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EXHIBIT 10.20
[LOGO] Merrill Lynch No. 9406340101
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TERM WCMA(R) LOAN AND SECURITY AGREEMENT
This Term WCMA Loan and Security Agreement ("Loan Agreement") is entered into
as of June 6, 1994, between ALANEX CORPORATION, a corporation organized and
existing under the laws of the State of California having its principal office
at 3550 General Atomics Court, San Diego, CA 92121 ("Customer"), and MERRILL
LYNCH BUSINESS FINANCIAL SERVICES INC., a corporation organized and existing
under the laws of the State of Delaware having its principal office at 33 West
Monroe Street, Chicago, IL 60603 ("MLBFS").
In accordance with that certain Working Capital Management(R) Account Agreement
No. 232-07A39 ("WCMA Agreement") between Customer and MLBFS' affiliate, Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), Customer has subscribed
to the WCMA Program described in the WCMA Agreement. The WCMA Agreement is by
this reference incorporated as a part hereof. In conjunction therewith,
Customer has requested that MLBFS make the Term WCMA Loan hereinafter described
(the "Loan"); and, subject to the terms and conditions herein set forth, MLBFS
has agreed to make the Loan to Customer.
The Loan combines the equivalent of 5 successive one-year term loans, each
equal to that portion of the Loan that will be fully amortized in one year,
with a line of credit under the WCMA Program ("WCMA Line of Credit") equal to
that portion of the Loan that will not be amortized in the ensuing year.
Subject to the terms hereof, each year after the initial funding there will be
an additional funding on account of the term portion of the Loan, with the
proceeds deposited into Customer's WCMA Account concurrently with a
corresponding reduction in the maximum WCMA Line of Credit.
This structure provides Customer with substantially the same funding and
amortization as a conventional term loan. However, unlike most conventional
term loans, it permits both a prepayment in whole or in part at any time
without penalty, and subject to the terms and conditions herein set forth, a
re-borrowing on a revolving basis of any such amounts prepaid on account of the
WCMA Line of Credit portion of the Loan. The structure therefore enables
Customer at its option to use its free cash balances to reduce term loan
interest expense without impairing working capital.
Accordingly, and in consideration of the premises and of the mutual covenants
of the parties hereto, Customer and MLBFS hereby agree as follows:
ARTICLE I. DEFINITIONS
1.1 SPECIFIC TERMS. In addition to terms defined elsewhere in this Loan
Agreement, when used herein the following terms shall have the following
meanings:
(a) "Additional Agreements" shall mean all agreements, instruments, documents
and opinions other than this Loan Agreement which are contemplated hereby or
otherwise reasonably required by MLBFS, and relate to this Loan Agreement or
evidence the creation, guaranty or collaterization of the Obligations or the
granting or perfection of security interests upon the Collateral or any other
collateral for the Obligations, and shall include, without limitation, the Term
WCMA Note.
(b) "Business Day" shall mean any day other than a Saturday, Sunday, federal
holiday or other day on which the New York Stock Exchange is regularly closed.
(c) "Closing Date" shall mean the date upon which all conditions precedent to
MLBFS' obligation to make the Loan shall have been met to the satisfaction of
MLBFS.
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(d) "Collateral" shall mean all Equipment of Customer, whether now owned or
hereafter acquired, and wherever located, and all accessories, accessions and
parts thereof, books and records (including computer records) in any way related
thereto and all proceeds thereof; together with the additional collateral
described in Section 4.7 (b) hereof.
(e) "Commitment Expiration Date" shall mean July 6, 1994.
(f) "Commitment Fee" shall mean a fee of $6,000.00 due to MLBFS in connection
with this Loan Agreement.
(g) "General Funding Conditions" shall mean each of the following conditions
to any loan or advance by MLBFS hereunder: (i) no Event of Default, or event
which with the giving of notice, passage of time, or both, would constitute an
Event of Default, shall have occurred and be continuing or would result from
the making of any WCMA Loan hereunder by MLBFS; (ii) there shall not have
occurred any material adverse change in the business or financial condition of
Customer or any Guarantor; (iii) all representations and warranties of Customer
or any Guarantor herein or in any Additional Agreements shall then be true and
correct in all material respects; (iv) no other event shall then have occurred
and be continuing which shall have reasonably caused MLBFS to in good faith
believe that the prospect of payment or performance by Customer or any
Guarantor has been materially impaired; (v) MLBFS shall have received this Loan
Agreement and all Additional Agreements, duly executed and filed or recorded
where applicable, all of which shall be in form and substance reasonably
satisfactory to MLBFS; (vi) the Commitment Fee shall have been paid in full;
(vii) MLBFS shall have received evidence reasonably satisfactory to it as to
the ownership of the Collateral and the perfection and priority of MLBFS' liens
and security interests thereon, as well as the ownership of and the perfection
and priority of MLBFS' liens and security interests on any other collateral for
the Obligations furnished pursuant to any of the Additional Agreements; (viii)
MLBFS shall have received evidence reasonably satisfactory to it of the
insurance required hereby or by any of the Additional Agreements; and (ix) any
additional conditions specified in an Approval Letter or Commitment Letter
executed by MLBFS with respect to the transactions contemplated hereby shall
have been met to the reasonable satisfaction of MLBFS.
(h) "Guarantor" shall mean a person or entity who has either guaranteed or
provided collateral for any or all of the Obligations; and "Business Guarantor"
shall mean any such Guarantor that is a corporation, partnership,
proprietorship, limited liability company or other entity regularly engaged in
a business activity.
(i) "Interest Rate" shall mean a fluctuating per annum rate equal to the sum
of (i) 2.95%, and (ii) the interest rate from time to time published in the
"Money Rates" section of The Wall Street Journal for 30-day high-grade
unsecured notes sold through dealers by major corporations (the "30-Day
Commercial Paper Rate"). The Interest Rate will change as of the date of
publication in The Wall Street Journal of a 30-Day Commercial Paper Rate that
is different from that published on the preceding Business Day. In the event
that The Wall Street Journal shall, for any reason, fail or cease to publish
the 30-Commercial Paper Rate, MLBFS will choose a reasonably comparable index
or source to use as the basis for the Interest Rate.
(j) "Loan Amount" shall mean an amount equal to the lesser of (i) 100% of
the aggregate cost to Customer of satisfying the Loan Purpose, (ii) the
aggregate amount requested by Customer to be advanced by MLBFS on account of
the Loan Purpose on or prior to the Closing Date, or (iii) $1,200,000.00.
(k) "Loan Purpose" shall mean the purpose for which the proceeds of the Loan
will be used; to wit: to finance the purchase of lab and research equipment.
(l) "Location of Collateral" shall mean the address of Customer set forth at
the beginning of this Loan Agreement, together with any other address or
addresses set forth on an exhibit hereto as being a Location of Collateral.
