Exhibit
10.1
BANK OF TEXAS,
N.A.,
a national banking
association,
COSTAR VIDEO SYSTEMS,
LLC,
a Delaware limited
liability company,
SIELOX,
INC.,
a Delaware
corporation,
and
SIELOX,
LLC,
a Delaware limited
liability company
AMENDED AND RESTATED
LOAN AGREEMENT
Dated: As of December
10, 2008
Amended and Restated
Loan Agreement
TABLE OF
CONTENTS
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Page
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ARTICLE I
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DEFINITIONS
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1
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Section 1.1
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Definitions
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1
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Section 1.2
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Accounting Matters
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1
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Section 1.3
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Other Definitional Provisions
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1
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Section 1.4
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Schedule and Exhibits
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1
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ARTICLE II
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EXTENSION OF CREDIT AND LEITERS OF
CREDIT
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2
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Section 2.1
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Advances
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2
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Section 2.2
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General Provisions Regarding Interest;
Etc
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2
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Section 2.3
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Unused Facility Fee
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3
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Section 2.4
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Use of Proceeds
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3
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Section 2.5
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Letters of Credit
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3
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Section 2.6
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Joint and Several Liability of
Borrowers
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3
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ARTICLE III
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PAYMENTS
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4
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Section 3.1
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Method of Payment
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4
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Section 3.2
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Prepayments
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4
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Section 3.3
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Lockbox and Account Collections
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5
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ARTICLE IV
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SECURITY
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5
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Section 4.1
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Collateral
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5
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Section 4.2
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Setoff
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5
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ARTICLE V
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CONDITIONS PRECEDENT
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5
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Section 5.1
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Initial Extension of Credit
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5
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Section 5.2
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All Extensions of Credit
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5
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ARTICLE VI
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REPRESENTATIONS AND WARRANTIES
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6
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Section 6.1
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Corporate Existence
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6
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Section 62
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Financial Statements; Etc
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6
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Section 6.3
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Action; No Breach
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6
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Section 6.4
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Operation of Business
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6
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section 6.5
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Litigation and Judgments :
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7
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Section 6.6
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Rights in Properties; Liens
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7
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Section 6.7
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Enforceability
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7
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Section 6.8
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Approvals
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7
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Section 6.9
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Debt
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7
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Section 6.10
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Taxes
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7
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Section 6.11
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Use of Proceeds; Margin Securities
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7
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Section 6.12
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Disclosure
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7
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Section 6.13
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Subsidiaries
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7
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Section 6.14
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Agreements
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8
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Section 6.15
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Compliance with Laws
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8
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Section 6.16
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Investment Company Act
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8
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Section 6.17
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Public Utility Holding Company Act
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8
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Section 6.18
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Environmental Condition
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8
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Section 6.19
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Intellectual Property
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8
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Section 620
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Depository Relationship
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8
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Section 6.21
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State of Organization; Location of Chief
Executive Office; Organizational Identification Number
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9
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Section 6.22
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Fraudulent Transfer
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9
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Section 6.23
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Leases
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9
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Amended and Restated
Loan Agreement – Page (i)
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Section 624
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Common Enterprise
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9
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Section 6.25
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Anti-Terrorism and Anti-Money
Laundering
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9
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ARTICLE VII
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AFFIRMATIVE COVENANTS
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9
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Section 7.1
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Reporting Requirements
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10
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Section 7.2
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Guarantor Reports
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10
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Section 7.3
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Maintenance of Existence; Conduct of
Business
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10
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Section 7.4
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Maintenance of Properties
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10
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Section 7.5
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Taxes and Claims
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10
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Section 7.6
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Insurance
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10
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Section 7.7
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Inspection Rights
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11
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Section 7.8
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Keeping Books and Records
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11
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Section 7.9
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Compliance with Laws
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11
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Section 7.10
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Compliance with Agreements
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11
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Section 7.11
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Further Assurances
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11
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Section 7.12
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ERISA
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11
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Section 7.13
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Environmental
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11
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ARTICLE VIII
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NEGATIVE COVENANTS
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11
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Section 8.1
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Debt
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11
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Section 8.2
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Limitation on Liens
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12
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Section 8.3
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Mergers, Consolidations, Etc.
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12
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Section 8.4
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Restricted Payments
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12
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Section 8.5
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Loans and Investments
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12
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Section 8.6
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Limitation on Issuance of Equity
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12
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Section 8.7
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Transactions With Affiliates
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12
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Section 8.8
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Disposition of Assets
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12
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Section 8.9
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Sale and Leaseback
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12
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Section 8.10
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Prepayment of Debt
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12
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Section 8.11
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Nature of Business
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13
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Section 8.12
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Environmental Protection
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13
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Section 8.13
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Accounting
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13
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Section 8.14
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No Negative Pledge
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13
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Section 8.15
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Anti-Terrorism and Anti-Money Laundering
Provisions
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13
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Section 8.16
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Officer and Director Compensation
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13
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Section 8.17
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Contingent Liabilities
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13
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Section 8.18
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Leases
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13
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ARTICLE IX
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FINANCIAL COVENANTS
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13
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Section 9.1
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Debt Service Coverage Ratio
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13
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Section 9.2
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Leverage Ratio
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13
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Section 9.3
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Quick Ratio
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13
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Section 9.4
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capital Expenditures
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13
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ARTICLE X
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DEFAULT
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14
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Section 10.1
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Events of Default
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14
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Section 10.2
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Remedies Upon Default
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15
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Section 10.3
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Performance by Lender
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15
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ARTICLE XI
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MISCELLANEOUS
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15
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Section I 1.1
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Expenses
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16
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Section 1].2
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INDEMNIFICATION
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16
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Section 1I.3
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Limitation of Liability
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16
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Section 11.4
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No Duty
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16
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Section 11.5
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Lender Not Fiduciary
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17
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Section 11.6
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Equitable Relief
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17
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Amended and Restated
Loan Agreement – Page (ii)
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Section 11.7
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No Waiver; Cumulative Remedies
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17
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Section 11.8
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Successors and Assigns
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17
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Section 11.9
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Survival
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17
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Section 11.10
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ENTIRE AGREEMENT; AMENDMENT
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17
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Section 11.11
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Notices
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17
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Section 11.12
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Governing Law; Venue; Service of
Process
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17
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Section 11.13
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Counterparts
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18
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Section 11.14
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Severability
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18
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Section 11.15
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Headings
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18
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Section 11.16
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Participations; Etc
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18
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Section 11.17
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Construction
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18
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Section 11.18
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Independence of Covenants
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18
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Section 11.19
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WAIVER OF JURY TRIAL
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18
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Section 11.20
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Additional Interest Provision
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18
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Section 11.21
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Costar as Agent for Borrower
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19
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Section 11.22
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Ceiling Election
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19
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Section 11.23
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Amendment and Restatement.
