Exhibit 10.14
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "Agreement") made this 8th day of March,
2001, by and between ALLFIRST BANK, a Maryland state-chartered commercial bank,
having an office at 1703 Oregon Pike, Lancaster, PA 17601 (the "Bank")
AND
MXL INDUSTRIES, INC. (the "Borrower") a Delaware corporation having an office
and place of business at 1764 Rohrerstown Road, Lancaster, PA 17601 and GP
STRATEGIES CORPORATION, a Delaware corporation having an office and place of
business at 9 West 57th Street, Suite 4170, New York, NY 10019 ( the "Surety").
BACKGROUND
Borrower requested a loan facility from Bank consisting of a
$1,680,000.00 term loan, which loan facility was described and agreed upon in a
commitment letter dated December 12, 2000 (the "Commitment Letter") signed by
Bank, Borrower and Surety. This Agreement and other documentation entered into
as of the date hereof is being entered into to carry out the terms of the
Commitment Letter and to complete the closing.
NOW THEREFORE, intending to be legally bound hereby, the Bank, the
Borrower and the Surety agree as follows:
1. Loan Facility. Bank hereby agrees to make available to Borrower
under the terms and conditions of this Agreement a term loan in the amount of
$1,680,000.00 (the "Loan") evidenced by a note in the amount of $1,680,000.00
(the "Note").
2. Use of Proceeds. The Loan proceeds shall be upstreamed to the
Surety, the parent corporation of the Borrower.
3. Interest Rate. The interest rate for the Loan shall be the floating
rate equal to 2.5% above the one-month LIBOR rate and shall change daily as such
rate changes provided, however, that the Borrower shall have the option from
time to time of fixing the interest rate for one-month periods upon providing
notice to Bank at least five (5) Business Days prior to the effective date of
the fixed rate. The fixed rate shall be equal to the one-month LIBOR Rate on the
effective date of such fixed rate. If the Borrower elects the fixed rate, the
interest rate shall remain fixed on a month-to-month basis unless and until the
Borrower provides notice to Bank that it is electing to revert to a rate that
changes daily. Such notice shall be given at least five (5) Business Days prior
to the end of a fixed rate monthly period. The Borrower shall have the right to
change back and forth between a monthly fixed rate and a daily floating rate
provided that the previously required prior notices are given to Bank. The LIBOR
rate shall mean the London Interbank Offered Rate as quoted from time to time
two (2) Business Days prior to the date such rate is to be effective, adjusted
for Federal Reserve Board reserve requirements and FDIC insurance, if any. The
LIBOR rate will be quoted by Bank as published in the money rates table of the
Wall Street Journal or otherwise publicly quoted or published from time to time.
The term "Business Days" shall mean any days on which commercial banks are open
in Baltimore, Maryland for domestic and international business, including deals
in U.S. Dollar deposits. If LIBOR shall become unavailable, interest shall
accrue at the Bank's Base Rate. The term "Bank's Base Rate", which is not
necessarily the lowest rate of interest charged by the Bank, is defined as the
prime rate of interest on domestic commercial loans established by the Bank from
time to time. Interest will be calculated on a daily basis and the interest due
for any particular day shall be determined by multiplying the amount on which
interest is due for that day by the applicable annual rate and dividing by 360.
4. Repayment Schedule. The Loan shall be repaid in full on or before
March 8, 2011, as more fully provided in the Note. Until the Loan is repaid in
full, principal in the amount of $8,333.33, plus accrued interest shall be paid
on a monthly basis on the 8th day of each month commencing on April 8, 2001.
Amounts repaid on the loan may not be reborrowed.
5. Security. As security for the performance of this Agreement, the
payment of the Note and all other indebtedness of Borrower to Bank, and the
performance of all obligations of Borrower to Bank, pursuant to this Agreement,
Borrower will cause to be furnished, executed and delivered to Bank in a form
satisfactory to Bank and its counsel the following:
(a) A mortgage (the "Mortgage") covering the real estate, improvements
and fixtures located thereon situate at 1764 Rohrerstown Road, East Hempfield
Township, Lancaster County, Pennsylvania (the "Premises"), in the principal
amount of $1,680,000.00 which shall be a first lien on the Premises.
(b) The suretyship agreement (the "Suretyship Agreement") of the Surety
guaranteeing, as surety, all payments under the Loan and all obligations of
Borrower under this Agreement.
6. Representations. The Borrower and the Surety hereby represent and
warrant to the Bank, that:
(a) Borrower is a corporation duly organized and validly existing and
in good standing under the laws of Delaware, and is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction in which
the conduct of its business or the ownership of its assets requires such
qualification. The Articles of Incorporation of the Borrower and all amendments
thereto have been duly filed and are in effect. All capital stock issued by
Borrower and outstanding was and is properly issued and fully paid.
