<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 26, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _______________
Commission file number: 333-31187
W.R. CARPENTER NORTH AMERICA, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 54-1049647
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
801 SOUTH PINE STREET
MADERA, CALIFORNIA 93637
(Address of principal executive offices and zip code)
(559) 662-3900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
At November 10, 1999, there were 55,000 shares of Class A common stock, $1.00
par value, and 5,000 shares of Class B common stock, $1.00 par value, of the
registrant issued and outstanding.
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
Sept 26 Sept 27 Jun 27
1999 1998 1999
(unaudited) (unaudited) (audited)
----------- ----------- ---------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 9,862 $ 53,285 $ 13,328
Accounts receivable (net of allowance for
doubtful accounts of $516, $502,
and $618, respectively) 47,502 34,525 41,817
Inventories 38,699 32,057 38,748
Prepaid expenses and other 3,358 2,446 2,345
Prepaid income taxes 1,156 -- 1,300
Deferred income taxes 1,479 1,790 1,448
-------- -------- --------
Total current assets 102,056 124,103 98,986
Property, plant and equipment, net 119,700 72,786 115,007
Other assets 9,795 9,216 10,027
-------- -------- --------
Total assets $231,551 $206,105 $224,020
======== ======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 18,319 $ 18,025 $ 26,833
Other accrued expenses 12,409 15,438 9,186
Current portion of long-term debt 10,165 10,304 8,258
-------- -------- --------
Total current liabilities 40,893 43,767 44,277
Senior Subordinated Notes Payable 104,631 104,583 104,619
Long-term debt, net of current portion 49,780 12,871 37,729
Other long-term liabilities 4,460 5,238 4,304
Deferred income taxes 4,660 3,111 4,698
-------- -------- --------
Total liabilities 204,424 169,570 195,627
-------- -------- --------
Commitments and contingencies
Stockholder's equity
Common stock 60 60 60
Preferred stock 25 25 25
Additional paid-in capital 8,767 8,767 8,767
Cumulative currency translation adjustment (CTA) 2,084 2,084 2,084
Retained earnings (on July 3, 1994 a
deficit of $31,395 was eliminated
due to a subsidiary's quasi-reorganization) 16,191 25,599 17,457
-------- -------- --------
27,127 36,535 28,393
-------- -------- --------
Total liabilities and stockholder's equity $231,551 $206,105 $224,020
======== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per-share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
Sept 26 Sept 27
1999 1998
-------- --------
<S> <C> <C>
Revenues
Equipment sales
New $ 42,724 $ 41,288
Used 2,336 1,411
Rental and services 11,772 9,058
-------- --------
Total revenues 56,832 51,757
-------- --------
Cost of Revenues
Equipment sales
New 35,029 30,172
Used 1,825 881
Rental and services 7,831 5,498
-------- --------
Total cost of revenues 44,685 36,551
-------- --------
Gross profit
Equipment sales
New 7,695 11,116
Used 511 530
Rental and services 3,941 3,560
-------- --------
Total gross profit 12,147 15,206
-------- --------
Operating expenses
Selling, general and administrative 9,011 7,234
Product liability 360 450
Research and development 1,190 1,934
-------- --------
Total operating expenses 10,561 9,618
-------- --------
Income from operations 1,586 5,588
Other income (expense)
Interest expense, net (3,875) (2,693)
Other income 177 8
-------- --------
Income/(loss) before income taxes (2,112) 2,903
(Provision)/benefit for income taxes 846 (1,058)
-------- --------
Net income/(loss) $ (1,266) $ 1,845
======== ========
Net income/(loss) per common share $ (21.10) $ 30.75
======== ========
Weighted average number of common
shares used to compute net
income/(loss) per common share 60,000 60,000
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
Sept 26 Sept 27
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities
Net income/(loss) $ (1,266) $ 1,845
-------- --------
Adjustments to reconcile net income/(loss)
to net cash used by operating activities
Depreciation and amortization 4,253 2,725
Gain on disposition of property, plant and equipment (530) (530)
Changes in operating assets and liabilities
Accounts receivable (5,685) (5,900)
Inventories 49 (4,650)
Prepaid expenses and other assets (869) 549
Deferred income taxes, net (31) 261
Accounts payable (8,514) (3)
Accrued expenses 3,223 3,583
Other, net 350 348
-------- --------
Total adjustments (7,754) (3,617)
-------- --------
Net cash used by operating activities (9,020) (1,772)
-------- --------
Cash flows from investing activities
Additions to property, plant and equipment (10,752) (13,382)
Proceeds from disposition of assets 2,336 1,301
-------- --------
Net cash used by investing activities (8,416) (12,081)
-------- --------
Cash flows from financing activities
Proceeds from long-term debt 38,571 5,547
Repayment of long-term debt (24,601) (2,078)
-------- --------
Net cash provided by financing activities 13,970 3,469
-------- --------
Net decrease in cash and cash equivalents (3,466) (10,384)
Cash and cash equivalents at beginning of period 13,328 63,669
-------- --------
Cash and cash equivalents at end of period $ 9,862 $ 53,285
======== ========
Supplemental disclosures of cash flow information:
Cash used for interest payments $ 1,055 $ 507
======== ========
Cash used for income tax payments 397 1,104
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying fiscal year 2000 and fiscal year 1999 unaudited interim
condensed consolidated financial statements included herein have been prepared
by W.R. Carpenter North America, Inc. (the "Company"), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. However, management
believes that the disclosures are adequate to prevent the information presented
from being misleading. These financial statements should be read in conjunction
with the financial statements and the notes hereto included in the Company's
Form 10-K, which contains financial information for the fiscal years ended June
27, 1999, June 28, 1998, and June 29, 1997.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Results of operations for the interim periods are not necessarily indicative of
the results that may be expected for a full year.
The condensed consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries.
2. CONTINGENCIES
The Company and its subsidiaries have various product liability claims and suits
pending. The Company's policy is to defend each suit vigorously, regardless of
the amount sought in damages. Although the outcome of such litigation cannot be
predicted with certainty, it is the opinion of management, based on the advice
of legal counsel and other considerations, that all claims (with the exception
of the claim described below), legal actions, complaints and proceedings which
have been filed or are pending against the Company and its subsidiaries, as well
as possible future claims, are adequately covered by reserves or insurance, and
are not expected to have a material adverse effect on the Company's consolidated
financial position. Horizon High Reach, Inc. ("Horizon"), a wholly owned
subsidiary of the Company, has been sued for damages arising out of a traffic
accident involving a Horizon employee. The status of this legal proceeding was
reported in the Company's Form 10-K for the fiscal year ended June 27, 1999 and,
subsequent thereto, there have been no material changes in the status of such
legal proceedings. Based upon investigation to date and consultation with the
Company's insurance carrier and legal counsel, management does not believe that
the ultimate resolution of this matter will have a materially adverse effect on
the Company's financial condition, results of operations or liquidity.
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W.R. CARPENTER NORTH AMERICA, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements in this Quarterly Report on Form 10-Q include forward-looking
information within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
are subject to the "safe harbor" created by those sections. These
forward-looking statements involve certain risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statement. Such risks and uncertainties include, but are not limited to, the
following factors: substantial leverage of the Company; industrial cyclicality;
dependence on the construction industry; consolidation of the customer base;
dependence upon major customers; risks relating to growth; significance of new
product development; the need for continual capital expenditures; competition;
product liability; insurance; availability of product components; reliance on
suppliers; foreign sales; government and environmental regulation; labor
matters; holding company structure; restrictions under debt agreements;
fraudulent conveyance; and control by the sole stockholder.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain historical
income statement data derived from the Company's condensed consolidated
statements of operations expressed in dollars and as a percentage of net
revenue.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------
September 26, 1999 September 27, 1998
---------------------- ----------------------
(Dollars in Thousands)
(Unaudited)
<S> <C> <C> <C> <C>
Revenue $ 56,832 100.0% $ 51,757 100.0%
Cost of revenue 44,685 78.6 36,551 70.6
Gross profit 12,147 21.4 15,206 29.4
Operating expenses 10,561 18.6 9,618 18.6
Operating income 1,586 2.8 5,588 10.8
Interest expense, net (3,875) (6.8) (2,693) (5.2)
Other income 177 0.3 8 0.0
(Provision)/benefit for income taxes 846 1.5 (1,058) (2.0)
Net income/(loss) (1,266) (2.2) 1,845 3.6
EBITDA 5,839 10.3 8,313 16.1
Depreciation and amortization 4,253 7.5 2,725 5.3
</TABLE>
SEGMENT OPERATIONS
The Company, through its wholly-owned subsidiaries, UpRight, Inc. ("UpRight")
and Horizon, manufactures, sells, rents and services aerial work platform
equipment to a diverse customer base.
UpRight is a leading manufacturer of aerial work platforms. Horizon is a leading
industrial equipment rental, sales and service company specializing in aerial
work platforms and is a significant customer of UpRight. Sales to Horizon
accounted for approximately 13.2% and 17.0% of UpRight's revenue for the three
months ended September 26, 1999 and September 27, 1998, respectively.
When equipment purchased from UpRight by Horizon is included in Horizon's rental
fleet, or held as sales inventory at the end of a reporting period, the gross
profit earned by UpRight on the sale of this equipment is eliminated from the
Company's consolidated Gross Profit. As Horizon's purchases of equipment for
rental fleet purposes vary by quarter, and the level of UpRight equipment held
in sales inventory by Horizon fluctuates by quarter, the resulting elimination
of Gross Profit on consolidation can cause consolidated Income from Operations
to fluctuate on a quarterly basis.
The Company believes its results of operations for its UpRight and Horizon
subsidiaries are most meaningful when analyzed from the perspective of two
arm's-length companies. The following table sets forth for the periods indicated
certain historical consolidating income statement data derived from the
Company's condensed consolidated statements of operations expressed in dollars
and as a percentage of revenue.
