 Access and Examination; Confidentiality. (a) The Agent
accompanied by any Lender which so elects, may, at the Borrowers' expense, at
all reasonable times during regular business hours (and at any time when a
Default or Event of Default exists) have access to, examine, audit, make
extracts from or copies of and inspect any or all of the Borrowers' records,
files, and books of account and the Collateral, and discuss the Borrowers'
affairs with the Borrowers' officers and management. The Borrowers will
deliver to the Agent any instrument necessary for the Agent to obtain records
from any service bureau maintaining records for the Borrowers. The Agent
may, and at the direction of the Majority Lenders shall, at any time when a
Default or Event of Default exists, and at the Borrowers' expense, make
copies of all of the Borrowers' books and records, or require the Borrowers
to deliver such copies to the Agent. The Agent may, without expense to the
Agent, use such of the Borrowers' respective personnel, supplies, and
premises as may be reasonably necessary for maintaining or enforcing the
Agent's Liens. The Agent shall have the right, at any time, in the Agent's
name or in the name of a nominee of the Agent, to verify the validity, amount
or any other matter relating to the Accounts, Inventory, or other Collateral,
by mail, telephone, or otherwise.
(b) The Borrowers agree that, subject to the Borrowers' prior
consent for uses other than in a traditional tombstone, which consent shall
not be unreasonably withheld or delayed, the Agent and each Lender may use
the Borrowers' name in advertising and promotional material and in
conjunction therewith disclose the general terms of this Agreement. The
Agent and each Lender agree to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information
identified as "confidential" or "secret" by the Borrowers and provided to the
Agent or such Lender by or on behalf of the Borrowers, under this Agreement
or any other Loan Document, and neither the Agent, nor such Lender nor any of
their respective Affiliates shall use any such information other than in
connection with or in enforcement of this Agreement and the other Loan
Documents, except to the extent that such information (i) was or becomes
generally available to the public other than as a result of disclosure by the
Agent or such Lender, or (ii) was or becomes available on a nonconfidential
basis from a source other than the Borrowers, provided that such source is
not bound by a confidentiality agreement with the Borrowers known to the
Agent or such Lender; provided, however, that the Agent and any Lender may
disclose such information (1) at the request or pursuant to any requirement
of any Governmental Authority to which the Agent or such Lender is subject or
in connection with an examination of the Agent or such Lender by any such
Governmental Authority; (2) pursuant to subpoena or other court process; (3)
when required to do so in accordance with the provisions of any applicable
requirement of law; (4) to the extent reasonably required in connection with
any litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may
be party; (5) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (6) to the
Agent's or such Lender's independent auditors, accountants, attorneys and
other professional advisors; (7) to any prospective Participating Lender or
assignee under any Assignment and Acceptance, actual or potential, provided
that such prospective Participating Lender or assignee agrees to keep such
information confidential to the same extent required of the Agent and the
Lenders hereunder; (8) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which a Borrower is party
or is deemed party with the Agent or such Lender; and (9) to its Affiliates.
6.6 Collateral Reporting. The Borrowers shall provide the Agent
weekly such information with respect to the Collateral as the Agent may
reasonably request.
6.7 Right to Cure. The Agent may, in its reasonable discretion, pay
any amount or do any act required of any Borrower hereunder or under any
other Loan Document in order to preserve, protect, maintain or enforce the
Obligations, the Collateral or the Agent's Liens therein, and which the
Borrowers fail to pay or do, including, without limitation, payment of any
insurance premium, any warehouse charge, any finishing or processing charge,
any landlord's claim, and any other Lien upon or with respect to the
Collateral. All payments that the Agent makes under this Section 6.7 and all
out-of-pocket costs and expenses that the Agent pays or incurs in connection
with any action taken by it hereunder shall be charged to the Loan Account as
a Loan. Any payment made or other action taken by the Agent under this
Section 6.7 shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed thereafter as herein provided.
6.8 Power of Attorney. The Borrowers hereby appoint the Agent and the
Agent's designee as the Borrowers' attorney, with power so long as any Event
of Default has occurred and is continuing: (a) to endorse each Borrower's
name on any checks, notes, acceptances, money orders, or other forms of
payment or security that come into the Agent's or any Lender's possession;
(b) to sign each Borrower's name on any invoice, ▇▇▇▇ of lading, warehouse
receipt or other document of title relating to any Collateral, on drafts
against customers, on assignments of Accounts and on notices of assignment;
(c) to notify the post office authorities to change the address for delivery
of any Borrower's mail to an address designated by the Agent and to receive,
open and dispose of all mail addressed to a Borrower; (d) to send requests
for verification of Accounts to customers or Account Debtors; and (e) to do
all things necessary to protect its interest in or exercise its rights with
respect to the Collateral; provided however that whether or not an Event of
Default has occurred and is continuing, the Borrower hereby appoints the
Agent and the Agent's designee as the Borrower's attorney, with power to sign
each Borrower's name to any financing statements and other public records and
file such financing statements by electronic means with or without a
signature as authorized or required by applicable law or filing procedures.
Each Borrower ratifies and approves all acts of such attorney. None of the
Lenders or the Agent nor their attorneys-in-fact will be liable for any acts
or omissions or for any error of judgment or mistake of fact or law; provided
that each of the Lenders and the Agent shall be liable for gross negligence,
bad faith, willful misconduct or fraud. This power, being coupled with an
interest, is irrevocable until this Agreement has been terminated and the
Obligations have been fully satisfied.
6.9 The Agent's and Lenders' Rights, Duties and Liabilities. Each
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral. The Obligations shall
not be affected by any failure of the Agent or any Lender to take any steps
to perfect the Agent's Liens or to collect or realize upon the Collateral,
nor shall loss of or damage to the Collateral release any Borrower from any
of the Obligations. Following the occurrence and continuation of an Event of
Default, the Agent may (but shall not be required to), and at the direction
of the Majority Lenders shall, without notice to or consent from the
Borrowers, ▇▇▇ upon or otherwise collect, extend the time for payment of,
modify or amend the terms of, compromise or settle for cash, credit, or
otherwise upon any terms, grant other indulgences, extensions, renewals,
compositions, or releases, and take or omit to take any other action with
respect to the Collateral, any security therefor, any agreement relating
thereto, any insurance applicable thereto, or any Person liable directly or
indirectly in connection with any of the foregoing, without discharging or
otherwise affecting the liability of the Borrowers for the Obligations or
under this Agreement or any other agreement now or hereafter existing between
the Agent and/or any Lender and the Borrowers. The Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Agent shall be deemed to
have exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as MFC reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Agent to comply with
any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
7.1 Books and Records. The Borrower shall hereafter maintain at all
times, correct and complete books, records and accounts in which complete,
correct and timely entries are made of its transactions in accordance with
GAAP applied consistently with its audited financial statements. The
Borrower shall, by means of appropriate entries, reflect in such accounts and
in all financial statements proper liabilities and reserves for all taxes and
proper provision for depreciation and amortization of property and bad debts,
all in accordance with GAAP. The Borrowers shall maintain at all times books
and records pertaining to the Collateral in such detail, form and scope as
the Agent or any Lender shall reasonably require, including, but not limited
to, records of (a) all payments received and all credits and extensions
granted with respect to the Accounts; (b) the return, rejections,
repossession, stoppage in transit, loss, damage, or destruction of any
Inventory; and (c) all other dealings affecting the Collateral.
7.2 Financial Information. The Borrowers shall promptly furnish to
each Lender, all such financial information as the Agent or any Lender shall
reasonably request, and notify its auditors and accountants that the Agent,
on behalf of the Lenders, is authorized to obtain such information directly
from them.
7.3 Notices to the Lenders. Each Borrower shall notify the Agent, in
writing of the following matters at the following times:
(a) Promptly after becoming aware of any Default or Event of
Default.
(b) Promptly after becoming aware of the assertion by the holder of
any capital stock of any Borrower or of any Debt that a default exists with
respect thereto or that any Borrower is not in compliance with the terms
thereof, or the threat or commencement by such holder of any enforcement
action because of such asserted default or non-compliance.
(c) Promptly after becoming aware of any pending or threatened
action, suit, proceeding, or counterclaim by any Person, or any pending or
threatened investigation by a Governmental Authority, or which may materially
and adversely affect the Collateral, the repayment of the Obligations, the
Agent's or any Lender's rights under the Loan Documents, or any Borrower
property, business, operations, or condition (financial or otherwise).