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20
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Amended and Restated
Loan Agreement – Page (iii)
AMENDED AND
RESTATED LOAN AGREEMENT
THIS AMENDED AND
RESTATED LOAN AGREEMENT (“ Agreement ”) is made
and entered into effective as of December 10, 2008, by and among
BANK OF TEXAS, N.A., a national banking association (together with
its successors and assigns, the “ Lender ”),
COSTAR VIDEO SYSTEMS, LLC, a Delaware limited liability company
(“ Costar ”), SIELOX, INC., a Delaware
Corporation (“ Parent ”), and SIELOX, LLC, a
Delaware limited liability company (“ Sielox, LLC
” and, together with Costar and Parent, the “
Borrower ”).
RECITALS:
A.
Costar and Lender
entered into that certain Business Loan Agreement (Asset Based)
dated on or about August 16, 2008 (the “ Original Loan
Agreement ’).
B.
Costar has requested
that Lender increase the Borrowing Limit from 14,000,000.00 to
$5,000,000.00 and that each of Parent and Sielox, LLC become
co-borrowers with Costar under the revolving loan.
C.
Lender has, subject to
the terms and conditions set forth herein, consented to
Costar’s request and, in connection therewith, Borrower and
Lender now desire to amend and restate the Original Loan Agreement
in its entirety as hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in
consideration of the premises, the covenants, representations,
warranties and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby covenant and agree
as follows:
ARTICLE
I
DEFINITIONS
Section 1.1
Definitions .
Capitalized terms used in this Agreement
shall be the meanings specified on Schedule 1.1 .
Section 1.2
Accounting
Matters .
Any accounting term used in this Agreement
or the other Loan Documents shall have, unless otherwise
specifically provided therein, the meaning customarily given such
term in accordance with GAAP, and all financial computations
thereunder shall be computed, unless otherwise specifically
provided therein, in accordance with GAAP consistently applied;
provided, that all financial covenants and calculations in the Loan
Documents shall be made in accordance with GAAP as in effect on the
date of this Agreement unless Borrower and Lender shall otherwise
specifically agree in writing. That certain items or computations
are explicitly modified by the phrase “in accordance with
GAAP” shall in no way be construed to limit the
foregoing.
Section 1.3
Other Definitional
Provisions .
All definitions contained in this Agreement
are equally applicable to the singular and plural forms of the
terms defined. The words “hereof’,
“herein”, and “hereunder” and words of
similar import referring to this Agreement refer to this Agreement
as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all Article and Section references
pertain to this Agreement Terms used herein that are defined in the
VCC, unless otherwise defined herein, shall have the meanings
specified in the VCC. Definitions contained in this Agreement and
each of the other Loan Documents which identify documents,
agreements or instruments shall be deemed to include all amendments
and supplements to such documents from the date of this Agreement
and all prior and future amendments, modifications, and supplements
thereto entered into from time to time. Each reference in the Loan
Documents to Borrower shall mean Borrower and its successors and
assigns.
Section 1.4
Schedule and
Exhibits .
AU of the Schedules and Exhibits attached
to this Agreement shall be deemed incorporated herein by
reference.
Amended and Restated
Loan Agreement – Page 1
ARTICLE
II
EXTENSION OF CREDIT
AND LEITERS OF CREDIT
Section 2.1
Advances
.
(a)
Advances
.
Subject to the terms and conditions of this
Agreement, Lender agrees to make one or more advances (“
Advance s”) to Borrower from time to time from the
date hereof to and including the Termination Date in an aggregate
principal amount at any time outstanding up to but not exceeding
the Maximum Revolver Amount, provided that the aggregate amount of
all Advances at any time outstanding shall not exceed the lesser of
(i) the Maximum Revolver Amount minus all outstanding Letter of
Credit Liabilities or (ii) the Borrowing Base minus all outstanding
Letter of Credit Liabilities. Subject to the foregoing limitations,
and the other terms and provisions of this Agreement, Borrower may
borrow, repay, and reborrow hereunder.
(i)
The Revolving Credit
Note .
The obligation of Borrower to repay the
Advances and interest thereon shall be evidenced by the Revolving
Credit Note.
(ii)
Repayment of
Advances .
Borrower shall repay the unpaid principal
amount of all Advances on the Termination Date, unless sooner due
by reason of acceleration by Lender as provided in this
Agreement.
(iii)
Interest
.
The unpaid principal amount of the Advances
shall, subject to the following sentence, bear interest as provided
in the Revolving Credit Note. If at any time the rate of interest
specified in the Revolving Credit Note would exceed the Maximum
Lawful Rate but for the provisions thereof limiting interest to
the. Maximum Lawful Rate, then any subsequent reduction shall not
reduce the rate of interest on the Advances below the Maximum
Lawful Rate until the aggregate amount of interest accrued on the
Advances equals the aggregate amount of interest which would have
accrued on the Advances if the interest rate had not been limited
by the Maximum Lawful Rate. Accrued and unpaid interest on the
Advances shall be payable as provided in the Revolving Credit Note
and on the Termination Dare.
(iv)
Borrowing
Procedure .
Administrative Borrower shall give Lender
notice of each Advance by means of an Advance Request Form
containing the information required therein and delivered (by hand
or by mechanically confirmed facsimile) to Lender no later than
1:00 p.m. (Texas time) on the day on which the Advance is desired
to be funded Advances shall be in a minimum amount of $100,000.00.
Lender at its option may accept telephonic requests for such
Advances. provided that such acceptance shall not constitute a
waiver of Lender’s right to require delivery of an Advance
Request Form in connection with subsequent Advances. Any telephonic
request for an Advance by Administrative Borrower shall be promptly
confirmed by submission of a properly completed Advance Request
Form to Lender, but failure to deliver an Advance Request Form
shall not be a defense to payment of the Advance. Lender shall have
no liability to Borrower for any loss or damage suffered by
Borrower as a result of Lender’s honoring of any requests,
execution of any instructions, authorizations or agreements or
reliance on any reports communicated to it telephonically, by
facsimile or electronically and purporting to have been sent to
Lender by Borrower, and Lender shall have no duty to verify the
origin of any such communication or the identity or authority of
the Person sending it. Subject to the terms and conditions of this
Agreement, each Advance shall be made available to Borrower by
depositing the same, in immediately available funds, in an account
of Borrower designated by Borrower maintained with Lender at the
Principal Office.
