EXHIBIT 10.1
LOAN AND SECURITY
AGREEMENT
This LOAN AND SECURITY AGREEMENT
dated and effective as of September 4, 2009 (the “
Agreement ”), is executed by and between THE WOOD
ENERGY GROUP, INC., a Missouri corporation (the “
Borrower ”), whose address is 2255 Glades Road, Suite
342-W, Boca Raton, Florida 33431 and FIFTH THIRD BANK, a Michigan
banking corporation (the “ Bank ”), whose
address is 222 South Riverside Plaza, 32 nd Floor, Chicago, Illinois, 60606.
In consideration of the mutual agreements
hereinafter set forth, the Borrower and the Bank hereby agree as
follows:
1.1
Defined Terms . For the purposes of this
Agreement, the following capitalized words and phrases shall have
the meanings set forth below.
“ Account Debtor ” shall mean
any party who is obligated on any Account.
“ Accounts
” shall mean all “accounts,” as such
term is defined in the UCC, now owned or hereafter acquired by
Borrower, including: (a) all accounts receivable, other
receivables, book debts and other forms of obligations (other than
forms of obligations evidenced by Chattel Paper or Instruments)
(including any such obligations that may be characterized as an
account or contract right under the UCC); (b) all of
Borrower’s rights in, to, and under, all purchase orders or
receipts for goods or services; (c) all of Borrower’s rights
to any goods represented by any of the foregoing (including unpaid
sellers’ rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or
repossessed goods); (d) all rights to payment due to Borrower for
Goods or other property sold, leased, licensed, assigned or
otherwise disposed of, for a policy of insurance issued or to be
issued, for a secondary obligation incurred or to be incurred,
arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by Borrower or in connection
with any other transaction (whether or not yet earned by
performance on the part of Borrower); (e) all health care insurance
receivables; and (f) all collateral security of any kind given by
any Account Debtor or any other Person with respect to any of the
foregoing.
“ Acquisitions ”
shall mean any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the
Borrower: (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or
division thereof, whether through purchase of assets, merger or
otherwise, or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by
percentage or voting power) of the outstanding partnership
interests of a partnership or equity interests in a limited
liability company.
“ Affiliate ” shall mean any
Person which, directly or indirectly, owns or controls, on an
aggregate basis, including all beneficial ownership and ownership
or control as a trustee, guardian or other fiduciary, any of the
outstanding equity interest having ordinary voting power to elect a
majority of the board of directors or other managing group
(irrespective of whether at the time, an equity interest of any
other class or classes of such entity have or might have voting
power by reason of the happening of any contingency) of the
Borrower or which controls, or is controlled by or is in control
with the Borrower or any shareholders of the
Borrower. For purposes hereof, “control”
means the possession, directly or indirectly, of the power to
direct or cause a direction of management and policies, whether
through the ownership of voting securities, by contract or
otherwise. For the avoidance of doubt, Patriot Rail
Corp. shall not be considered an Affiliate.
“ Applicable Margin ” shall
mean, with respect to a LIBOR Loan, four and one-half percent
(4.5%), and with respect to a Prime Loan, five percent
(5%).
“ Appraiser ” shall mean any
Equipment appraiser acceptable to Bank in its sole and absolute
discretion.
“ Asset Disposition ” shall
mean the sale, lease, assignment or other transfer for value (each
a “Disposition”) by the Borrower to any Person of any
Collateral (including, the loss, destruction or damage of any
thereof or any actual or threatened (in writing to the Borrower)
condemnation, confiscation, requisition, seizure or taking
thereof), or any other real property owned by Borrower, other than
(a) the disposition of any asset which is to be replaced, and is in
fact replaced, within ninety (90) days with another asset
performing the same or a similar function or, (b) the sale or lease
of inventory, equipment and other property in the ordinary course
of business.
“ Authorized Borrower
Representative ” shall mean any of Gary O. Marino,
Bennett Marks, Larry Rutstein and Greg Smith, or any other person
identified as such by the Borrower to the Bank in
writing.
“ B.H.I.T. Inc. ” shall mean
the parent company of Borrower.
“ Bankruptcy Code ” shall
mean the United States Bankruptcy Code, as now existing or
hereafter amended.
“ Borrower ” shall mean The
Wood Energy Group, Inc., a Missouri corporation, having its
principal place of business at 2255 Glades Road, Suite 342-W, Boca
Raton, Florida 33431. Any and all references to Borrower
in this Agreement shall be deemed to collectively include the
aforesaid corporation, and its Subsidiaries.
“ Borrowing Base Amount ”
shall mean, in relation to advances under the Working Capital
Facility, the total, without duplication, of the following: (i)
eighty percent (80%) of the face amount of all then existing
Eligible Accounts as set forth on the Borrowing Base Certificate
delivered by Borrower to the Bank from time to time, minus all
finance charges and prompt payment, volume and all other discounts,
credits or allowances which may be taken by or granted to Account
Debtors, minus 100% of the face amount of all proceeds of the
Eligible Accounts listed on such Borrowing Base Certificate which
Borrower has received since the date of the most recently delivered
Borrowing Base Certificate delivered to the Bank plus (ii)
fifty percent (50%) of the value of Borrower’s
Inventory.
“ Business Day ” shall mean
any day other than a Saturday, Sunday or a legal holiday on which
banks are authorized or required to be closed for the conduct of
commercial banking business in Chicago, Illinois.
“ Capex Facility ” shall mean
a Capex Loan in the principal amount of One Million Five Hundred
Thousand and No/100 Dollars ($1,500,000.00), converting to a Term
Loan, for the purpose of financing the purchase of
Equipment.
“ Capex Interest Rate
” shall mean, with respect to the Capex Loan, an
interest rate (determined at Borrower’s option from time to
time) equal to either (i) the Prime Rate plus the Applicable
Margin, or (ii) the LIBOR Rate plus the Applicable
Margin.
“ Capital Lease ” shall mean,
as to any Person, a lease of any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or
intangible, by such Person as lessee that is, or should be, in
accordance with Financial Accounting Standards Board Statement No.
13, as amended from time to time, or, if such Statement is not then
in effect, such statement of GAAP as may be applicable, recorded as
a “capital lease” on the balance sheet of the Borrower
prepared in accordance with GAAP.
“ Capex Loan ” and “
Capex Loans ” shall mean, respectively, each direct
advance and the aggregate of all such direct advances, from time to
time in the form of either Prime Loans or LIBOR Loans, made by the
Bank to the Borrower under and pursuant to this Agreement, as set
forth in Section 2.1 hereof.
“ Capex Loan Commitment ”
shall mean an amount equal to One Million Five Hundred Thousand and
No/100 Dollars ($1,500,000.00) for the Capex Facility.
“ Capex Loan Maturity Date ”
shall mean September 3, 2010.