(b) The Borrower has the corporate power to execute and deliver this
Agreement, the Note, the Mortgage and all other documents executed by Borrower
in connection with the Loan (collectively referred to herein as the "Loan
Documents") and all corporate action has been taken on the part of Borrower, its
directors or stockholders necessary for the authorization, execution, delivery
and performance of the Loan Documents.
(c) The Loan Documents have been duly authorized, executed and
delivered by the Borrower and are the legal, valid and binding agreements of the
Borrower and the Loan Documents are enforceable against the Borrower in
accordance with their respective terms, except as the enforceability may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally.
(d) The Surety is a corporation duly organized and validly existing and
in good standing under the laws of Delaware, and is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction in which
the conduct of its business or the ownership of its assets requires such
qualification. The Articles of Incorporation of the Surety and all amendments
thereto have been duly filed and are in effect. All capital stock issued by
Surety and outstanding was and is properly issued and fully paid.
(e) The Surety has the corporate power to execute and deliver this
Agreement and the Suretyship Agreement (collectively referred to as the "Surety
Documents") and all corporate action has been taken on the part of the Surety,
its directors or stockholders necessary for the authorization, execution,
delivery and performance of the Surety Documents.
(f) The Surety Documents have been duly authorized, executed and
delivered by the Surety, and such Surety Documents are enforceable against the
Surety in accordance with their respective terms, except as the enforceability
may be limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally.
(g) No consent of any other party which has not been obtained and no
consent, permission, license, approval, order, authorization of, or registration
or declaration with, any governmental authority, bureau or agency which has not
been obtained is required in connection with the execution, delivery,
performance, validity or enforceability of the Loan Documents or the Surety
Documents or any transaction contemplated hereby or thereby.
(h) The most recent financial statements of the Borrower and the Surety
delivered to the Bank, and all financial statements of the Borrower and the
Surety which will hereafter be furnished to the Bank, are or will be (when
furnished) true and correct in all material respects and do or will (when
furnished) present accurately and completely in all material respects the
financial position of the Borrower and the Surety and the results of their
operations as of the dates and for the periods indicated and show all known
liabilities of the Borrower and the Surety, direct or contingent, as of the date
thereof required to be disclosed according to generally accepted accounting
principles and practices consistently applied. All such financial statements
have been prepared in accordance with generally accepted accounting principles
and practices consistently applied on a consistent basis. Since September 30,
2000 the date of the financial statements which were most recently furnished by
the Borrower and the Surety to the Bank: (i) there has been no material adverse
change in the financial condition of the Borrower or the Surety or in their
operations, businesses or properties; (ii) neither the Borrower nor the Surety
has incurred, other than in the ordinary course of business or as disclosed in
this Agreement, any material indebtedness, liabilities, obligations or
commitments; and (iii) no event has occurred that could reasonably be expected
to interfere substantially with the normal business operations of the Borrower
or the Surety, except as disclosed in writing to the Bank heretofore or
concurrently herewith.
(i) There are no actions, suits, proceedings or tax claims now pending
or to the knowledge of the Borrower or the Surety, threatened which might have a
material adverse effect on the financial condition of the Borrower or the
Surety, or upon the ability of the Borrower or the Surety to perform their
obligations hereunder and under the Loan Documents and the Surety Documents,
except as set forth on Exhibit "A" attached hereto.
(j) All statements as to ownership of Borrower and the Surety are true,
correct and substantially complete.
(k) There is no charter, bylaw or capital stock provision of the
Borrower or the Surety and no provision of any material indenture or agreement
to which the Borrower or the Surety is a party or under which the Borrower or
the Surety or any of their properties are bound, nor is there any statute, rule
or regulation, or any judgment, decree of any court or agency binding upon the
Borrower or the Surety or any of their properties which would be contravened by
the execution and delivery of any of the Loan Documents or the Surety Documents,
or by the performance of any provision, condition, covenant or other term
thereof.
(l) Neither the Borrower nor the Surety is in default under any
material indenture, mortgage, deed of trust, promissory note, debenture,
agreement or other material instrument of whatever nature to which the Borrower
or the Surety is a party or which the Borrower or the Surety has assumed or by
which the Borrower or the Surety or any of the assets of the Borrower or the
Surety may be affected.
(m) All federal, state, local or other tax returns and reports of the
Borrower and the Surety required by law to be filed have been duly filed and all
federal, state, local or other governmental taxes, assessments, or other charges
or levies which are due and payable have been paid, and adequate provision has
been made for the payment of all such liabilities which have heretofore accrued
but are not yet due and payable.
(n) Upon execution and delivery of the Mortgage and the recording
thereof in the Recorder's Office in and for Lancaster County, Pennsylvania, the
Mortgage shall be a valid first lien covering the Premises.