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Consolidating Statement of Operations
Three Months Ended
September 26, 1999
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Carpenter Horizon UpRight Eliminations Consolidated
--------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES
New equipment sales $ 9,052 $ 38,877 $ (5,205) $ 42,724
Used equipment sales 1,990 346 2,336
Rental and services 11,691 81 11,772
-------- -------- -------- -------- --------
TOTAL REVENUES 22,733 39,304 (5,205) 56,832
-------- -------- -------- -------- --------
COST OF REVENUES
New equipment sales 7,070 33,121 (5,162) 35,029
Used equipment sales 1,634 191 1,825
Rental and services 7,678 153 7,831
-------- -------- -------- -------- --------
TOTAL COST OF REVENUES 16,382 33,465 (5,162) 44,685
-------- -------- -------- -------- --------
GROSS PROFIT
New equipment sales 1,982 5,756 (43) 7,695
Used equipment sales 356 155 511
Rental and services 4,013 (72) 3,941
-------- -------- -------- -------- --------
TOTAL GROSS PROFIT 6,351 5,839 (43) 12,147
-------- -------- -------- -------- --------
% of revenue 27.9% 14.9% .1% 21.4%
INCOME FROM OPERATIONS
Selling, general and $ 1,424 4,061 3,526 9,011
administrative
Product liability 360 360
Research and development 1,190 1,190
-------- -------- -------- -------- --------
Total operating expenses 1,424 4,061 5,076 10,561
======== ======== ======== ======== ========
INCOME FROM OPERATIONS (1,424) 2,290 763 (43) 1,586
% of revenue 10.1% 1.9% .1% 2.8%
</TABLE>
Consolidating Statement of Operations
Three Months Ended
September 27, 1998
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
-------------------------------------------------------------------
Carpenter Horizon UpRight Eliminations Consolidated
--------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES
New equipment sales $ 6,751 $41,591 $(7,054) $41,288
Used equipment sales 1,411 1,411
Rental and services 9,058 9,058
------- ------- ------- ------- -------
TOTAL REVENUES 17,220 41,591 (7,054) 51,757
------- ------- ------- ------- -------
COST OF REVENUES
New equipment sales 5,390 30,866 (6,084) 30,172
Used equipment sales 881 881
Rental and services 5,498 5,498
------- ------- ------- ------- -------
TOTAL COST OF REVENUES 11,769 30,866 (6,084) 36,551
------- ------- ------- ------- -------
GROSS PROFIT
New equipment sales 1,361 10,725 (970) 11,116
Used equipment sales 530 530
Rental and services 3,560 3,560
------- ------- ------- ------- -------
TOTAL GROSS PROFIT 5,451 10,725 (970) 15,206
------- ------- ------- ------- -------
% of revenue 31.7% 25.8% 13.8% 29.4%
INCOME FROM OPERATIONS
Selling, general and $ 1,296 3,129 2,809 7,234
administrative
Product liability 450 450
Research and development 1,934 1,934
------- ------- ------- ------- -------
Total operating expenses 1,296 3,129 5,193 9,618
======= ======= ======= ======= =======
INCOME FROM OPERATIONS (1,296) 2,322 5,532 (970) 5,588
% of revenue 13.5% 13.3% 13.8% 10.8%
</TABLE>
Page 7
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THREE MONTHS ENDED SEPTEMBER 26, 1999 COMPARED TO THREE MONTHS ENDED SEPTEMBER
27, 1998
Revenue for the three months ended September 26, 1999 was $56.8 million, an
increase of $5.0 million over revenue of $51.8 million for the three months
ended September 27, 1998. The increase in revenue was mainly due to an increase
in Horizon's rental and service revenue of $2.6 million and new equipment sales
by Horizon of $2.3 million. The increase in Horizon's rental and service revenue
is primarily attributable to rental fleet additions subsequent to the first
quarter of fiscal 1999 and the inclusion of results from a business acquired
subsequent to the third quarter of fiscal 1999.
Gross profit for the three months ended September 26, 1999 was $12.1 million, a
decrease of $3.1 million from gross profit of $15.2 million for the three months
ended September 27, 1998. Gross margin decreased to 21.4% in the three months
ended September 26, 1999 compared to 29.4% in the three months ended September
27, 1998. The decline in gross profit is primarily a result of UpRight's
manufacturing inefficiencies due to the ramp-up of production at the new Madera
facility, including worker training costs, and delays in bringing on-line the
continuous flow paint facility. In addition, UpRight has also experienced
capacity constraints at the Selma facility, resulting primarily from increasing
international customer demand for their equipment to be painted particular
colors, which usually include two tone color schemes. The paint facilities at
Selma do not have the capacity to undertake this task efficiently at the volumes
experienced in the first three months of fiscal 2000. Horizon experienced
substantially lower margins on used equipment sales, lower rental equipment
utilization, and higher depreciation expense on rental equipment for the three
months ended September 26, 1999 compared to the three months ended September 27,
1998. Horizon's gross profit on used equipment sales in the three months ended
September 26, 1999 included losses on the sale of certain boom lift products
which had the effect of lowering the average gross profit.
Operating expenses, consisting of selling, general and administrative expense
(SG & A), product liability and research and development expense, were $10.6
million in the three months ended September 26, 1999 compared to $9.6 million
for the same period last year. SG & A expenses increased by $1.8 million to $9.0
million in the three months ended September 26, 1999 compared to the three
months ended September 27, 1998. The increase in SG & A expenses is primarily
due to increased costs from the addition of resources to support the higher
activity level at Horizon (although as a percentage of Horizon's revenue,
Horizon's SG & A expenses declined from 18.2% for the three months ended
September 27, 1998 to 17.9% for the three months ended September 26, 1999) as
well as increased marketing and administrative costs at UpRight, which are
required to support the increased manufacturing capacity of UpRight following
the ramp-up of production at the Madera facility. As a percentage of revenue, SG
& A expenses were 15.9% in the three months ended September 26, 1999 compared to
14.0% for the three months ended September 27, 1998. Product liability expense
was essentially flat at $0.4 million in the three months ended September 26,
1999 and in the three months ended September 27, 1998. Research and development
expenses for the three months ended September 26, 1999 were $1.2 million, a
decrease of $0.7 million compared to the three months ended September 27, 1998.
The decrease in research and development expenses is primarily related to
reduced new product development following the introduction of the additional
boom lift products in fiscal 1999, as well as $0.3 million which had previously
been expensed, but was subsequently recovered as a result of a favorable sales
tax ruling.
Interest expense, net of interest income, increased to $3.9 million for the
three months ended September 26, 1999 from $2.7 million for the three months
ended September 27, 1998 due primarily to a $0.7 decrease in interest income
related to lower cash balances at the Company as well as increased borrowings.
Income tax for the three months ended September 26, 1999 was a benefit of $0.8
million compared to an expense of $1.1 million for the three months ended
September 27, 1998. The Company's effective tax rate was minus 40.0% for the
three months ended September 26, 1999 compared to 36.4% for the three months
ended September 27, 1998.
Net loss for the three months ended September 26, 1999 was $1.3 million,
representing a decrease of $3.1 million from net income of $1.8 million for the
three months ended September 27, 1998, as a result of the factors described
above.
CAPITAL RESOURCES AND LIQUIDITY
The Company's cash flow requirements are for working capital, capital
expenditures and debt service.
The Company's cash balance as of September 26, 1999 was $9.9 million. This cash
is used in part to finance the capital expenditure program at UpRight and
Horizon and, in addition, is used for general corporate purposes. UpRight and
Horizon have revolving lines of credit from major financial institutions of
$40.0 million and $6.3 million, respectively. As of September 26, 1999, UpRight
and Horizon had utilized $0.0 million and $0.1 million of their respective
revolving lines of credit. On August 9, 1999, UpRight entered into a financing
agreement with a financial institution that will hold available to UpRight
credit facilities in the aggregate total amount of $40.0 million to renegotiate
its existing revolving line of credit of $20.0 million. Facility number one is a
revolving line of credit for working capital of up to $25.0 million, with a
step-down of available commitment amount and outstanding balances to $20.0
million on January 31, 2000. Facility number two is a revolving line of credit
for funding equipment purchases of up to $10.0 million due and payable at
maturity, which is June 30, 2000, with periodic principal reductions from
refinance by certain leasing companies. Facility number three is a revolving
line of credit for real estate construction and improvements of the boom
manufacturing plant of up to $5.0 million, due and payable at maturity, which is
June 30, 2000. On September 3, 1999, Horizon entered into a financing agreement
with a financial institution to increase its credit facilities from $5.3 million
to $46.3 million. The facility includes a $30.0 million term loan, payable in
equal principal payments plus accrued interest for 60 months. In addition, a
$10.0 million facility was established for purchasing rental equipment during
fiscal 2000. This facility is interest only and will convert to a five year term
loan in July 2000. Finally, Horizon's revolver under this facility was increased
from $5.3 million to $6.3 million.
The Company's working capital was $61.2 million and $54.7 million at September
26, 1999 and June 27, 1999, respectively. The increase in working capital in
this period is mainly due to an increase in accounts receivable of $5.7 million,
a decrease in accounts payable of $8.5 million, and a decrease in cash of $3.5
million.
The Company's outstanding debt was $164.6 million and $150.6 million at
September 26, 1999 and June 27, 1999, respectively. The increase in outstanding
debt primarily resulted from increased use of cash by operating activities
during the three months ended
Page 8
<PAGE> 9
September 26, 1999. Cash and cash equivalents were $9.9 million and $13.3
million at September 26, 1999 and June 27, 1999, respectively.
Net cash used by operating activities was $9.0 million in the three months ended
September 26, 1999 and $1.8 million for the three months ended September 27,
1998. The increase in net cash used by operating activities of $7.2 million is
primarily related to the decrease in accounts payable of $8.5 million since June
27, 1999 and the net loss versus net income for the three months ended September
26, 1999 compared to the three months ended September 27, 1998 which accounted
for $3.1 million, partially offset by the reduced usage of cash of $4.7 million
for inventory in the three months ended September 26, 1999 compared to the three
months ended September 27, 1998.
Net cash used by investing activities was $8.4 million in the three months ended
September 26, 1999 compared to $12.1 million in the three months ended September
27, 1998. The decrease in net cash used by investing activities resulted
primarily from a decrease in cash used for the purchase of property, plant and
equipment which totaled $10.8 million for the three months ended September 26,
1999 compared to $13.4 million for the three months ended September 27, 1998.
Net cash used by investing activities in the three months ended September 26,
1999 was to acquire/build facilities for Horizon, buy new manufacturing
equipment for UpRight's Selma and Madera, California facilities and upgrade
Horizon's rental fleet.
Net cash provided by financing activities was $14.0 million and $3.5 million in
the three months ended September 26, 1999 and September 27, 1998, respectively.
The change in net cash provided by financing activities is primarily due to
increased use of cash by operating activities during the three months ended
September 26, 1999.