“ Capex Note ” shall have the
meaning set forth in Section 4.2 hereof.
“ Capital Expenditures ”
shall mean expenditures (including Capital Lease obligations which
should be capitalized under GAAP) for the acquisition of fixed
assets, machinery, equipment (including Equipment), land and
buildings or other property which are required to be capitalized
under GAAP.
“ Cash ” and “ Cash
Equivalents ” shall mean (1) cash held by Borrower in
accounts with the Bank, (2) direct obligations of the United States
Government, including, without limitation, treasury bills, notes
and bonds held by Borrower in accounts with the Bank, and (3)
repurchase agreements with the Bank fully secured by the United
States Government or agency collateral equal to or exceeding the
principal amount on a daily basis and held in safekeeping held by
Borrower in accounts with the Bank.
“ Change in Control ” shall
have the meaning set forth in Section 11.9
hereof.
“ Collateral ” shall have the
meaning set forth in Section 6.1 .
“ Computation Period ” means
each period of twelve (12) consecutive calendar months ending on
the last day of each calendar month.
“ Contingent Liability ” and
“ Contingent Liabilities ” shall mean,
respectively, the present value of each obligation and liability of
the Borrower and all such obligations and liabilities of the
Borrower incurred pursuant to any agreement, undertaking or
arrangement by which the Borrower: (i) guarantees,
endorses or otherwise becomes or is contingently liable upon (by
direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the
indebtedness, dividend, obligation or other liability of any other
Person in any manner (other than by endorsement of instruments in
the course of collection), including without limitation, any
indebtedness, dividend or other obligation which may be issued or
incurred at some future time; (ii) guarantees the payment of
dividends or other distributions upon the shares or ownership
interest of any other Person; (iii) undertakes or agrees (whether
contingently or otherwise): (A) to purchase, repurchase,
or otherwise acquire any indebtedness, obligation or liability of
any other Person or any or any property or assets constituting
security therefore, (B) to advance or provide funds for the payment
or discharge of any indebtedness, obligation or liability of any
other Person (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, working capital or other
financial condition of any other Person, or (C) to make payment to
any other Person other than for value received; (D) agrees to lease
property or to purchase securities, property or services from such
other Person with the purpose or intent of assuring the owner of
such indebtedness or obligation of the ability of such other Person
to make payment of the indebtedness or obligation; (E) to induce
the issuance of, or in connection with the issuance of, any letter
of credit for the benefit of such other Person; or (F) undertakes
or agrees otherwise to assure a creditor against
loss. The amount of any Contingent Liability shall
(subject to any limitation set forth herein) be deemed to be the
outstanding principal amount (or maximum permitted principal
amount, if larger) of the indebtedness, obligation or other
liability guaranteed or supported thereby.
“ Converted Loan ” shall have
the meaning set forth in Section 2.1(c) .
“ Corporate Guaranty ” shall
have the meaning set forth in Section 3.1 hereof.
“ Default Rate ” shall mean a
per annum rate of interest then in effect plus 2% per
annum.
“ Depreciation ” shall mean
the total amounts added to depreciation, obsolescence, valuation
and other proper reserves, as reflected on the Borrower’s
financial statement and determined in accordance with
GAAP.
“ EBITDA ” shall mean, for
any period, the sum for such period of: (i) Net Income,
plus (ii) Interest Charges, plus (iii) federal and state income
taxes (including the Illinois replacement tax) as determined in
accordance with GAAP, plus (iv) Depreciation and Amortization, plus
(v) extraordinary losses as defined by GAAP and all other non-cash
charges, plus (vi) Permitted Distributions, minus (vii) any items
of gain which are extraordinary items as defined by GAAP,
including, without limitation, that portion of Net Income arising
out of the sale of assets outside of the ordinary course of
business, in each case to the extent included in determining Net
Income for such period.
“ Eligible Accounts ” shall
mean all Accounts, except for the following:
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Accounts which
remain unpaid for more than ninety (90) days after their invoice
date;
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Accounts owing
by a single Account Debtor, including a currently scheduled
Account, if twenty-five percent (25%) of the balance owing
(excluding retainage) by said Account Debtor on such Account
remains unpaid more than ninety (90) days after the
invoice date;
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Accounts which
are not due and payable within at least thirty (30) days after
their invoice date;
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Accounts with
respect to which the Account Debtor is a director, officer,
employee or agent of Borrower or is a Parent, a Subsidiary or an
Affiliate of Borrower (for the avoidance of doubt, this will not
include Accounts with Patriot Rail Corp.);
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Accounts with
respect to which the Account Debtor (1) is not a resident, a
citizen of or otherwise located in the United States of America; or
(2) is not subject to service of process in the United States of
America, unless, in each case, such Accounts are supported by
foreign credit insurance in form and substance acceptable to
Lender;
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Accounts with
respect to which the Account Debtor is (1) the United States of
America or any department, agency or instrumentality thereof,
unless Borrowers assign their right to payment of such Accounts to
the Bank in accordance with the Assignment of Claims Act of 1940,
as amended, or (2) any country other than the United States of
America or any department, agency or instrumentality
thereof;
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The face amount
of any Accounts with respect to which Borrower is or may become
liable to the Account Debtor for Goods sold or services rendered by
such Account Debtor to Borrower, but only to the extent of the
maximum aggregate amount of Borrower’s liability to such
Account Debtor;
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If applicable,
Accounts with respect to which (1) the Goods giving rise thereto
have not been shipped and delivered to and accepted as satisfactory
by the Account Debtor, or (2) the services performed have not been
completed and accepted as satisfactory by the Account
Debtor;
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If applicable,
Accounts which are not invoiced, dated as of such date and sent to
the Account Debtor concurrently with or promptly after the shipment
and delivery to and acceptance by said Account Debtor of the goods
or the performance of the services giving rise thereto;
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(10)
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Accounts which
are owing by any Account Debtor involved as a debtor in any
bankruptcy or insolvency proceeding, whether voluntary or
involuntary;
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(11)
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Accounts which
arise in any manner other than the sale of inventory or services in
the ordinary course of Borrower’s business;
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(12)
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The portion of
any Account which constitutes retainage under the applicable
contract;
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(13)
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The portion of
any Account which is subject to a priority claim in favor of a
bonding or surety company;
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(14)
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Accounts which
arise in any manner other than (1) the performance of services by
Borrower in the ordinary course of Borrower’s business, and
such services have been fully performed and acknowledged and
accepted by the Account Debtor thereunder; or (2) the sale or lease
of Goods by Borrower in the ordinary course of Borrower’s
business, and (x) such Goods have been completed in accordance with
the Account Debtor’s specifications (if any) and delivered to
the Account Debtor, (y) such Account Debtor has not refused to
accept, returned or offered to return, any of the Goods which are
the subject of such Account, and (z) Borrower has possession of, or
Borrower has delivered to the Bank (at the Bank’s request)
shipping and delivery receipts evidencing delivery of
such Goods;
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(15)
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Accounts as to
which the Bank, at any time or times hereafter, determines in good
faith that the prospect of payment or performance by the Account
Debtor is or will be materially impaired.