(b)
Term Loan
.
Intentionally deleted.
Section 2.2
General Provisions
Regarding Interest: Etc .
Amended and Restated
Loan Agreement – Page 2
(a)
Any outstanding
principal of any Advance and (to the fullest extent permitted by
law) any other amount payable by Borrower that is not paid in full
when due (whether at stated maturity, by acceleration, or
otherwise) shall bear interest at the Default Rate for the period
from and including the due date thereof to but excluding the date
the same is paid in full. Additionally, upon the occurrence of an
Event of Default (and from the date of such occurrence) all
outstanding and unpaid principal amounts of all of the Obligations
shall, to the extent permitted by law, bear interest at the Default
Rate until such time as Lender shall waive in writing the
application of the Default Rate to such Event of Default. Interest
payable at the Default Rate shall be payable from time to time on
demand.
(b)
Computation of
Interest .
Interest on the Advances and all other
amounts payable by Borrower shall be computed on the basis of a
year of 360 days and the actual number of days elapsed (including
the first day but excluding the last day) unless such calculation
would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case
may be.
Section 2.3
Unused Facility
Fee .
Intentionally deleted.
Section 2.4
Use of
Proceeds .
The proceeds of the Advances shall be used
by Costar for working capital in the ordinary course of business;
provided, however, that up to, but not in excess of, $1,000,000.00,
in the aggregate, may be used for the working capital needs of the
Parent and Sielox, LLC.
Section 2.5
Letters of
Credit .
Subject to the terms and conditions of this
Agreement. Lender may, but is not obligated to, issue one or more
Letters of Credit for the account of Borrower from time to time
from the date hereof to and including the Termination Date;
provided, however, that the outstanding Letter of Credit
Liabilities shall not at any time exceed the lesser of (a)
$200,000.00, (b) an amount equal to the Maximum Revolver Amount
minus the outstanding Advances, or (c) the Borrowing Base minus the
outstanding Advances. Each Letter of Credit shall have an
expiration date not to exceed 60 days, shall not have an expiration
date beyond the Termination Date, shall be payable in Dollars,
shall have a minimum face amount of$200,000.00, must support a
transaction that is entered into in the ordinary course of
Borrower’s business, must be satisfactory in form and
substance to Lender, will be subject to the payment of such Letter
of Credit fees as Lender may require, and shall be issued pursuant
to such documents and instruments executed by Borrower (including,
without limitation. a Letter of Credit Application as then in
effect) as Lender may require.
Each payment by Lender
pursuant to a drawing under a Letter of Credit is due and payable
ON DEMAND, and at the sole option of Lender, can be charged by
Lender as (and will be deemed to be) an Advance by Lender to
Borrower under the Revolving Credit Note and this Agreement as of
the day and time such payment is made by Lender and in the amount
of such payment.
Section 2.6
Joint and Several
Liability of Borrowers .
(a)
Each Borrower is
accepting joint and several liability under the Notes, this
Agreement and the other Loan Documents in consideration of the
financial accommodations to be provided by Lender under this
Agreement. for the mutual benefit, directly and indirectly, of each
Borrower and in consideration of the undertakings of the other
Borrowers to accept joint and several liability for the
Obligations.
(b)
Each Borrower, jointly
and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.6), it
being the intention of the parties hereto that all the Obligations
shall be the joint and several obligations of each Borrower without
preferences or distinction among them.
(c)
If and to the extent
that any Borrower shall fail to make any payment with respect to
any of the Obligations as and when due or to perform any of the
Obligations in accordance with the terms thereof, then in each such
event the other Borrowers will make such payment with respect to,
or perform, such Obligation.
Amended and Restated
Loan Agreement – Page 3
(d)
The Obligations
constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to
the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement, the
Notes, the other Loan Documents, or any other circumstances
whatsoever.
(e)
Except as otherwise
expressly provided in this Agreement, each Borrower hereby waives
notice of acceptance of its joint and several liability, notice of
any Advances issued under or pursuant to this Agreement., notice of
the occurrence of any Default, Event of Default, or of any demand
for any payment under Ibis Agreement, or the Notes, or any of the
other Loan Documents, notice of any action at any time taken or
omitted by Lender under or in respect of any of the Obligations,
any requirement of diligence or to mitigate damages and, generally,
to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement,
the Notes, and the other Loan Documents (except as otherwise
provided in this Agreement). Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the
payment of any of the Obligations. The acceptance of any payment of
any of the Obligations, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by
Lender at any time or times in respect of any default by any
Borrower in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, the Notes, and the other
Loan Documents, any and all other indulgences whatsoever by Lender
in respect of any of the Obligations, and the taking. addition,
substitution or release, in whole or in part, at any time or times,
of any security fur any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower.
Without limiting the generality of the foregoing, each Borrower
assents to any other action or delay in acting or failure to act on
the part of Lender with respect to the failure by any Borrower to
comply with any of its respective Obligations, including, without
limitation, any failure strictly or diligently to assert any right
or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of the
Notes and this Section 2.6 afford grounds for terminating.
discharging or relieving any Borrower, in whole or in part, from
any of its Obligations it being the intention of each Borrower
that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of each Borrower shall not be
discharged except by performance and then only to the extent of
such performance. The Obligations of each Borrower shall not be
diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction 01’
similar proceeding with respect to any Borrower or
Lender.
(f)
Each Borrower represents
and warrants to Lender that such Borrower is currently informed of
the financial condition of Borrowers and of all other circumstances
which a diligent inquiry would reveal and which bear upon the risk
of nonpayment· of the Obligations. Each Borrower further
represents and warrants to Lender that such Borrower has read and
understands the terms and conditions of the Loan Documents. Each
Borrower hereby covenants that such Borrower will continue to keep
informed of Borrowers’ financial condition, and of all other
circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.
ARTICLE
III
PAYMENTS
Section 3.1
Method of
Payment .
All payments of principal, interest, and
other amounts to be made by Borrower under this Agreement and the
other Loan Documents shall be made to Lender at the Principal
Office in Dollars and immediately available funds, without setoff,
deduction, or counterclaim, and free and clear of all taxes at the
time and in the manner provided in the Notes. Lender is authorized
by Borrower to debit, automatically, without notice to Borrower,
the amount of any such payments from any deposit or other account
of Borrower with Lender.
Section 3.2
Prepayments .
(a)
Voluntary
Prepayments .
Borrower may prepay all or any portion of
the Notes to the extent and in the manner provided for
therein.