The Company believes that, in addition to its cash on hand, internally generated
funds and amounts available to UpRight and Horizon under revolving credit
facilities are and will continue to be sufficient to satisfy its operating cash
requirements and planned capital expenditures. The Company may, however, require
additional capital through borrowings and equity if the Company undertakes
acquisitions.
SEASONALITY
The Company's revenue and operating results historically have fluctuated from
quarter to quarter, and the Company expects that they will continue to do so in
the future. These fluctuations have been caused by a number of factors,
including seasonal purchasing patterns of UpRight's customers and seasonal
rental patterns of Horizon's customers (principally due to the effect of weather
on construction activity). The operating results of any historical period are
not necessarily indicative of results for any future period.
YEAR 2000
The Year 2000 ("Y2K") issue is the result of computer programs being written
using two digits (i.e. "98") rather than four (i.e. "1998") to define the
applicable year. These programs treat years as occurring between 1900 and the
end of 1999 and do not self-convert to reflect the upcoming change in the
century. In addition, February, 2000 is a leap year at the end of a century, an
event that occurs only once every 400 years. If not corrected, computer
applications could fail or create erroneous results in date sensitive
applications.
Each of the Company, UpRight and Horizon has undertaken a program to understand
the nature and extent of the work required to make its respective systems Y2K
compliant. These programs encompass information systems, facilities systems,
vehicles, UpRight and Horizon's products and the readiness of UpRight and
Horizon's suppliers and customers. These programs include the following phases:
identification and assessment, compliance plan development, remediation and
testing, and contingency planning.
Each of the Company, UpRight and Horizon have essentially completed their Y2K
programs and believe their respective systems and products to be compliant. The
Company (including UpRight and Horizon) does not believe there to be any Y2K
issue with the products it sells, rents or services. Each of the Company,
UpRight and Horizon has written assurances from its respective suppliers to
confirm this.
The total cost of the Y2K project to date has not been material. The Company
believes that the most reasonably likely worst case Y2K scenario would result
from suppliers or other third parties failing to achieve Y2K compliance.
Depending upon the number of third parties, their identity and the nature of the
non-compliance, the Y2K issue could have a material adverse effect on the
Company's financial position or results of operations. The Y2K project has
significantly reduced the Company's level of uncertainty about the compliance
and readiness of third parties. The Company is completing a contingency plan
should any problems occur in critical areas.
Page 9
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
Page 10
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The status of certain legal proceedings was reported in the Company's Form 10-K
for the fiscal year ended June 27, 1999 and, subsequent thereto, there have been
no material changes in the status of such legal proceedings. Such legal
proceedings are also described in Note 2 to the Condensed Consolidated Financial
Statements in Item 1 of this Form 10-Q. Based upon investigation to date and
consultation with the Company's insurance carrier and legal counsel, management
does not believe that the ultimate resolution of this matter will have a
materially adverse effect on the Company's financial condition, results of
operations or liquidity.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. The following Exhibits are filed herewith and made a part hereof:
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<S> <C>
*3.1(i) Certificate of Incorporation of the Registrant, as amended.
*3.1(ii) Bylaws of the Registrant, as amended.
*4.1 Indenture, dated as of June 10, 1997, by and among the
Registrant, the Guarantors named therein and U.S. Trust
Company of California, N.A.
*4.4 Form of Exchange Global Note.
*10.3 Industrial Lease, dated February 7, 1997, between A.L.L., a
general partnership, and UpRight, Inc.
*10.4 Lease, entered into as of November 1995, by and between
Townview Partners, a Ohio partnership and UpRight, Inc.
*10.5 Recourse Agreement, dated February 11, 1997, by and between
Horizon High Reach, Inc., and American Equipment Leasing.
*10.6 Management Services Agreement, dated May 12, 1997, by and
between the Registrant and Griffin Group International
Management Ltd.
*10.8 Lease, dated January 1997, by and between Morris Ragona and
Joan Ragona, and Horizon High Reach, Inc.
*10.9 Agreement of Lease, dated January 26, 1995, by and between
Richard V. Gunner and George Andros, and Horizon High Reach,
Inc.
*10.10(i) Lease Agreement, executed November 10, 1989, by and between
Trussel Electric, Inc., and Up-Right, Inc., including Lease
Extension Agreement dated February 28, 1994, Lease
Modification Agreement dated January 26, 1994, and Notice of
Option to Renew dated May 7, 1992.
**10.10(ii) Lease Extension and Modification Agreement dated September 3,
1998.
***10.10(iii) Lease Extension and Modification Agreement dated October 28,
1997.
*10.11 Lease Agreement (undated) by and between T.T. Templin and
Horizon High Reach & Equipment Company.
*10.12 Agreement of Lease, dated October 15, 1992, by and between
Robert I. Selsky and Up-Right Aerial Platforms, Assignment of
Lease, dated June 1994, by and between Up-Right, Inc., and
Horizon High Reach, Inc., and Consent to Assignment dated July
15, 1994.
*10.13 Lease Agreement, dated April 27, 1990, by and between D.L.
Phillips Investment Builders, Inc., and Up-Right, Inc.,
together with Supplemental Agreement to Lease, dated September
30, 1994, Assignment of Lease, dated June 18, 1990, by and
between D.L. Phillips Investment Builders, Inc., and JMA,
Ltd., Assignment of Lease dated June 1994, by and between
Up-Right, Inc., and Horizon High Reach, Inc., and Consent to
Assignment dated July 15, 1994.
*10.14 Lease Renewal Agreement, dated October 19, 1992, between
Ronald W. Werner and UpRight, Inc.
*10.15 Lease, dated March 7, 1995, by and between BMB Investment
Group and Horizon High Reach, Inc.
**10.18(i) Equipment Financing Agreement, dated April 23, 1998, between
UpRight, Inc., and KeyCorp Leasing LTD.
*****10.18(ii) Promissory Note of UpRight, Inc., and Security Agreement,
dated April 1, 1999, between UpRight, Inc., and KeyCorp
Leasing.
*****10.18(ii) Promissory Note of UpRight, Inc., and Security Agreement,
dated May 4, 1999, between UpRight, Inc., and KeyCorp Leasing.
****10.19(i) Equipment Financing Agreement, dated February 26, 1999,
between UpRight, Inc., and Associates Commercial Corp.
*****10.19(ii) Security Agreement, dated May 13, 1999, between UpRight, Inc.,
and Associates Commercial Corporation.
*****10.19(ii) Security Agreement, dated June 2, 1999, between UpRight, Inc.,
and Associates Commercial Corporation.
10.19(iv) Security Agreement, dated June 24, 1999, between UpRight,
Inc., and Associates Commercial Corporation.
*****10.20 Lease Agreement, dated April 1, 1999, between FMCSR Holding
Corp., and Horizon High Reach, Inc.
*****10.21 Lease, dated May 24, 1999, between Industrial Boxboard Company
and Horizon High Reach, Inc.
10.22(i) Credit Agreement, dated August 26, 1999, between Wells Fargo
Bank, NA and Horizon High Reach, Inc.
10.22(ii) Revolving Line of Credit Note of Horizon High Reach, Inc.,
dated August 26, 1999.
10.22(iii) Term Note of Horizon High Reach, Inc., dated August 26, 1999.
10.22(iv) Term Commitment Note of Horizon High Reach, Inc., dated August
26, 1999.
10.22(v) Foreign Exchange Agreement, dated August 26, 1999, between
Wells Fargo Bank, NA and Horizon High Reach, Inc.
10.22(vi) Security Agreement-Equipment, dated August 26, 1999, between
Wells Fargo Bank, NA and Horizon High Reach, Inc.
10.22(vii) Continuing Security Agreement, dated August 26, 1999, between
Wells Fargo Bank, NA and Horizon High Reach, Inc.
10.22(viii) Subordination Agreement, dated August 26, 1999, between Wells
Fargo Bank, NA and Horizon High Reach, Inc.
10.23(i) Second Amended and Restated Business Loan Agreement between
Union Bank of California, NA and UpRight, Inc.
10.23(ii) Security Agreement, dated August 30, 1999, between Union Bank
of California, NA and UpRight, Inc.
10.23(iii) Promissory Notes of UpRight, Inc., dated August 30, 1999.
10.23(iv) Subordination Agreement, dated August 30, 1999, between
Union Bank of California, NA and UpRight, Inc.
27.1 Financial Data Schedule
</TABLE>
* Incorporated herein by reference to the Company's Registration Statement
on Form S-4 (Reg. No. 333-31187), filed with the Securities and Exchange
Commission on July 11, 1997.
** Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended June 28, 1998, filed with the Securities
and Exchange Commission on September 28, 1998.
Page 11
<PAGE> 12
*** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 27, 1998, filed with the
Securities and Exchange Commission on November 12, 1998.
**** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 28, 1999, filed with the
Securities and Exchange Commission on May 12, 1999.
***** Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended June 27, 1999, filed with the Securities
and Exchange Commission on September 27, 1999.
(b) REPORTS ON FORM 8-K. The Company did not file any reports on Form 8-K
during the quarter ended September 26, 1999.
Page 12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
W.R. CARPENTER NORTH AMERICA, INC.
Date: November 10, 1999
By: /s/ Graham D. Croot
---------------------------------------
Graham D. Croot
Chief Financial Officer
(Principal Financial Officer and Duly
Authorized Signatory)
Page 13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<S> <C>
*3.1(i) Certificate of Incorporation of the Registrant, as amended.
*3.1(ii) Bylaws of the Registrant, as amended.
*4.1 Indenture, dated as of June 10, 1997, by and among the
Registrant, the Guarantors named therein and U.S. Trust
Company of California, N.A.
*4.4 Form of Exchange Global Note.
*10.3 Industrial Lease, dated February 7, 1997, between A.L.L., a
general partnership, and UpRight, Inc.
*10.4 Lease, entered into as of November 1995, by and between
Townview Partners, a Ohio partnership and UpRight, Inc.
*10.5 Recourse Agreement, dated February 11, 1997, by and between
Horizon High Reach, Inc., and American Equipment Leasing.
*10.6 Management Services Agreement, dated May 12, 1997, by and
between the Registrant and Griffin Group International
Management Ltd.
*10.8 Lease, dated January 1997, by and between Morris Ragona and
Joan Ragona, and Horizon High Reach, Inc.
*10.9 Agreement of Lease, dated January 26, 1995, by and between
Richard V. Gunner and George Andros, and Horizon High Reach,
Inc.