(m) "Maximum WCMA Line of Credit" shall mean the maximum aggregate line of
credit which MLBFS will extend to Customer subject to the terms and conditions
hereof, as the same shall be reduced from time to time in accordance with the
terms hereof.
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(n) "Obligations" shall mean all liabilities, indebtedness and other obligations
of Customer to MLBFS, howsoever created, arising or evidenced, whether now
existing or hereafter arising, whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary or joint or several,
and, without limiting the foregoing, include all present and future
liabilities, indebtedness and obligations of Customer under this Loan Agreement
and the Term WCMA Note.
(o) "Permitted Liens" shall mean (i) liens for current taxes not delinquent
and, if MLBFS' rights to and interest in the Collateral are not materially and
adversely affected thereby, liens for taxes being contested in good faith by
appropriate proceedings; (ii) liens arising in the ordinary course of business
for sums not due; (iii) liens in favor of MLBFS; (iv) liens which will be
discharged with any proceeds of the Term WCMA Loan; and (v) liens described on
any exhibit hereto or otherwise expressly permitted in writing by MLBFS.
(p) "Term WCMA Note" shall mean and refer to the Term WCMA Note executed by
Customer and dated as of the date hereof which incorporates both a WCMA Note
evidencing amounts owing on account of the WCMA Line of Credit portion of the
Loan, and a Term Note evidencing amounts owing on account of the term portion
of the Loan.
(q) "WCMA Account" shall mean and refer to the Working Capital Management
Account of Customer with MLPF&S identified as WCMA Account No. 232-07A39.
(r) "WCMA Loan" shall mean each advance made by MLBFS pursuant to the WCMA Line
of Credit.
(s) "WCMA Loan Balance" shall mean an amount equal to the aggregate unpaid
principal balance of all WCMA Loans.
1.2 OTHER TERMS. Except as otherwise defined herein: (i) all terms used in
this Loan Agreement which are defined in the Uniform Commercial Code of
Illinois ("UCC") shall have the meanings set forth in the UCC, and (ii)
capitalized terms used herein which are defined in the WCMA Agreement shall
have the meaning set forth in the WCMA Agreement.
ARTICLE II. THE LOAN
2.1 COMMITMENT. Subject to the terms and conditions hereof, MLBFS hereby
agrees to make the Loan to Customer, and Customer hereby agrees to borrow the
Loan from MLBFS. Unless otherwise hereafter agreed by MLBFS, the entire
proceeds of the Loan will be disbursed either directly to the applicable third
party or parties on account of the Loan Purpose or to reimburse Customer for
amounts directly expended by it; all as directed by Customer in a Closing
Certificate to be executed and delivered to MLBFS prior to the date of funding.
2.2 OPERATION OF LOAN.
(a) The Loan will be evidenced by and shall be repayable in accordance with the
terms of the Term WCMA Note and this Loan Agreement. The Term WCMA Note
combines two promissory notes, one evidencing the term portion of the Loan (the
"Term Note") and the other evidencing the WCMA Line of Credit portion of the
Loan (the "WCMA Note"). The balance owing by Customer on account of the Loan
at any time shall be an amount equal to the sum of the then outstanding
balances under the WCMA Note and the Term Note included in the Term WCMA Note.
The Term WCMA Note is hereby incorporated as a part hereof.
(b) The principal balance owing under the Term Note at any time shall be an
amount equal to the difference between (i) the Loan Amount less the aggregate
principal paid by Customer on account of the Term Note; and (ii) the WCMA Line
of Credit. So long as there shall be any moneys owing by Customer to MLBFS
hereunder or there shall be a WCMA Line of Credit, no reduction in the unpaid
principal balance of the Term Note to zero shall be deemed a payment of the
Term Note in full or an extinguishment of any of the obligations of Customer
thereunder or hereunder.
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(c) Subject to the terms hereof, the Term Note will be funded by MLBFS in 5
annual installments, each equal to 1/5th of the Loan Amount. The first 1/5th
installment funded by MLBFS will be funded on the Closing Date and applied on
account of the Loan Purpose, as aforesaid. Subsequent installments will be
funded on a date chosen by MLBFS in its sole discretion which will be on or
within two weeks before or after each subsequent anniversary of the last day of
the calendar month in which the Closing Date occurs (each, a "Subsequent
Funding Date"). Each Term Note funding after the first shall be deposited into
Customer's WCMA Account.
(d) On the Closing Date, MLBFS will activate and make available as an integral
part of the Loan a WCMA Line of Credit equal to 4/5ths of the Loan Amount, all
of which will be immediately disbursed on account of the Loan Purpose as part
of the Loan in accordance with the directions of Customer set forth in the
Closing Certificate, as aforesaid.
(e) On the first Subsequent Funding Date, concurrently with MLBFS' funding of
the second installment of the debt evidenced by the Term Note into the WCMA
Account, the WCMA Line of Credit will be reduced to an amount equal to 3/5ths
of the Loan Amount. On the second Subsequent Funding Date, the WCMA Line of
Credit will be reduced to an amount equal to 2/5ths of the Loan Amount; and on
the third Subsequent Funding Date the WCMA Line of Credit will be reduced to an
amount equal to 1/5th of the Loan Amount.
(f) On the fourth Subsequent Funding Date (the "WCMA Maturity Date"), the WCMA
Line of Credit will be terminated and the WCMA Account, at the option of
Customer, will either be converted to a WCMA Cash Account (subject to any
requirements of MLPF&S) or terminated.
2.3 CONDITIONS OF MLBFS' OBLIGATION. The Closing Date and MLBFS' obligation
to make the Loan on the Closing Date are subject to the prior fulfillment of
each of the following conditions: (a) MLBFS shall have received a written
request from Customer that the Loan be funded in accordance with the terms
hereof, together with a written direction from Customer as to the method of
payment and payee(s) of the proceeds of the Loan, which request and direction
shall have been received by MLBFS not less than two Business Days prior to any
requested funding date; (b) MLBFS shall have received a copy of invoices, bills
of sale, payoff letters or other applicable evidence reasonably satisfactory to
it that the proceeds of the Term Loan will satisfy the Loan Purpose; (c) the
Commitment Fee shall have been paid in full; (d) the Commitment Expiration Date
shall not then have occurred; and (e) each of the General Funding Conditions
shall have been met or satisfied to the reasonable satisfaction of MLBFS.