Amended and Restated
Loan Agreement – Page 4
(b)
Mandatory
Prepayment .
Borrower must pay on DEMAND the amount by
which at any time the unpaid principal balance of the Revolving
Credit Note, plus the aggregate Letter of Credit Liabilities,
exceeds the lesser of the Borrowing Base or the Maximum Revolver
Amount
Section 3.3
Lockbox and Account
Collections .
Upon request of Lender, Borrower will
maintain under such written agreements as Lender requires, as
security for the Obligations, a lockbox (“Lockbox”) and
depository account in the name of Lender (“Depository
Account”). All payments from account debtors of Borrower will
be deposited directly into the Depository Accounts, and Lender is
authorized to transfer to the Depository Account any funds which
are account debtor payments but which have been deposited into any
other depository account of Borrower at Lender. Borrower agrees
that Lender will have all right, title and interest in and to all
items and funds from time to time in the Depository Account Checks
received into the Depository Account will not be considered good
funds until Lender’s depository bank has effected final
settlement with respect thereto by irrevocable credit to Lender.
Lender is authorized to apply any and all funds in the Depository
Account at any time, and from time to time, to the Obligations in
any order Lender may elect.
Upon written notice to
Borrower from Lender, Borrower will advise all of its Account
debtors to direct their payments to the Lockbox, at the address
established by the Lockbox arrangements. All payments received into
the Lockbox wt1I be deposited into the Depository Account for
disposition as set forth above in this section.
ARTICLE
IV
SECURITY
Section 4.1
Collateral
.
To secure full and complete payment and
performance of the Obligations, Borrower shall execute and deliver
or cause to be executed and delivered all of the Security Documents
required by Lender covering the Property and collateral described
in such 8ecmity Documents (which, together with any other Property
and collateral described in the security Agreement, and any other
property which may now or hereafter secure the Obligations or any
part thereof, is sometimes herein called the
“Collateral”). Borrower shall execute and cause to be
executed such further documents and instruments as Lender, in its
sole discretion, deems necessary or desirable to create, evidence,
preserve, and perfect its liens and security interests in the
Collateral
Section 4.2
Setoff
.
If an Event of Default shall have occurred
and be continuing. Lender shall have the
right to set off and apply against the Obligations in such manner
as Lender may determine. at any time and without notice to
Borrower, any and all deposits (general or special, time or demand,
provisional or final) or other sums at any time credited by or
owing from Lender to Borrower whether or not the Obligations are
then due. As further security for the Obligations, Borrower hereby
grants to Lender a security interest in all money, instruments, and
other property of Borrower now or hereafter held by Lender,
including, without limitation, property held in safekeeping. In
addition to Lender’s right of setoff and as further security
for the Obligations, Borrower hereby grants to Lender a security
interest in all deposits (general or special, time or demand,
provisional or final) and other accounts of Borrower now or
hereafter on deposit with or held by Lender and all other sums at
any time credited by Of” owing from Lender to Borrower. The
rights and remedies of Lender hereunder are in addition to other
rights and remedies (including, without limitation, other rights of
setoff) which Lender may have.
ARTICLE
V
CONDITIONS
PRECEDENT
Section 5.1
Initial Extension of
Credit .
The obligation of Lender to make any
initial extension of credit after the date hereof is subject to the
fulfillment, to the satisfaction of Lender, of each of the
conditions precedent set forth on Schedule 5.1.
Section 5.2
All Extensions of
Credit .
The Obligation of Lender to make any
Advances hereunder at any time (or to extend any other credit
hereunder) shall be subject to the following additional conditions
precedent:
(a)
Request for Advance
or Letter of Credit . Lender
shall have received in accordance with this Agreement, as the case
may be, an Advance Request Form or Letter of Credit Request Form
pursuant
Amended and Restated
Loan Agreement – Page 5
to Lender’s
requirements dated the date of such Advance or Letter of Credit and
executed by an authorized officer of Administrative
Borrower;
(b)
No Default.
Etc .
No Default or material adverse change or
effect shall have occurred and be continuing. or would result from
or after giving effect to such extension of Credit;
(c)
Representations and
Warranties .
All of the representations and warranties
contained in this Agreement and in the other Loan Documents shall
be true and correct on and as of the date of such extension of
credit with the same force and effect as if such representations
and warranties had been made on and as of such date; and
(d)
Additional
Documentation . Lender
shall have received such additional approvals. opinions. or
documents as Lender or its legal counsel may reasonably
request
ARTICLE
VI
REPRESENTATIONS AND
WARRANTIES
To induce Lender to
enter into this Agreement, Borrower represents and warrants to
Lender that:
Section 6.1
Corporate
Existence .
Each Related Party (a) is duly organized.
validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. organization, or formation, as
applicable; (b) has all requisite power and authority to own its
assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions
in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a Material
Adverse Effect. Each Related party has the power and authority to
execute, deliver. and perform its obligations under this Agreement
and the other Loan Documents to which it is or may become a
party.
Section 6.2
Financial Statements:
Etc .
The financial statements previously
delivered to Lender are true and correct. have been prepared in
accordance with GAAP. and fairly and accurately present, on a
consolidated basis, the financial condition of the Related Parties
as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. No·
Related Party has any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments, or unrealized
or anticipated losses from any unfavorable commitments except as
referred to or reflected in such financial statements. There has
been no material adverse change in the business, condition
(financial or otherwise), operations, prospects, or properties of
any Related Party since the effective date of the most recent
financial statements referred to in this Section. All projections
delivered by Borrower to Lender have been prepared in good faith,
with care and diligence and use assumptions that are reasonable
under the circumstances at the time such projections were prepared
and delivered to Lender and all such assumptions are disclosed in
the projections.
Section 6.3
Action; No
Breach .
The execution, delivery, and performance by
each Related Party of the Loan Documents to which it is or may
become a party and compliance with the terms and provisions thereof
have been duly authorized by all requisite action on the part of
each Related Party and do not and will not (a) violate or conflict
with, or result in a breach of. or require any consent under (i)
the Constituent Documents of any Related Party, (ii) any applicable
law. rule, or regulation or any order, writ, injunction, or decree
of any Governmental Authority or arbitrator to which any Related
Party is subject, or (iii) any agreement or instrument to which any
Related Party is a party or by which any Related Party or any of
its Property is bound or subject, or (b) constitute a default under
any such agreement or instrument. or result in the creation or
imposition of any Lien upon any of the revenues or assets of any
Related Party, other than Liens created by the Loan
Documents.
Section 6.4
Operation of
Business .