(d) Promptly after becoming aware of any pending or threatened
strike, work stoppage, unfair labor practice claim, or other labor dispute
affecting any Borrowers in a manner which could reasonably be expected to
have a Material Adverse Effect.
(e) Promptly after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting any
Borrower which could reasonably be expected to have a Material Adverse
Effect.
(f) Any change in any Borrower's name, state of incorporation, or
form of organization, trade names or trade styles under which any Borrower
will sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto.
Each notice given under this Section shall describe the subject matter
thereof in reasonable detail, and shall set forth the action that the
applicable Borrower has taken or proposes to take with respect thereto.
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
8.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. Each Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents, to
incur the Obligations, and to grant to the Agent Liens upon and security
interests in the Collateral, as applicable. Each Borrower has taken all
necessary corporate action (including without limitation, obtaining approval
of its stockholders if necessary) to authorize its execution, delivery, and
performance of this Agreement and the other Loan Documents. No consent,
approval, or authorization of, or declaration or filing with, any
Governmental Authority, and no consent of any other Person, is required in
connection with any Borrower's execution, delivery and performance of this
Agreement and the other Loan Documents, except for those already duly
obtained, including the consents listed on Schedule 8.1. This Agreement and
the other Loan Documents have been duly executed and delivered by the
Borrowers and constitute the legal, valid and binding obligations of the
Borrowers enforceable against the Borrower in accordance with their
respective terms without defense, setoff or counterclaim. The Borrowers'
execution, delivery, and performance of this Agreement and the other Loan
Documents do not and will not (x) conflict with, or constitute a violation or
breach of, or constitute a default under, or (y) result in the creation or
imposition of any Lien upon the property of any such Person by reason of the
terms of (a) any contract, mortgage, Lien, lease, agreement, indenture, or
instrument to which any such Borrower is a party or which is binding upon it,
(b) any Requirement of Law applicable to any such Borrower, or (c) the
certificate or articles of incorporation or by-laws of any such Borrower;
provided, however, that as to matters described in clause (x) this
representation shall only be applicable with respect to obligations
aggregating in excess of $100,000.
8.2 Validity and Priority of Security Interest. The provisions of
this Agreement and the other Loan Documents create legal and valid Liens on
all the Collateral to secure the Obligations in favor of the Agent, for the
ratable benefit of the Agent and the Lenders, and such Liens constitute
perfected and continuing Liens on all the Collateral, having priority over
all other Liens on the Collateral (except Liens set forth in Schedule 8.2
hereof), securing all the Obligations, and enforceable against each Borrower
granting a security interest in Collateral and all third parties.
8.3 Organization and Qualification. Each Borrower (a) is duly
incorporated and organized and validly existing in good standing under the
laws of the state of its incorporation, (b) is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which
qualification is necessary in order for it to own or lease its property and
conduct its business and (c) has all requisite power and authority to conduct
its business and to own its property.
8.4 Corporate Name; Prior Transactions. No Borrower has, during the
past five (5) years, been known by or used any other corporate or fictitious
name, or been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person, or acquired any of its
property outside of the ordinary course of business except as set forth on
Schedule 8.4.
8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and
complete list of the name and relationship to MFC of each and all of the
Borrowers and other Subsidiaries and Affiliates.
8.6 Trade Names. All trade names or styles under which any Borrower
will sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, are listed on Schedule 8.6.
8.7 Restrictive Agreements. None of the Borrowers is a party to any
contract or agreement, or subject to any charter or other corporate
restriction, which adversely affects its ability to execute, deliver, and
perform the Loan Documents and repay the Obligations.
8.8 Labor Disputes. Except as set forth on Schedule 8.8, (a) there is
no collective bargaining agreement or other labor contract covering employees
of any Borrower, (b) no such collective bargaining agreement or other labor
contract is scheduled to expire during the term of this Agreement, (c) no
union or other labor organization is seeking to organize, or to be recognized
as, a collective bargaining unit of employees of any Borrower or for any
similar purpose, and (d) there is no pending or (to the best of the
Borrowers' knowledge) threatened, strike, work stoppage, material unfair
labor practice claim, or other material labor dispute against or affecting
any Borrower or its employees.
8.9 No Violation of Law. None of the Borrowers is in violation of any
law, statute, regulation, ordinance, judgment, order, or decree applicable to
it which violation could reasonably be expected to have a Material Adverse
Effect.
8.10 Regulated Entities. None of the Borrowers or any Person
controlling the Borrower, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. None of the Borrowers is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or
any other Federal or state statute or regulation limiting its ability to
incur indebtedness.
8.11 Use of Proceeds; Margin Regulations. The proceeds of the Loans
are to be used by each Borrower to satisfy obligations currently due by each
Borrower, for general corporate purposes and by MFC for the purpose of paying
amounts due to affiliated insurance companies in the approximate amount of
$6,000,000. No such proceeds shall be used to repay the principal of any
indebtedness for borrowed money.
8.12 Copyrights, Patents, Trademarks and Licenses, etc. Each of the
Borrowers owns or is licensed or otherwise has the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of its businesses, without conflict with the rights of any
other Person. To the best knowledge of the Borrowers, no slogan or other
advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by any Borrower
infringes upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or threatened, and no patent,
invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of any Borrower,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
8.13 Licenses. Each Borrower has all licenses necessary to engage in
its business as now conducted, to make all loans made by it and to purchase
all Chattel Paper purchased by it. All such loans and Chattel Paper comply
with all applicable laws.
8.14 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrowers.
8.15 Benefit. Each Borrower shall receive substantial benefit from the
availability of the Loans. The Borrowers acknowledge that their business is
managed on a consolidated basis and that each will be benefitted by the
application of the proceeds of the Loans.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower covenants to the Agent and each Lender that, so long as
any of the Obligations remain outstanding or this Agreement is in effect:
9.1 Business Conducted. The Borrower shall not engage directly or
indirectly, in any line of business other than the businesses in which they
are engaged on the Closing Date.
9.2 Liens. None of the Borrowers shall create, incur, assume, or
permit to exist any Lien on any property now owned or hereafter acquired by
any of them, except Permitted Liens and as set forth in Schedule 8.2.
9.3 New Subsidiaries. The Borrower shall not, directly or indirectly,
organize, create, acquire or permit to exist any Subsidiary other than those
listed on Schedule 8.5.
9.4 Use of Proceeds. No Borrower shall use any portion of the Loan
proceeds, directly or indirectly, (i) to purchase or carry Margin Stock, (ii)
to repay or otherwise refinance indebtedness of any Borrower or others
incurred to purchase or carry Margin Stock, (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the
Exchange Act.
9.5 Further Assurances. Each Borrower shall execute and deliver, or
cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions,
as the Agent or any Lender may, from time to time, reasonably request to
carry out the terms and conditions of this Agreement and the other Loan
Documents.
9.6 Accounts and Chattel Paper. The Borrowers shall at all times on a
consolidated basis maintain gross Accounts and Chattel Paper of at least
$1,000,000,000.
9.7 Sale of Assets. The Borrowers shall upon any sale of assets, apply
10% of the net proceeds of such asset sale to the prepayment of the Loans and
reduction of the Maximum Revolving Amount.
9.8 Insurance. The Borrower shall maintain insurance in amounts and
against such risks as is customarily maintained by companies engaged in
similar businesses in similar locations. Upon request of the Agent, the
Borrowers will deliver a certificate to the Agent evidencing such insurance.
ARTICLE 10
CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Loans on the Closing Date are
subject to the following conditions precedent having been satisfied in a
manner satisfactory to the Agent and each Lender:
(a) This Agreement and the other Loan Documents have been executed
by each party thereto and the Borrowers shall have performed and complied
with all covenants, agreements and conditions contained herein and the other
Loan Documents which are required to be performed or complied with by the
Borrowers before or on such Closing Date.
(b) The Borrowers shall have paid the Closing Fee and Arrangement
Fee.
(c) All representations and warranties made hereunder and in the
other Loan Documents shall be true and correct in all material respects as of
the Closing Date as if made on such date.
(d) No Default or Event of Default shall exist on the Closing Date,
or would exist after giving effect to the Loans to be made on such date.
(e) The Agent and the Lenders shall have received such opinions of
counsel for the Borrowers as the Agent or any Lender shall request, each such
opinion to be in a form, scope, and substance satisfactory to the Agent, the
Lenders, and their respective counsel.