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“ Employee Plan ” includes
any pension, stock bonus, employee stock ownership plan,
retirement, disability, medical, dental or other health plan, life
insurance or other death benefit plan, profit sharing, deferred
compensation, stock option, bonus or other incentive plan, vacation
benefit plan, severance plan or other employee benefit plan or
arrangement, including, without limitation, those pension,
profit-sharing and retirement plans of the Borrower described from
time to time in the financial statements of the Borrower and any
pension plan, welfare plan, Defined Benefit Pension Plans (as
defined in ERISA) or any multi-employer plan, maintained or
administered by the Borrower or to which the Borrower is a party or
may have any liability or by which the Borrower is
bound.
“ Environmental Laws ” shall
mean all federal, state, district, local and foreign laws, rules,
regulations, ordinances, and consent decrees relating to health,
safety, hazardous substances, pollution and environmental matters,
as now or at any time hereafter in effect, applicable to the
Borrower’s business or facilities owned or operated by the
Borrower, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contamination,
chemicals, or hazardous, toxic or dangerous substances, materials
or wastes in the environment (including, without limitation,
ambient air, surface water, land surface or subsurface strata) or
otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
“ Equipment ” shall mean all
wood grinders or related equipment or maintenance-of-way equipment
utilized by Borrower in connection with its business.
“ ERISA ” shall mean the
Employee Retirement Income Security Act of 1974, as amended from
time to time.
“ Event of Default ” shall
mean any of the events or conditions set forth in Article 11
hereof.
“ Excess Cash Flow ” shall
mean EBITDA minus (i) non-financed Capital Expenditures,
(ii) actual cash taxes paid (net of tax credits), (iii) principal
and interest payments due and owing in accordance with this
Agreement or any other agreement with the Bank, and (iv) Management
Fees (not to exceed Fifty Thousand and No/100 Dollars ($50,000.00)
in 2009).
“ Funded Indebtedness ” shall
mean, as to any Person, all outstanding Indebtedness of such
Person, but not including Contingent Liabilities and Rate
Management Obligations. The outstanding amounts under
the Loans (not including the Rate Management Agreements) shall be
considered as being included within Funded Indebtedness of the
Borrower.
“ GAAP ” shall mean generally
accepted accounting principles in the United States, using the
accrual basis of accounting and consistently applied with prior
periods, provided, however, that GAAP with respect to any interim
financial statements or reports shall be deemed subject to fiscal
year-end adjustments and footnotes made in accordance with
GAAP.
“ Governmental Authority ”
shall mean the United States of America, any state, territory or
district thereof, and any other political subdivision or body
politic created pursuant to any applicable Law, and any court,
agency, department, commission, board, bureau or instrumentality of
any of the foregoing.
“ Hazardous Materials ” shall
mean any hazardous, toxic or dangerous substance, materials and
wastes, including, without limitation, hydrocarbons (including
naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation,
radioactive materials, biological substances, polychlorinated
biphenyls, pesticides, herbicides and any other kind and/or type of
pollutants or contaminants (including, without limitation,
materials which include hazardous constituents), sewage, sludge,
industrial slag, solvents and/or any other similar substances,
materials or wastes that are or become regulated under any
Environmental Law (including without limitation, any that are or
become classified as hazardous or toxic under any Environmental
Law).
“ Indebtedness ” shall
mean at any time (i) all Liabilities of the Borrower to the Bank,
(ii) all Capital Lease obligations of the Borrower, (iii) all other
debt, secured or unsecured, created, issued, incurred or assumed by
the Borrower for money borrowed or for the deferred purchase price
of any fixed or capital asset, (iv) indebtedness secured by any
Lien existing on property owned by the Borrower whether or not the
Indebtedness secured thereby has been assumed, and (v) all Rate
Management Obligations.
“ Indemnified Party ” and
“ Indemnified Parties ” shall mean,
respectively, each of the Bank and any parent corporations,
affiliated corporations or subsidiaries of the Bank, and each of
their respective officers, directors, employees, attorneys and
agents, and all of such parties and entities.
“ Interest Charges ” shall
mean, for any period, the sum of: (i) all cash interest,
charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the
deferred purchase price of assets that are treated as interest in
accordance with GAAP, plus (ii) the portion of rent payable with
respect to that fiscal period under Capital Leases that should be
treated as interest in accordance with GAAP, plus (iii) all charges
paid or payable (without duplication) during that period with
respect to any Rate Management Agreements.
“ Interest Period ” shall
mean, with regard to any LIBOR Loan, successive one, three or
six-month periods as selected from time to time by the Borrower by
notice given to the Bank not less than two Business Days prior to
the first day of each respective Interest Period; provided,
however, that: (i) each such Interest Period occurring after the
initial Interest Period of any LIBOR Loan shall commence on the day
on which the preceding Interest Period for such LIBOR Loan expires,
(ii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, then the last day of such Interest Period shall
occur on the immediately preceding Business Day, (iii) whenever the
first day of any Interest Period occurs on a day of a month for
which there is no numerically corresponding day in the calendar
month in which such Interest Period terminates, such Interest
Period shall end on the last Business Day of such calendar month,
(iv) if the Capex, Term, and/or Revolving Loans are subject to a
mandatory prepayment, the last Business Day of the then current
Interest Period for all Capex, Term, and/or Revolving Loans which
are LIBOR Loans must coincide with the date of the mandatory
prepayment, and (v) the final Interest Period must be such that its
expiration occurs on or before the applicable Capex, Revolving Loan
and Term Loan Maturity Dates, respectively.
“ Inventory ” shall mean all
present and future goods intended for sale, lease or other
disposition including, without limitation, all raw materials, work
in process, finished goods and other retail inventory, goods in the
possession of outside processors or other third parties, consigned
goods (to the extent of the consignee’s interest therein),
materials and supplies of any kind, nature or description which are
or might be used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of any such goods, all
documents of title or documents representing the same and all
records, files and writings with respect thereto.
“ Invoice ” shall mean, in
the case of purchased Equipment, the purchase invoice tendered by
the Equipment seller to Borrower for the Equipment purchased by
Borrower.
“ Law ” shall mean any
federal, state or local law, statute, ordinance, order, decree,
rule or regulation.
“ Liabilities ” shall mean at
all times all liabilities of the Borrower that would be shown as
such on a balance sheet of the Borrower prepared in accordance with
GAAP.