Each Related Party possesses all licenses,
permits, franchises, patents, copyrights, trademarks, and
tradenames, or rights thereto, necessary to conduct its business
substantially as now conducted and as presently proposed to be
conducted, and no Related party is in violation of any valid rights
of others with respect to any of the foregoing.
Amended and Restated
Loan Agreement – Page 6
Section 6.5
Litigation and
Judgments .
There is no action, suit, investigation, or
proceeding before or by any Governmental Authority or arbitrator
pending, or to the knowledge of Borrower, threatened against or
affecting any Related Party, that would, if adversely determined,
have a Material Adverse Effect. There are no outstanding judgments
against any Related Party.
Section 6.6
Rights in Properties:
Liens .
Each Related Party has good and
indefeasible title to or valid leasehold interests in its Property,
including the Property reflected in the Initial Financial
Statements and none of the Property of any Related Party is subject
to any Lien, except as permitted by Section 8.2 .
Section 6.7
Enforceability
.
The Loan Documents constitute legal, valid,
and binding obligations of each Related Party thereto, enforceable
against each Related Party in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws
of general application relating to the enforcement of
creditors’ rights.
Section 6.8
Approvals
.
No authorization, approval, or consent of,
and no filing or registration with, any Governmental Authority or
third party is or will be necessary for the execution, delivery, or
performance by any Related Party of the Loan Documents to which it
is a party or the validity or enforceability thereof.
Section 6.9
Debt
.
No Related Party has any Debt, except for
the Obligations and Debt disclosed in the Initial Financial
Statements.
Section 6.10
Taxes
.
Each Related Party has filed all tax
returns (federal, state, and local) required to be filed, including
all income, franchise, employment, property, and sales tax returns,
and has paid all of its liabilities for taxes, assessments,
governmental charges, and other levies that are due and payable.
Borrower knows of no pending investigation of any Related Party by
any taxing authority or of any pending but unassessed tax liability
of any Related Party.
Section 6.11
Use of Proceeds:
Margin Securities . No Related
Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of
Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance win be
used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying margin
stock.
Section 6.12
ERIS
A.
The Related Parties are in compliance in
all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan. No notice of
intent to terminate a Plan has been filed, nor bas any Plan been
terminated. No circumstances exist which constitute grounds
entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings. Neither the Related Parties nor
any ERISA Affiliate have completely or partially withdrawn from a
Multiemployer Plan. The Related Parties and each ERISA Affiliate
have met their minimum funding requirements under ERISA with
respect to all of their Plans, and the present value of all vested
benefits under each Plan do not exceed the fair market value of all
Plan assets allocable to such benefits, as determined on the most
recent valuation date of the Plan and in accordance with ERISA.
Neither the Related Parties nor any ERISA Affiliate have incurred
any liability to the PBGC under ERISA.
Section 6.12
Disclosure
.
No statement, information, report,
representation, or warranty made by any Related Party in this
Agreement or in any other Loan Document or furnished to Lender in
connection with this Agreement or any of the transactions
contemplated hereby contain any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
herein or therein not misleading. There is no fact known to
Borrower which has a Material Adverse Effect, or which might in the
future have a Material Adverse Effect, that has not been disclosed
in writing to Lender.
Section 6.13
Subsidiaries . Borrower
has no Subsidiaries other than those listed on Schedule 6.13
attached hereto and Schedule 6.13 sets forth the
jurisdiction of incorporation or organization of each such Person
and the percentage of Borrower’s ownership interest in such
Person. All of the outstanding capital stock or other
Amended and Restated
Loan Agreement – Page 7
ownership interest of a
Person described on Schedule 6.13 has been validly issued, is fully
paid, and is nonassessable.
Section 6.14
Agreements
.
No Related Party is a party to any
indenture, loan. or Loan Agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate or
other organizational restriction which could have a Material
Adverse Effect No Related Party is in default in any respect in the
performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument
material to its business to which it is a party.
Section 6.15
Compliance with
Laws .
No Related Party is in violation in any
material respect of any law, role, regulation, order, or decree of
any Governmental Authority or arbitrator.
Section 6.16
Investment Company
Act .
No Related Party is an “investment
company” within the meaning of the Investment Company Act of
t940, as amended.
Section 6.17
Public Utility
Holding Company Act . No Related
Party is a “holding company” or a “subsidiary
company” of a ·’holding company” or an
“affiliate” of a “holding company” or a
“public utility” within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 6.18
Environmental
Condition .
(a)
to Borrower’s
knowledge, none of properties or assets of any Related Party has
ever been used by any of the Related Parties, or by previous owners
or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials, where such
use, production, storage, handling, treatment, release or transport
was in violation, in any material respect, of any applicable
Environmental Law;
(b)
to Borrower’s
knowledge, none of properties or assets of any Related Party has
ever been designated or identified in any manner pursuant to any
environmental protection statute as a Hazardous Materials disposal
site;
(c)
none of the Related
Parties bas received notice that a Lien arising under any
Environmental Law has attached to any revenues or to any real
property owned or operated by any Related Party; and
(d)
none of the Related
Parties has received a summons, citation, notice, or directive from
the United States Environmental Protection Agency or any other
federal or state governmental agency concerning any action or
omission by any Related Party resulting in the releasing or
disposing of Hazardous Materials into the environment
Section 6.19
Intellectual
Property .
All material Intellectual Property owned or
used by the Related Parties is listed, together with application or
registration numbers, where applicable, on Schedule 6.19
attached hereto. Each Person identified on Schedule 6.19
owns, or is licensed to use, all Intellectual Property necessary to
conduct its business as currently conducted except for such
Intellectual Property the failure of which to own or license could
not reasonably be expected to have a Material Adverse Effect. Each
Person identified on Schedule 6.19 will maintain the
patenting and registration of all Intellectual Property with the
United States Patent and Trademark Office, the United States
Copyright Office, or other appropriate Governmental Authority and
each Person identified on Schedule 6.19 will promptly patent
or register, as the case may be, all new Intellectual Property and
notify Lender in writing five (5) Business Days prior to filing any
such new patent or registration.
Section 6.20
Depository
Relationship . To induce
Lender to establish the interest rates provided for in the Notes,
the Related Parties have established and use Lender as their
principal depository bank and the Related Parties covenant and
agree to maintain Lender as their principal depository bank,
including for the maintenance of business, cash management,
operating and administrative deposit accounts.
Amended and Restated
Loan Agreement – Page 8
Section 6.21
State of
Organization: Location of Chief Executive Office; Organizational
Identification Number .
(a)
The jurisdiction of
organization of each Related party is set forth in subparagraph (a)
of Schedule 6.21 attached hereto.