*10.10(i) Lease Agreement, executed November 10, 1989, by and between
Trussel Electric, Inc., and Up-Right, Inc., including Lease
Extension Agreement dated February 28, 1994, Lease
Modification Agreement dated January 26, 1994, and Notice of
Option to Renew dated May 7, 1992.
**10.10(ii) Lease Extension and Modification Agreement dated September 3,
1998.
***10.10(iii) Lease Extension and Modification Agreement dated October 28,
1997.
*10.11 Lease Agreement (undated) by and between T.T. Templin and
Horizon High Reach & Equipment Company.
*10.12 Agreement of Lease, dated October 15, 1992, by and between
Robert I. Selsky and Up-Right Aerial Platforms, Assignment of
Lease, dated June 1994, by and between Up-Right, Inc., and
Horizon High Reach, Inc., and Consent to Assignment dated July
15, 1994.
*10.13 Lease Agreement, dated April 27, 1990, by and between D.L.
Phillips Investment Builders, Inc., and Up-Right, Inc.,
together with Supplemental Agreement to Lease, dated September
30, 1994, Assignment of Lease, dated June 18, 1990, by and
between D.L. Phillips Investment Builders, Inc., and JMA,
Ltd., Assignment of Lease dated June 1994, by and between
Up-Right, Inc., and Horizon High Reach, Inc., and Consent to
Assignment dated July 15, 1994.
*10.14 Lease Renewal Agreement, dated October 19, 1992, between
Ronald W. Werner and UpRight, Inc.
*10.15 Lease, dated March 7, 1995, by and between BMB Investment
Group and Horizon High Reach, Inc.
**10.18(i) Equipment Financing Agreement, dated April 23, 1998, between
UpRight, Inc., and KeyCorp Leasing LTD.
*****10.18(ii) Promissory Note of UpRight, Inc., and Security Agreement,
dated April 1, 1999, between UpRight, Inc., and KeyCorp
Leasing.
*****10.18(ii) Promissory Note of UpRight, Inc., and Security Agreement,
dated May 4, 1999, between UpRight, Inc., and KeyCorp Leasing.
****10.19(i) Equipment Financing Agreement, dated February 26, 1999,
between UpRight, Inc., and Associates Commercial Corp.
*****10.19(ii) Security Agreement, dated May 13, 1999, between UpRight, Inc.,
and Associates Commercial Corporation.
*****10.19(ii) Security Agreement, dated June 2, 1999, between UpRight, Inc.,
and Associates Commercial Corporation.
10.19(iv) Security Agreement, dated June 24, 1999, between UpRight,
Inc., and Associates Commercial Corporation.
*****10.20 Lease Agreement, dated April 1, 1999, between FMCSR Holding
Corp., and Horizon High Reach, Inc.
*****10.21 Lease, dated May 24, 1999, between Industrial Boxboard Company
and Horizon High Reach, Inc.
10.22(i) Credit Agreement, dated August 26, 1999, between Wells Fargo
Bank, NA and Horizon High Reach, Inc.
10.22(ii) Revolving Line of Credit Note of Horizon High Reach, Inc.,
dated August 26, 1999.
10.22(iii) Term Note of Horizon High Reach, Inc., dated August 26, 1999.
10.22(iv) Term Commitment Note of Horizon High Reach, Inc., dated August
26, 1999.
10.22(v) Foreign Exchange Agreement, dated August 26, 1999, between
Wells Fargo Bank, NA and Horizon High Reach, Inc.
10.22(vi) Security Agreement-Equipment, dated August 26, 1999, between
Wells Fargo Bank, NA and Horizon High Reach, Inc.
10.22(vii) Continuing Security Agreement, dated August 26, 1999, between
Wells Fargo Bank, NA and Horizon High Reach, Inc.
10.22(viii) Subordination Agreement, dated August 26, 1999, between Wells
Fargo Bank, NA and Horizon High Reach, Inc.
10.23(i) Second Amended and Restated Business Loan Agreement between
Union Bank of California, NA and UpRight, Inc.
10.23(ii) Security Agreement, dated August 30, 1999, between Union Bank
of California, NA and UpRight, Inc.
10.23(iii) Promissory Notes of UpRight, Inc., dated August 30, 1999.
10.23(iv) Subordination Agreement, dated August 30, 1999, between Union
Bank of California, NA and UpRight, Inc.
27.1 Financial Data Schedule
</TABLE>
* Incorporated herein by reference to the Company's Registration Statement
on Form S-4 (Reg. No. 333-31187), filed with the Securities and Exchange
Commission on July 11, 1997.
** Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended June 28, 1998, filed with the Securities
and Exchange Commission on September 28, 1998.
*** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended September 27, 1998, filed with the
Securities and Exchange Commission on November 12, 1998.
**** Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for the quarterly period ended March 28, 1999, filed with the
Securities and Exchange Commission on May 12, 1999.
***** Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended June 27, 1999, filed with the Securities
and Exchange Commission on September 27, 1999.
Page 14
<PAGE> 1
EXHIBIT 10.19(iv)
[LOGO]
SECURITY AGREEMENT
The undersigned debtor, meaning all debtors jointly and severally ("Debtor"), to
secure the obligations set forth herein grants to the secured party named below
(herein, with its successors and assigns, called "Secured Party") under the
terms and provisions of this agreement (this "Agreement") a security interest in
the following described property (herein, with all present and future
attachments, accessories, replacement parts, repairs and additions or
substitutions, referred to collectively as "Equipment"):
SEE SCHEDULE A ATTACHED HERETO AND MADE A PART HEREOF:
The Equipment will be used primarily for: [X] business or commercial use other
than farming operations ____ farming operations. When not in and, when in use,
will be used only in the following State(s): CA Equipment will be kept at: 801
S. Pine St., Madera, CA. 93637
- -------------------------------------------------------------------------------
PAYMENT SCHEDULE
Debtor promises to pay Secured Party the Total $3,124,440.00
--------------------
Amount of in installments as follows: (the "Total Amount")
(a) ________ at _________, beginning thirty (30) calendar days following the
date of the Delivery and Acceptance
OR
(b) Beginning with 24 payment(s) of $35,049.00. EACH COMMENCING 8/1/99
Followed by 36 payment(s) of $63,424.00. EACH COMMENCING 8/1/01
provided, however, that the final installment will be in the amount of the then
remaining unpaid balance. All amounts payable under this Agreement are payable
at Secured Party's address shown below or at such other address as Secured Party
may specify from time to time.
- --------------------------------------------------------------------------------
USE OF PROCEEDS
Secured Party is hereby irrevocably authorized and directed to disburse the
proceeds of this Agreement as follows:
<TABLE>
<CAPTION>
Amount Payee (Name and Address)
------ ------------------------
<S> <C>
Upright, Inc.
$2,503,956.39 1775 Park Street
Selma, CA 93662
$ 0.00
------------------
$ 0.00
------------------
</TABLE>
Debtor hereby acknowledges and agrees that the proceeds of this Agreement will
be used for commercial, business or agricultural purposes and will not be used
for personal, family or household purposes.
Secured Party may disburse the proceeds using checks, drafts, orders, transfer
funds, or any other method or media Secured Party deems desirable. Disbursement
may be made in Secured Party's name on Debtor's behalf or in Debtor's name.
Disbursement in accordance with the above instructions or any written supplement
to these instructions will constitute payment and delivery to and receipt by
Debtor of all such proceeds.
- --------------------------------------------------------------------------------
INSURANCE: Physical damage insurance covering the equipment is required. Debtor
can furnish this insurance through an agent or broker of Debtor's choice. Debtor
hereby authorizes Secured Party and any assignee to release to any insurance
company affiliated with Secured Party or any assignee any information relating
to a contract or policy of insurance which is providing or may provide insurance
coverage against physical damage to the Equipment.
- --------------------------------------------------------------------------------
DELINQUENCY: For each installment not paid when due, Debtor agrees to pay
Secured Party a delinquency charge calculated on the amount of such installment
at the rate of 1 1/2% per month for the period of the delinquency, or, a Secured
Party's option, 5% of such installment, provided that such a delinquency charge
is not prohibited by law, otherwise at the highest rate that Debtor can legally
obligate itself to pay and/or Secured Party can legally collect. Debtor agrees
to reimburse Secured Party immediately upon demand for any amount charged to
Secured Party by any depositary institution because a check, draft or other
order made or drawn by or for the benefit of Debtor is returned unpaid for any
reason. From and after acceleration, Debtor agrees to pay interest on all
amounts then owing at the rate of 1 1/2% per month, if not prohibited by law,
otherwise at the highest rate that Debtor can legally obligate itself to pay
and/or Secured Party can legally collect. If the implementation of any provision
of this Agreement would at any time raise the interest rate (whether before or
after acceleration) or delinquency charge above the lawful maximum, if any, in
effect from time to time under applicable state or federal laws for loans to
borrowers of the type, in the amount, for the purposes, and otherwise of the
kind contemplated by this Agreement, then such interest rate and/or delinquency
charge will be limited to such lawful maximum and any excess amount
inadvertently collected will be deemed to be a partial prepayment of principal
and applied or reapplied by Secured Party in that manner.
- --------------------------------------------------------------------------------
SECURITY INTEREST: To secure payment of the Total Amount and all of Debtor's
obligations under this Agreement or with respect to the Equipment, Debtor hereby
grants to Secured Party a first priority security interest in the Equipment and
in all cash and non-cash proceeds thereof (the Equipment and all such proceeds
are herein called the "Collateral") regardless of any retaking and/or redelivery
of the Collateral to Debtor.
Page 1 of 4 of Security Agreement dated: June 24, 1999 between Upright, Inc.
(Debtor) and Associates Commercial Corporation (Secured Party).
<PAGE> 2
CROSS SECURITY: Debtor further grants to Secured Party a security interest in
the Collateral to secure the payment of all absolute and all contingent
obligations and liabilities of Debtor to Secured Party now existing or hereafter
arising, whether under this Agreement or under any other agreement and whether
due directly or by assignment; provided, however, upon any assignment of this
Agreement by Secured Party, the assignee shall be deemed for the purpose of this
paragraph as the only party with a security interest in the Collateral.
- --------------------------------------------------------------------------------
DELIVERY AND ACCEPTANCE OF EQUIPMENT
(Check Appropriate Box)
Debtor's obligations and liabilities to Secured Party are absolute and
unconditional under all circumstances and regardless of any failure of operation
or Debtor's loss of possession of any item of Equipment or the cessation or
interruption of Debtor's business for any reason whatsoever.