2.4 CONDITIONS OF SUBSEQUENT FUNDINGS; TERMINATION.
(a) The obligation of MLBFS to fund installments of the term portion of the
Loan on any Subsequent Funding Date shall be subject to each of the conditions
specified in Section 2.3 hereof being met at such date, and the further
condition that all payments due under the Term Note on or prior to any
Subsequent Funding Date shall have been paid in full; provided, however, that
notwithstanding the failure of any such conditions to have been met, MLBFS may
in its sole discretion fund such installment and/or any other installments, and
no such funding shall constitute a waiver by MLBFS of any of its rights
hereunder or under any of the Additional Agreements. Without limiting the
foregoing, it is understood that no funding by MLBFS of any sum hereunder while
an Event of Default shall have occurred and is continuing shall under any
circumstances be deemed a waiver by MLBFS of such Event of Default, or a waiver
of any of MLBFS' rights hereunder.
(b) Notwithstanding anything herein or in any of the Additional Agreements to
the contrary, if at any time after the Closing Date there shall not be a
balance outstanding under either the WCMA Note or Term Note included in the
Term WCMA Note, then either Customer or MLBFS may at its respective option
terminate the Loan. Following any such termination, MLBFS shall be relieved of
all further obligations with respect to the Loan and WCMA Line of Credit.
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2.5 COMMITMENT FEE. In consideration of the agreement by MLBFS to extend the
Loan to Customer in accordance with and subject to the terms hereof, Customer
has paid or shall, on or before the Closing Date pay, the Commitment Fee to
MLBFS. The Commitment Fee shall not be refundable under any circumstances.
2.6 ACKNOWLEDGEMENT OF CUSTOMER. Customer acknowledges, covenants and agrees
that:
(a) PAYMENT OF WCMA INTEREST; ADDITIONAL DEPOSITS. Under the terms of this Loan
Agreement, interest accrued on amounts outstanding on the Term WCMA Line of
Credit each month will, subject to the terms hereof, ordinarily be paid from the
proceeds of a borrowing of an additional sum under the Term WCMA Line of Credit.
Since substantially the entire Term WCMA Line of Credit may be drawn on the
Closing Date, CUSTOMER AGREES THAT IT WILL, WITHOUT DEMAND, INVOICING OR THE
REQUEST OF MLBFS, FROM TIME TO TIME MAKE SUFFICIENT DEPOSITS INTO THE WCMA
ACCOUNT IN ORDER TO ASSURE THAT THE MAXIMUM WCMA LINE OF CREDIT IS NOT
EXCEEDED. Installments of principal and interest under the Term Note shall be
paid directly to MLBFS in accordance with the terms of the Term Note.
(b) ADDITIONAL INTEREST CHARGES. SUBJECT TO THE TERMS HEREOF, ON EACH
SUBSEQUENT FUNDING DATE MLBFS WILL DEPOSIT THE AMOUNT FUNDED INTO THE WCMA
ACCOUNT. DUE TO POSSIBLE DELAYS IN POSTING AS WELL AS CERTAIN DELAYS IN
RECOGNITION OF DEPOSITS INHERENT IN THE WCMA PROGRAM, CUSTOMER WILL NOT RECEIVE
CREDIT FOR THE AMOUNT DEPOSITED FOR UP TO SEVERAL DAYS THEREAFTER, RESULTING IN
AN INTEREST CHARGE FOR THAT PERIOD OF TIME ACCRUING AND CHARGED IN THE WCMA
ACCOUNT. ON THE OTHER HAND, BECAUSE MLBFS BORROWS ALL OR SUBSTANTIALLY ALL OF
THE FUNDS THAT IT LENDS ON THE DATE OF FUNDING, IT MUST CHARGE INTEREST ON THE
AMOUNT FUNDED ON EACH SUBSEQUENT FUNDING DATE FROM THE DATE OF ITS DEPOSIT INTO
THE WCMA ACCOUNT, WHETHER OR NOT SUCH DEPOSIT IS IMMEDIATELY RECOGNIZED. THE
TIMING DIFFERENCES BETWEEN THE DATE OF DEPOSIT AND DATE OF RECOGNITION OF THE
DEPOSIT IN THE WCMA ACCOUNT WILL THEREFORE RESULT IN EXTRA INTEREST CHARGES TO
CUSTOMER, WHICH ACKNOWLEDGES ARE AN ADDITIONAL COST OF THE LOAN AND HEREBY
UNCONDITIONALLY AGREES TO PAY.
ARTICLE III. THE WCMA LINE OF CREDIT
3.1 WCMA NOTE.
All amount owing under the WCMA Line of Credit shall be deemed owing under and
evidenced by the WCMA Note included in the Term WCMA Note.
3.2 WCMA LOANS.
(a) LOAN COMMITMENT AND REQUESTS. Subject to the terms and conditions hereof:
(i) on the Closing Date, MLBFS will make a WCMA Loan to Customer in an amount
equal to the Maximum WCMA Line of Credit, the entire proceeds of which will be
disbursed on account of the Loan Purpose, as aforesaid; and (ii) during the
period from and after the Closing Date to the WCMA Maturity Date: (x) Customer
may repay said WCMA Loan and any other WCMA Loans in whole or in part at any
time without premium or penalty, and request a re-borrowing of amounts repaid
on a revolving basis, and (y) MLBFS will make such additional WCMA Loans as
Customer may from time to time request in accordance with the terms hereof,
provided that without limiting any of the other conditions hereof, the making
of any such WCMA Loan shall not cause the WCMA Loan Balance to exceed the
Maximum WCMA Line of Credit. Customer may request WCMA Loans by use of WCMA
Checks, FTS, Visa(R) charges, wire transfers, or such other means of access to
the WCMA Line of Credit as may be permitted by MLBFS from time to time; it
being understood that so long as the WCMA Line of Credit shall be in effect,
any change or debit to the WCMA Account which but for the WCMA Line of Credit
would under the terms of the WCMA Agreement result in an overdraft, shall be
deemed a request by Customer for a WCMA Loan.
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(b) CONDITIONS OF WCMA LOANS. Notwithstanding the foregoing, MLBFS shall not
be obligated to make any WCMA Loan, and may without notice refuse to honor any
such request by Customer, if at the time of Customer's request: (i) the making
of such WCMA Loan would cause the Maximum WCMA Line of Credit to be exceeded;
or (ii) the Maturity Date shall have occurred, or the WCMA Line of Credit
shall have otherwise been terminated in accordance with the terms hereof; or
(iii) an event shall have occurred and is continuing which shall have caused
any of the General Funding Conditions to not then be met or satisfied to the
reasonable satisfaction of MLBFS. The making by MLBFS of any WCMA Loan at a
time when any one or more of said conditions shall not have been met shall not
in any event be construed as a waiver of said condition or conditions or of any
Event of Default, and shall not prevent MLBFS at any time thereafter while any
condition shall not have been met from refusing to honor any request by
Customer for a WCMA Loan.