(o) All required approvals, licenses and permits of all boards,
authorities, agencies and departments, governmental or otherwise, having
jurisdiction over the Premises, or the occupancy or use of the Premises, have
been obtained, are final, unappealed and unappealable, and remain in full force
and effect without restriction or modification.
(p) No part of the proceeds of the Loan will be used directly or
indirectly for the purpose of purchasing or carrying, any margin stock as such
term is defined by Regulation U of the Board of Governors of the Federal Reserve
System or to extend credit to any person or entity for the purpose of purchasing
or carrying any such margin stock or for any purpose which violates or is
inconsistent with Regulation X of such Board of Governors.
(q) Neither the financial information and statements referred to in
Section 6(h) above, nor any certificate, written statement, report or other
document furnished to the Bank by the Borrower or the Surety in connection
herewith or in connection with any transaction contemplated hereby, nor this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements contained therein or
herein not misleading in any material respect.
(r) The Borrower has duly complied with, and its business, operations,
assets, equipment, property, leaseholds, or other facilities are in compliance,
in all material respects, with, the provisions of all federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder applicable to it. The Borrower has been
issued and will maintain all required federal, state, and local permits,
licenses, certificates, and approvals relating to (1) air emissions; (2)
discharges to surface water or groundwater; (3) noise emissions; (4) solid or
liquid waste disposal; (5) the use, generation, storage, transportation, or
disposal of toxic or hazardous substances or wastes (intended hereby and
hereafter to include any and all such materials listed in any federal, state, or
local law, code or ordinance, and all rules and regulations promulgated
thereunder as hazardous or potentially hazardous); or (6) other environmental,
health, or safety matters. The Borrower has not received notice of and does not
know of facts which might constitute any violations of any federal, state, or
local environmental, health, or safety laws, codes or ordinances, and any rules
or regulations promulgated thereunder with respect to its business, operations,
assets, equipment, property, leaseholds, or other facilities. Except in
accordance with a valid governmental permit, license, certificate, or approval,
there has been no emission, spill, release, or discharge into or upon (1) the
air; (2) soils, or any improvements located thereon; (3) surface water or
groundwater; or (4) the sewer septic system or waste treatment, storage or
disposal system servicing any real property owned or occupied by Borrower,
including the Premises, of any toxic or hazardous substances or wastes at or
from such real property. Borrower has not received any written complaint, order,
directive, claim, citation, or notice by any governmental authority or any
person or entity with respect to (1) air emissions; (2) spills, releases, or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing any real property owned or occupied by Borrower, including the
Premises; (3) noise emissions; (4) solid or liquid waste disposal; (5) the use,
generation, storage, transportation, or disposal of toxic or hazardous
substances or waster; or (6) other environmental, health, or safety matters
affecting the Borrower or its business, operations, assets, equipment, property,
leaseholds, or other facilities. To Borrower's knowledge, the Borrower does not
have any indebtedness, obligation, or liability, absolute or contingent, matured
or not matured, with respect to the storage, treatment, cleanup, or disposal of
any solid wastes, hazardous wastes, or other toxic or hazardous substances
(including without limitation any such indebtedness, obligation, or liability
with respect to any current regulation, law, or statute regarding such storage,
treatment, cleanup or disposal).
7. Conditions Precedent. The obligation of Bank to make any advances
under this Agreement is conditioned upon delivery by Borrower on or before the
closing of the Loan of the following:
(a) All of the security and documents with respect thereto required of
the Borrower or the Surety by this Agreement.
(b) Such UCC forms or other financing documentation as Bank may require
to perfect Bank's security interests as provided for in this Agreement in a form
reasonably satisfactory to Bank and executed by Borrower.
(c) A policy of title insurance on the Premises in an amount not less
than $1,680,000.00 showing the Mortgage as being a first mortgage lien on the
Premises, free and clear of all other liens, charges and encumbrances, including
mechanic's liens, except those liens more fully described on Exhibit "B"
attached hereto, issued by a title insurance company doing business in
Pennsylvania and acceptable to Bank. The policy shall contain endorsements 100,
300, 710 and 8.1 and any other endorsements reasonably necessary to insure the
accuracy of the survey and no encroachments with regard to the Premises.
(d) Copies, certified by the Secretary of the Borrower, of the Articles
of Incorporation of Borrower with evidence of filing with the Delaware
Corporation Commission, the Bylaws of Borrower and resolutions of the Board of
Directors of the Borrower authorizing and approving the execution and delivery
of and performance under the Loan Documents and the borrowings provided for
herein.