“ LIBOR ” shall mean the per
annum rate of interest determined on the basis of the rate for
deposits in United States Dollars for a period equal to the
relevant Interest Period for such Loan, commencing on the first day
of such Interest Period, appearing on Page BBAM of the Bloomberg
Financial Markets Information Service as of 11:00 a.m. (Chicago,
Illinois time) (or as soon thereafter as practical), two (2)
Business Days prior to the first day of such Interest
Period. In the event that such rate does not appear on
Page BBAM of the Bloomberg Financial Markets Information Service
(or otherwise on such Service), then the term “LIBOR”
shall be determined by reference to such other publicly available
service for displaying Eurodollar rates as may be agreed upon by
Bank and Borrower, or, in the absence of such agreement,
“LIBOR” shall, instead, mean the per annum rate equal
to the average (rounded upward, if necessary, to the nearest
one-sixteenth of one percent (1/16%)) of the rate at which Bank is
offered dollar deposits at or about 11:00 a.m. (Chicago, Illinois
time) (or as soon thereafter as practical), two (2) Business Days
prior to the first day of such Interest Period in the interbank
Eurodollar market in an amount comparable to the principal amount
of the respective LIBOR-based Loan which is to bear interest at
such LIBOR-based rate and for a period equal to the relevant
Interest Period. The Bank’s determination of LIBOR
shall be conclusive, absent manifest error.
“ LIBOR Loan ” or “
LIBOR Loans ” shall mean that portion, and
collectively, those portions of the aggregate outstanding principal
balance of the Loans that will bear interest at the LIBOR Rate plus
the Applicable Margin.
“ LIBOR Rate ” shall mean a
per annum rate of interest equal to LIBOR for the relevant Interest
Period (rounded upward if necessary, to the nearest 1/16 of
1.00%). Notwithstanding the foregoing, with
respect to the Term Loan and Capex Loans, LIBOR shall be a minimum
of two percent (2%) during any and all Interest Periods.
“ Lien ” shall mean any
mortgage, pledge, hypothecation, judgment lien or similar legal
process, title retention lien, or other lien or security interest,
including, without limitation, the interest of a vendor under any
conditional sale or other title retention agreement and the
interest of a lessor under a lease of any interest in any kind of
property or asset, whether real, personal or mixed, or tangible or
intangible, by such Person as lessee that is, or should be, a
Capital Lease on the balance sheet of the Borrower prepared in
accordance with GAAP.
“ Loans ” shall mean,
collectively, all Capex Loans, Revolving Loans and the Term Loan
(whether Prime Loans or LIBOR Loans) made by the Bank to the
Borrower, under and pursuant to this Agreement.
“ Loan Documents ” shall have
the meaning set forth in Section 3.1 .
“ Management Fees ” shall
mean reasonable fees paid to B.H.I.T. Inc. for administrative
services.
“ Net Income ” shall mean,
with respect to any period, the amount shown opposite the caption
“Net Income” or a similar caption on the financial
statements of the Borrower, prepared in accordance with
GAAP.
“ Notes ” shall mean
collectively the Term Note, the Capex Note and the Revolving
Note.
“ Obligations ” shall mean
the Loans, as evidenced by the Notes, all interest accrued thereon,
any fees due the Bank hereunder, any expenses incurred by the Bank
hereunder and any and all other liabilities and obligations of the
Borrower (and of any partnership in which the Borrower is or may be
a partner) to the Bank, howsoever created, arising or evidenced,
and howsoever owned, held or acquired, whether now or hereafter
existing, whether now due or to become due, direct or indirect,
absolute or contingent, and whether several, joint or joint and
several, including, but not limited to, any and all Rate Management
Obligations.
“ Obligor ” shall mean the
Borrower, any guarantor, accommodation endorser, third-party
pledgor, or any other party liable with respect to the
Obligations.
“ Permitted Distributions ”
shall mean (i) Tax Distributions and (ii) distributions for the
payment of Management Fees to B.H.I.T. Inc. as and to the extent
permitted under this Agreement, not to exceed Fifty Thousand and
No/100 Dollars ($50,000.00) in 2009.
“ Permitted Liens ” shall
mean Liens permitted under Section 8.2 hereof.
“ Person ” shall mean any
individual, partnership, limited liability company, corporation,
trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or political
subdivision thereof, or other entity.
“ Prime ” shall mean the
floating per annum rate of interest which at any time, and from
time to time, shall be most recently announced by the Bank as its
“Prime Interest Rate”, which is not intended to be the
Bank’s lowest or most favorable rate of interest at any one
time. The effective date of any change in the Prime
Interest Rate shall for purposes hereof be the date the Prime
Interest Rate is changed by the Bank. The Bank shall not
be obligated to give notice of any change in the Prime Interest
Rate.
“ Prime Rate ” shall mean a
per annum rate of interest equal to Prime for the relevant
period.
“ Prime Loan ” or “
Prime Loans ” shall mean that portion, and
collectively, those portions of the aggregate outstanding principal
balance of the Loans that will bear interest at the Prime Rate plus
the Applicable Margin.
“ Rate Management Agreement ”
means any agreement, device or arrangement providing for payments
which are related to fluctuations of interest rates, exchange
rates, forward rates, or equity prices, including, but not limited
to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap
or collar protection agreements, forward rate currency or interest
rate options, puts and warrants, and any agreement pertaining to
equity derivative transactions (e.g., equity or equity index swaps,
options, caps, floors, collars and forwards), including without
limitation any ISDA Master Agreement between Borrower and Bank or
any affiliate of the Bank, and any schedules, confirmations and
documents and other confirming evidence between the parties
confirming transactions thereunder, all whether now existing or
hereafter arising, and in each case as amended, modified or
supplemented from time to time.
“ Rate Management Obligations
” means any and all obligations of Borrower to Bank or any
affiliate of the Bank, whether absolute, contingent or otherwise
and howsoever and whensoever (whether now or hereafter) created,
arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefore), under or in
connection with (i) any and all Rate Management Agreements, and
(ii) any and all cancellations, buy-backs, reversals, terminations
or assignments of any Rate Management Agreement.
“ Regulatory Change ” shall
mean the introduction of, or any change in, any applicable law,
treaty, rule, regulation or guideline or in the interpretation or
administration thereof by any governmental authority or any central
bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending office.
“ Revolving Interest Rate ”
shall mean, with respect to a Revolving Loan, an interest rate
(determined at Borrower’s option from time to time) equal to
either (i) the Prime Rate plus the Applicable Margin, or
(ii) the LIBOR Rate plus the Applicable Margin.
“ Revolving Loan ” and
“ Revolving Loans ” shall mean, respectively,
each direct advance and the aggregate of all such direct advances,
from time to time in the form of either Prime Loans or LIBOR Loans,
made by the Bank to the Borrower under and pursuant to this
Agreement, as set forth in Section 2.1 hereof.