(c) FORCE MAJEURE. MLBFS shall not be responsible, and shall have no liability
to Customer or any other party, for any delay or failure of MLBFS to honor any
request of Customer for a WCMA Loan or any other act or omission of MLBFS,
MLPF&S or any of their affilliates due to or resulting from any system failure,
error or delay in posting or other clerical error, loss of power, fire, Act of
God or other cause beyond the reasonable control of MLBFS, MLPF&S or any of
their affiliates unless directly arising out of the willful wrongful act or
active gross negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential damages arising from any
act or omission by MLBFS, MLPF&S or any of their affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.
(d) INTEREST. The WCMA Loan Balance shall bear interest at the Interest Rate.
Interest shall be computed for the actual number of days elapsed on the basis of
a year consisting of 360 days. Notwithstanding any other provision in this Loan
Agreement or any Additional Agreements to the contrary, in no event shall the
Interest Rate exceed the highest rate permissible under any applicable law. In
the event that any court having jurisdiction determines that MLBFS has received
excess interest hereunder, MLBFS will promptly refund such excess interest to
Customer, without charge or penalty. Except as otherwise provided herein,
accrued and unpaid interest on the WCMA Loan Balance shall be payable monthly on
the last Business Day of each calendar month, commencing with the last Business
Day of the calendar month in which the Closing Date shall occur. Customer
hereby irrevocably authorizes and directs MLPF&S to pay MLBFS such accrued
interest from any available free credit balances in the WCMA Account, and if
such available free credit balances are insufficient to satisfy any interest
payment due, to liquidate any investments in the Money Accounts (other than any
investments constituting any Minimum Money Accounts Balance) in an amount up to
the balance of such accrued interest, and pay to MLBFS the available proceeds on
account thereof. If available free credit balances in the WCMA Account and
available proceeds of the Money Accounts are insufficient to pay the entire
balance of accrued interest, and Customer otherwise fails to make such payment
when due, MLBFS may, in its sole discretion, make a WCMA Loan in an amount equal
to the balance of such accrued interest and pay the proceeds of such WCMA Loan
to itself on account of such interest. The amount of any such WCMA Loan will be
added to the WCMA Loan Balance. If MLBFS declines to extend a WCMA Loan to
Customer under these circumstances, Customer hereby authorizes and directs
MLPF&S to make all such interest payments to MLBFS from any Minimum Money
Accounts Balance. If there is no Minimum Money Accounts Balance, or it is
insufficient to pay all such interest, MLBFS will invoice Customer for payment
of the balance of the accrued interest, and Customer shall pay such interest as
directed by MLBFS within 5 business Days of receipt of such invoice.
(e) PAYMENTS. All payments required or permitted to be made pursuant to this
Loan Agreement shall be made in lawful money of the United States. Unless
otherwise directed my MLBFS, payments on account of the WCMA Loan Balance may be
made by the delivery of checks (other than WCMA Checks), or by means of FTS or
wire transfer of funds (other than funds from the WCMA Line of Credit) to MLPF&S
for credit to Customer's WCMA Account. Notwithstanding anything in the WCMA
Agreement to the contrary, Customer hereby irrevocably authorizes and directs
MLPF&S to apply available free credit balances in the WCMA Account to the
repayment of the WCMA Loan Balance prior to application for any other purpose.
Payments to MLBFS from funds in the WCMA Account shall be deemed to be made by
Customer upon the same basis and schedule as funds are made available for
investment in the Money Accounts in accordance with the terms of the WCMA
Agreement. The acceptance by or on behalf of MLBFS of a check or other payment
for a lesser amount than shall be due from Customer, regardless of any
endorsement or statement thereon or
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transmitted therewith, shall not be deemed an accord and satisfaction or
anything other than a payment on account, and MLBFS or anyone acting on behalf
of MLBFS may accept such check or other payment without prejudice to the rights
of MLBFS to recover the balance actually due or to pursue any other remedy under
this Loan Agreement or applicable law for such balance. All checks accepted by
or on behalf of MLBFS in connection with the Loan and WCMA Line of Credit are
subject to final collection.
(f) EXCEEDING THE MAXIMUM WCMA LINE OF CREDIT. In the event that the WCMA Loan
Balance shall at any time exceed the Maximum WCMA Line of Credit, Customer shall
within 2 Business Days of the first to occur of (i) any request or demand of
MLBFS, or (ii) receipt by Customer of a statement from MLPF&S showing a WCMA
Loan Balance in excess of the WCMA Line of Credit, deposit sufficient funds into
the WCMA Account to reduce the WCMA Loan Balance below the Maximum WCMA Line of
Credit.
(g) STATEMENTS. MLPF&S will include in each monthly statement it issues under
the WCMA Program information with respect to WCMA Loans and the WCMA Loan
Balance. Any questions that Customer may have with respect to such information
should be directed to MLBFS; and any questions with respect to any other matter
in such statements or about or affecting the WCMA Program should be directed to
MLPF&S.
ARTICLE VI. GENERAL PROVISIONS
4.1 REPRESENTATIONS AND WARRANTIES.
Customer represents and warrants to MLBFS that:
(a) DUE ORGANIZATION, ETC. Customer is a corporation, duly organized, validly
existing and in good standing under the laws of the State of California, and if
any Guarantor is a corporation, partnership or limited liability company, such
Guarantor is, duly organized, validly existing and in good standing under the
laws of the State of its incorporation or formation.
(b) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and performance
by Customer of this Loan Agreement and the Term WCMA Note and by Customer and
each Guarantor of such of the other Additional Agreements to which it is a
party: (i) have been duly authorized by all requisite action, (ii) do not and
will not violate or conflict with any law or other governmental requirement, or
any of the agreements, instruments or documents which formed or govern Customer
or any such Guarantor, and (iii) do not and will not breach or violate any of
the provisions of, and will not result in a default by Customer or any such
Guarantor under, any other agreement, instrument or document to which it is a
party or by which it is bound.
(c) NOTICES AND APPROVALS. Except as may have been given or obtained, no notice
to or consent or approval of any governmental body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by Customer or any
Guarantor of such of this Loan Agreement, the Term WCMA Note and the other
Additional Agreements to which it is a party.
(d) ENFORCEABILITY. This Loan Agreement, the Term WCMA Note and such of the
other Additional Agreements to which it is a party are the legal, valid and
binding obligations of Customer or the Guarantors, enforceable against it or
them, as the case may be, in accordance with their respective terms, except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principals of equity.
(e) COLLATERAL. Customer has good and marketable title to the Collateral, and,
except for Permitted Liens: (i) none of the Collateral is subject to any lien,
encumbrance or security interest other than the liens and security interests of
MLBFS, and (ii) upon the filing of all Uniform Commercial Code financing
statements executed by Customer with respect to the Collateral in the
appropriate jurisdiction(s) and/or the completion of any other action required
by applicable law to perfect its liens and security interests, MLBFS will have
valid and perfected first liens and security interests upon all of the
Collateral.