(e) Copies, certified by the Secretary of the Surety, of the Articles
of Incorporation of the Surety with evidence of filing with the Delaware
Corporation Commission, the Bylaws of the Surety and resolutions of the Board of
Directors of the Surety authorizing and approving the execution and delivery of
and performance under the Surety Documents.
(f) The execution and delivery by the Presidents and Secretaries of the
Borrower and the Surety to the Bank of certificates of incumbency, in form and
substance satisfactory to the Bank.
(g) Payment to Bank at the closing of the loan service fees as required
in Section 9 of this Agreement.
(h) Evidence of compliance with all of the insurance provisions of this
Agreement contained in Section 10(c) hereof.
(i) A written opinion of Borrower's and Surety's counsel addressed to
Bank in form and substance reasonably satisfactory to Bank and its counsel.
(j) The representations and warranties contained in Section 6 hereof
shall be true and correct on and as of the date of the making of the Loan and no
default or event of default shall be in existence on the date of the making of
the Loan or shall occur as a result thereof.
(k) The Bank shall have received such secured transaction, judgment and
docket searches as it reasonably deems appropriate.
8. Loan Advances. On the date hereof Bank will advance the entire
amount of the Note to Borrower.
9. Fees. The Borrower shall pay to Bank on or before Closing for the
Term Loan a commitment fee of $16,800.00.
10. Affirmative Covenants. From the date hereof until payment in full
of all indebtedness of Borrower to Bank and the performance of all obligations
of Borrower to Bank, whether such indebtedness or obligations arise pursuant to
this Agreement, exist prior hereto, or are created after closing, Borrower and
the Surety will:
(a) Maintain proper books of account in accordance with generally
accepted accounting principles.
(b) Duly pay and discharge all taxes, assessments and governmental
charges upon the Borrower or the Surety or against any of the property of the
Borrower or the Surety, whether real or personal, tangible or intangible, prior
to the date upon which penalties are attached thereto, unless and to the extent
only that such taxes shall be contested in good faith and by the appropriate
legal proceedings, and the Borrower and the Surety shall maintain a reserve
account therefor in accordance with generally accepted accounting principles.
(c) Keep insured all of the Borrower's and the Surety's properties,
real and personal, now owned and hereafter acquired, and carry in coverage, form
and amount reasonably satisfactory to the Bank, hazard insurance (with fire,
extended, and vandalism and malicious mischief coverage and coverage against
such other hazards as are customarily insured against by companies in the same
or similar business), comprehensive general liability insurance, worker's
compensation insurance, comprehensive automobile liability insurance and
business interruption insurance and pay all premiums on the policies for such
insurance when and as they become due and do all other things necessary to
maintain such policies in full force and effect. The Borrower and the Surety
shall from time to time, upon request by the Bank promptly furnish or cause to
be furnished to the Bank evidence, in form and substance reasonably satisfactory
to the Bank, of the maintenance of all insurance required to be maintained by
this Section including, but not limited to, such originals or copies, as the
Bank may request, of policies, certificates of insurance, riders and
endorsements relating to such insurance and proof of premium payments. Each
policy of insurance maintained by the Borrower with respect to the Premises
shall:
(i) Contain a loss payee clause endorsement naming the Bank
and its successors and assigns as additional insureds thereunder, as
its interests may appear;
(ii) Provide that the insurance as to the interest of the Bank
shall not be invalidated by any act or neglect of the insured or owner
of the property described in such policy, nor by any foreclosure, or
other proceeding, nor by any change in the title of ownership of such
property, nor by the occupation of the premises where the property is
located for purposes more hazardous than are permitted by such policy;
(iii) Provide that the policy will not be reduced or canceled
at the request of the insured nor will such loss payee endorsement be
amended or deleted without thirty (30) days' prior written notice to
the Bank from the insurance carrier.
The Borrower and the Surety shall notify the Bank in writing immediately upon
the occurrence of any loss or losses in an aggregate amount in excess of
$150,000.00 required to be insured hereunder. The Borrower and the Surety hereby
agree that in the event they fail to pay any premium on any such insurance when
due and such failure continues for ten (10) days thereafter, the Bank may do so
(but shall not be obligated to do so), and if any premium is paid by the Bank,
the same shall be considered an advance under the Loan. Upon the occurrence of
an event of default as defined in Section 13 of this Agreement or the occurrence
of an event which but for the passage of time or giving of notice or both would
constitute an event of default, the Bank is hereby appointed the Borrower's and
the Surety's attorney-in-fact (without requiring the Bank to act as such) to
endorse any check which may be payable to the Borrower or the Surety or to
collect any returned or unearned premiums or the proceeds of such insurance, and
any amount so collected may be applied by the Bank towards the satisfaction of
any of the Loan, as determined by Bank. In the event of conflict between the
provisions hereof regarding insurance and those set forth in the Mortgage, the
provisions of the Mortgage shall apply.