[ ] On _________________, the Equipment being purchased with the proceeds of
this Agreement was delivered to Debtor with all installation and other
work necessary for the proper use of the Equipment completed at a
location agreed upon by Debtor; the Equipment was inspected by Debtor
and found to be in satisfactory condition in all respects and delivery
was unconditionally accepted by Debtor.
[ ] The Equipment being purchased with the proceeds of this Agreement has
not yet been delivered to or accepted by Debtor and, upon delivery,
Debtor agrees to execute such delivery and acceptance certificate as
Secured Party requires.
[ ] All of the Equipment was acquired by Debtor prior to the date hereof and
was previously delivered to and unconditionally accepted by Debtor.
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL TERMS
1. Additional Warranties and Agreements. Debtor warrants and agrees that:
the execution of and performance by Debtor under the terms of this Agreement has
been approved for Debtor by all necessary action and by Debtor's partners or
board of directors, as applicable; the Equipment is currently and will continue
be maintained in good operating condition, repair and appearance and is
currently and will continue be used and operated with care only by qualified
personnel in the regular course of Debtor's business and in conformity with all
applicable governmental laws and regulations, manufacturer's specifications and
the restrictions contained in any insurance policy insuring the Equipment; the
Equipment is not currently and will not be used in conjunction with the storage,
transportation or disposal of substances considered to be toxic and/or hazardous
or in conjunction with any activity or for any use that would subject the
Equipment to seizure or confiscation by any governmental body; and the Equipment
is currently located at and will be kept by Debtor at the location set forth for
it on the reverse side of this Agreement and will not be removed from said
location without the prior written consent of Secured Party, except that if the
Equipment is of a type which is mobile and normally used by Debtor at more than
one location, Debtor may use the Equipment away from said location in the
regular course of Debtor's business provided that (a) if the Equipment is not
returned to said location within 30 days, Debtor will immediately thereafter,
and each 30 days thereafter until the Equipment is returned, report the then
current location of the Equipment to Secured Party in writing and (b) the
Equipment shall not be removed from the State(s) of use indicated on the reverse
side of this Agreement. Secured Party shall have the right to inspect the
Equipment at all reasonable times and from time to time.
Debtor further warrants and agrees that: the security interest in the
Collateral granted to and/or retained by Secured Party is and will continue to
be superior to any title to or interest in the Equipment now or hereafter held
or claimed by any other party; the Collateral is free from and will be kept free
from all liens, claims, security interests and encumbrances (whether superior or
inferior to the interests of Secured Party) other than that created by this
Agreement; notwithstanding Secured Party's interest in proceeds, Debtor will not
and will not allow any other party to consign, sell, rent, lend, encumber,
pledge, transfer, secrete or otherwise dispose of any of the Collateral without
Secured Party's prior written consent; Debtor will do everything Secured Party
deems necessary or expedient to perfect or preserve the interests granted to
Secured Party under this Agreement and the first priority of such interests; any
Manufacturer's Statement or Certificate of Origin or Certificate of Title
relating to the Equipment shall be immediately delivered to Secured Party and,
if a registration is required for any item of Equipment, Debtor will cooperate
with Secured Party in obtaining the Certificate of Title or registration
disclosing the interests of Debtor and Secured Party in the Equipment; Debtor
will defend any action, proceeding or claim affecting the Collateral or the
interests of Secured Party in the Collateral; Debtor shall promptly pay all
amounts payable in conjunction with the storage, maintenance or repair of the
Equipment and all taxes, assessments, license fees and other public or private
charges levied or assessed in conjunction with the operation or use of the
Equipment or levied or assessed against the Collateral, this Agreement or any
accompanying note except for those which are being contested by Debtor in good
faith by appropriate proceedings and which do not constitute a lien or
encumbrance upon the Collateral; and Debtor will from time to time furnish
Secured Party with such financial statements and other information as Secured
Party may reasonably request.
2. Insurance and Risk of Loss. Debtor will at all times bear all risk of
loss of, damage to or destruction of the Equipment. Debtor agrees to immediately
procure and maintain insurance on the Equipment for the full insurable value
thereof and for the life of this Agreement, in the form of "All Risk" or similar
insurance (insuring the Equipment for fire, extended coverage, vandalism, theft
and collision and containing only those exclusions from coverage which are
acceptable to Secured Party) plus such other insurance as Secured Party may
specify from time to time, all in form and amount and with insurers satisfactory
to Secured Party. Debtor agrees to deliver promptly to Secured Party
certificates or, if requested, policies of insurance satisfactory to Secured
Party, each with a standard long-form loss-payable endorsement naming Secured
Party or assigns as loss-payee and providing that Secured Party's rights under
such policy will not be invalidated by any act, omission or neglect of anyone
other than Secured Party, and containing the insurer's agreement to give 30 days
prior written notice to Secured Party before any cancellation of or material
change in the policy(s) will be effective as to Secured Party, whether such
cancellation or change is at the direction of Debtor or insurer. Secured Party's
acceptance of policies in lesser amounts or risks will not be a waiver of
Debtor's obligation to procure insurance complying with the provisions hereof
promptly after notice from Secured Party. Debtor assigns to Secured Party all
proceeds of any physical damage or credit insurance which is maintained by
Debtor in accordance herewith, including returned and unearned premiums, up to
the amount owing hereunder by Debtor. Debtor directs all insurers to pay such
proceeds solely to the order of Secured Party for application to Debtor's
indebtedness to Secured Party. Secured Party will not have the right to cancel
any such insurance without Debtor's consent prior to the occurrence of any event
of default and the repossession, loss or destruction of the Equipment. Secured
Party may, at its option, apply any such proceeds received by Secured Party to
the final maturing installments due hereunder in the inverse order of their
maturity.
3. Performance By Secured Party. If Debtor fails to perform any of Debtor's
obligations pursuant to Paragraphs 1 or 2 above, Secured Party may perform the
same for the account of Debtor. Any such action by Secured Party will be in
Secured Party's sole discretion and Secured Party will not be obligated in any
way to do so. Secured Party's performance on behalf of Debtor will not obligate
Secured Party to perform the same or any similar act in the future and will not
cure or waive Debtor's failure of performance as an event of default hereunder.
All sums advanced or costs and expenses incurred by Secured Party pursuant to
this Paragraph, including the reasonable fees of any attorney retained by
Secured Party, will be for the account of Debtor, will constitute indebtedness
secured by Secured Party's security interest in
Page 2 of 4 of Security Agreement dated: June 24, 1999 between Upright, Inc.
(Debtor) and Associates Commercial Corporation (Secured Party).
<PAGE> 3
the Collateral, will bear interest at the rate as specified on the reverse side
of this Agreement in the event of acceleration and, unless Secured Party, in
Secured Party's sole discretion agrees otherwise in writing, shall be
immediately due and payable.
4. Events of Default. Time is of the essence. An event of default will
occur if: (a) Debtor fails to pay when due any amount owed by it to Secured
Party under this Agreement or under the terms of any promissory note delivered
in conjunction with this Agreement or if Debtor fails to pay when due any amount
owed by it to Secured Party or to any affiliate of Secured Party under any other
document, agreement or instrument; (b) Debtor fails to perform in compliance
with any of its agreements hereunder or any warranty made by Debtor in this
Agreement is or becomes incorrect or if Debtor fails to perform or observe any
term or provision to be performed or observed by it under any other document,
instrument or agreement furnished by Debtor to Secured Party or any affiliate of
Secured Party or otherwise acquired by Secured Party or any affiliate of Secured
Party; (c) any information, representation, or warranty furnished by Debtor to
Secured Party or to any affiliate of Secured Party is inaccurate or incorrect in
any material respect when furnished; (d) Debtor becomes insolvent or ceases to
do or is prohibited by any court order or governmental action from conducting
the business in which Debtor is principally engaged on the date of this
Agreement as a going concern; (e) any surety or bonding company assumes any of
Debtor's responsibilities under any contract or job; (f) if any of the Equipment
is lost, stolen, destroyed, confiscated by any governmental agency, abandoned,
or relocated, used or maintained in violation of the terms hereof or if Debtor
attempts to consign, sell, rent, lend or encumber any of the Equipment or allows
another to do so; (g) Debtor files a petition in bankruptcy, or for an
arrangement, reorganization, or similar relief, or makes an assignment for the
benefit of creditors, or applies for the appointment of a receiver or trustee
for a substantial part of its assets or for any of the Equipment, or attempts to
take advantage of any process or proceeding for the relief of debtors, or if any
such action is taken against Debtor; (h) any other party attempts to attach,
repossess or execute upon any of the Collateral; (i) Debtor ceases to exist as a
legal entity or Debtor or any party in control of Debtor takes any action
looking to Debtor's dissolution as a legal entity; (j) there shall be a material
change in the management, ownership or control of Debtor; or (k) Secured Party
in good faith believes that the prospect of payment or performance hereunder is
impaired. Secured Party's inaction with respect to an event of default shall not
be a waiver of such default and Secured Party's waiver of any default shall not
be a waiver of any other default.
5. Remedies Upon Default. Upon the occurrence of an event of default, and
at any time thereafter as long as the default continues, Secured Party may, at
its option, with or without notice to Debtor (i) declare this Agreement to be in
default, (ii) declare the indebtedness hereunder to be immediately due and
payable, (iii) declare all other debts then Owing by Debtor to Secured Party to
be immediately due and payable, (iv) cancel any insurance and credit any refund
to the indebtedness, and (v) exercise all of the rights and remedies of a
Secured Party under the Uniform Commercial Code and any other applicable laws,
including, without limitation, the right to require Debtor to assemble the
Equipment and deliver it to Secured Party at a place to be designated by Secured
Party which is reasonably convenient to both parties, and to lawfully enter any
premises where the Collateral may be without judicial process and take
possession thereof. Acceleration of any or all indebtedness, if so elected by
Secured Party, shall be subject to all applicable laws including those
pertaining to refunds and rebates of unearned charges. Any property other than
the Collateral which is in or upon the Collateral at the time of repossession
may be taken and held without liability until its return is requested by Debtor.