(f) The Agent shall have received:
(i) confirmation that proper
financing statements, duly filed on or before the Closing Date under the UCC
of all jurisdictions that the Agent may deem necessary or desirable in order
to perfect the Agent's Lien;
(ii) the certificates evidencing the
stock (together with undated stock powers executed in blank) pledged under
the Pledge Agreement;
(iii) certified copies of resolutions of the Board of Directors of
each Borrower authorizing or ratifying the execution, delivery and
performance by such Borrower of the Loan Documents to which such Borrower is
a party; and
(iv) a certificate of the Secretary
or an Assistant Secretary of each Borrower certifying the names of the
officer or officers of such entity authorized to sign the Loan Documents to
which such entity is a party and, to borrow Loans under this Agreement,
together with a sample of the true signature of each such officer (it being
understood that the Agent and each Lender may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein).
(g) The Borrowers shall have paid all fees and expenses of the
Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby.
Notwithstanding the foregoing provisions of clause (f)(i), if the
financing statements required under clause (f)(i) have been filed only with
respect to Collateral in Texas, Illinois and Florida, the Lenders will,
subject to the other provisions hereof, make Loans not in excess of
$10,000,000 at any time outstanding pending receipt of all such other
documents required by clause (f)(i).
The acceptance by the Borrower of any Loans made on the Closing Date
shall be deemed to be a representation and warranty made by the Borrower to
the effect that all of the conditions precedent to the making of such Loans
have been satisfied, with the same effect as delivery to the Agent and the
Lenders of a certificate signed by a Responsible Officer of the Borrowers,
dated the Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of this
Agreement shall be deemed confirmation by such Lender that (i) all conditions
precedent in this Section 10.1 have been fulfilled to the satisfaction of
such Lender and (ii) the decision of such Lender to execute and deliver to
the Agent an executed counterpart of this Agreement was made by such Lender
independently and without reliance on the Agent or any other Lender as to the
satisfaction of any condition precedent set forth in this Section 10.1.
10.2 Conditions Precedent to Each Loan. The obligation of the Lenders
to make each Loan, including the initial Loans on the Closing Date shall be
subject to the further conditions precedent that on and as of the date of any
such extension of credit the following statements shall be true, and the
acceptance by a Borrower of any extension of credit shall be deemed to be a
statement to the effect set forth in clauses (i) and (ii), with the same
effect as the delivery to the Agent and the Lenders of a certificate signed
by a Responsible Officer, dated the date of such extension of credit, stating
that:
(a) The representations and warranties contained in this Agreement
and the other Loan Documents are correct in all material respects on and as
of the date of such extension of credit as though made on and as of such
date, other than any such representation or warranty which relates to a
specified prior date and except to the extent the Agent and the Lenders have
been notified by a Borrower that any representation or warranty is not
correct and the Majority Lenders have explicitly waived in writing compliance
with such representation or warranty; and
(b) No event has occurred and is continuing, or would result from
such extension of credit, which constitutes a Default or an Event of Default.
ARTICLE 11
DEFAULT; REMEDIES
11.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure to pay the principal of or interest or premium on
any of the Obligations when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by a
Borrower in this Agreement or by a Borrower in any of the other Loan
Documents, or any certificate furnished by a Borrower at any time to the
Agent or any Lender shall prove to be untrue in any material respect as of
the date on which made, deemed made, or furnished;
(c) any default shall occur in the observance or performance of any
of the covenants and agreements contained in this Agreement or any other Loan
Documents or if any such agreement or document shall terminate (other than in
accordance with its terms or the terms hereof or with the written consent of
the Agent and the Majority Lenders) or become void or unenforceable, without
the written consent of the Agent and the Majority Lenders;
(d) any Borrower shall (i) file a voluntary petition in bankruptcy
or file a voluntary petition or an answer or otherwise commence any action or
proceeding seeking reorganization, arrangement or readjustment of its debts
or for any other relief under the federal Bankruptcy Code, as amended, or
under any other bankruptcy or insolvency act or law, state or federal, now or
hereafter existing, or consent to, approve of, or acquiesce in, any such
petition, action or proceeding; (ii) apply for or acquiesce in the
appointment of a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for it or for all or any part of its
property; or (iii) make a general assignment for the benefit of creditors;
(e) an involuntary petition or proposal shall be filed or an action
or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of any Borrower or for any other
relief under the federal Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency act or law, state or federal, now or hereafter
existing and either (i) such petition, proposal, action or proceeding shall
not have been dismissed within a period of sixty (60) days after its
commencement or (ii) an order for relief against any Borrower shall have been
entered in such proceeding;
(f) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for any Borrower or for all or any part
of any Borrower's property shall be appointed or a warrant of attachment,
execution or similar process shall be issued against any part of the property
of any Borrower;
(g) any Borrower shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up or shall
commence or have commenced against it any action or proceeding for
dissolution, winding-up or liquidation, or shall take any corporate action in
furtherance thereof;
(h) one or more judgments or orders for the payment of money, the
execution of which are not stayed by a court of competent jurisdiction,
aggregating in excess of $100,000, which amount shall not be fully covered by
insurance, shall be rendered against any of the Borrowers; and
(i) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens, pursuant
to the Loan Documents, any Loan Document ceases to be in full force and
effect or any Lien with respect to any material portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected and
prior to all other Liens (other than Permitted Liens) or is terminated,
revoked or declared void.
11.2 Remedies. If an Event of Default exists, the Agent shall, at the
direction of the Majority Lenders, do one or more of the following, in
addition to the actions described in the preceding sentence, at any time or
times and in any order, without notice to or demand on any Borrower: (a)
terminate the Commitments and this Agreement; (b) declare any or all
Obligations to be immediately due and payable; provided, however, that upon
the occurrence of any Event of Default described in Sections 11.1(d),
11.1(e), or 11.1(f), the Commitments shall automatically and immediately
expire and all Obligations shall automatically become immediately due and
payable without notice or demand of any kind; and (c) pursue its other rights
and remedies under the Loan Documents and applicable law.
(b) If an Event of Default exists: (i) the Agent shall have for
the benefit of the Lenders, in addition to all other rights of the Agent and
the Lenders, the rights and remedies of a secured party under the UCC; (ii)
the Agent may, at any time, take possession of the Collateral and keep it on
the Borrowers' premises, at no cost to the Agent or any Lender, or remove any
part of it to such other place or places as the Agent may desire, or the
Borrowers shall, upon the Agent's demand, at the Borrowers' cost, assemble
the Collateral and make it available to the Agent at a place reasonably
convenient to the Agent; and (iii) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise, at
such prices and upon such terms as the Agent deems advisable, in its sole
discretion, and may, if the Agent deems it reasonable, postpone or adjourn
any sale of the Collateral by an announcement at the time and place of sale
or of such postponed or adjourned sale without giving a new notice of sale.
Without in any way requiring notice to be given in the following manner, the
Borrowers agree that any notice by the Agent of sale, disposition or other
intended action hereunder or in connection herewith, whether required by the
UCC or otherwise, shall constitute reasonable notice to the Borrowers if such
notice is mailed by registered or certified mail, return receipt requested,
postage prepaid, or is delivered personally against receipt, at least five
(5) Business Days prior to such action to the Borrowers' address specified in
or pursuant to Section 15.8. If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Agent or the Lenders receive payment, and if the buyer
defaults in payment, the Agent may resell the Collateral without further
notice to the Borrowers. In the event the Agent seeks to take possession of
all or any portion of the Collateral by judicial process, the Borrowers
irrevocably waive: (a) the posting of any bond, surety or security with
respect thereto which might otherwise be required; (b) any demand for
possession prior to the commencement of any suit or action to recover the
Collateral; and (c) any requirement that the Agent retain possession and not
dispose of any Collateral until after trial or final judgment. The Borrowers
agree that the Agent has no obligation to preserve rights to the Collateral
or marshal any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, the Borrowers'
labels, patents, copyrights, name, trade secrets, trade names, trademarks,
and advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrowers' rights under all
licenses and all franchise agreements shall inure to the Agent's benefit for
such purpose. The proceeds of sale shall be applied first to all expenses of
sale, including attorneys' fees, and then to the Obligations in whatever
order the Agent elects. The Agent will return any excess to the Borrowers
and the Borrowers shall remain liable for any deficiency.