(b)
The chief executive
office of each Related party is located at the address indicated in
subparagraph (b) of Schedule 6.21.
(c)
Each Related
Party’s organization identification numbers, jf any, are
identified in subparagraph (c) of Schedule 621.
(d)
Each Related
Party’s federal tax identification number is identified in
subparagraph (d) of Schedule 6.21 .
Section 6.22
Fraudulent
Transfer .
(a)
Each Related Party is
Solvent
(b)
No transfer of Property
is being made by any Related. Party and no obligation is being
incurred by any Related Party in connection with the transaction
contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future
creditors of any Related Party.
Section 6.23
Leases
.
The Related Parties enjoy peaceful and
undisturbed possession under all leases material to their
businesses and to which they are parties or under which they are
operating, and all of such material leases are valid and subsisting
and no default by any Related party exists under any of
them.
Section 6.24
Common
Enterprise .
The successful operation and condition of
each Related Party is dependent on the continued successful
performance of the functions of the group of Related Parties as a
whole and the successful operation of each Related Party is
dependent on the successful performance and operation of each other
Related Party. Each Related party expects to derive benefit (and
its board of directors or other governing body bas determined that
it may reasonably be expected to derive benefit), directly and
indirectly, from successful operations of each of the other Related
Parties. Each Related Party expects to derive benefit (and the
boards of directors or other governing body of each Related Party
has determined that it may reasonably be expected to derive
benefit), directly and indirectly, from the credit extended by
Lender to the Related Parties hereunder, both in their separate
capacities and as members of the group of companies. Each Related
Party has determined that execution, delivery, and performance of
this Agreement and any other Loan Documents to be executed by such
Related Party is within its purpose, will be of direct and indirect
benefit to such Related Party, and is in its best
interest.
Section 6.25
Anti-Terrorism and
Anti-Money Laundering . No Related
Party or any of its Affiliates is or shall be (a) listed on the
Specially Designated Nationals and Blocked Person List maintained
by the Office of Foreign Assets Control (“OFAC”),
Department of the Treasury, or any other similar lists maintained
by OFAC or any other Governmental Authority pursuant to any
authorizing statute, Executive Order or regulation~ or (b) a Person
designated under Section l(b), (c) or (d) of Executive Order No.
13224 (September 23,2001), any related enabling legislation, or any
other similar Executive Orders. To Borrower’s knowledge, each
Related Party and its Affiliates are in full compliance with all
applicable provisions of the Bank Secrecy Act (“ ESA
”) and of all other laws, regulations, and government
guidance relating to the prevention and detection of money
laundering violations or terrorist activities or
threats.
ARTICLE
VII
AFFIRMATIVE
COVENANTS
So long as the
Obligations or any part thereof are outstanding or Lender has any
obligation to extend credit hereunder, unless Lender otherwise
consents in writing, Borrower agrees that :
Amended and Restated
Loan Agreement – Page 9
Section 7.1
Reporting
Requirements . Borrower
will deliver to Lender each of the financial statements, reports
and other items set forth on Schedule 7.1 at the times specified
therein.
Section 7.2
Guarantor
Reports .
Borrower will cause each Guarantor to
deliver its financial statements at the time when Borrower provides
its audited financial statements to Lender, but only to the extent
such Guarantor’s financial statements are not consolidated
with Borrower’s financial statements.
Section 7.3
Maintenance of
Existence: Conduct of Business . Each
Related party will preserve and maintain its existence and all of
its leases, privileges, licenses, permits, franchises,
qualifications, and rights that are necessary or desirable in the
ordinary conduct of its business. Each Related Party will conduct
its business in an orderly and efficient manner in accordance with
good business practices. Without limitation, no Related Party will
make any material change in its credit collection policies if such
change would materially impair the collectibility of any Account,
nor will it rescind, cancel or modify any Account except in the
ordinary course of business.
Section 7.4
Maintenance of
Properties .
Each Related Party will maintain, keep, and
preserve all of its Property (tangible and intangible) necessary or
useful in the proper conduct of its business in good working order
and condition.
Section 7.5
Taxes and
Claims .
Each Related party will payor discharge
before becoming delinquent (a) all taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any
of its property, and (b) all lawful claims for labor, material, and
supplies, which, if unpaid, might become a Lien upon any of its
Property; provided, however, that no Related Party shall be
required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate
reserves have been established.
Section 7.6
Insurance
.
(a)
At the expense of the
Related Parties, each Related Party will maintain insurance
respecting its assets wherever located, covering loss or damage by
fire, theft, explosion, and all other hazards and risks as
ordinarily are insured against by other Persons engaged in the same
or similar businesses. Each Related Party also shall maintain
business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and
criminal misappropriation. All such policies of insurance shall be
in such amounts and with such insurance companies as are reasonably
satisfactory to Lender. Each Related Party shall deliver copies of
all such policies to Lender with an endorsement naming Lender as
the sole loss payee (under a satisfactory lender’s loss
payable endorsement) or additional insured, as appropriate. Each
policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 30 days prior written notice to
Lender in the event of cancellation of the policy for any reason
whatsoever.
(b)
Borrower shall give
Lender prompt notice of any loss exceeding $10,000.00 covered by
such insurance. So long as no Event of Default has occurred and is
continuing, Borrower shall have the exclusive right to adjust any
losses payable under any such insurance policies which are less
than $50,000.00. Following the occurrence and during the
continuation of an Event of Default, or in the case of any losses
payable under such insurance exceeding $50,000.00, Lender shall
have the exclusive right to adjust any losses payable under any
such insurance policies, without any liability to Borrower
whatsoever in respect of such adjustments. Any monies received as
payment for any loss under any insurance policy mentioned above
(other than liability insurance policies) or as payment of any
award or compensation for condemnation or taking by eminent domain,
shall be paid over to Lender to be applied at the option of Lender
either to the prepayment of the Obligations or shall be disbursed
to Borrower under staged payment terms reasonably satisfactory to
Lender for application to the cost of repairs, replacements, or
restorations; provided, however, that, with respect to any such
monies in an aggregate amount during any 12 consecutive month
period not in excess of $50,000.00, so long as (A) no Default or
Event of Default shall have occurred and is continuing, (B)
Borrower shall have given Lender prior written notice of its
intention to apply such monies to the costs of repairs,
replacement, or restoration of the property which is the subject of
the loss, destruction, or taking by condemnation, (C) the monies
are held in a cash collateral account in which Lender has a
perfected first-priority security interest, and (D) Borrower
completes, or causes the
Amended and Restated
Loan Agreement – Page 10
completion of, such
repairs, replacements, or restoration within 180 days after the
initial receipt of such monies, Borrower shall have the option to
apply such monies to the costs of repairs, replacement, or
restoration of the property which is the subject of the loss,
destruction, or taking by condemnation unless and to the extent
that such applicable period shall have expired without such
repairs, replacements, or restoration being made, in which case,
any amounts remaining in the cash collateral account shall be paid
to Lender and applied as set forth above.