(d) Maintain, preserve, and keep their properties in good repair,
working order and condition, ordinary wear and tear excepted, and make
reasonable repairs, replacements, additions, betterments, and improvements
thereto.
(e) Permit the Bank and its duly authorized agents to make, or cause to
be made, inspections and audits of any books, records and papers of the Borrower
and the Surety and to make extracts therefrom at all such reasonable times on
reasonable prior notice and as often as the Bank may reasonably require.
(f) Preserve and maintain Borrower's and Surety's corporate existence
and good standing in the State of Delaware and qualify Borrower and Surety and
keep Borrower and Surety qualified, as foreign corporations in each jurisdiction
in which such qualification is required.
(g) Comply with all statutes, rules and regulations, the noncompliance
of which would materially and adversely affect their businesses, assets or
condition, financial or otherwise.
(h) Furnish proof reasonably satisfactory to the Bank of the making of
payment or deposit of all federal, state or local withholding taxes required by
the Borrower and the Surety under applicable law, such proof to be furnished
within five (5) days of Bank's request therefor.
(i) Deliver to Bank within one hundred five (105) days after the close
of each fiscal year of Borrower an annual financial statement of Borrower which
shall be a consolidating statement within the Surety's unqualified audit
prepared by an independent certified public accountant reasonably acceptable to
the Bank.
(j) Deliver to Bank within fifty (50) days after the end of each fiscal
quarter of each fiscal year of Borrower, financial statements of Borrower
prepared by and certified by Borrower's chief financial officer.
(k) Deliver to Bank within one hundred five (105) days after the close
of each fiscal year of Surety, a copy of Surety's annual 10-K filing and audited
financial statement of Surety prepared by an independent certified accountant
reasonably acceptable to the Bank.
(l) Deliver to Bank within fifty (50) days after the end of each fiscal
quarter of each fiscal year of Surety, a copy of Surety's quarterly 10-Q filing
for such quarter and a financial statement of Surety prepared by and certified
by Surety's chief financial officer.
(m) Duly and punctually pay, or cause to be paid, the principal of and
the interest on all other indebtedness of Borrower and the Surety, when and as
the same shall become due and payable; faithfully observe, perform and
discharge, or cause to be faithfully observed, performed and discharged, all the
material covenants, conditions and obligations which are imposed on it by any
and all indentures and other agreements securing or evidencing such
indebtedness, or pursuant to which such indebtedness is issued; and not permit
to occur any act or omission which is a default thereunder.
(n) Promptly inform Bank of any material adverse change in financial
conditions and further notify the Bank if taxes in an aggregate amount in excess
of $25,000.00 paid to any governmental bodies are being contested or appealed.
(o) Execute and deliver to Bank all instruments and do such other acts
and things as Bank may reasonably request which may be necessary or desirable to
effect the purposes of this Agreement.
(p) Transfer, establish and maintain throughout the life of this
Agreement and until all indebtedness and obligations of Borrower hereunder are
paid and performed, such of Borrower's bank accounts or other funds on deposit
with financial institutions with Bank so as to constitute Bank as the primary
depository for Borrower.
(q) Indemnify and save harmless Bank, its agents, servants and
employees from any and all loss or damage of whatsoever kind and from any suits,
claims, demands, or liability of any kind, including Bank's reasonable legal
fees and expenses, on account of any matter or thing arising out of this
Agreement or in connection herewith, or on account of any act or omission to act
by Bank in connection with this Agreement, and including liability caused by or
resulting directly from the negligence of Bank, its agents, servants, employees
or any other person, firm or corporation, excepting only their willful
misconduct and gross negligence. Such obligation shall survive payment of the
Loans made hereunder.
(r) Notify Bank promptly after the commencement thereof, of all
actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
against the Borrower; provided, however, that if such action, suit or proceeding
involves a monetary claim and the total amount of such claim is not in excess of
$25,000.00, notice to Bank shall not be required.
(s) Provide to Bank promptly after the furnishing thereof, copies of
any statement or report furnished to any other party pursuant to the terms of
any indenture, loan, credit, or similar agreement and not otherwise required to
be furnished to the Bank pursuant to any other clause of this Section 10.
(t) Be and remain in compliance with the provisions of all federal,
state, and local environmental, health, and safety laws, codes and ordinances,
and all rules and regulations issued thereunder; notify the Bank immediately of
any notice of hazardous discharge or environmental complaint received from any
governmental agency or any other party; notify the Bank immediately of any
hazardous discharge from or affecting its premises; immediately contain and
remove the same, in compliance with all applicable laws; promptly pay any fine
or penalty assessed in connection therewith; permit the Bank to inspect the
premises, to conduct tests thereon, and to inspect all books, correspondence,
and records pertaining thereto.