Any sale or other disposition of any of the Collateral may be made at public or
private sale or through public auction for a wholesale or retail price at the
option of Secured Party. Secured Party may buy at any sale and become the owner
of the Collateral. Unless otherwise provided by law, any requirement of
reasonable notice which Secured Party may be obligated to give regarding the
sale or other disposition of Collateral will be met if such notice is mailed to
Debtor at its address shown herein at least ten days before the time of sale or
other disposition. Debtor agrees that Secured Party may bring any legal
proceedings it deems necessary to enforce the payment and performance of
Debtor's obligations hereunder in any court in the State shown in Secured
Party's address set forth herein, and service of process may be made upon Debtor
by mailing a copy of the summons to Debtor at its address shown herein. The
filing by Secured Party of any action or proceeding with respect to the
Collateral or any of Debtor's obligations hereunder shall not constitute an
election by Secured Party's remedies or a waiver of Secured Party's rights to
take possession of the Collateral as provided above.
Expenses of retaking, holding, preparing for sale, selling and the like shall
include (a) the reasonable fees of any attorneys retained by Secured Party,(b)
any amounts advanced or expenses incurred by Secured Party pursuant to Paragraph
3 hereof and (c) all other legal and other expenses incurred by Secured Party.
Debtor agrees that it is liable for and will promptly pay any deficiency
remaining after any disposition of Collateral after default and all costs and
expenses, including the reasonable fees of any attorney, incurred by Secured
Party in the collection of any such deficiency.
6. Power of Attorney And Financing Statement. DEBTOR HEREBY APPOINTS
SECURED PARTY OR ANY OFFICER, EMPLOYEE OR DESIGNEE OF SECURED PARTY OR ANY
ASSIGNEE OF SECURED PARTY (OR ANY DESIGNEE OF SUCH ASSIGNEE) AS DEBTOR'S
ATTORNEY-IN-FACT TO, IN DEBTOR'S OR SECURED PARTY'S NAME, TO: (a) PREPARE,
EXECUTE AND SUBMIT ANY NOTICE OR PROOF OF LOSS IN ORDER TO REALIZE THE BENEFITS
OF ANY INSURANCE POLICY INSURING THE EQUIPMENT; (b) PREPARE, EXECUTE AND FILE
NAY INSTRUMENT WHICH, IN SECURED PARTY'S OPINION, IS NECESSARY TO PERFECT AND/OR
GIVE PUBLIC NOTICE OF THE INTERESTS OF SECURED PARTY IN THE EQUIPMENT; AND (c)
ENDORSE DEBTOR'S NAME ON ANY REMITTANCE REPRESENTING PROCEEDS OF ANY INSURANCE
RELATING TO THE EQUIPMENT OR THE PROCEEDS OF THE SALE LEASE OR OTHER DISPOSITION
OF THE EQUIPMENT (WHETHER OR NOT THE SAME IS A DEFAULT HEREUNDER). This power is
coupled with an interest and is irrevocable so long as any indebtedness
hereunder remains unpaid. Debtor agrees to execute and deliver Secured Party,
upon Secured Party's request such documents and assurances as Secured Party
deems necessary or advisable for the confirmation or perfection of this Security
Agreement and Secured Party's rights hereunder, including such documents as
Secured Party may require for filing or recording. DEBTOR AGREES THAT A CARBON,
PHOTOGRAPHIC OR OTHER REPRODUCTION OR THIS LEASE OR OF A FINANCING STATEMENT MAY
BE FILED AS A FINANCING STATEMENT.
7. Assignment. Debtor shall not assign this Agreement without the prior
written consent of Secured Party. Secured Party may assign this Agreement with
or without notice to or the consent of Debtor. Upon assignment, the term
"Secured Party" shall mean and refer to any assignee who is the holder of this
Agreement. After assignment of this Agreement by Secured Party, the assignor
will not be the assignee's agent for any purpose and Debtor's obligations to the
assignee will be absolute and unconditional and, to the extent permitted by
applicable law, will not be subject to any abatement, reduction, recoupment,
defense, set-off or counterclaim available to Debtor for breach of warranty or
for any other reason whatsoever. Upon full payment of all obligations secured by
this Agreement, the assignee may deliver all original papers to the assignor for
Debtor.
8. Miscellaneous. (A) All of Secured Party's rights hereunder are
cumulative and not alternative. (B) The inclusion of a trade name or division
name in the identification of Debtor hereunder does not limit Secured Party's
rights, after the occurrence of an event of default, to proceed against all of
Debtor's assets, including those held or used by Debtor individually or under
another trade or division name. (C) If permitted by law, Debtor agrees that a
carbon, photographic or other reproduction of this Agreement or of a financing
statement may be filed as a financing statement. (D) Secured Party may correct
patent errors herein and fill in blanks. (E) All of the terms and provisions
hereof will apply to and be binding upon Debtor, its heirs, personal
representatives, successors and assigns and shall inure to the benefit of
Secured Party, its successors and assigns. (F) Debtor and Secured Party hereby
waive any right to trial by jury in any action or proceeding relating to this
Agreement or the transaction contemplated hereby. (G) Debtor hereby expressly
waives notice of nonpayment, presentment, protest, dishonor, default, intent to
accelerate the maturity hereof and of acceleration of the maturity hereof. (H)
If allowed by law, "the reasonable fees of attorneys" retained by Secured Party
shall
Page 3 of 4 of Security Agreement dated: June 24, 1999 between Upright, Inc.
(Debtor) and Associates Commercial Corporation (Secured Party).
<PAGE> 4
include the amount of any flat fee, retainer, contingent fee and/or the hourly
charges of any attorney retained by Secured Party in enforcing any of Secured
Party's rights hereunder in the prosecution or defense of any litigation related
to this Agreement or the transactions contemplated by this Agreement. (I) To the
extent allowed by law, Debtor hereby waives any exemptions or appraisals. (J) No
waiver or change in this Agreement or in any related note will be binding upon
Secured Party, or Secured Party's assignee, unless such waiver or change is in
writing and signed by one of its officers and any such waiver or change shall
then be effective only upon the terms and to the extent provided in such
writing. (K) The acceptance by Secured Party of any remittance from a party
other than Debtor will in no way constitute Secured Party's consent to the
transfer of any of the Collateral to such party. (L) Any captions or headings
included in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning of any provision contained in this
Agreement. (M) Any provision contained herein which is contrary to, prohibited
by or invalid under applicable laws or regulations will be deemed inapplicable
and omitted herefrom, but shall not invalidate the remaining provisions hereof.
(N) The only copy of this Agreement which constitutes "chattel paper" is the
original executed copy designated as "Original For Associates".
ADDITIONAL TERMS AND ORAL AGREEMENTS: Debtor and Secured Party agree that this
is a three page Agreement and each page hereof constitutes a part of this
Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Debtor's Social Security or Federal Taxpayer Identification Number is 99-1099653
and Co-Debtor's is:___________________________.
DATED: June 24, 1999
---------------------------------------------------
SECURED Associates Commercial Corporation
PARTY --------------------------------------------------
By:
-----------------------------------------------
Title:
--------------------------------------------
303 North Hurstbourne Parkway, Suite 250
--------------------------------------------
(Street Address)
Louisville, KY 40222
--------------------------------------------
(City, State and Zip Code)
Debtor hereby acknowledges receipt of an exact copy of this
Agreement.
DEBTOR: Upright, Inc.
---------------------------------------------------
By: /s/ Alan Harper
-----------------------------------------------
Title: Controller
-----------------------------------------
By:
-----------------------------------------------
Title:
--------------------------------------------
1775 Park Street
--------------------------------------------
(Street Address)
Selma, CA 93662
--------------------------------------------
(City, COUNTY, State and Zip Code)
Debtor hereby acknowledges receipt of an exact copy of this Agreement
Page 4 of 4 of Security Agreement dated: June 24, 1999 between Upright, Inc.
(Debtor) and Associates Commercial Corporation (Secured Party).