(c) If an Event of Default occurs, the Borrowers hereby waive all
rights to notice and hearing prior to the exercise by the Agent of the
Agent's rights to repossess the Collateral without judicial process or to
replevy, attach or levy upon the Collateral without notice or hearing.
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date. The Agent upon direction from the Majority Lenders
may terminate this Agreement without notice upon the occurrence of an Event
of Default. Upon the effective date of termination of this Agreement for any
reason whatsoever, all Obligations (including, without limitation, all unpaid
principal, accrued interest and any early termination or prepayment fees or
penalties) shall become immediately due and payable. Notwithstanding the
termination of this Agreement, until all Obligations are indefeasibly paid
and performed in full in cash, the Borrowers shall remain bound by the terms
of this Agreement and the other Loan Documents and shall not be relieved of
any of their respective Obligations hereunder or thereunder, and the Agent
and the Lenders shall retain all their rights and remedies hereunder and
thereunder (including, without limitation, the Agent's Liens in and all
rights and remedies with respect to all then existing and after-arising
Collateral).
ARTICLE 13
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 No Waivers Cumulative Remedies. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or
among any Borrower and the Agent and/or any Lender, or delay by the Agent or
any Lender in exercising the same, will not operate as a waiver thereof. No
waiver by the Agent or any Lender will be effective unless it is in writing,
and then only to the extent specifically stated. No waiver by the Agent or
the Lenders on any occasion shall affect or diminish the Agent's and each
Lender's rights thereafter to require strict performance by the Borrowers of
any provision of this Agreement and the other Loan Documents. The Agent's
and each Lender's rights under this Agreement will be cumulative and not
exclusive of any other right or remedy which the Agent or any Lender may
have.
13.2 Amendments and Waivers. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to
any departure by the Borrowers therefrom, shall be effective unless the same
shall be in writing and signed by the Majority Lenders (or by the Agent at
the written request of the Majority Lenders) and, the Borrowers and then any
such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders and the Borrowers and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under
any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any
of them to take any action hereunder;
(e) amend this Section or any provision of the Agreement providing
for consent or other action by all Lenders;
(f) release Collateral other than as permitted by Section 14.11; or
(g) change the definitions of "Majority Lenders".
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent
under this Agreement or any other Loan Document.
13.3 Assignments; Participations.
(a) Any Lender may, with (x) the written consent of the Borrowers
(which consent shall not be required so long as any Event of Default has
occurred and is continuing and which consent shall not be unreasonably
withheld) and (y) the written consent of the Agent, assign and delegate to
one or more assignees (provided that no written consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to an
Affiliate of such Lender) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitments and the other rights and obligations of
such Lender hereunder, in a minimum amount of $10,000,000 or if less the
entire amount of such Lender's Commitment; provided, however, that
BankAmerica Business Credit, Inc. shall not assign Commitments in amounts
which would cause its retained Commitment to be less than $10,000,000 and
provided further that the Borrowers and the Agent may continue to deal solely
and directly with such Lender in connection with the interest so assigned to
an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such Lender
and the Assignee; (ii) such Lender and its Assignee shall have delivered to
the Borrowers and the Agent an Assignment and Acceptance in the form of
Exhibit B ("Assignment and Acceptance") and (iii) the assignor Lender or
Assignee has paid to the Agent a processing fee in the amount of $5,000.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance and payment
of the above-referenced processing fee, (i) the Assignee thereunder shall be
a party hereto and, to the extent that rights and obligations have been
assigned to it pursuant to such Assignment and Acceptance, shall have the
rights and obligations of a Lender under the Loan Documents, and (ii) the
assignor Lender shall, to the extent that rights and obligations hereunder
and under the other Loan Documents have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (2) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrowers or the performance or observance by the Borrowers
of any of their obligations under this Agreement or any other Loan Document
furnished pursuant hereto; (3) such Assignee confirms that it has received a
copy of this Agreement, together with such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (4) such Assignee will,
independently and without reliance upon the Agent, such assigning Lender or
any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (5) such Assignee appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; and (6) such Assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce
such Commitments of the assigning Lender pro tanto.
(e) Any Lender may, with the written consent of the Borrowers
(which consent shall not be required so long as any Event of Default has
occurred and is continuing and which consent shall not be unreasonably
withheld), at any time sell to one or more commercial banks, financial
institutions, or other Persons not Affiliates of the Borrowers (a
"Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the originating Lender shall remain solely responsible for the
performance of such obligations, (iii) the Borrowers and the Agent shall
continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer or
grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, and all amounts payable by the
Borrowers hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this
Agreement.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
ARTICLE 14
THE AGENT
14.1 Appointment and Authorization. Each Lender hereby designates and
appoints BankAmerica Business Credit, Inc. as its Agent under this Agreement
and the other Loan Documents and each Lender hereby irrevocably authorizes
the Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. The Agent agrees to act as such on the
express conditions contained in this Article 14. The provisions of this
Article 14 are solely for the benefit of the Agent and the Lenders and the
Borrowers shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Agent shall not have any duties or responsibilities, except those expressly
set forth herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
Without limiting the generality of the foregoing sentence, the use of the
term "agent" in this Agreement with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as
a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties. Except
as expressly otherwise provided in this Agreement, the Agent shall have and
may use its sole discretion with respect to exercising or refraining from
exercising any discretionary rights or taking or refraining from taking any
actions which the Agent is expressly entitled to take or assert under this
Agreement and the other Loan Documents, (a) the making of Agent Advances
pursuant to Section 2.2(i), and (b) the exercise of remedies pursuant to
Section 11.2, and any action so taken or not taken shall be deemed consented
to by the Lenders.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects as long as such selection was made without gross negligence
or willful misconduct.
14.3 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or
in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by any
Borrower, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
or any other Loan Document, or for any failure of the Borrowers or any other
party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the
Borrower.
14.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Borrowers), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any
such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 10.1, each Lender that has executed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter either sent by the Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the Lender.
14.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Lenders, unless
the Agent shall have received written notice from a Lender, or a Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." The Agent will notify the
Lenders of its receipt of any such notice. The Agent shall take such action
with respect to such Default or Event of Default as may be requested by the
Majority Lenders in accordance with Section 11; provided, however, that
unless and until the Agent has received any such request, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable.
14.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
any Agent-Related Person to any Lender. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of
the Borrower, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrowers. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the
Borrowers. Except for notices, reports and other documents expressly herein
required to be furnished to the Lenders by the Agent, the Agent shall not
have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the any Borrower which
may come into the possession of any of the Agent-Related Persons.
14.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), pro
rata, from and against any and all Indemnified Liabilities as such term is
defined in Section 15.11; provided, however, that no Lender shall be liable
for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence
or willful misconduct. Without limitation of the foregoing, each Lender
shall reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrowers. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
14.8 Agent in Individual Capacity. BABC and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with the Borrowers
and their Subsidiaries and Affiliates as though BABC were not the Agent
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, BABC or its Affiliates may
receive information regarding the Borrowers or their Affiliates (including
information that may be subject to confidentiality obligations in favor of
the Borrowers or such Affiliates) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, BABC shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Agent, and
the terms "Lender" and "Lenders" include BABC in its individual capacity.
14.9 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Lenders and the Borrowers. If the Agent resigns under this
Agreement, the Majority Lenders shall appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is appointed prior to
the effective date of the resignation of the Agent, the Agent may appoint,
after consulting with the Lenders and the Borrowers, a successor agent from
among the Lenders. Upon the acceptance of its appointment as successor agent
hereunder, such successor agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall
be terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article 14 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
If no successor agent has accepted appointment as Agent by the date which is
30 days following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Lenders appoint a successor agent as provided
for above.
14.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441
or 1442 of the Code, such Lender agrees with and in favor of the Agent, to
deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before the payment of any interest in each third succeeding calendar
year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid
under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Borrowers to such Lender,
such Lender agrees to notify the Agent of the percentage amount in which it
is no longer the beneficial owner of Obligations of the Borrowers to such
Lender. To the extent of such percentage amount, the Agent will treat such
Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
the Borrowers to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to the Agent, then the Agent
may withhold from any interest payment to such Lender not providing such
forms or other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because
the appropriate form was not delivered, was not properly executed, or because
such Lender failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs). The obligation of
the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of the Agent.