11. Negative Covenants. The Borrower and the Surety covenant that so
long as any advances made pursuant to this Agreement, any interest thereon or
any other sums owing shall remain unpaid, the Borrower shall not, without the
Bank's written consent:
(a) Create, incur, assume or suffer to exist any mortgage pledge, lien,
charge, security interest or other encumbrance upon the Premises except (1) such
liens as are maintained in favor of Bank, and (2) the liens and encumbrances
more fully described on Exhibit "B" attached hereto.
(b) Wind up, liquidate or dissolve itself, reorganize, merge or
consolidate with or into, or convey, sell, assign, transfer, lease, or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to any
person or entity.
(c) Purchase, redeem, retire, or otherwise acquire for value any of its
capital stock now or hereafter outstanding; alter or amend its capital structure
or allow the transfer of ownership of any of its shares of stock.
(d) Make any loan or advance to any person or entity (other than the
lending or distribution to the Surety of the proceeds of this Loan).
(e) Assume, guarantee, endorse, or otherwise be or become directly or
contingently responsible or liable (including, but not limited to, an agreement
to purchase any obligation, stock, assets, goods, or services, or to supply or
advance any funds, assets, goods, or services, or an agreement to maintain or
cause any person or entity to maintain a minimum working capital or net worth,
or otherwise to assure the creditors of any such person or entity against loss)
for obligations of any such person or entity, except guaranties (i) by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and (ii) pursuant to the Amended
and Restated Subsidiary Guaranty and Security Agreement dated as of August 31,
2000 by and among Borrower and certain other guarantors and Fleet National Bank,
as agent.
(f) Permit or suffer the Premises to be attached, garnished or levied
upon under any legal process of any nature whatsoever.
12. Financial Covenants. So long as any advance made pursuant to this
Agreement, any interest thereon or any other sums owing shall remain unpaid or
the Bank shall have any commitment to lend under this Agreement:
(a) The Borrower shall maintain at all times a minimum Cash Flow
Coverage Ratio of 1.25 to 1.00. The Cash Flow Coverage Ratio shall be defined as
net profit, plus noncash charges, plus interest expense, less distributions,
less any increases in receivables due from the Surety and its affiliates divided
by the current portion of long term debt, plus interest expense.
(b) The Borrower shall maintain at all times a minimum Tangible Net
Worth of $4,000,000. Tangible New Worth shall mean net worth less intangibles,
less moneys due from the Surety and its affiliates. If the Borrower purchases or
otherwise acquires any capital stock, intangible assets, obligations or other
securities of, makes any capital contribution to, or otherwise invests in or
acquires any interest in any person or entity, or participates as a partner or
joint venturer with any other person or entity, the value of such stock, assets,
obligations, securities, investment, partnership interest or other interest
shall be considered an intangible asset for purposes of the determination of
Tangible Net Worth.
(c) Receivables due from the Surety and its affiliates to the Borrower
may not increase in any fiscal year of Borrower by more than 75% of Borrower's
net profits for such year and may not increase by more than 60% of Borrower's
net profits for any three consecutive fiscal years of Borrower. For purposes of
this determination, the receivable owing from the Surety to the Borrower as a
result of this transaction shall be excluded.
13. Events of Default. The occurrence of any of the following events shall
constitute an Event of Default hereunder:
(a) If Borrower or the Surety shall fail to pay within ten (10) days
after it is due, any amount due hereunder or under any of the Loan Documents,
whether existing at the time of the execution of this Agreement, created
simultaneous herewith, or created hereafter.
(b) If Borrower or the Surety shall fail to observe or perform any
term, covenant, agreement or provision required to be observed or performed by
it under this Agreement or in any of the Loan Documents, and such failure
continues for thirty (30) days after notice thereof is provided to Borrower by
Bank.
(c) If any representation, warranty, certification or statement of fact
made or furnished to Bank at any time by the Borrower or the Surety is false or
misleading in any material respect when made.
(d) If there shall occur the making or filing of any lien (other than
liens permitted by this Agreement), tax lien, levy or execution on, or seizure,
attachment or garnishment of any of the collateral for the Loan which shall not
be removed within thirty (30) days of the date of notice of such lien.
(e) If a judgment, decree, or order for the payment of money in excess
of $150,000.00 shall be rendered against the Borrower or the Surety and such
judgment, decree, or order shall continue unsatisfied and in effect for a period
of thirty (30) consecutive days without being vacated, discharged, satisfied, or
stayed or fully bonded pending appeal.