“ Revolving Loan Commitment ”
shall mean an amount equal to Five Hundred Thousand and No/100
Dollars ($500,000.00) for the Working Capital Facility Revolving
Loan.
“ Revolving Loan Maturity Date
” shall mean September 3, 2010.
“ Revolving Note ” shall have
the meaning set forth in Section 4.1 hereof.
“ Stock ” shall mean all
shares, options, interests, participations or other equivalents,
howsoever designated, of or in a corporation, partnership, limited
liability company or similar entity whether voting or nonvoting,
including, common stock, warrants, preferred stock, convertibles,
debentures, partnership interest and all agreements, instruments
and documents convertible, in whole or in part, into any one or
more of the foregoing.
“ Subsidiary ” and “
Subsidiaries ” shall mean, respectively, each and all
such corporations, partnerships, limited partnerships, limited
liability companies, limited liability partnerships or other
entities of which or in which the Borrower owns directly or
indirectly fifty percent (50.00%) or more of (i) the combined
voting power of all classes of stock having general voting power
under ordinary circumstances to elect a majority of the board of
directors of such entity if a corporation, (ii) the management
authority and capital interest or profits interest of such entity,
if a partnership, limited partnership, limited liability company,
limited liability partnership, joint venture or similar entity, or
(iii) the beneficial interest of such entity, if a trust,
association or other unincorporated organization.
“ Tax Distributions ”
means, for any taxable year for which Borrower is
treated under the Internal Revenue Code of 1986, as amended from
time to time (the “ Code ”) as a partnership for
income tax purposes or otherwise similarly disregarded under the
Code for income tax purposes, dividends and/or distributions paid
by Borrower to its member(s) in an amount not to exceed the product
of (i) taxable income related to such member’s ownership
interest in the applicable Borrower multiplied by (ii) the sum of
the highest marginal individual federal and state income tax rates
in any state in which such member is subject to tax that were
applicable in such taxable year.
“ Term Interest Rate ” shall
mean, with respect to the Term Loan, an interest rate (determined
at Borrower’s option from time to time) equal to either (i)
the Prime Rate plus the Applicable Margin, or (ii) the LIBOR
Rate plus the Applicable Margin.
“ Term Loan ” shall mean the
advance of either a Prime Loan or a LIBOR Loan made by the Bank to
the Borrower under and pursuant to this Agreement, as set forth in
Section 2.2 hereof.
“ Term Loan Commitment ”
shall mean an amount equal to Three Million and No/100 Dollars
($3,000,000.00), as such amount may be increased on account of the
Converted Loans pursuant to Section 2.1(c)
hereof.
“ Term Loan Maturity Date ”
shall mean September 3, 2014.
“ Term Note ” shall have the
meaning set forth in Section 4.3 hereof.
“ Total Debt ” shall mean the
Funded Indebtedness of Borrower less Cash and Cash
Equivalents.
“ UCC ” shall mean the
Uniform Commercial Code in effect in Illinois from time to
time.
“ Unmatured Event of Default
” shall mean any event which has occurred and/or condition
which exists which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default.
“ Working Capital Facility ”
shall mean a facility encompassing Revolving Loans in the principal
amount of Five Hundred Thousand and No/100 Dollars ($500,000.00)
for the purposes of financing working capital and other reasonable
and appropriate corporate purposes.
1.2
Accounting Terms . Any accounting terms used in
this Agreement which are not specifically defined herein shall have
the meanings customarily given them in accordance with
GAAP. Calculations and determinations of financial and
accounting terms used and not otherwise specifically defined
hereunder and the preparation of financial statements to be
furnished to the Bank pursuant hereto shall be made and prepared,
both as to classification of items and as to amount, in accordance
with GAAP as used in the preparation of the financial statements of
the Borrower on the date of this Agreement. If any
changes in accounting principles or practices from those used in
the preparation of the financial statements are hereafter
occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants (or any successor thereto or agencies with
similar functions), which results in a material change in the
method of accounting in the financial statements required to be
furnished to the Bank hereunder or in the calculation of financial
covenants, standards or terms contained in this Agreement, the
parties hereto agree to enter into good faith negotiations to amend
such provisions so as equitably to reflect such changes to the end
that the criteria for evaluating the financial condition and
performance of the Borrower will be the same after such changes as
they were before such changes; and if the parties fail to agree on
the amendment of such provisions, the Borrower will furnish
financial statements in accordance with such changes but shall
provide calculations for all financial covenants, perform all
financial covenants and otherwise observe all financial standards
and terms in accordance with applicable accounting principles and
practices in effect immediately prior to such
changes. Calculations with respect to financial
covenants required to be stated in accordance with applicable
accounting principles and practices in effect immediately prior to
such changes shall be reviewed and certified by the
Borrower’s accountants.
1.3
Other Terms Defined in UCC . All other
capitalized words and phrases used herein and not otherwise
specifically defined shall have the respective meanings assigned to
such terms in the UCC, as amended from time to time, to the extent
the same are used or defined therein.
1.4
Other Definitional Provisions; Construction
. Whenever it is provided in this Agreement that a party
“may” perform an act or do anything, it will be
construed that such party “may, but will not be obligated
to,” so perform or so do. The following words and
phrases will be construed as follows: (i) “at any time”
will be construed as “at any time or from time to
time;” (ii) “any” will be construed as “any
one or all”; (iii) “include” and
“including” will be construed as “including but
not limited to;” and (iv) “will” and
“shall” will each be construed as
mandatory. Except as otherwise specifically indicated,
all references to Article and Section numbers and letters will
refer to the Articles and Sections of this
Agreement. The words “hereby,”
“hereof,” “hereto,” “herein”
and “hereunder” and any similar terms will refer to
this Agreement as a whole and not to any particular
paragraph. The word “hereafter” will mean
after the date hereof and the word “heretofore” will
mean before the date hereof. Words of the masculine,
feminine or neuter gender will mean and include the corresponding
words of other genders, and words implying the singular number will
mean and include the plural number and vice versa. The
Article and Section headings are inserted in this Agreement for
convenience only and are not intended to, and will not be construed
to limit, enlarge or affect the scope or intent of this Agreement
or the meaning of any provision hereof. All references
to “Exhibits” and “Schedules” shall mean
the Exhibits and Schedules attached to this Agreement. All
references to any agreement or instrument (including this
Agreement) will be to such agreement or instrument as in effect
from time to time, including any amendments, replacements,
restatements, modifications and/or supplements thereto. An Event of
Default or Unmatured Event of Default shall “continue”
or be “continuing” until such Event of Default or
Unmatured Event of Default has been cured or waived in accordance
with Section 13.3 . References in this Agreement
to any party shall include such party’s successors and
permitted assigns. To the extent any of the provisions of the other
Loan Documents are inconsistent with the terms of this Loan
Agreement, the provisions of this Loan Agreement shall
govern.