<PAGE> 5
Page 1 of 3
SCHEDULE A
Attached to and made a part of a(n) SECURITY AGREEMENT dated June 24, 1999
between Upright, Inc. (Debtor) and Associates Commercial Corporation (Secured
Party)
(Describe property fully, including year if appropriate, make, model, kind of
unit, serial number and any other pertinent information.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
VENDOR INVOICE NUMBER DESCRIPTION
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Dell Receivables 101396312 Inspiron D266XT Pentium II
Dell Receivables 166339044 Inspiron D266XT Pentium II
CDW Computer Centers 8185826 HP Netserver
CDW Computer Centers 8208914 HP Netserver
Ace Electric 12666 Electrical for Batch System
Kasparian Paint 44623 Dwn Pymnt Graco Pro Mix System
Kasparian Paint 46589 Final Pymt Graco Pro Mix System
Rigoli Fire Equipment 11078 Dry Chemical Fire System
Tellkamp Systems 5677 Batch liquid painting system
Tellkamp Systems 5718 Serial Number 3713, with 18'x16'x40'
Tellkamp Systems 5734 Steam Cleaning Booth, Dry Filter
Tellkamp Systems 5788 Spray Booth, Cure Oven and Waste
Tellkamp Systems 5854 Water Treatment System
Coast Tool Company 2010793-01 Presetter
J.M. Equipment 25684 Hoppers
MHI Machine Tool USA, Inc. 19072 (2) Mitsubishi MTH11/1416
MHI Machine Tool USA, Inc. Horizontal Boring Mills
Mitsubishi Machine Tools Serial #'s G62240 & G62250
Stanley Storage Systems 478945 Storage Cabinets
TCB Industrial 980643 Scope # 1
TCB Industrial 990014 Scope # 2
Gateway 2000 32236107 GP6-400 System
Gateway 2000 32240501 Hitachi Monitor
Dell Receivables 173327420 Inspiron D266XT Pentium II
Dell Receivables 183026731 Inspiron D266XT Pentium II
PDM Moldings 15772 LX Control Cast Tool-50%
PDM Moldings 16960 LX Control Cast Tool-50% & other
California Furnishings 38632 Office Furniture
Gateway 2000 33548323 GP6-400 System
CDW Computer Centers 8639534 Viewsonic Monitor
Gateway 2000 33655790 GP6-400 System
Gateway 2000 33672722 GP6-400 System
California Furnishings 38626 Office Furniture
Tech-Tools 11227 Digiset Calibrator
Dell Receivables 180109159 Inspiron D266GT Pentium II
Dell Receivables 130109621 Inspiron D233XT Pentium II
Hunter Associates 6548376 Miniscan XE Plus Spectrophotometer
Johnston Industrial B190564 Willis SE2030 Gear Drill Press
Jack Martin Tool & Die 5892 8-Spreader Bars
Veco Technologies 11389 Weld Fixture 2515, 2516, 2517
Greco Systems 79523 Touch Station DNC Link for CNC
Gateway 2000 33569514 GP6-450 PC w/HP4000 Laser Printer
</TABLE>
(Debtor) Signature: /s/ Alan Harper
----------------
Controller
<PAGE> 6
Page 2 of 3
SCHEDULE A
Attached to and made a part of a(n) SECURITY AGREEMENT dated June 24, 1999
between Upright, Inc. (Debtor) and Associates Commercial Corporation (Secured
Party)
(Describe property fully, including year if appropriate, make, model, kind of
unit, serial number and any other pertinent information.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
VENDOR INVOICE NUMBER DESCRIPTION
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Contec Industries 2320 Chain Sling
Contec Industries 23182 Chain Sling
Contec Industries 23245 Contec Industries
Contec Industries 23341 1600lb. Magnet
Hydraulics Controls Inc P-81461-0 Power Unit
J.M. Equipment 25066 Fiberglass Ladders
Northern Steel Inc SL0001233 1" Beams
Northern Steel Inc SL0001239 Stack Bins
PDM 765329 12 GA Steel
Tech-Tools 12224 Carbide Drill
Tech-Tools 12289 Clicker Torque Wrench
Tech-Tools 12315 Drive Wrench
Tech-Tools 12316 Drive Wrench
Tech-Tools 12452 Torque Wrench
W.W. Grainger 732-266393-6 Gauges
Gateway 2000 34578836 GP6-400 System
Manitex 19846 Boom Tube Weld Fixture
Jack Martin Tool & Die 5891 Weld Fixture 2912
Veco Technologies 11388 Weld Fixture 2832 & 2836
Jack Martin Tool & Die 5893 Weld Fixture 2911
Aero Methods 1576 Weld Fixture 2865
Aero Methods 1586 Weld Fixture 2957
Entegee 68102 Weld Fixture 2931 & 2939
Entegee 67426 Weld Fixture 2930 & 2940
Method Tool & Design 111 Weld Fixture 2937
Method Tool & Design UPRT#11-14 Weld Fixture 2915,2936-2938
COB Enterprises 2237 Weld Fixture 2834
COB Enterprises 2236 Weld Fixture 2833-50%
COB Enterprises 2242 Weld Fixture 2833-50%
CNC Machining Service 8381 Mill Fixture
CNC Machining Service 8382 Mill Fixture
Jaeckel Tool & Die 99074 Drill Jig
Kem-Tech 10616 Machining Fixture
Kem-Tech 10619 Milling Fixture
Kem-Tech 10620 Machining Fixture
Fresno Oxygen 813498 Wall Fan
Kings Canyon Welding 199910 Paint Rack
McMaster-Carr 11416055 Hydraulic Scissor Lift Table
Tech-Tools 12746 Burnishing Tool
Finishing Equipment 34064 Blast Booth-40%
Finishing Equipment 33866 Blast Booth-50%
Finishing Equipment 34070 Blast Booth-10%
Fresno Oxygen 811415 Willis SE2030 Gear Drill Press
</TABLE>
(Debtor) Signature: /s/ Alan Harper
----------------
Controller
<PAGE> 7
Page 3 of 3
SCHEDULE A
Attached to and made a part of a(n) SECURITY AGREEMENT dated June 24, 1999
between Upright, Inc. (Debtor) and Associates Commercial Corporation (Secured
Party)
(Describe property fully, including year if appropriate, make, model, kind of
unit, serial number and any other pertinent information.)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
VENDOR INVOICE NUMBER DESCRIPTION
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Tech-Tools 11699 Stronghold Cabinet
W.W. Grainger 506-868507-1 Light Meter
W.W. Grainger 732-134212-8 Cabinet
W.W. Grainger 732-340608-7 Trash Pump
W.W. Grainger 930-236200-0 Band Saw
Weco 463527 Lincoln Welder
Weco 470210 Labeler/Digital Camera
Weco 475065 Cut Off Saws
Dell Receivables 188370811 Inspiron D300GT Pentium II
CAD Graphics 1236 2 Engineering PC Workstations
Dell Receivables 189131394 2-Inspiron D300GT Pentium II
Cal-Weld Supply 64915 Dereeler Accutrack
Michael H. Clements 11848 Weld Fixture 2878
Abell Tool 990010106 Machining Fixture 2766 & 2767
Kem Tech 10457 Machining Fixture 2801
Dell Receivables 184103737 Inspiron D300GT Pentium II
CDW Computer Centers 8895430 MS WIN NT SVR
CDW Computer Centers 8914641 MS MSOL Exchange Cint NT
CDW Computer Centers 8948107 HP Netserver
CDW Computer Centers 8985687 HP 9.1 GB Profile Hot Swap
</TABLE>
(Debtor) Signature: /s/ Alan Harper
----------------
Controller
<PAGE> 8
[LOGO]
PAYMENT ADJUSTMENT ADDENDUM TO PROMISSORY NOTE
AND SECURITY AGREEMENT BETWEEN
ASSOCIATES COMMERCIAL CORPORATION., AS SECURED PARTY AND
UPRIGHT, INC., AS DEBTOR
DATED JUNE 24, 1999.
ADJUSTMENT CLAUSE:
Base Monthly Payments have been calculated using a rate factor of (2.53295%)
times equipment cost. This factor is based on a Sixty (60) month U.S. Treasury
Note Yield of 5.72% as published in the Wall Street Journal on June 01, 1999.
The Rate Factor and Base Monthly Payments are fixed for a period of Thirty (30)
days from June 22, 1999. Debtor agrees that, after this Thirty (30) Day Period,
(until the day of contract commencement) the rate factor and monthly payment
will be adjusted to any increase in the aforementioned Sixty (60) month U.S.
Treasury Note Yield as of the first day of the month the contract commencement.
If no sixty (60) month U.S. Treasury Note Yield is published as of the first of
the month, an average of the published Fifty-Nine (59) month and Sixty-One (61)
month U.S. Treasury Note Yields will be used for adjustment purposes. The final
rate factor and monthly payments will be fixed on the day of contract
commencement for the full term.
AGREED TO, THIS 24 DAY OF JUNE, 1999
UPRIGHT, INC.
DEBTOR
BY: /S/ ALAN HARPER TITLE: CONTROLLER
-------------------------------- ----------------------------------
<PAGE> 1
EXHIBIT 10.22(i)
CREDIT AGREEMENT
THIS AGREEMENT is entered into as of August 26, 1999 by and between
HORIZON HIGH REACH, INC., a Delaware corporation ("Borrower"), and WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Bank").
RECITAL
Borrower has requested from Bank the credit accommodations described
below (each, a "Credit" and collectively, the "Credits"), and Bank has agreed to
provide the Credits to Borrower on the terms and conditions contained herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrower hereby agree as follows:
ARTICLE I
THE CREDITS
SECTION 1.1. LINE OF CREDIT.
(a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including November 5, 2001, not to exceed at any time the aggregate
principal amount of Six Million Dollars ($6,000,000.00) ("Line of Credit"), the
proceeds of which shall be used for working capital requirements. Borrower's
obligation to repay advances under the Line of Credit shall be evidenced by a
promissory note substantially in the form of Exhibit A attached hereto ("Line of
Credit Note"), all terms of which are incorporated herein by this reference.
(b) Borrowing and Repayment. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above.
-1-
<PAGE> 2
SECTION 1.2. TERM LOAN.
(a) Term Loan. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make a loan to Borrower in the principal amount of Thirty
Million Dollars ($30,000,000.00) ("Term Loan"), the proceeds of which shall be
used to paydown existing term debt owed to its parent company, W.R. Carpenter
North America, Inc. ("Parent") Borrower's obligation to repay the Term Loan
shall be evidenced by a promissory note substantially in the form of Exhibit B
attached hereto ("Term Note"), all terms of which are incorporated herein by
this reference. Bank's commitment to grant the Term Loan shall terminate on
September 30, 1999.
(b) Repayment. The principal amount of the Term Loan shall be repaid in
accordance with the provisions of the Term Note.
(c) Prepayment. Borrower may prepay principal on the Term Loan solely in
accordance with the provisions of the Term Note.
SECTION 1.3. TERM COMMITMENT.
(a) Term Commitment. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including November 5, 2000, not to exceed the aggregate principal amount
of Ten Million Dollars ($10,000,000.00) ("Term Commitment"), the proceeds of
which shall be used to assist with the purchase of budgeted capital expenditures
for fiscal year 2000, and which shall be converted on November 5, 2000, to a
term loan, as described more fully below. Borrower's obligation to repay
advances under the Term Commitment shall be evidenced by a promissory note
substantially in the form of Exhibit C attached hereto ("Term Commitment Note"),
all terms of which are incorporated herein by this reference.
(b) Borrowing and Repayment. Borrower may from time to time during the
period in which Bank will make advances under the Term Commitment borrow and
partially or wholly repay its outstanding borrowings, and reborrow, subject to
all the limitations, terms and conditions contained herein; provided however,
that the total outstanding borrowings under the Term Commitment shall not at any
time exceed the maximum principal amount available thereunder, as set forth
above. The outstanding principal balance of the Term Commitment shall be due and
payable in full on November 5, 2000; provided however, that so long as Borrower
is in compliance on said date with all terms
-2-
<PAGE> 3
and conditions contained herein and in any other documents evidencing the
Credits, Bank agrees to restructure repayment of said outstanding principal
balance so that principal shall be amortized over 5 years and shall be repaid in
60 monthly installments, as set forth in the Term Commitment Note.
(c) Prepayment. Borrower may prepay principal on the Term Commitment
solely in accordance with the provisions of the Term Commitment Note.
SECTION 1.4. FOREIGN EXCHANGE FACILITY.
(a) Foreign Exchange Facility. Subject to the terms and conditions of
this Agreement, Bank hereby agrees to make available to Borrower a facility (the
"Foreign Exchange Facility") under which Bank, from time to time up to and
including November 5, 2001, will enter into foreign exchange contracts for the
account of Borrower for the purchase and/or sale by Borrower in United States
dollars or Danish Krone; provided however, that the maximum amount of all
outstanding foreign exchange contracts shall not at any time exceed an aggregate
of Seven Hundred Fifty Thousand United States Dollars (US$750,000.00). No
foreign exchange contract shall be executed for a term in excess of twelve (12)
months or for a term which extends beyond November 5, 2001. Borrower shall have
a "Delivery Limit" under the Foreign Exchange Facility not to exceed at any time
the aggregate principal amount of Two Hundred Seventy-five Thousand United
States Dollars (US$275,000.00), which Delivery Limit reflects the maximum
principal amount of Borrower's foreign exchange contracts which may mature
during any one (1) day period. All foreign exchange transactions shall be
subject to the additional terms of a Foreign Exchange Agreement, substantially
in the form of Exhibit D attached hereto ("Foreign Exchange Agreement"), all
terms of which are incorporated herein by this reference.