(f) If Borrower or the Surety shall admit in writing an inability to
pay its debts; or shall have made a general assignment for the benefit of
creditors; or shall have been adjudicated bankrupt; or shall have filed a
voluntary petition in bankruptcy or for reorganization or to effect a plan or
other arrangement with creditors; or shall be the subject of an involuntary
petition in bankruptcy or for reorganization which is not dismissed within sixty
(60) days; or shall have filed an answer to a creditor's petition or other
petition filed against it (admitting the material allegations thereof) for an
adjudication in bankruptcy or for an arrangement or reorganization; or shall
have applied for or permitted the appointment of a receiver or trustee or
custodian, or a receiver, trustee or custodian shall have been applied for, for
any of its property or assets (otherwise than upon application or consent of the
Bank) and such receiver, trustee or custodian so applied for shall not have been
discharged within sixty (60) days after the date of his appointment; or if an
order shall be entered and shall not be dismissed or stayed within the time
after its entry by which it becomes final and nonappealable, approving any
petition for a reorganization of Borrower or the Surety.
(g) If the Surety Agreement shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void.
(h) If the usual business of Borrower or the Surety should be
terminated.
(i) If the Borrower shall (i) fail to pay any indebtedness for any
borrowed money (other than borrowings from Bank) or any interest or premium
thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise), or (ii) fail to perform or observe any
term, covenant, or condition on its part to be performed or observed under any
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if as a result of such failure to perform, the holder of
such indebtedness declares Borrower in default or accelerates such indebtedness
provided, however, that this Section 13(i) shall not apply to any indebtedness
having a principal balance due of less than $25,000.00.
(j) If the Surety or any subsidiaries of the Surety shall (i) fail to
pay when due any payments of principal or interest under the syndicated bank
debt credit facility with Fleet Bank as the lead lender dated June 15, 1998 or
any renewals or replacements thereof (the "Bank Debt"), or (ii) fail to perform
or observe any term, covenant, or condition on its part to be performed or
observed under the Bank Debt, if as a result of such failure the Bank Debt is
declared in default or accelerated.
14. Remedies. If an Event of Default shall have occurred, at the election of
Bank:
(a) The obligation of Bank to make loans or otherwise extend credit
hereunder shall immediately terminate.
(b) All amounts due hereunder to Bank shall be forthwith due and
payable with interest accrued thereon at the rate specified under the Note to
the date of default and thereafter at a rate of 2% above the applicable interest
rate specified in the Note, or if such rate violates any law, at the highest
rate then allowable, without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived, anything contained herein or in any
paper delivered by Borrower in connection with any of the foregoing to the
contrary notwithstanding. The Borrower further waives and releases all
procedural errors, defects and imperfections in any proceedings instituted by
Bank under the terms of any of the Loan Documents.
(c) Borrower shall, at Bank's request, cause the collateral to be
assembled and made available to Bank at a place or places reasonably convenient
to both of them.
(d) Borrower shall permit Bank to examine its books, accounts, records,
ledgers, and assets of every kind and description, at any reasonable time upon
oral or written request of Bank by Bank's authorized attorneys, accountants and
representatives.
(e) In addition to and not in limitation of any right which the Bank
may have under applicable law or otherwise, upon the occurrence of an Event of
Default, the Borrower hereby grants and confirms to Bank a right to set off and
a lien upon and security interest in all deposit accounts of the Borrower now or
at any time in the Bank's possession in any capacity whatsoever as security for
all liabilities of the Borrower, whether created hereunder or under any prior or
subsequent agreement or document.
(f) Bank may exercise any and all rights and remedies which it may have
under any statute, law, or rule, and all such rights and remedies along with the
remedies specifically set forth in this Agreement or any other agreement of
Borrower and Bank shall be cumulative and enforceable alternatively,
successively or concurrently.
(g) Bank shall not be required to marshal any present or future
security or collateral for, or guaranties of the Note or to resort to any such
security, collateral or guaranties in any particular order. Borrower waives, to
the fullest extent it lawfully can, any right it might have to require Bank to
pursue any particular remedy before proceeding against it, and any right to the
benefit of, or to direct the application of the proceeds of, any security or
collateral until all indebtedness of Borrower to Bank has been paid in full.
15. Miscellaneous.
(a) The Borrower shall promptly pay, or reimburse the Bank for, all
reasonable costs and expenses (including, without limitation, all reasonable
attorneys' fees and expenses, court costs, and costs of litigation) incurred by
the Bank in connection with the preparation of the Loan Documents, the closing
of the Loan, the collection or enforcement of the Note or other obligations, the
protection, preservation, foreclosure, liquidation or other use of all or any of
the Bank's collateral security therefor, and the exercise of all or any of the
Bank's rights and remedies under all or any of the Loan Documents.