2.1
Capex and Revolving Loans .
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Capex and
Revolving Loan Commitment . Subject to the terms and conditions
of this Agreement and the other Loan Documents, and in reliance
upon the representations and warranties of the Borrower, herein and
in the other Loan Documents, the Bank agrees to make such Capex and
Revolving Loans at such times as the Borrower may from time to time
request until, but not including, the Capex and Revolving Loan
Maturity Date, respectively, and in such amounts as the Borrower
may from time to time request, provided, however, that (i) the
principal amount of no single Capex Loan encompassed within the
Capex Facility shall exceed 80% of the related Invoice with respect
to Equipment, (ii) the aggregate principal balance of all Capex
and/or Revolving Loans outstanding at any time with respect to a
particular Facility shall not exceed the applicable Capex or
Revolving Loan Commitment for that Facility, and (iii) the
aggregate principal balance of all Revolving Loans outstanding at
any time shall not exceed the Borrowing Base Amount. With respect
to the Working Capital Facility, Revolving Loans made by the Bank
may be repaid and, subject to the terms and conditions hereof,
borrowed again up to, but not including the Revolving Loan Maturity
Date or the time that a Revolving Loan is otherwise terminated or
extended as provided in this Agreement. With respect to
the Capex Facility, Capex Loans made by the Bank, when repaid, may
not be reborrowed.
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Capex and
Revolving Loan Interest and Payments . The principal amount of the Capex
and Revolving Loans outstanding from time to time shall bear
interest at the applicable Capex and Revolving Interest Rates,
respectively. Accrued and unpaid interest on the unpaid
principal balance of all Capex and Revolving Loans outstanding from
time to time which are Prime Loans, shall be due and payable
monthly, in arrears, commencing on September 30, 2009 and
continuing on the last day of each calendar month thereafter, and
on the Capex and Revolving Loan Maturity Dates,
respectively. Accrued and unpaid interest on the
principal balance of all Capex and Revolving Loans outstanding from
time to time which are LIBOR Loans shall be payable on the last
Business Day of each Interest Period, commencing on the first such
date to occur after the date hereof, on the date of any principal
repayment of a LIBOR Loan, and on the Capex and Revolving Loan
Maturity Dates, respectively. Any amount of principal or
interest on the Capex and Revolving Loans which is not paid when
due, whether at stated maturity, by acceleration or otherwise,
shall bear interest payable on demand at the Default
Rate.
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(c)
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Terming out
of Capex Loans . On the applicable Capex Loan
Maturity Date, all then-outstanding Capex Loans shall automatically
be converted into a Term Loan maturing on the Term Loan Maturity
Date bearing interest at the same rate as the Term Loan (each a
“ Converted Loan ” and collectively “
Converted Loans ”). The principal balance
of the Converted Loans with respect to the Capex Facility will be
amortized over a 60-month period and principal and interest thereon
will be payable in arrears on the last day of each calendar month.
In order to effectuate the foregoing, Borrower will execute a note
evidencing such Converted Loans in the form set forth in
Exhibit G attached hereto on the Capex Loan Maturity
Date. Provided that there is no Unmatured Event of
Default or Event of Default at that time, the Bank agrees to
increase the aggregate Term Loan Commitment by the amount of the
Converted Loans then being converted.
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Capex and
Revolving Loan Principal Repayments .
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Mandatory
Principal Repayments . Each Revolving Loan hereunder with
respect to the Working Capital Facility shall be repaid by the
Borrower on the Revolving Loan Maturity Date, unless payable sooner
pursuant to the provisions of this Agreement. Each Capex
Loan hereunder shall be repaid by the Borrower on the Capex Loan
Maturity Date, unless payable sooner pursuant to the provisions of
this Agreement or unless converted to a Term Loan pursuant to the
provisions of Section 2.1(c) .
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Optional
Prepayments . The Borrower may from time to time
prepay the Capex and Revolving Loans which are Prime Loans and,
subject to Section 2.3(a) hereof, LIBOR Loans, in whole or in part,
without any prepayment penalty whatsoever, subject to the following
conditions: (i) each partial prepayment shall be in
an amount equal to Fifty Thousand and No/100 Dollars ($50,000.00)
or a higher integral multiple of Twenty-Five Thousand and No/100
Dollars ($25,000.00); and (ii) any prepayment of the entire
principal balance of the Capex and/or Revolving Loans shall include
accrued interest on such Capex and/or Revolving Loans to the date
of such prepayment and payment in full of all other Obligations
pertaining to such Capex and Revolving Loans, then due and
payable.
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Term Loan
Commitment . Subject to the terms and conditions
of this Agreement and the other Loan Documents, and in reliance
upon the representations and warranties of the Borrower set forth
herein and in the other Loan Documents, the Bank agrees to make a
Term Loan equal to the Term Loan Commitment. The Term
Loan shall be available to the Borrower in a single principal
advance. The Term Loan shall be used by Borrower for the
acquisition of the Wood Energy Group and transaction
expenses. The Term Loan may be prepaid in whole or in
part at any time without penalty (except for any LIBOR breakage
fees), but shall be due in full on the Term Loan Maturity Date,
unless the credit extended under the Term Loan is otherwise
terminated or extended as provided in this Agreement.
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Term Loan
Interest and Payments . Except as otherwise provided in
this Section 2.2(b) , the principal amount of the Term Loan
outstanding from time to time shall bear interest at the Term
Interest Rate. Accrued and unpaid interest on that portion of the
unpaid principal balance of the Term Loan outstanding from time to
time which is a Prime Loan shall be due and payable monthly, in
arrears, commencing on September 30, 2009 and continuing on the
last day of each calendar month thereafter, and on the Term Loan
Maturity Date. Accrued and unpaid interest on that
portion of the unpaid principal balance of the Term Loan
outstanding from time to time which is a LIBOR Loan shall be
payable on the last Business Day of each Interest Period,
commencing on the first such date to occur after the date hereof,
on the date of any principal repayment of a LIBOR Loan and on the
Term Loan Maturity Date. Any amount of principal or
interest on the Term Loan which is not paid when due, whether at
stated maturity, by acceleration or otherwise, shall bear interest
payable on demand at the Default Rate.
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Term Loan
Principal Payments . The outstanding principal balance
of the Term Loan shall be repaid in equal monthly principal
installments of Fifty Thousand Dollars and No/100 Dollars
($50,000.00), together with an additional amount representing
accrued interest as set forth above, beginning on September 30,
2009, and continuing on the last day of each month thereafter, with
a final payment of all outstanding principal and accrued interest
due on the Term Loan Maturity Date. Principal amounts
repaid on the Term Note may not be borrowed again.