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(f) FINANCIAL STATEMENTS. Except as expressly set forth in Customer's or any
Business Guarantor's financial statements, all financial statements of Customer
and each Business Guarantor furnished to MLBFS have been prepared in conformity
with generally accepted accounting principles, consistently applied, are true
and correct, and fairly present the financial condition of it as at such dates
and the results of its operations for the periods then ended; and since the most
recent date covered by such financial statements, there has been no material
adverse change in any such financial condition or operation. All financial
statements furnished to MLBFS of any Guarantor other than a Business Guarantor
are true and correct and fairly represent such Guarantor's financial condition
as of the date of such financial statements, and since the most recent date of
such financial statements, there has been no material adverse change in such
financial condition.
(g) LITIGATION. No litigation, arbitration, administrative or governmental
proceedings are pending or threatened against Customer or any Guarantor, which
would, if adversely determined, materially and adversely affect the financial
condition of Customer or any such Guarantor or the continued operations of
Customer or any Business Guarantor.
(h) TAX RETURNS. All federal, state and local tax returns, reports and
statements required to be filed by Customer and each Guarantor have been filed
with the appropriate governmental agencies and all taxes due and payable by
Customer and each Guarantor have been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely affect either the
liens and security interests of MLBFS hereunder or under any of the Additional
Agreements, the financial condition of Customer or any Guarantor, or the
continued operations of Customer or any Business Guarantor).
(i) COLLATERAL LOCATION. All of the Collateral is located at a Location of
Collateral.
Each of the foregoing representations and warranties are continuing and shall be
deemed remade by Customer on the Closing Date, on each Subsequent Funding Date
and concurrently with each request for a WCMA Loan.
4.2 FINANCIAL AND OTHER INFORMATION.
Customer covenants and agrees that Customer will furnish or cause to be
furnished to MLBFS during the term of this Loan Agreement: (a) within 120 days
after the close of each fiscal year of Customer, a copy of the annual financial
statements of Customer consisting of at least a balance sheet as at the close of
such fiscal year and related statements of income, retained earnings and cash
flows, certified by its chief financial officer; (b) a copy of the 10Q and 10K
reports of Amgen, Inc., when and as filed with the Securities Exchange
Commission; (c) within 45 days after the close of each fiscal quarter of
Customer; (i) a statement of profit and loss for the fiscal quarter then ended,
and (ii) a balance sheet as at the close of such fiscal quarter; all in
reasonable detail and certified by its chief financial officer; (d) a copy of
the Federal Income Tax Return of Customer, including all schedules thereto, not
later than 15 days after the date filed with the Internal Revenue Service; and
(e) such other information as MLBFS may from time to time reasonably request
relating to Customer, any Guarantor or the Collateral.
Customer acknowledges that (i) timely receipt of all such information is
critical to the ability of MLBFS to prudently extend and monitor the Loan,and
(ii) the failure to provide any such information within the time required will
constitute a material breach by Customer of this Loan Agreement.
4.3 OTHER COVENANTS. Customer further covenants and agrees during the term of
this Loan Agreement that:
(a) FINANCIAL RECORDS; INSPECTION. Customer and each Business Guarantor will:
(i) maintain complete and accurate books and records, and maintain all of its
financial records in a manner consistent with the financial statements
heretofore furnished to MLBFS, or prepared on such other basis as may be
approved in writing
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by MLBFS; and (ii) permit MLBFS, upon reasonable notice and at reasonable times,
to inspect its properties (both real or personal), operations, books and
records.
(b) TAXES. Customer and each Guarantor will pay when due all taxes,
assessments and other governmental charges, howsoever designated, and all other
liabilities and obligations, except to the extent that any such failure to pay
will not materially and adversely affect either the liens and security interests
of MLBFS hereunder or under any of the Additional Agreements, the financial
condition of Customer or any Guarantor or the continued operations of Customer
or any Business Guarantor.
(c) COMPLIANCE WITH LAWS. Neither Customer nor any Guarantor will violate any
law, regulation or other governmental requirement, or any judgment or order of
any court or governmental agency or authority if any such violation will
materially and adversely affect either the liens and security interests of
MLBFS hereunder or under any of the Additional Agreements, the financial
condition of Customer or any Guarantor, or the continued operations of Customer
or any Business Guarantor.
(d) USE OF LOAN PROCEEDS; SECURITIES TRANSACTIONS. The proceeds of the Loan
(including the initial WCMA Loan) shall be used by Customer solely for the Loan
Purpose, or, with the prior written consent of MLBFS, for other lawful business
purposes of Customer not prohibited hereby. The proceeds of each WCMA Loan
other than the initial WCMA Loan shall be used by Customer solely for working
capital in the ordinary course of Customer's business, or, with the prior
written consent of MLBFS, for other lawful business purposes of Customer not
prohibited hereby. CUSTOMER AGREES THAT UNDER NO CIRCUMSTANCES WILL THE LOAN OR
FUNDS BORROWED FROM MLBFS THROUGH WCMA LINE OF CREDIT BE USED: (I) FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES OF ANY PERSON WHATSOEVER, (II) TO PURCHASE, CARRY
OR TRADE IN SECURITIES, INCLUDING SHARES OF THE MONEY ACCOUNTS, OR (III) TO
REPAY DEBT INCURRED TO PURCHASE, CARRY OR TRADE IN SECURITIES; NOR WILL ANY SUCH
FUNDS BE REMITTED, DIRECTLY OR INDIRECTLY, TO MLPF&S OR ANY OTHER BROKER OR
DEALER IN SECURITIES, BY WCMA CHECK, CHECK, FTS, WIRE TRANSFER, OR OTHERWISE.
(e) CONTINUITY. Except upon the prior written consent of MLBFS, which consent
will not be unreasonably withheld; (i) neither Customer nor any Business
Guarantor will be a party to any merger or consolidation with, or purchase or
otherwise acquire all or substantially all of the assets or stock of, or any
material partnership or joint venture interest in, any person or entity, or
sell, transfer or lease all or any substantial part of its assets if any such
action causes a material change in its control or principal business, or a
material adverse change in its financial condition or operations; (ii) Customer
and each Business Guarantor that is a corporation, partnership or limited
liability company will preserve its existence and good standing in the
jurisdictions of establishment and operation, and will not operate in any
material business other than a business substantially the same as its business
as of the date of application by Customer for credit from MLBFS; and (iii)
neither Customer nor any Business Guarantor will cause or permit any material
change in its controlling ownership, controlling senior management or, except
upon not less than 30 days prior written notice to MLBFS, its name or principal
place of business.
(f) NEGATIVE PLEDGE. Except upon the prior written consent of MLBFS, Customer
shall not directly or indirectly mortgage, encumber, pledge or grant a lien or
security interest to anyone other than MLBFS in any of its Accounts, Inventory,
Chattel Paper, Contract Rights, General Intangibles, Deposit Accounts,
Documents and Instruments, now owned or hereafter acquired.