Section 7.7
Inspection
Rights .
At any reasonable time and from time to
time, each Related Party will permit representatives of Lender to
examine the Collateral and to examine, copy, and make extracts from
its books and records, to visit and inspect its Property, and to
discuss its business, operations, and financial condition with its
officers, employees, and independent certified public accountants.
Borrower shall permit representatives of Lender at the expense of
Borrower to inspect and conduct audits of all of Borrower’s
Property (including Accounts and Inventory), books and records;
provided that, so long as no Event of Default has occurred and is
continuing, Borrower shall only be obligated to pay the expenses
associated with one field audit by Lender or its representatives
annually.
Section 7.8
Keeping Books and
Records .
Each Related Party will maintain proper
books of record and account in which full, true, and correct
entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its business and activities.
Section 7.9
Compliance with
Laws .
Each Related Party will comply, in all
material respects. with all applicable laws, rules, regulations,
orders, and decrees of any Governmental Authority or
arbitrator.
Section 7.10
Compliance with
Agreements .
Each Related Party will comply, in all
material respects, with all agreements, contracts. and instruments
binding on it or affecting its Property or business.
Section 7.11
Further
Assurances .
Each Related Party will execute and deliver
such further agreements and instruments and take such further
action as may be requested by Lender to carry out the provisions
and purposes of this Agreement and the other Loan Documents and to
create, preserve, and perfect the Liens of Lender in the
Collateral.
Section 7.12
ERISA
.
Each Related Party will comply with all
minimum funding requirements, and all other material requirements,
of ERISA, if applicable, so as not to give rise to any liability
thereunder.
Section 7.13
Environmenta l. Each
Related Party will keep any Property either owned or operated by it
free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material
respects, with Environmental Laws and provide to Lender
documentation of such compliance which Lender reasonably requests,
(c) promptly notify Lender of any release of a Hazardous Material
in any reportable quantity from or onto property owned or operated
by any Related Party and take any Remedial Actions required to
abate said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly, but in any event
within 5 days of its receipt thereof, provide Lender with written
notice of any of the following: (i) notice that an Environmental
Lien has been filed against any of the real or personal property of
any Related Party, (ii) commencement of any Environmental Action or
notice that an Environmental Action will be filed against any
Related Party. and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to have a
Material Adverse Change.
ARTICLE
VIII
NEGATIVE
COVENANTS
So long as the
Obligations or any part thereof are outstanding or Lender has any
obligation to extend credit hereunder, unless Lender otherwise
consents in writing, Borrower agrees that:
Section 8.1
Debt
.
No Related Party will incur, create,
assume, or permit to exist any Debt, except:
(a)
Debt to Lender;
and
Amended and Restated
Loan Agreement – Page 11
(b) existing Debt
disclosed in the Initial Financial Statement.
Section 8.2
Limitation on
Liens .
No Related Party will incur, create, assume, or
permit to exist any Lien upon any of its property, assets, or
revenues, whether now owned or hereafter acquired, except Permitted
Liens.
Section 8.3
Mergers,
Consolidations. Etc . No Related
Party will (a) amend its Constituent Documents or otherwise change
its corporate name or structure, (b) form a subsidiary company, (c)
consolidate with or merge into, or acquire any Person, (d) permit
any Person to consolidate with or merge into, or acquire any
Related Party, (e) acquire any shares or other evidence of any
ownership or beneficial interest of any Person, or (f) acquire all
or substantially all of the assets and business of any Person or
any division of any Person.
Section 8.4
Restricted
Payments .
No Related party will declare or pay any
dividends or make any other payment or distribution (in cash,
property, or obligations) on account of its equity interests, or
redeem, purchase, retire, or otherwise acquire any of its equity
interests or purchase or otherwise acquire any equity interest of
any other Related Party or set apart any money for a sinking or
other analogous fund for any dividend or other distribution on its
equity interests or for any redemption, purchase, retirement, or
other acquisition of any of its equity interests.
Section 8.5
Loans and
Investments .
No Related Party will make or permit to
remain outstanding any loans or advances to or investments in, any
Person, except:
(a)
loans, advances and
investments existing on the date of this Agreement which are
reflected in the Initial Financial Statements;
(b)
readily marketable
direct obligations of the United States of America or any agency
thereof with maturities of one year or less from the date of
acquisition;
(c)
fully insured
certificates of deposit with maturities of one year or less from
the date of acquisition issued by any commercial bank operating in
the United States of America having capital and surplus in excess
of$50,000,000.00; and
(d)
commercial paper of a
domestic issuer if at the time of purchase such paper is rated in
one of the two highest rating categories of Standard and
Poor’s Corporation or Moody’s Investors
Service.
Section 8.6
Limitation on
Issuance of Equity . No Related
Party will at any time issue, sell, assign, or otherwise dispose of
(a) any of its equity interests, (b) any securities exchangeable
for or convertible into or carrying any rights to acquire any of
its equity interests, or (c) any option, warrant, or other right to
acquire any of its equity interests.
Section 8.7
Transactions With
Affiliates .
No Related party will enter into any
transaction, including. without limitation, the purchase, sale, or
exchange of property or the rendering of any service, with any
Affiliate of the Related Parties, except in the ordinary course of
and pursuant to the reasonable requirements of the Related
Parties’ business and upon fair and reasonable terms no less
favorable to the Related Parties than would be obtained in a
comparable arm’s-length transaction with a Person not an
Affiliate of the Related Parties’.
Section 8.8
Disposition of
Assets .
No Related Party will sell, lease, assign,
transfer, or otherwise dispose of any of its assets except (a)
dispositions of inventory in the ordinary course of business or (b)
dispositions, for fair value, of worn-out and obsolete equipment
not necessary or useful to the conduct of business.
Section 8.9
Sale and
Leaseback .
No Related Party will enter into any
arrangement with any Person pursuant to which it leases from such
Person real or personal property that has been or is to be sold or
transferred, directly or indirectly, by it to such
Person.
Section 8.10
Prepayment of
Debt .
No Related Party will prepay any Debt,
except the Obligations.