(b) No amendment, modification, termination, or waiver of any provision
of any of the Loan Documents to which the Borrower is a party, nor consent to
any departure by the Borrower from any of the Loan Documents to which it is a
party, shall in any event be effective unless the same shall be in writing and
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
(c) No failure or delay on the part of the Bank in exercising any
right, power, or remedy hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right, power, or remedy preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy hereunder. The rights and remedies provided herein are cumulative, and
are not exclusive of any other rights, powers, privileges or remedies, now or
hereafter existing, at law or in equity or otherwise.
(d) All representations, warranties, covenants and agreements of the
Borrower and the Surety contained herein or made in writing in any documents
submitted to the Bank shall survive the execution and delivery of this
Agreement, the making of the Loans and the issuance of the Note.
(e) All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles consistent
with those applied in the preparation of the financial statements referred to in
Section 6(h) and all financial data submitted pursuant to this Agreement shall
be prepared in accordance with such principles.
(f) All notices, statements, requests and demands given to or made upon
any party hereto in accordance with the provisions of this Agreement shall be in
writing and shall be deemed to have been given or made when deposited in the
mail, postage prepaid, addressed to such party at the address written
hereinafter, or in accordance with the latest unrevoked written direction from
such party to any other party hereto:
"BANK"
ALLFIRST BANK
1703 Oregon Pike
Lancaster, PA 17601
Copies to:
Dan A. Blakinger, Esquire
Blakinger, Byler & Thomas, P.C.
28 Penn Square
Lancaster, PA 17603
"BORROWER"
MXL INDUSTRIES, INC.
1764 Rohrerstown Road
Lancaster, PA 17601
Copies to:
Andrea D. Kantor, Esquire
9 West 57th Street
Suite 4170
New York, NY 10019
"SURETY"
GP STRATEGIES
9 West 57th Street
Suite 4170
New York, NY 10019
Copies to:
Andrea D. Kantor, Esquire
9 West 57th Street
Suite 4170
New York, NY 10019
(g) This Agreement may be executed in as many counterparts as may be
deemed necessary and convenient, each of which when so executed shall be deemed
an original, but all such counterparts shall constitute but one and the same
document.
(h) The invalidity of any one or more sections of this Agreement, or of
any part of any thereof, shall not affect the remaining portions of this
Agreement, all of which are inserted conditionally on their being held valid in
law. This Agreement and the Note shall be deemed to be contracts under the laws
of the Commonwealth of Pennsylvania, and for all purposes shall be construed in
accordance with the laws of said Commonwealth.
(i) The Loan Documents and the Surety Documents contain the entire
agreement between the parties relating to the subject matter hereof and
supersede all oral statements and prior writings with respect thereto.
(j) This Agreement shall be binding upon and inure to the benefit of
the Bank, the Borrower and the Surety and their respective successors and
assigns, except that neither the Borrower nor the Surety may assign or transfer
their rights or obligations hereunder. Borrower and the Surety agree that Bank
may assign its interests hereunder or may grant participations in its interests
hereunder.
(k) THE BANK, THE BORROWER AND THE SURETY HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT
LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
LOAN DOCUMENTS. NO OFFICER OF THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR
MODIFY THIS PROVISION.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this instrument to be executed as of the day and year
first above written.
"BANK"
ALLFIRST BANK
By:
Eric A. Rebert, Senior Vice President
"BORROWER"
MXL INDUSTRIES, INC.
By:
Scott N. Greenberg, Vice President
ATTEST:
Andrea D. Kantor, Vice President
(CORP SEAL)
The undersigned, the Surety in the foregoing Loan Agreement, consents
to the Loan Agreement and the undersigned agrees to comply with all provisions
of the Loan Agreement applicable to the Surety.
"SURETY"
GP STRATEGIES CORPORATION
By:
Scott N. Greenberg, Vice President
ATTEST:
Andrea D. Kantor, Vice President
STATE OF NEW YORK )
) SS:
COUNTY OF )
On this 8th day of March, 2001, before me, the undersigned officer,
personally appeared SCOTT N. GREENBERG, who acknowledged himself to be the Vice
President of MXL INDUSTRIES, INC., and that he as such officer, being authorized
to do so, executed the foregoing instrument for the purposes therein contained
by signing the name of said corporation by himself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
Notary Public
STATE OF NEW YORK )
) SS:
COUNTY OF )
On this 8th day of March, 2001, before me, the undersigned officer,
personally appeared SCOTT N. GREENBERG, who acknowledged himself to be the
Executive Vice President of GP STRATEGIES CORPORATION, and that he as such
officer, being authorized to do so, executed the foregoing instrument for the
purposes therein contained by signing the name of said corporation by himself as
such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
Notary Public
EXHIBIT "A"
ACTIONS, SUITS, PROCEEDINGS AND TAX CLAIMS
NONE
EXHIBIT "B"
EXISTING MORTGAGES, LIENS AND SECURITY INTERESTS