14.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Lien upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by the Borrowers of all Loans and all other Obligations;
(ii) constituting property in which a Borrower owned no interest at the time
the Lien was granted and at any time thereafter; or (iii) constituting
property leased to the Borrowers under a lease which has expired or been
terminated in a transaction permitted under this Agreement. Except as
provided above, the Agent will not release any of the Agent's Liens without
the prior written authorization of the Majority Lenders; provided that the
Agent may, in its discretion, release the Agent's Liens on Collateral valued
in the aggregate not in excess of $1,000,000 without the prior written
authorization of the Majority Lenders. Upon request by the Agent or the
Borrowers at any time, the Lenders will confirm in writing the Agent's
authority to release any Agent's Liens upon particular types or items of
Collateral pursuant to this Section 14.11.
(b) Upon receipt by the Agent of any authorization required pursuant
to Section 14.11(a) from the Lenders of the Agent's authority to release any
Agent's Liens upon particular types or items of Collateral, and upon at least
five (5) Business Days' prior written request by the Borrowers, the Agent
shall (and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Agent's Liens
upon such Collateral; provided, however, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens (other than those expressly being
released) upon (or obligations of the Borrowers in respect of) all interests
retained by the Borrowers, including (without limitation) the proceeds of any
sale, all of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by the Borrowers or
is cared for, protected or insured or has been encumbered, or that the
Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority,
or to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Agent pursuant to any of
the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Agent may act
in any manner it may deem appropriate, in its sole discretion given the
Agent's own interest in the Collateral in its capacity as one of the Lenders
and that the Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing.
14.12 Restrictions on Actions by Lenders; Sharing of Payments. (a)
Each of the Lenders agrees that it shall not, without the express consent of
all Lenders, and that it shall, to the extent it is lawfully entitled to do
so, upon the request of all Lenders, set off against the Obligations, any
amounts owing by such Lender to the Borrowers or any accounts of such Persons
now or hereafter maintained with such Lender. Each of the Lenders further
agrees that it shall not, unless specifically requested to do so by the
Agent, take or cause to be taken any action to enforce its rights under this
Agreement or any other Loan Document or against any Borrower, including,
without limitation, the commencement of any legal or equitable proceedings,
to foreclose any Lien on, or otherwise enforce any security interest in, any
of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations from the Borrowers, except for any such
proceeds or payments received by such Lender from the Agent pursuant to the
terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in
same day funds, as applicable, for the account of all of the Lenders for
application to the Obligations in accordance with the applicable provisions
of this Agreement, or (2) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other
Lenders so that such excess payment received shall be applied ratably as
among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to
such purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the recovery
of the excess payment.
14.13 Agency for Perfection. The Agent and each Lender hereby appoints
each other Lender as agent for the purpose of perfecting the Lenders'
security interest in assets which, in accordance with Article 9 of the UCC
can be perfected only by possession. Should any Lender (other than the
Agent) obtain possession of any such Collateral, such Lender shall notify the
Agent thereof, and, promptly upon the Agent's request therefor shall deliver
such Collateral to the Agent or in accordance with the Agent's instructions.
14.14 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds in accordance with such wire transfer
instructions or internal transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such
payment, the Agent shall identify whether such payment (or any portion
thereof) represents principal, premium or interest on the Loans, or
otherwise.
14.15 Concerning the Collateral and the Loan Documents. Each Lender
authorizes and directs the Agent to enter into this Agreement and the other
Loan Documents relating to the Collateral, for the ratable benefit of the
Agent and the Lenders. Each Lender agrees that any action taken by the Agent
or Majority Lenders, as applicable, in accordance with the terms of this
Agreement or the other Loan Documents relating to the Collateral, and the
exercise by the Agent or the Majority Lenders, as applicable, of their
respective powers set forth therein or herein, together with such other
powers that are reasonably incidental thereto, shall be binding upon all of
the Lenders.
14.16 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by
the Agent;
(b) expressly agrees and acknowledges that neither BABC nor the
Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party
performing any audit or examination will inspect only specific information
regarding the Borrowers and will rely significantly upon the Borrowers' books
and records, as well as on representations of the Borrowers' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach
or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to the
Borrowers, or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, a loan or loans of the Borrowers; and (ii) to pay and
protect, and indemnify, defend and hold the Agent and any such other Lender
preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses and other amounts (including, without
limitation attorney costs) incurred by the Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who
might obtain all or part of any Report through the indemnifying Lender.
14.17 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
ARTICLE 15
MISCELLANEOUS
15.1 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Agent's and each Lender's rights and remedies is
not intended to be exclusive, and such rights and remedies are in addition to
and not by way of limitation of any other rights or remedies that the Agent
and the Lenders may have under the UCC or other applicable law. The Agent
and the Lenders shall have the right, in their sole discretion, to determine
which rights and remedies are to be exercised and in which order. The
exercise of one right or remedy shall not preclude the exercise of any
others, all of which shall be cumulative. The Agent and the Lenders may,
without limitation, proceed directly against the Borrowers to collect the
Obligations without any prior recourse to the Collateral. No failure to
exercise and no delay in exercising, on the part of the Agent or any Lender,
any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
15.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required
hereunder.
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver. (a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION
ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE
CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE
STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS, THE AGENT
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWERS, THE AGENT
AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
NOTWITHSTANDING THE FOREGOING: (1) THE AGENT AND THE LENDERS SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST EITHER THE BORROWERS OR THEIR
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS
DEEM NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER
SECURITY FOR THE OBLIGATIONS AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES
THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING
SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) EACH OF THE BORROWERS, AND IN THE EVENT THE AGENT OR ANY LENDER
IS NOT AT ANY RELEVANT TIME LOCATED IN ILLINOIS, THE AGENT AND SUCH LENDER,
AS APPLICABLE, HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT
AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWERS AT THEIR ADDRESS SET
FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, THE LENDERS,
ANY BORROWER TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
15.4 WAIVER OF JURY TRIAL. THE BORROWERS, THE LENDERS AND THE AGENT
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWERS, THE LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
15.5 Survival of Representations and Warranties. All of the Borrowers'
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding
any investigation by the Agent or the Lenders or their respective agents.
15.6 Other Security and Guaranties. The Agent may, without notice or
demand and without affecting the Borrowers' obligations hereunder, from time
to time: (a) take from any Person and hold collateral (other than the
Collateral owned by the Borrowers) for the payment of all or any part of the
Obligations and exchange, enforce or release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of
all or any part of the Obligations and release or substitute any such
endorser or guarantor, or any Person who has given any Lien in any other
collateral as security for the payment of all or any part of the Obligations,
or any other Person in any way obligated to pay all or any part of the
Obligations.
15.7 Fees and Expenses. The Borrowers agree to pay to the Agent, for
its benefit, promptly, all reasonable costs and expenses that Agent pays or
incurs in connection with the negotiation, preparation, consummation,
administration, enforcement, and termination of this Agreement, including,
without limitation: (a) Attorney Costs; (b) costs and expenses (including
attorneys' and paralegals' fees and disbursements which shall include the
allocated costs of Agent's in-house counsel fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection
with the Loan Documents and the transactions contemplated thereby; (c) costs
and expenses of lien and title searches and title insurance; (d) taxes, fees
and other charges for, filing financing statements, amendments and
continuations, and other actions to perfect, protect, and continue the
Agent's Liens (including costs and expenses paid or incurred by the Agent in
connection with the consummation of Agreement); (e) sums paid or incurred to
pay any amount or take any action required of the Borrowers under the Loan
Documents that the Borrowers fail to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including, without
limitation, travel, lodging, and meals for inspections of the Collateral and
the Borrowers' operations by the Agent plus the Agent's then customary charge
for field examinations and audits and the preparation of reports thereof
(such charge is currently $ 500 per day (or portion thereof) for each agent
or employee of the Agent with respect to each field examination or audit);
(g) reasonable costs and expenses of forwarding loan proceeds, collecting
checks and other items of payment, and establishing and maintaining Payment
Accounts and lock boxes; (h) costs and expenses of preserving and protecting
the Collateral; and (i) costs and expenses (including attorneys' and
paralegals' fees and disbursements which shall include the allocated cost of
Agent's in-house counsel fees and disbursements) paid or incurred to obtain
payment of the Obligations, enforce the Agent's Liens, sell or otherwise
realize upon the Collateral, and otherwise enforce the provisions of the Loan
Documents, or to defend any claims made or threatened against the Agent or
any Lender arising out of the transactions contemplated hereby (including
without limitation, preparations for and consultations concerning any such
matters). The foregoing shall not be construed to limit any other provisions
of the Loan Documents regarding costs and expenses to be paid by the
Borrowers. All of the foregoing costs and expenses shall be charged to the
Loan Account as Loans as described in Section 4.4.