Amended and Restated
Loan Agreement – Page 12
Section 8.11
Nature of
Business .
No Related party will engage in any
business other than the business in which it is engaged as of the
date hereof:
Section 8.12
Environmental
Protection .
No Related Party will (a) use (or permit
any tenant to use) any of its properties or assets for the
handling, processing, storage, transportation, or disposal of any
Hazardous Material, (b) generate any Hazardous Material, (c)
conduct any activity that is likely to cause a Release or
threatened Release of any Hazardous Material, or (d) otherwise
conduct any activity or use any of its properties or assets in any
manner that is likely to violate any Environmental Law or create
any Environmental Liabilities for which any of the Related Parties
would be responsible.
Section 8.13
Accounting
.
No Related Party wilt change its fiscal
year or make any change (a) in accounting treatment or reporting
practices, except as required by GAAP and disclosed to Lender, or
(b) in tax reporting treatment, except as required by law and
disclosed to Lender.
Section 8.14
No Negative
Pledge .
No Related Party will enter into or permit
to exist any arrangement or agreement, other than pursuant to this
Agreement or any Loan Document, which directly or indirectly
prohibits any Related Party from creating or incurring a Lien on
any of its assets.
Section 8.15
Anti-Terrorism and
Anti-Money Laundering Provisions . No Related
Party will take any action or engage in any activity of any nature
whatsoever that would or could result in any Related Party or any
of its Affiliates being (a) listed on the Specially Designated
Nationals and Blocked Person List maintained by OFAC or any other
similar lists maintained by OFAC or any other Governmental
Authority pursuant to any authorizing statute, Executive Order or
regulation; or (b) 8 Person designated under Section l(b), (c) or
(d) of Executive Order No. 13224 (September 23,2001), any related
enabling legislation, or any other similar Executive Orders. Each
Related Party shall comply with the applicable provisions of the
BSA and all other laws, regulations, and government guidance
relating to the prevention and detection of money laundering
violations or terrorist activities or threats.
Section 8.16
Officer and Director
Compensation . No Related
party will pay excessive or unreasonable salaries, bonuses,
commissions, consultant fees or other compensation.
Section 8.17
Contingent
Liabilities .
No Related party will assume, guarantee,
endorse, contingently agree to purchase or otherwise become liable
upon the obligation of any Person (other than Borrower) except by
the endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of
business.
Section 8.18
Leases
.
No Related Party will become a party to any
lease (other than leases in full force and effect as of the date of
this Agreement) without the prior written consent of
Lender.
ARTICLE
IX
FINANCIAL
COVENANTS
So long as the
Obligations or any part thereof are outstanding or Lender has any
obligation to extend credit hereunder, unless Lender otherwise
consents in writing, Borrower agrees that:
Section 9.1
Debt Service Coverage
Ratio .
Costar will at all times maintain, on a
rolling four quarter basis, a Debt Service Coverage Ratio of not
less than 125 to 1.00. to 1.0.
Section 9.2
Leverage
Ratio .
Costar will at all times maintain a
Leverage Ratio of not more than 3.0 to 1.0
Section 9.3
Quick
Ratio .
Parent will at all times maintain a Quick
Ratio of not less than 1.0 to 1.0.
Section 9.4
Capital
Expenditures . Borrower
will not permit the Capital Expenditures and operating tease
expense of the Related Parties to exceed $100,000.00, in the
aggregate, during any fiscal year.
Amended and Restated
Loan Agreement – Page 13
ARTICLE
X
DEFAULT
Section 10.1
Events of
Default .
Each of the following shall be deemed an
“Event of Default”:
(a)
Borrower shall fail to
pay the Obligations or any part thereof shall not be paid within
three days of when due or declared due.
(b)
Borrower shall fail to
provide to Lender timely any notice of Default as required by
Section 7.1 of this Agreement or Borrower shall breach any
provision of Article VIII or Article IX of this
Agreement.
(c)
Any representation or
warranty made or deemed made by any Related party (or any of its
officers) in any Loan Document or in any certificate, report,
notice, or financial statement furnished at any time in connection
with this Agreement shall be false, misleading, or erroneous in any
material respect when made or deemed to have been made.
(d)
Any Related party shall
fail to perform. observe, or comply with any covenant, agreement,
or term contained in this Agreement or any other Loan Document
(other than as covered by Section 1O.1(a) and (b) above), and such
failure continues for more than 15 days following the date such
failure first began.
(e)
Any Related Party shall
commence a voluntary proceeding seeking liquidation,
reorganization. or other relief with respect to itself or its debts
under any bankruptcy, insolvency, or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or
a substantial part of its property or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it or shall make a general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become
due or shall take any corporate action to authorize any of the
foregoing.
(f)
Any Related party shall
fail to pay when due any principal of or interest on any Debt
(other than the Obligations), or the maturity of any such Debt
shall have been accelerated, or any such Debt shall have been
required to be prepaid prior to the stated maturity thereof, or any
event shall have occurred that permits (or. with the giving of
notice or lapse of time or both, would permit) any holder or
holders of such Debt or any Person acting on behalf of such holder
or holders to accelerate the maturity thereof or require any such
prepayment.
(g)
This Agreement or any
other Loan Document shall cease to be in full force and effect or
shall be declared null and void or the validity or enforceability
thereof shall be contested or challenged by any Related Party or
any of its shareholders, or any Related Party shall deny that it
has any further liability or obligation under any of the Loan
Documents. or any lien or security interest created by the Loan
Documents shall for any reason cease to be a valid, first priority
perfected security interest in and lien upon any of the Collateral
purported to be covered thereby.
(h)
Any of the following
events shall occur or exist with respect to any Related party or
any ERISA Affiliate: (i) any Prohibited Transaction involving any
Plan; (ii) any Reportable Event with respect to any Plan; (iii) the
filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event
or circumstance that might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the
termination of, or for the appointment of a trustee to administer,
any Plan, or 1he institution by the PBGC of any such proceedings;
or (v) complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan or the reorganization, insolvency,
or termination of any Multiemployer Plan; and in each case above,
such event or condition. together with all other events or
conditions, if any, have subjected or could in the reasonable
opinion of Lender subject any Related Party to any tax, Penalty, or
other liability to a Plan, a Multiemployer Plan. The
Amended and Restated
Loan Agreement – Page 14
PBGC, or otherwise (or
any combination thereof) which in the aggregate exceed or could
reasonably be expected to exceed $50,000.00.
(i)
Any Related Party, or
any of its properties, revenues, or assets, shall become subject to
an order of forfeiture, seizure, or divestiture (whether under RICO
or otherw