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Mandatory
Term Loan Prepayments . Upon receipt of proceeds from an
Asset Disposition, Borrower shall, without notice or demand of any
kind, immediately pay to the Bank an amount greater than or equal
to 100% of the net cash proceeds resulting from such Disposition,
and such amount shall be applied to the then-outstanding Term Loan
balance. In lieu of making Term Loan pre-payments in the
foregoing-computed amount, Borrower shall be permitted to pre-pay
Capex and/or Revolving Loans in the same amount if such amount of
the Capex and/or Revolving Loans is then outstanding.
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If Borrower has
generated Excess Cash Flow during any calendar year that this
Agreement remains in effect (commencing September 4, 2009 –
December 31, 2009, and each calendar year thereafter), then
seventy-five percent (75%) of that Excess Cash Flow shall
constitute a required Mandatory Term Loan Prepayment, Borrower
shall, without notice or demand of any kind, pay to the Bank
seventy-five percent (75%) of such Excess Cash Flow within one
hundred twenty (120) days after the end of each such calendar year,
and such amount shall be applied to the then-outstanding Term Loan
balance.
Notwithstanding
the foregoing, in calendar year 2010 and in each calendar year
thereafter, such Excess Cash Flow payment shall not be required if,
on December 31 of each such calendar year, the Indebtedness of
Borrower to Bank does not exceed the aggregate of 80% of the value
of Borrower’s Accounts Receivable plus 50% of the value of
Borrower’s Inventory plus 80% of the appraised fair market
value of Borrower’s owned Equipment.
2.3
Additional LIBOR Loan Provisions .
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LIBOR Loan
Prepayments . If, for any reason, a LIBOR Loan is
paid prior to the last Business Day of any Interest Period, then
Borrower agrees to pay to the Bank the Bank’s normal and
customary LIBOR breakage fees, if any, actually incurred, plus any
cost or expense incurred by the Bank as a result of such
prepayment.
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LIBOR
Unavailability . If the Bank determines in good
faith (which determination shall be conclusive, absent manifest
error) prior to the commencement of any Interest Period that (i)
United States dollar deposits of sufficient amount and maturity for
funding any LIBOR Loan are not available to the Bank in the London
Interbank Eurodollar market in the ordinary course of business, or
(ii) by reason of circumstances affecting the London Interbank
Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the relevant
LIBOR Loan, the Bank shall promptly notify the Borrower thereof
and, so long as the foregoing conditions continue, Loans may not be
advanced as LIBOR Loans thereafter. In addition, at the
Borrower’s option, each existing LIBOR Loan shall be
immediately (i) converted to a Prime Loan on the last Business Day
of the then existing Interest Period, or (ii) due and payable on
the last Business Day of the then existing Interest Period, without
further demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Borrower.
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Regulatory
Change . In
addition, if, after the date hereof, a Regulatory Change shall, in
the reasonable determination of the Bank, make it unlawful for the
Bank to make or maintain the LIBOR Loans, then the Bank shall
promptly notify the Borrower and Loans may not be advanced as LIBOR
Loans thereafter. In addition, at the Borrower’s
option, each existing LIBOR Loan shall be immediately (i) converted
to a Prime Loan on the last Business Day of the then existing
Interest Period or on such earlier date as required by law, or (ii)
due and payable on the last Business Day of the then existing
Interest Period or on such earlier date as required by law, all
without further demand, presentment, protest or notice of any kind,
all of which are hereby waived by the Borrower.
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LIBOR Loan
Indemnity . If
any Regulatory Change (whether or not having the force of law)
shall (i) impose, modify or deem applicable any assessment,
reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of or loans by, or any other
acquisition of funds or disbursements by, the Bank; (ii) subject
the Bank or any LIBOR Loan to any tax, duty, charge, stamp tax or
fee or change the basis of taxation of payments to the Bank of
principal or interest due from the Borrower to the Bank hereunder
(other than a change in the taxation of the overall net income of
the Bank); or (iii) impose on the Bank any other condition
regarding such LIBOR Loan or the Bank’s funding thereof, and
the Bank shall determine (which determination shall be conclusive,
absent manifest error) that the result of the foregoing is to
increase the cost to the Bank of making or maintaining such LIBOR
Loan or to reduce the amount of principal or interest received by
the Bank hereunder, then the Borrower shall pay to the Bank, on
demand, such additional amounts as the Bank shall, from time to
time, reasonably determine are sufficient to compensate and
indemnify the Bank for such increased cost or reduced
amount.
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2.4
Interest and Fee Computation; Collection of Funds
. Except as otherwise set forth herein, all interest and
fees shall be calculated on the basis of a year consisting of 360
days and shall be paid for the actual number of days
elapsed. Principal payments submitted in funds not
immediately available shall continue to bear interest until
collected. If any payment to be made by the Borrower
hereunder or under the Notes shall become due on a day other than a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in
computing any interest in respect of such payment.
Notwithstanding any other provision of this
Agreement, the Bank shall not be required to disburse or make all
or any portion of the Loans if any of the following conditions
shall have occurred:
3.1
Loan Documents . The Borrower shall have failed
to execute and deliver to the Bank any of the following Loan
Documents (collectively, the “ Loan Documents
”), all of which must be satisfactory to the Bank and the
Bank’s counsel in form, substance and execution:
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Loan
Agreement . Three (3) copies of this
Agreement.
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Revolving
Note (Working Capital Facility) . The Revolving Note in the form
attached hereto as Exhibit A .
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Capex Note
(Capex Facility) . The Capex Note in the form attached
hereto as Exhibit B .
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Term
Note . The
Term Note in the form attached hereto as Exhibit C
.
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Corporate
Guaranty . The
Corporate Guaranty of B.H.I.T. Inc. in the form attached hereto as
Exhibit D .
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Search
Results . Copies of UCC search reports
(and/or, in the sole discretion of the Bank, opinions of counsel),
dated such a date as is reasonably acceptable to the Bank, with
respect to (i) effective UCC financing statements in all
applicable jurisdictions which name the Borrower, under its present
names and previous names, as debtors, together with copies of such
UCC financing statements, and (ii) such Surface Transportation
Board Filings as the Bank shall reasonably require to determine the
ownership of any one or more of the Rail Equipment.
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Filings . Such UCC filings and Surface
Transportation Board Filings as the Bank shall have required to
(i) establish a first priority lien in favor of the Bank in
and to all Collateral, or (ii) to establish the
Borrower’s ownership of any Rail Equipment.
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Organizational and Authorization
Documents . Copies of (i) the Articles of
Incorporation and Bylaws of the Borrower; (ii) resolutions of
the directors or members of the Borrower approving and authorizing
such Person’s execution, delivery and performance of the Loan
Documents to which it is party and the transactions contemplated
thereby; (iii) signature and incumbency certificates of the
officers and directors of the Borrower, executing any of the Loan
Documents, each of which the Borrower hereby certifies to be true
and complete, and in full force and effect without modification, it
being understood that the Bank may conclusively rely on each such
document and certificate until formally advised by the Borrower of
any changes therein; and (iv) good standing certificates in
the state of formation of the Borrower and in each other state
requested by the Bank.