15.8 Notices. Except as otherwise provided herein, all notices,
demands and requests that any party is required or elects to give to any
other shall be in writing, or by a telecommunications device capable of
creating a written record, and any such notice shall become effective (a)
upon personal delivery thereof, including, but not limited to, delivery by
overnight mail and courier service, or (b) in the case of notice by such a
telecommunications device, when properly transmitted, in each case addressed
to the party to be notified as set forth in Schedule 15.8 or to such other
address as each party may designate for itself by like notice. Failure or
delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to the persons designated above to receive
copies shall not adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication.
15.9 Waiver of Notices. Unless otherwise expressly provided herein,
the Borrowers waive presentment, protest and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the Obligations
and notice of acceleration of the Obligations, as well as any and all other
notices to which it might otherwise be entitled. No notice to or demand on
the Borrowers which the Agent or any Lender may elect to give shall entitle
the Borrowers to any or further notice or demand in the same, similar or
other circumstances.
15.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Borrowers without prior written
consent of the Agent and each Lender. The rights and benefits of the Agent
and the Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof.
15.11 Indemnity of the Agent and the Lenders by the Borrowers. The
Borrowers agree to defend, indemnify and hold the Agent-Related Persons, and
each Lender and each of its respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses and
disbursements (including Attorney Costs) of any kind or nature whatsoever
which may at any time (including at any time following repayment of the Loans
and the termination, resignation or replacement of the Agent or replacement
of any Lender) be imposed on, incurred by or asserted against any such Person
in any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated
hereby, or any action taken or omitted by any such Person under or in
connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding
or appellate proceeding) related to or arising out of this Agreement, any
other Loan Document, or the Loans or the use of the proceeds thereof, whether
or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that the Borrowers
shall have no obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting solely from the gross negligence or willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.
15.12 Limitation of Liability. To the extent permitted by applicable
law, no claim may be made by the Borrowers, any Lender or other Person
against the Agent, any Lender, or the affiliates, directors, officers,
employees, or agents of any of them 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 this Agreement or any other Loan Document, or any act,
omission or event occurring in connection therewith, and the Borrowers, and
each Lender hereby waive, release and agree not to ▇▇▇ upon any claim for
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
15.13 Final Agreement. This Agreement and the other Loan Documents are
intended by the Borrowers, the Agent and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This
Agreement supersedes any and all prior oral or written agreements relating to
the subject matter hereof. No modification, rescission, waiver, release, or
amendment of any provision of this Agreement or any other Loan Document shall
be made, except by a written agreement signed by the Borrowers and a duly
authorized officer of each of the Agent and the requisite Lenders.
15.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and each Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
15.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not
be construed to modify, enlarge, or restrict any provision.
15.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrowers, any such notice being waived by the
Borrowers to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final)
at any time held by, and other indebtedness at any time owing by, such Lender
to or for the credit or the account of the Borrowers against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of
whether or not the Agent or such Lender shall have made demand under this
Agreement or any Loan Document and although such Obligations may be
contingent or unmatured. Each Lender agrees promptly to notify the Borrowers
and the Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. NOTWITHSTANDING THE FOREGOING, NO
LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE
AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE BORROWERS HELD OR MAINTAINED
BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
15.17 Joint and Several Liability. The Borrowers shall be jointly
and severally liable for all amounts due to any Agent-Related Person and/or
any Lender under this Agreement, regardless of which Borrower actually
receives Loans or other extensions of credit hereunder or the amount of such
Loans received or the manner in which the Agent and/or such Lender accounts
for such Loans or other extensions of credit on its books and records. Each
Borrower's Obligations with respect to Loans made to it, and the Borrower's
Obligations arising as a result of the joint and several liability of the
Borrowers hereunder, with respect to Loans made to the other Borrower
hereunder, shall be separate and distinct obligations, but all such
Obligations shall be primary obligations of each Borrower.
Each Borrower's Obligations arising as a result of the joint and several
liability of such Borrower hereunder with respect to Loans or other
extensions of credit made to the other Borrower hereunder shall, to the
fullest extent permitted by law, be unconditional irrespective of (i) the
validity or enforceability, avoidance or subordination of the Obligations of
the other Borrower or of any promissory note or other document evidencing all
or any part of the Obligations of the other Borrower (other than the defense
that such Obligations have been paid), (ii) the absence of any attempt to
collect the Obligations from the other Borrower, any guarantor, or any
security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension, forbearance or granting of any
indulgence by the Agent and/or any Lender with respect to any provision of
any instrument evidencing the Obligations of the other Borrower, or any part
thereof, or any other agreement now or hereafter executed by the other
Borrower and delivered to the Agent and/or any Lender, (iv) the failure by
the Agent and/or any Lender to take any steps to perfect and maintain its
security interest in, or to preserve its rights to, any security or
collateral of the other Borrower for the Obligations, (v) the Agent's and/or
any Lender's election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111 (b)(2) of the Bankruptcy Code, (vi)
any borrowing or grant of a security interest by the other Borrower, as
debtor-in-possession under Section 364 of the Bankruptcy Code, (vii) the
disallowance of all or any portion of the Agent's and/or any Lender's
claim(s) for the repayment of the Obligations of the other Borrower under
Section 502 of the Bankruptcy Code, or (viii) any other circumstances which
might constitute a legal or equitable discharge or defense of a guarantor or
of the other Borrower. With respect to each Borrower's Obligations arising
as a result of the joint and several liability of such Borrower hereunder
with respect to Loans or other extensions of credit made to any other
Borrower hereunder, each Borrower waives, until the Obligations shall have
been paid in full and the Loan Agreement shall have been terminated, any
right to enforce any right of subrogation or any remedy which the Agent
and/or any Lender now has or may hereafter have against each such Borrower,
any endorser or any guarantor of all or any part of the Obligations, and any
benefit of, and any right to participate in, any security or collateral given
to the Agent and/or any Lender to secure payment of the Obligations or any
other liability of the Borrowers to the Agent and/or any Lender.
Notwithstanding the foregoing, a Borrower shall be liable for obligations
arising from its joint and several liability to the maximum amount of such
liability that can be incurred without rendering its Obligation, as a result
thereof, a fraudulent conveyance or fraudulent transfer and not for any
greater amount.
Upon any Event of Default, the Agent may proceed directly and at once,
without notice, against a Borrower to collect and recover the full amount, or
any portion of the Obligations, without first proceeding against the other
Borrower or any other Person, or against any security or collateral for the
Obligations. The Borrowers consent and agree that the Agent shall be under
no obligation to marshal any assets in favor of a Borrower or against or in
payment of any or all of the Obligations.
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
MERCURY FINANCE COMPANY
By
Name:
Title:
MERCURY FINANCE CORPORATION OF ALABAMA
MERCURY FINANCE COMPANY OF ARIZONA
MERC FINANCE COMPANY OF CALIFORNIA
MERCURY FINANCE COMPANY OF COLORADO
MERCURY FINANCE COMPANY OF DELAWARE
MERCURY FINANCE COMPANY OF FLORIDA
MERCURY FINANCE COMPANY OF GEORGIA
MERCURY FINANCE COMPANY OF IDAHO
MERCURY FINANCE COMPANY OF ILLINOIS
MERCURY FINANCE COMPANY OF INDIANA
MERCURY FINANCE COMPANY OF IOWA
MERCURY FINANCE COMPANY OF KANSAS
MERCURY FINANCE COMPANY OF KENTUCKY
MERCURY FINANCE COMPANY OF LOUISIANA
MERCURY FINANCE COMPANY OF MICHIGAN
MERCURY FINANCE COMPANY OF MISSISSIPPI
MERCURY FINANCE COMPANY OF MISSOURI
MERCURY FINANCE COMPANY OF NEVADA
MERCURY FINANCE COMPANY OF NEW MEXICO
MERCURY FINANCE COMPANY OF NEW YORK
MERCURY FINANCE COMPANY OF NORTH CAROLINA
MERCURY FINANCE COMPANY OF OHIO
MFC FINANCE COMPANY OF OKLAHOMA
MERCURY FINANCE COMPANY OF OREGON
MERCURY FINANCE COMPANY OF PENNSYLVANIA
MERCURY FINANCE COMPANY OF SOUTH CAROLINA
MERCURY FINANCE COMPANY OF TENNESSEE
MFC FINANCE COMPANY OF TEXAS
MERCURY FINANCE COMPANY OF UTAH
MERCURY FINANCE COMPANY OF VIRGINIA
MERCURY FINANCE COMPANY OF WASHINGTON
MERCURY FINANCE COMPANY OF WISCONSIN
FILCO MARKETING COMPANY
MFC FINANCIAL SERVICES, INC.