4.4 COLLATERAL
(a) PLEDGE OF COLLATERAL. To secure payment and performance of the
Obligations, Customer hereby pledges, assigns, transfers and sets over to
MLBFS, and grants to MLBFS first liens and security interests in and upon all
of the Collateral, subject only to Permitted Liens.
(b) LIENS. Customer shall not create or permit to exist any lien, encumbrance
or security interest upon or with respect to any Collateral now owned or
hereafter acquired, except for any Permitted Liens. Customer shall further
perform any and all acts reasonably requested by MLBFS to establish, perfect,
maintain and
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continue MLBFS' security interests and liens upon the Collateral, including,
but not limited to: (i) executing financing statements and any and all other
instruments and documents when and as reasonably requested by MLBFS, and (ii)
if in the reasonable judgment of MLBFS it is required by local law, causing the
owners and/or mortgagees of the real property on which any Collateral may be
located to execute and deliver to MLBFS waivers or subordinations reasonably
satisfactory to MLBFS with respect to any rights in such Collateral.
(c) PERFORMANCE OF OBLIGATIONS. Customer shall perform all of its obligations
owing on account of or with respect to the Collateral; it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise, shall be deemed an assumption by MLBFS of any of Customer's said
obligations.
(d) ALTERATIONS AND MAINTENANCE. Except upon the prior written consent of
MLBFS, Customer shall not make or permit any material alterations to any
Collateral which might materially reduce or impair its market value or utility.
Customer shall at all times keep the Collateral in good condition and repair and
shall pay or cause to be paid all obligations arising from the repair and
maintenance of such Collateral, as well as all obligations with respect to the
premises where any Collateral is or may be located, except for any such
obligations being contested by Customer in good faith by appropriate
proceedings.
(e) LOCATION. Except for movements required in the ordinary course of
Customer's business, Customer shall give MLBFS 30 days' prior written notice of
the placing at or movement of any Collateral to any location other than a
Location of Collateral. In no event shall Customer cause or permit any
Collateral to be removed from the United States without the prior written
consent of MLBFS.
(f) INSURANCE. Customer shall insure all of the Collateral under a policy or
policies of physical damage insurance providing that losses will be payable to
MLBFS as its interests may appear pursuant to a Lender's Loss Payable
Endorsement and containing such other provisions as may be reasonably required
by MLBFS. Customer shall further provide and maintain a policy or policies or
comprehensive public liability insurance naming MLBFS as an additional party
insured. Customer and each Business Guarantor shall maintain such other
insurance as may be required by law or is customarily maintained by companies
in a similar business or otherwise reasonably required by MLBFS. All such
insurance shall provide that MLBFS will receive not less than 10 days prior
written notice of any cancellation, and shall otherwise be in form and amount
and with an insurer or insurers reasonably acceptable to MLBFS. Customer shall
furnish MLBFS with a copy or certificate of each such policy or policies and,
prior to any expiration or cancellation, each renewal or replacement thereof.
(g) EVENT OF LOSS. Customer shall at its expense promptly repair all
repairable damage to any Collateral. In the event that any Collateral is
damaged beyond repair, lost, totally destroyed or confiscated (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of
$25,000.00 or more, then, on or before the first to occur of (i) 90 days after
the occurrence of such Event of Loss, or (ii) 10 Business Days after the date
on which either Customer or MLBFS shall receive any proceeds of insurance on
account of such Event of Loss, or any underwriter of insurance on such
Collateral shall advise either Customer or MLBFS that it disclaims liability in
respect of such Event of Loss, Customer shall, at Customer's option, either
replace the Collateral subject to such Event of Loss with comparable Collateral
free of all liens other than Permitted Liens, or, in absence of insurance
payment, as reasonably determined by MLBFS. Notwithstanding the foregoing, if
at the time of occurrence of such Event of Loss or any time thereafter prior to
replacement or prepayment, as aforesaid, an Event of Default shall occur
hereunder, then MLBFS may at its sole option, exercisable at any time while
such Event of Default shall be continuing, require Customer to either replace
such Collateral or prepay the Loan, as aforesaid. Any prepayment of the Loan
pursuant to this Section shall be applied first to installments on account of
the then "Term Note Balance" (as defined in the Term WCMA Note) in inverse
order of maturity; with any prepayment in excess of the then Term Note Balance
applied on account of the WCMA Note concurrently with: (i) a like permanent
reduction in the WCMA Line of Credit, and (ii) a like reduction in the
obligation of MLBFS to fund future installments on account of the Term Note in
inverse order of funding. No amount prepaid pursuant to this Section may be
re-borrowed by Customer.
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(h) NOTICE OF CERTAIN EVENTS. Customer shall give MLBFS immediate notice of
any attachment, lien, judicial process, encumbrance or claim affecting or
involving $25,000.00 or more of the Collateral.
(i) INDEMNIFICATION. Customer shall indemnify, defend and save MLBFS harmless
from and against any and all claims, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising
out of or in any manner occasioned by (i) the ownership, possession use or
operation of any Collateral, or (ii) any failure by Customer to perform any of
its obligations hereunder; excluding, however, from said indemnity any such
claims, liabilities, etc. arising directly out of the willful wrongful act or
active gross negligence of MLBFS. This indemnity shall survive the expiration
or termination of this Loan Agreement as to all matters arising or accruing
prior to such expiration or termination.
4.5 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an "Event of
Default" under this Loan Agreement: (a) Customer shall fail to pay when due any
amount owing by Customer to MLBFS under the Note or this Loan Agreement, and
such failure shall continue for more than 5 Business Days after written notice
thereof shall have been given by MLBFS to Customer; or (b) Customer or any
Guarantor shall default in the performance or observance of any covenant or
agreement on its part to be performed or observed under this Loan Agreement or
any of the Additional Agreements (not constituting an Event of Default under
any other clause of this Paragraph), and such default shall continue unremedied
for 10 Business Days after written notice thereof shall have been given by
MLBFS to Customer; or (c) any representation or warranty made by Customer or
any Guarantor contained in this Loan Agreement or any of the Additional
Agreements shall at any time prove to have been incorrect in any material
respect when made; or (d) a default or Event of Default by Customer or any
Guarantor shall occur under the terms of any other agreement, instrument or
document with or intended for the benefit of MLBFS, MLPF&S or any of their
affiliates, and any required notice shall have been given and required passage
of time shall have elapsed; or (e) a proceeding under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt or receivership
law or statute shall be filed by Customer or any Guarantor, or any such
proceeding shall be filed against Customer or any Guarantor and shall not be
dismissed or withdrawn within 60 days after filing, or Customer or any
Guarantor shall make an assignment for the benefit of creditors, or Customer or
any Guarantor shall become insolvent or generally fail to pay, or admit in
writing its inability to pay, its debts as they become due; or (f) any event
shall occur which shall reasonably cause MLBFS to in good faith believe that
the prospect of payment or performance by Customer or any Guarantor has been
materially impaired; or (g) any event shall occur which results in the
acceleration of the maturity of any indebtedness of $100,000.00 or more of
Customer or any Guarantor to another creditor under any indenture, agreement,
undertaking, or otherwise; or (h) the Collateral, or any material part thereof,
shall be or become subject to any material abuse or misuse, or any levy,
attachment, seizure or confiscation which is not released within 10 Business
Days.