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Insurance . Evidence satisfactory to the Bank
of the existence of insurance required to be maintained pursuant to
Section 9.4 , together with evidence that the Bank has
been named as a lender’s loss payee with respect to each
policy of property or casualty insurance and as an additional
insured with respect to all liability policies.
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Additional
Documents . Such other certificates, financial
statements, schedules, resolutions, opinions of counsel, notes and
other documents which are provided for hereunder or which the Bank
shall reasonably require, including any and all Rate Management
Agreements with the Bank.
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3.2
Event of Default . Any Event of Default, or
Unmatured Event of Default shall have occurred and be
continuing.
3.3
Adverse Changes . A material adverse change in
the condition, operations or affairs of the Borrower, whether
pertaining to the Borrower’s finances or otherwise, as
determined in the Bank’s sole and complete discretion, shall
have occurred.
3.4
Litigation . Any litigation or governmental
proceeding shall have been instituted against the Borrower or any
of its officers or shareholders which in the discretion of the
Bank, reasonably exercised, materially adversely affects the
financial condition or continued operation of the
Borrower.
3.5
Representations and Warranties . Any
representation or warranty of the Borrower contained herein or in
any Loan Document shall be untrue or incorrect in any material
respect as of the date of any Loan as though made on such date,
except to the extent such representation or warranty expressly
relates to an earlier date.
3.6
Closing Fee . The Borrower shall have failed to
pay to the Bank a Closing Fee in the amount of One Hundred Thousand
Dollars and No/100 ($100,000.00), payable from the funds advanced
by Bank with respect to the Term Loan.
4.1
Revolving Note . The Revolving Loans shall be
evidenced by a Revolving Note (together with any and all renewal,
extension, modification or replacement notes executed by the
Borrower and delivered to the Bank and given in substitution
therefore, the “ Revolving Note ”), duly
executed by the Borrower and payable to the order of the
Bank. At the time of the initial disbursement of a
Revolving Loan and at each time an additional Revolving Loan shall
be requested hereunder or a repayment made in whole or in part
thereon, an appropriate notation thereof shall be made on the books
and records of the Bank. All amounts recorded shall be,
absent demonstrable error, conclusive and binding evidence of (i)
the principal amount of the Revolving Loans advanced hereunder,
(ii) any unpaid interest owing on the Revolving Loans, and (iii)
all amounts repaid on the Revolving Loans. The failure
to record any such amount or any error in recording such amounts
shall not, however, limit or otherwise affect the obligations of
the Borrower under the Revolving Note to repay the principal amount
of the Revolving Loans, together with all interest accruing
thereon.
4.2
Capex Note . The Capex Loans shall be evidenced
by a Capex Note (together with any and all renewal, extension,
modification or replacement notes executed by the Borrower and
delivered to the Bank and given in substitution therefore, the
“Capex Note”), duly executed by the Borrower and
payable to the order of the Bank. At the time of the
initial disbursement of a Capex Loan and at each time an additional
Capex Loan shall be requested hereunder or a repayment made in
whole or in part thereon, an appropriate notation thereof shall be
made on the books and records of the Bank. All amounts
recorded shall be, absent demonstrable error, conclusive and
binding evidence of (i) the principal amount of the Capex Loans
advanced hereunder, (ii) any unpaid interest owing on the Capex
Loans, and (iii) all amounts repaid on the Capex
Loans. The failure to record any such amount or any
error in recording such amounts shall not, however, limit or
otherwise affect the obligations of the Borrower under the Capex
Note to repay the principal amount of the Capex Loans, together
with all interest accruing thereon.
4.3
Term Note . The Term Loan shall be evidenced by a
Term Note (together with any and all renewal, extension,
modification or replacement notes executed by the Borrower and
given in substitution therefore, the “ Term Note
”), duly executed by the Borrower and payable to the order of
the Bank. At the time any disbursement is made under the
Term Loan or a repayment is made under the Term Loan in whole or in
part thereon, an appropriate notation thereof shall be made on the
books and records of the Bank. All amounts recorded
shall be, absent demonstrable error, conclusive and binding
evidence of (i) the principal amount of the Term Loan advanced
hereunder, (ii) any unpaid interest owing on the Term Loan and
(iii) all amounts repaid on the Term Loan. The failure
to record any such amounts or any error in recording such amounts
shall not, however, limit or otherwise affect the obligations of
the Borrowers under the Term Note to repay the principal amount of
the Term Loan, together with all interest accruing
thereon.
5.1
All Loans . Each Loan shall be made available to
the Borrower upon its request, from any Person whose authority to
so act has not been revoked by the Borrower in writing previously
received by the Bank. Each Loan may be advanced either
as a Prime Loan or a LIBOR Loan, provided, however, that at any
time and from time to time, the Borrower may identify no more than
three (3) Loans which may be LIBOR Loans. A request for
a Prime Loan must be received by no later than 11:00 a.m. Chicago,
Illinois time, on the day it is to be funded. A request
for a LIBOR Loan must be (i) received by no later than 11:00 a.m.
Chicago, Illinois time, two days before the day it is to be funded,
and (ii) in an amount greater than or equal to Fifty Thousand and
No/100 Dollars ($50,000.00). If for any reason the
Borrower shall fail to select timely an Interest Period for an
existing LIBOR Loan, then such LIBOR Loan shall be immediately
converted to a Prime Loan on the last Business Day of the then
existing Interest Period, all without demand, presentment, protest
or notice of any kind, all of which are hereby waived by the
Borrower. The proceeds of each Prime Loan or LIBOR Loan
shall be made available at the office of the Bank by credit to the
account of the Borrower or by other means requested by the Borrower
and acceptable to the Bank.
5.2
Capex and Revolving Loans . Each request for a
Capex Loan with respect to the Capex Facility shall be accompanied
by a certificate setting forth the amount of the Invoice of the
Equipment for which such Capex Loan is being
requested. Upon receipt of a request for a Capex or a
Revolving Loan with respect to the Working Capital Facility or the
Capex Facility, respectively, the Bank shall either advance such
Capex or Revolving Loan as provided in Section 5.1 hereof or
promptly notify the Borrower of the reason that such Capex or
Revolving Loan is not being so advanced.
The Bank is authorized to rely on any written,
electronic, telephonic or telecopy loan requests which the Bank
believes in its good faith judgment to emanate from an Authorized
Borrower Representative, whether or not that is in fact the
case. The Borrower does hereby irrevocably confirm,
ratify and approve all such advances by the Bank and does hereby
indemnify the Bank against losses and expenses (including court
costs, attorneys’ and paralegals’ fee
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