GULFCO FINANCE COMPANY
GULFCO INVESTMENT, INC.
MIDLAND FINANCE CO.
By
Name:
Title:
BANKAMERICA BUSINESS CREDIT,
INC., as a Lender and as the Agent
By
Name:
Vice President
EXHIBIT A
NOTICE OF BORROWING
Date: , 1997
To: BankAmerica Business Credit, Inc. as Agent for the Lenders who are
parties to the Loan and Security Agreement dated as of February 7, 1997
(as extended, renewed, amended, restated or otherwise modified from time
to time, the "Loan and Security Agreement") among certain Lenders which
are parties thereto, BankAmerica Business Credit, Inc., as Agent,
Mercury Finance Company and certain additional borrowers
Ladies and Gentlemen:
The undersigned, [INSERT NAME OF REQUESTING BORROWER], refers to the
Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the Borrowing
specified below:
1. The Business Day of the proposed Borrowing is
, 19 .
2. The aggregate amount of the proposed Borrowing is $
.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties contained in the Loan and
Security Agreement and the other Loan Documents are true and correct as
though made on and as of such date;
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing; and
[INSERT NAME OF REQUESTING BORROWER]
By:
Title:
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of , 1997 is made between
(the "Assignor") and (the
"Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Loan and Security
Agreement dated as of February 7, 1997 (as amended, amended and restated,
supplemented, renewed or otherwise modified, the "Loan and Security
Agreement") among the several financial institutions from time to time party
thereto (including the Assignor, the "Lenders"), BankAmerica Business Credit,
Inc., as agent for the Lenders (the "Agent"), Mercury Finance Company and
certain additional borrowers (together the Borrowers"). Any terms defined in
the Loan and Security Agreement and not defined in this Assignment and
Acceptance are used herein as defined in the Loan and Security Agreement;
WHEREAS, as provided under the Loan and Security Agreement, the
Assignor has committed to making Loans (the "Committed Loans") to the
Borrowers in an aggregate amount not to exceed $ (the
"Commitment");
WHEREAS, the Assignor has made Committed Loans in the aggregate
principal amount of $ to the Borrowers; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of
the] [all] rights and obligations of the Assignor under the Loan and Security
Agreement in respect of its Commitment, together with a corresponding portion
of each of its outstanding Committed Loans and L/C Obligations, in an amount
equal to $ (the "Assigned Amount") on the terms and subject
to the conditions set forth herein and the Assignee wishes to accept
assignment of such rights and to assume such obligations from the Assignor on
such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except
as provided in this Assignment and Acceptance) % (the "Assignee's
Percentage Share") of (A) the Commitment and the Committed Loans of the
Assignor and (B) all related rights, benefits, obligations, liabilities and
indemnities of the Assignor under and in connection with the Loan and
Security Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Loan and Security
Agreement and succeed to all of the rights and be obligated to perform all of
the obligations of a Lender under the Loan and Security Agreement, including
the requirements concerning confidentiality and the payment of
indemnification, with a Commitment in an amount equal to the Assigned Amount.
The Assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Loan and Security Agreement are
required to be performed by it as a Lender. It is the intent of the parties
hereto that the Commitment of the Assignor shall, as of the Effective Date,
be reduced by an amount equal to the Assigned Amount and the Assignor shall
relinquish its rights and be released from its obligations under the Loan and
Security Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights
under Article V and Section 15.11 of the Loan and Security Agreement to the
extent such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $
.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $
.
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on
the Effective Date in immediately available funds an amount equal to $
, representing the Assignee's Pro Rata Share of the principal amount of
all Committed Loans.
(b) The Assignee further agrees to pay to the Agent a processing
fee in the amount specified in Section 13.3(a) of the Loan and Security
Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment and Committed Loans shall be for the account of the
Assignor. Any interest, fees and other payments accrued on and after the
Effective Date with respect to the Assigned Amount shall be for the account
of the Assignee. Each of the Assignor and the Assignee agrees that it will
hold in trust for the other party any interest, fees and other amounts which
it may receive to which the other party is entitled pursuant to the preceding
sentence and pay to the other party any such amounts which it may receive
promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Loan
and Security Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent financial statements of the Borrowers, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance
upon the Assignor, the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit and legal decisions in taking or not taking action under the
Loan and Security Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date
for this Assignment and Acceptance shall be , 199 (the
"Effective Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee shall have
been duly obtained and shall be in full force and effect as of the Effective
Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance; and
(iv) the processing fee referred to in Section 13.3(a) of the
Loan and Security Agreement shall have been paid to the Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached
hereto as Schedule 1.
[6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Loan and Security Agreement as are delegated to the Agent by the Lenders
pursuant to the terms of the Loan and Security Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Loan and Security Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lenders, the Agent and
the Borrowers that under applicable law and treaties no tax will be required
to be withheld with respect to any payments to be made to the Assignee
hereunder or under the Loan and Security Agreement, (b) agrees to furnish (if
it is organized under the laws of any jurisdiction other than the United
States or any State thereof) to the Agent and the Borrowers prior to the time
that the Agent or a Borrower is required to make any payment of principal,
interest or fees hereunder, duplicate executed originals of either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein the Assignee claims entitlement to the benefits of a tax treaty that
provides for a complete exemption from U.S. federal income withholding tax on
all payments hereunder) and agrees to provide new Forms 4224 or 1001 upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto,
duly executed and completed by the Assignee, and (c) agrees to comply with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to
take, and has taken, all action necessary to execute and deliver this
Assignment and Acceptance and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and Acceptance
and to fulfill its obligations hereunder; (iii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any
already given or obtained) for its due execution, delivery and performance of
this Assignment and Acceptance, and apart from any agreements or undertakings
or filings required by the Loan and Security Agreement, no further action by,
or notice to, or filing with, any Person is required of it for such
execution, delivery or performance; and (iv) this Assignment and Acceptance
has been duly executed and delivered by it and constitutes the legal, valid
and binding obligation of the Assignor, enforceable against the Assignor in
accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable
principles.
(b) The Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan and Security Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan and Security Agreement or any other
instrument or document furnished pursuant thereto. The Assignor makes no
representation or warranty in connection with, and assumes no responsibility
with respect to, the solvency, financial condition or statements of the
Borrowers, or the performance or observance by the Borrowers, of any of its
respective obligations under the Loan and Security Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any
already given or obtained) for its due execution, delivery and performance of
this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Loan and Security Agreement, no further action by,
or notice to, or filing with, any Person is required of it for such
execution, delivery or performance; and (iii) this Assignment and Acceptance
has been duly executed and delivered by it and constitutes the legal, valid
and binding obligation of the Assignee, enforceable against the Assignee in
accordance with the terms hereof, subject, as to enforcement, to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
relating to or affecting creditors' rights and to general equitable
principles.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrowers or the Agent, which may be required
in connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment
and Acceptance shall be in writing and signed by the parties hereto. No
failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off
or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number
of counterparts and all of such counterparts taken together shall be deemed
to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. The Assignor
and the Assignee each irrevocably submits to the non-exclusive jurisdiction
of any State or Federal court sitting in the Northern District of the State
of Illinois over any suit, action or proceeding arising out of or relating to
this Assignment and Acceptance and irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such
State or Federal court. Each party to this Assignment and Acceptance hereby
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AND SECURITY
AGREEMENT, ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By:
Title:
By:
Title:
Address:
[ASSIGNEE]
By:
Title:
By:
Title:
Address:
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
, 19
BankAmerica Business Credit, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: Mercury Finance Company
Ladies and Gentlemen:
We refer to the Loan and Security Agreement dated as of February 7, 1997
(as amended, amended and restated, supplemented, renewed or otherwise
modified from time to time the "Loan and Security Agreement") among the
Lenders party thereto, BankAmerica Business Credit, Inc., as agent for the
Lenders (the "Agent"), Mercury Finance Company and certain additional
borrowers (together the "Borrowers"). Terms defined in the Loan and Security
Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by (the "Assignor") to (the
"Assignee") of % of the right, title and interest of the Assignor in and
to the Loan and Security Agreement (including, without limitation, the right,
title and interest of the Assignor in and to the Commitments of the Assignor,
all outstanding Loans made by the Assignor pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). We
understand and agree that the Assignor's Commitment, as of , 19
, is $ , the aggregate amount of its outstanding Loans is $
.