4.6 REMEDIES.
(a) REMEDIES UPON DEFAULT. Upon the occurrence and continuance of any Event
of Default: (i) MLBFS may terminate the Loan and WCMA Line of Credit without
notice, and upon any such termination MLBFS shall be relieved of any further
obligation to make the Loan (if any portion of the Loan has not then been
funded), or fund any further amount on account of the Term Note, or make or
continue to make the WCMA Line of Credit available to Customer, or otherwise
extend any credit to or for the benefit of Customer; and (ii) MLBFS may declare
the principal of and interest on the Term Note and WCMA Note included in the
Term WCMA Note, and all other Obligations to be forthwith due and payable,
whereupon all such amounts shall be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived; and (iii) MLBFS may exercise any or all of the
remedies of a secured party under applicable law, including, but not limited to,
the UCC, and any or all of its other rights and remedies under this Loan
Agreement, the Term WCMA Note and the other Additional Agreements; and (iv)
MLBFS may require Customer to make the Collateral and the records pertaining to
the Collateral available to MLBFS at a place designated by MLBFS which is
reasonably convenient or may take possession of the Collateral and the records
pertaining to the Collateral without the use of any judicial process and
without any prior notice to Customer, and (v) MLBFS may sell any or all of the
Collateral at public or private sale upon
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such terms and conditions as MLBFS may reasonably deem proper, and MLBFS may
purchase any Collateral at any such public sale; and the net proceeds of any
such public or private sale and all other amounts actually collected or
received by MLBFS pursuant hereto, after deducting all costs and expenses
incurred at any time in the collection of the Obligations and in the
protection, collection and sale of the Collateral, will be applied to the
payment of the Obligations, with any remaining proceeds paid to Customer or
whoever else may be entitled thereto, and with Customer and the Guarantors
remaining jointly and severally liable for any amount remaining unpaid after
such application.
(b) REMEDIES ARE SEVERABLE AND CUMULATIVE. All rights and remedies of MLBFS
herein are severable and cumulative and in addition to all other rights and
remedies available in the Note, the other Additional Agreements, at law or in
equity, and any one or more of such rights and remedies may be exercised
simultaneously or successively.
(c) NOTICES. To the fullest extent permitted by applicable law, Customer
hereby irrevocably waives and releases MLBFS of and from any and all
liabilities and penalties for failure of MLBFS to comply with any statutory or
other requirement imposed upon MLBFS relating to notices of sale, holding of
sale or reporting of any sale, and Customer waives all rights of redemption from
any such sale. Any notices required under applicable law shall be reasonably
and properly given to Customer if given by any of the methods provided herein
at least 5 Business Days prior to taking action. MLBFS shall have the right to
postpone or adjourn any sale or other disposition of Collateral at any time
without giving notice of any such postponed or adjourned date. In the event
MLBFS seeks to take possession of any or all of the Collateral by court
process. Customer further irrevocably waives to the fullest extent permitted by
law any bonds and any surety or security relating thereto required by any
statute, court rule or otherwise as an incident to such possession, and any
demand for possession prior to the commencement of any suit or action.
4.7 MISCELLANEOUS.
(a) NON-WAIVER. No failure or delay on the part of MLBFS in exercising any
right, power or remedy pursuant to this Loan Agreement, the Term WCMA Note or
any of the other Additional Agreements shall operate as a waiver thereof, and no
single or partial exercise of any such right, power or remedy shall preclude any
other or further exercise thereof, or the exercise of any other right, power or
remedy. Neither any amendment, modification, supplement, termination or waiver
of any provision of this Loan Agreement, the Term WCMA Note or any of the other
Additional Agreements, nor any consent to any departure by Customer therefrom,
shall be effective unless the same shall be in writing and signed by MLBFS. Any
waiver of any provision of this Loan Agreement, the Term WCMA Note or any of the
other Additional Agreements and any consent to any departure by Customer from
the terms thereof shall be effective only in the specific instance and for the
specific purpose for which given. Except as otherwise expressly provided
herein, no notice to or demand on Customer shall in any case entitle Customer to
any other or further notice or demand in similar or other circumstances.
(b) SET-OFF; DISCLOSURE. MLBFS shall have the right upon the occurrence and
during the continuance of an Event of Default to set-off, appropriate and apply
toward payment of any of the Obligations, in such order of application as MLBFS
may from time to time and at any time elect, any cash, credit, deposits,
accounts, securities and any other property of Customer which is in transit to
or in the possession, custody or control of MLBFS, MLPF&S or any agent, bailee,
or affiliate of MLBFS or MLPF&S including, without limitation, the WCMA Account
and any Money Accounts, and all cash and securities therein or controlled
thereby, and all proceeds thereof. Customer hereby grants to MLBFS a security
interest in all such property as additional Collateral. Customer and each
Guarantor hereby irrevocably authorized MLBFS and each of its affiliates,
including without limitation MLPF&S, to at any time (whether or not an Event of
Default shall have occurred) obtain from and disclose to each other any and all
financial and other information about Customer or any Guarantor.
(c) COMMUNICATIONS. All notices and other communications required or
permitted hereunder or in connection with any of the Additional Agreements
shall be in writing, and shall be either delivered personally, mailed by
postage prepaid certified mail or sent by express overnight courier or by
facsimile. Such notices and communications shall be deemed to be given on the
date of personal delivery, facsimile
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transmission or actual delivery of certified mail, or one Business Day after
delivery to an express overnight courier. Unless otherwise specified in a
notice sent or delivered in accordance with the terms hereof, notices and other
communications in writing shall be given to the parties hereto at their
respective addresses set forth at the beginning of this Loan Agreement, or, in
the case of facsimile transmission, to the parties at their respective regular
facsimile telephone number.