2. The Assignee agrees that, upon receiving the consent of the Agent
to such assignment, the Assignee will be bound by the terms of the Loan and
Security Agreement as fully and to the same extent as if the Assignee were
the Lender originally holding such interest in the Loan and Security
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
Address:
Attention:
Telephone: ( )
Telecopier: ( )
Telex (Answerback):
(B) Payment Instructions:
Account No.:
At:
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above
mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BankAmerica Business Credit, Inc.,
as Agent
By:
Title:
SCHEDULE 1
OTHER BORROWERS
MERCURY FINANCE CORPORATION OF ALABAMA
MERCURY FINANCE COMPANY OF ARIZONA
MERC FINANCE COMPANY OF CALIFORNIA
MERCURY FINANCE COMPANY OF COLORADO
MERCURY FINANCE COMPANY OF DELAWARE
MERCURY FINANCE COMPANY OF FLORIDA
MERCURY FINANCE COMPANY OF GEORGIA
MERCURY FINANCE COMPANY OF IDAHO
MERCURY FINANCE COMPANY OF ILLINOIS
MERCURY FINANCE COMPANY OF INDIANA
MERCURY FINANCE COMPANY OF IOWA
MERCURY FINANCE COMPANY OF KANSAS
MERCURY FINANCE COMPANY OF KENTUCKY
MERCURY FINANCE COMPANY OF LOUISIANA
MERCURY FINANCE COMPANY OF MICHIGAN
MERCURY FINANCE COMPANY OF MISSISSIPPI
MERCURY FINANCE COMPANY OF MISSOURI
MERCURY FINANCE COMPANY OF NEVADA
MERCURY FINANCE COMPANY OF NEW MEXICO
MERCURY FINANCE COMPANY OF NEW YORK
MERCURY FINANCE COMPANY OF NORTH CAROLINA
MERCURY FINANCE COMPANY OF OHIO
MFC FINANCE COMPANY OF OKLAHOMA
MERCURY FINANCE COMPANY OF OREGON
MERCURY FINANCE COMPANY OF PENNSYLVANIA
MERCURY FINANCE COMPANY OF SOUTH CAROLINA
MERCURY FINANCE COMPANY OF TENNESSEE
MFC FINANCE COMPANY OF TEXAS
MERCURY FINANCE COMPANY OF UTAH
MERCURY FINANCE COMPANY OF VIRGINIA
MERCURY FINANCE COMPANY OF WASHINGTON
MERCURY FINANCE COMPANY OF WISCONSIN
FILCO MARKETING COMPANY
MFC FINANCIAL SERVICES, INC.
GULFCO FINANCE COMPANY
GULFCO INVESTMENT, INC.
MIDLAND FINANCE CO.
SCHEDULE 6.3
LOCATIONS OF COLLATERAL
SCHEDULE 8.1
CONSENTS
Copies of Consents received are attached hereto.
SCHEDULE 8.2
LIENS
1. Liens in favor of Lafayette Village Associates on the inventory,
equipment and fixtures of Mercury Finance Co. securing obligations not to
exceed $50,000.
2. Liens in favor of AT&T Credit Corp. on leases of Midland Finance Co.
securing obligations not to exceed $50,000.
SCHEDULE 8.4
CORPORATE NAMES/PRIOR TRANSACTIONS
Mercury Finance Company has in the past five (5) years acquired all of
the outstanding shares of the following: Gulfco Investment, Inc. on April 1,
1993, Midland Finance Co. on September 30, 1994, and ITT ▇▇▇▇▇▇ Property and
ITT ▇▇▇▇▇▇ Insurance Company on October 2, 1995.
SCHEDULE 8.5
SUBSIDIARIES AND AFFILIATES
SUBSIDIARIES INCORPORATED DATE FED ID #
Mercury Finance Corporation of AL 03/31/86 ▇▇-▇▇▇▇▇▇▇
Alabama
Mercury Finance Company of Arizona AZ 06/23/87 ▇▇-▇▇▇▇▇▇▇
Merc Finance Company of California CA 05/06/87 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of DEL 06/07/93 ▇▇-▇▇▇▇▇▇▇
Colorado
Mercury Finance Company of DEL 03/27/95 ▇▇-▇▇▇▇▇▇▇
Delaware
Mercury Finance Company of Florida DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of Georgia DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of Idaho DEL 02/22/96 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of DEL 01/11/84 ▇▇-▇▇▇▇▇▇▇
Illinois
Mercury Finance Company of Indiana DEL 09/17/84 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of Iowa DEL 12/27/96 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of Kansas DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Kentucky
Mercury Finance Company of DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Louisiana
Mercury Finance Company of DEL 02/22/91 ▇▇-▇▇▇▇▇▇▇
Michigan
Mercury Finance Company of DEL 07/16/84 ▇▇-▇▇▇▇▇▇▇
Mississippi
Mercury Finance Company of MO 07/13/87 ▇▇-▇▇▇▇▇▇▇
Missouri
Mercury Finance Company of Nevada NV 12/17/84 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of New DEL 03/28/90 ▇▇-▇▇▇▇▇▇▇
Mexico
Mercury Finance Company of New DEL 02/16/96 ▇▇-▇▇▇▇▇▇▇
York
Mercury Finance Company of North DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Carolina
Mercury Finance Company of Ohio DEL 10/14/92 ▇▇-▇▇▇▇▇▇▇
MFC Finance Company of Oklahoma DEL 01/11/84 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of Oregon DEL 06/09/95 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of DEL 01/04/95 ▇▇-▇▇▇▇▇▇▇
Pennsylvania
Mercury Finance Company of South DEL 07/25/84 ▇▇-▇▇▇▇▇▇▇
Carolina
Mercury Finance of Tennessee TN 07/02/87 ▇▇-▇▇▇▇▇▇▇
MFC Finance Company of Texas DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of Utah DEL 01/17/96 ▇▇-▇▇▇▇▇▇▇
Mercury Finance Company of DEL 12/06/83 ▇▇-▇▇▇▇▇▇▇
Virginia
Mercury Finance Company of DEL 09/20/94 ▇▇-▇▇▇▇▇▇▇
Washington
Mercury Finance Company of DEL 03/28/90 ▇▇-▇▇▇▇▇▇▇
Wisconsin
Filco Marketing Company DEL 03/22/96 ▇▇-▇▇▇▇▇▇▇
MFC Financial Services, Inc. FL 03/09/88 ▇▇-▇▇▇▇▇▇▇
Gulfco Finance Company LA 07/03/56 ▇▇-▇▇▇▇▇▇▇
Gulfco Investment, Inc. LA 05/20/74 ▇▇-▇▇▇▇▇▇▇
Midland Finance Co. IL 08/26/54 ▇▇-▇▇▇▇▇▇▇
Twin Mercury Life Insurance AZ 06/22/78 ▇▇-▇▇▇▇▇▇▇
Company
Gulfco Life Insurance Company LA 07/25/56 ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇ General Agency of Texas TX 04/19/96 ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇ Life MO 02/21/78 ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇ Property MO 05/30/78 ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇ Warranty MO 08/17/95 ▇▇-▇▇▇▇▇▇▇
SCHEDULE 8.6
TRADE NAMES
Each of the Borrowers does business under its legal name. In addition,
Mercury Finance Company of Georgia, Mercury Finance Company of Louisiana,
Mercury Finance Company of Mississippi, MFC Finance Company of Texas, and
Gulfco Finance Company do business under the trade name "Gulfco Finance".
SCHEDULE 8.8
LABOR DISPUTES
None
SCHEDULE 15.8
To Agent or BABC:
BankAmerica Business Credit, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Bank of America NT & SA
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
To the Borrower:
c/o Mercury Finance Company
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▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (847) ____________
with copies to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