(d) COSTS, EXPENSES AND TAXES. Customer shall upon demand pay or reimburse
MLBFS for: (i) all reasonable fees and out-of-pocket expenses of MLBFS
(including, but not limited to, reasonable fees and expenses of outside counsel
and Uniform Commercial Code filing and search fees and expenses) in connection
with the verification, protection, perfection or preservation of MLBFS' rights
hereunder or in the Collateral or any other collateral for the Obligations, or
the enforcement of this Loan Agreement or any of the Additional Agreements,
excluding, however, salaries and expenses of MLBFS' employees; and (ii) any and
all stamp, transfer and other taxes and fees payable or determined to be
payable in connection with the execution, delivery and/or recording of this
Loan Agreement or any of the Additional Agreements. If any suit or proceeding
arising from any of the foregoing is brought against MLBFS, Customer, to the
extent and in the manner directed by MLBFS, shall resist and defend such suit
or proceeding with counsel approved by MLBFS (such approval not to be
unreasonably withheld). The obligations of Customer under this paragraph shall
survive the expiration or termination of this Loan Agreement and the discharge
of the other Obligations.
(e) RIGHT TO PERFORM OBLIGATIONS. If Customer shall fail to do any act or
thing which it has covenanted to do under this Loan Agreement or any
representation or warranty on the part of Customer contained in this Loan
Agreement shall be breached, MLBFS may, in its sole discretion, after 5
Business Days written notice is sent to Customer, do the same or cause it to be
done or remedy any such breach, and may expend its funds for such purpose. Any
and all reasonable amounts so expended by MLBFS shall be repayable to MLBFS by
Customer upon demand, with interest at the Interest Rate during the period from
and including the date funds are so expended by MLBFS to the date of repayment,
and all such amounts shall be additional Obligations.
(f) LATE CHARGES. Any payment required to be made by Customer pursuant to this
Loan Agreement or any of the Additional Agreements not paid within 5 Business
Days of the applicable due date shall be subject to a late charge in an amount
equal to the lesser of: (i) 5% of the overdue amount, or (ii) the maximum
amount permitted by applicable law. Such late charges shall be payable on
demand, or, without demand, may in the sole discretion of MLBFS be paid by a
WCMA Loan and added to the WCMA Loan Balance in the same manner as provided
herein for accrued interest with respect to the WCMA Line of Credit.
(g) FURTHER ASSURANCES. Customer agrees to do such further acts and things and
to execute and deliver to MLBFS such additional agreements, instruments and
documents as MLBFS may reasonably require or deem advisable to carry into
effect the purposes of this Loan Agreement, or to confirm unto MLBFS its
rights, powers and remedies under this Loan Agreement, the Term WCMA Note and
the other Additional Agreements.
(h) BINDING EFFECT. This Loan Agreement, the Term WCMA Note and the other
Additional Agreements shall be binding upon, and shall inure to the benefit of
MLBFS, Customer and their respective successors and assigns. Customer shall not
assign any of its rights or delegate any of its obligations under this Loan
Agreement, the Term WCMA Note or any of the other Additional Agreements without
the prior written consent of MLBFS. Unless otherwise expressly agreed to in a
writing signed by MLBFS, no such consent shall in any event relieve Customer of
any of its obligations under this Loan Agreement, the Term WCMA Note or any of
the other Additional Agreements.
(i) HEADINGS. Captions and section and paragraph headings in this Loan
Agreement and the Additional Agreements are inserted only as a matter of
convenience, and shall not affect the interpretation hereof.
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(j) GOVERNING LAW. This Loan Agreement, the Term WCMA Note and, unless otherwise
expressly provided therein, each of the other Additional Agreements, shall be
governed in all respects by the laws of the State of Illinois.
(k) SEVERABILITY OF PROVISIONS. Whenever possible, each provision of this Loan
Agreement, the Term WCMA Note and the other Additional Agreements shall be
interpreted in such manner as to be effective and valid under applicable law.
Any provision of this Loan Agreement, the Term WCMA Note or any of the other
Additional Agreements which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Loan Agreement, the Term WCMA Note and the other Additional Agreements or
affecting the validity or enforceability of such provision in any other
jurisdiction.
(i) TERM. This Loan Agreement shall become effective on the date accepted by
MLBFS at its offices in Chicago, Illinois, and, subject to the terms hereof,
shall continue in effect so long thereafter as either MLBFS shall be obligated
to make the Loan, or, after the Closing Date, there shall be any moneys
outstanding under the Term Note or WCMA Note included in the Term WCMA Note or
under this Loan Agreement, or there shall be any other Obligations outstanding.
(m) INTEGRATION. THIS LOAN AGREEMENT, TOGETHER WITH THE TERM WCMA NOTE AND THE
OTHER ADDITIONAL AGREEMENTS, CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS
THE FULL AND FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN
AGREEMENTS OR PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. WITHOUT
LIMITING THE FOREGOING, CUSTOMER ACKNOWLEDGES THAT: (i) NO PROMISE OR COMMITMENT
HAS BEEN MADE TO IT BY MLBFS, MLPF&S OR ANY OF THEIR RESPECTIVE EMPLOYEES,
AGENTS OR REPRESENTATIVES TO MAKE THE LOAN ON ANY TERMS OTHER THAN AS EXPRESSLY
SET FORTH HEREIN AND IN THE TERM WCMA NOTE, OR TO MAKE ANY OTHER LOAN OR
OTHERWISE EXTEND ANY OTHER CREDIT TO CUSTOMER OR ANY OTHER PARTY; AND (ii)
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS LOAN AGREEMENT SUPERSEDES
AND REPLACES ANY AND ALL PROPOSALS, LETTERS OF INTENT AND APPROVAL AND
COMMITMENT LETTERS FROM MLBFS TO CUSTOMER, NONE OF WHICH SHALL BE CONSIDERED AN
ADDITIONAL AGREEMENT.
(n) JURISDICTION; WAIVER. CUSTOMER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN
ITS SOLE DISCRETION, TO ENFORCE THIS LOAN AGREEMENT, THE TERM WCMA NOTE AND THE
OTHER ADDITIONAL AGREEMENTS IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER
JURISDICTION WHERE CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE
LOCATED. IF SO ELECTED BY MLBFS, CUSTOMER CONSENTS TO JURISDICTION IN THE STATE
OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT IN THE COUNTY OF COOK FOR
SUCH PURPOSES, AND CUSTOMER WAIVES ANY AND ALL RIGHTS TO CONTEST SAID
JURISDICTION AND VENUE. CUSTOMER FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY
ACTION AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND STATE
OF ILLINOIS. MLBFS AND CUSTOMER HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER RELATING TO,
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN, THIS LOAN AGREEMENT, THE
TERM WCMA NOTE, ANY OTHER ADDITIONAL AGREEMENTS AND/OR ANY OF THE TRANSACTIONS
WHICH ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT.
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IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and
year first above written.
ALANEX CORPORATION
By: /s/ Marvin R. Brown /s/ Alex Polinsky
---------------------------------------------------
Signature (1) Signature (2)
Marvin R. Brown Alex Polinsky
- -------------------------------------------------------
Printed Name Printed Name
President and CEO Secretary
- -------------------------------------------------------
Title Title
Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.
By: /s/ Beth A. Jensen, AVP
--------------------------
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