(b) Settlement. Each foreign exchange contract under the Foreign
Exchange Facility shall be settled on its maturity date by Bank's debit to any
demand deposit account maintained by Borrower with Bank.
SECTION 1.5. LIMITATION ON BORROWINGS.
Notwithstanding any other provision of this Agreement, the aggregate
amount of all outstanding borrowings under the Term Loan, the Term Commitment
and any other existing term debt of Borrower, including, without limitation, to
Parent, shall not at any time exceed a maximum of eighty-five percent (85%) of
the
-3-
<PAGE> 4
net book value of Borrower's inventory consisting of assets of the type
currently and historically reflected under the heading of "Rental Equipment" in
Borrower's financial statements, with the understanding that notwithstanding
such characterization as "equipment", the assets in question are Borrower's
inventory. Borrower shall repay principal under the Term Loan, Term Commitment
and/or other term debt upon demand by Bank to the extent of any such excess. Any
such repayment(s) to Bank shall be subject to applicable prepayment fee(s).
Further, notwithstanding any other provision of this Agreement, the
aggregate amount of all outstanding borrowings hereunder shall not at any time
exceed the maximum amount of aggregate indebtedness permitted to Borrower,
Parent, or any affiliate of Borrower or Parent (with, Borrower, Parent and any
affiliate of Borrower or Parent being, individually and collectively, the
"Companies") or any or all of them under any contract, obligation, indenture or
other instrument to which any of the Companies is a party or by which any of the
Companies may be bound, including, without limitation, any agreements or
obligations of any of the Companies related to or arising in connection with
Parent's 10 5/8% Senior Subordinated Notes due 2007 ("Parent Financing").
Borrower shall immediately repay principal under the applicable Credit in such
amount as may be necessary to prevent any such violation. Any such repayment(s)
to Bank shall be subject to applicable prepayment fee(s).
SECTION 1.6. INTEREST/FEES.
(a) Interest. The outstanding principal balance of the Line of Credit,
Term Loan and Term Commitment shall bear interest at the rate(s) of interest set
forth in, respectively, the Line of Credit Note, Term Note and Term Commitment
Note, (collectively, the "Notes").
(b) Computation and Payment. Interest shall be computed on the basis of
a 360-day year, actual days elapsed. Interest shall be payable at the times and
place set forth in the Notes.
SECTION 1.7. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect
all principal, interest and fees due under the Line of Credit, Term Loan and
Revolving Term Commitment by charging Borrower's demand deposit account number
4192-150217 with Bank, or any other demand deposit account maintained by
Borrower with Bank, for the full amount thereof. Should there be insufficient
funds in any such demand deposit account to pay all such sums when due, the full
amount of such deficiency shall be immediately due and payable by Borrower.
-4-
<PAGE> 5
SECTION 1.8. COLLATERAL.
As security for all indebtedness of Borrower to Bank under the Line of
Credit, Term Loan and Revolving Term Commitment, Borrower hereby grants to Bank
security interests of first priority in all Borrower's accounts receivable and
other rights to payment, general intangibles, equipment and inventory, and
subject only to Permitted Liens. "Permitted Liens" shall mean the following:
(a) Any liens existing as of the date hereof and consented to by Bank;
(b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith by appropriate
proceeding;
(c) Liens of materialmen, mechanics, warehousemen, carriers, or
employees or other like liens arising in the ordinary course of business and
securing obligations either not delinquent or being contested in good faith by
appropriate proceedings;
(d) Any judgment, attachment or similar lien, unless the judgment it
secures is not fully covered by insurance and has not been discharged or
execution thereof effectively stayed and bonded against pending appeal within 30
days of the entry thereof;
(e) Easements, rights of way, servitudes or zoning or building
restrictions and other minor encumbrances on real or personal property and
irregularities in the title to such property that do not in the aggregate impair
the use or value of such property or risk the loss of forfeiture of title
thereto;
(f) Liens (i) upon or in any equipment acquired or held by the Borrower
or any of its subsidiaries to secure the purchase price of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment where the aggregate amount of such liens does not exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) or (ii) existing on such equipment
at the time of its transfer to Borrower from UpRight, Inc., provided that the
such lien is confined solely to the property so acquired and improvements
thereon; and
(g) Liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by Liens of the type described in
clauses (a) and (f) above, provided that
-5-
<PAGE> 6
any extension, renewal or replacement lien shall be limited to the property
encumbered by the existing lien and the principal amount of the indebtedness
being extended, renewed or refinanced does not increase.
All of the foregoing shall be evidenced by and subject to the terms of such
security agreements, financing statements, deeds of trust and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall reimburse Bank immediately upon demand for all costs and expenses
incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of appraisals, audits
and title insurance.
SECTION 1.9. SUBORDINATION OF DEBT. All obligations of Borrower to any
other of the Companies (as defined in Section 2.3) shall be subordinated in
right of repayment to all obligations of Borrower to Bank, as evidenced by and
subject to the terms of subordination agreements in form and substance
satisfactory to Bank.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to Bank
subject to this Agreement.
SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly organized and
existing and in good standing under the laws of the state of Delaware, and is
qualified or licensed to do business (and is in good standing as a foreign
corporation, if applicable) in all jurisdictions in which such qualification or
licensing is required or in which the failure to so qualify or to be so licensed
could have a material adverse effect on Borrower.
SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement, the Notes, and
each other document, contract and instrument required hereby or at any time
hereafter delivered to Bank in connection herewith (collectively, the "Loan
Documents") have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the
-6-
<PAGE> 7
party which executes the same, enforceable in accordance with their respective
terms.
SECTION 2.3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any law
or regulation, or contravene any provision of the Articles of Incorporation or
By-Laws of any of the Companies, or result in any breach of or default under any
contract, obligation, indenture or other instrument to which any of the
Companies is a party or by which any of the Companies may be bound, including,
without limitation, any agreements or obligations of any of the Companies
related to or arising in connection with the Parent Financing. Without limiting
the generality of the foregoing, the indebtedness and obligations of Borrower to
Bank arising hereunder, under the other Loan Documents, and under the
transactions contemplated hereby and thereby ("Bank Indebtedness") constitutes
indebtedness permitted under the Parent Financing in addition to the "Permitted
Indebtedness" defined in that certain indenture dated June 19, 1997 executed by
Parent in connection with such Parent Financing Financing (the "Indenture"), and
shall hereafter continue to constitute indebtedness permitted thereunder without
regard as to whether such Bank Indebtedness at any time would or would not fall
under the definition of "Permitted Indebtedness" under the Indenture.
SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.
SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial statement
of Borrower dated June 27, 1999, a true copy of which has been delivered by
Borrower to Bank contemporaneously with the execution hereof (a) is complete and
correct and presents fairly the financial condition of Borrower, (b) discloses
all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles consistently applied. Since the date of
such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a
security interest
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in or otherwise encumbered any of its assets or properties except in favor of
Bank or as otherwise permitted by Bank in writing.
SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any
pending assessments or adjustments of its income tax payable with respect to any
year.
SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower is a party or by which Borrower may be
bound that requires the subordination in right of payment of any of Borrower's
obligations subject to this Agreement to any other obligation of Borrower.
SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and
rights to all trademarks, trade names, patents, and fictitious names, if any,
necessary to enable it to conduct the business in which it is now engaged in
compliance with applicable law.
SECTION 2.9. ERISA. Borrower is in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as defined
in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no
Reportable Event as defined in ERISA has occurred and is continuing with respect
to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.
SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.
SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to
Bank in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable federal or state environmental, hazardous
waste, health and safety statutes, and any rules or regulations adopted pursuant
thereto, which govern or affect any of Borrower's operations and/or properties,
including without limitation, the
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<PAGE> 9
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control
Act, as any of the same may be amended, modified or supplemented from time to
time. None of the operations of Borrower is the subject of any federal or state
investigation evaluating whether any remedial action involving a material
expenditure is needed to respond to a release of any toxic or hazardous waste or
substance into the environment. Borrower has no material contingent liability in
connection with any release of any toxic or hazardous waste or substance into
the environment.
ARTICLE III
CONDITIONS
SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation
of Bank to grant any of the Credits is subject to the fulfillment to Bank's
satisfaction of all of the following conditions:
(a) Approval of Bank Counsel. All legal matters incidental to the
granting of each of the Credits shall be satisfactory to Bank's counsel.
(b) Documentation. Bank shall have received, in form and substance
satisfactory to Bank, each of the following, duly executed:
(i) This Agreement and the Notes
(ii) Continuing Security Agreement: Rights to Payment and Inventory
(iii) Security Agreement: Equipment
(iv) Foreign Exchange Agreement
(v) Corporate Borrowing Resolution
(vi) Certificate of Incumbency
(vii) Opinion of Borrower's Counsel
(viii) Articles of Incorporation
(ix) Subordination Agreement
(x) Such other documents as Bank may require under any other
Section of this Agreement.
(c) Financial Condition. Bank shall have received Borrower's annual FYE
1999 financial statements in from, detail and content acceptable to Bank. There
shall have been no material adverse change, as determined by Bank, in the
financial condition or business of Borrower, nor any material decline, as
determined by Bank, in the market value of any collateral
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<PAGE> 10
required hereunder or a substantial or material portion of the assets of
Borrower.
(d) Insurance. Borrower shall have delivered to Bank evidence of
insurance coverage on all Borrower's property, in form, substance, amounts,
covering risks and issued by companies satisfactory to Bank, and where required
by Bank, with loss payable endorsements in favor of Bank.
SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of
Bank to make each extension of credit requested by Borrower hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:
(a) Compliance. The representations and warranties contained herein and
in each of the other Loan Documents shall be true on and as of the date of the
signing of this Agreement and on the date of each extension of credit by Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with
the giving of notice or the passage of time or both would constitute such an
Event of Default, shall have occurred and be continuing or shall exist.
(b) Documentation. Bank shall have received all additional documents
which may be required in connection with such extension of credit.
ARTICLE IV
AFFIRMATIVE COVENANTS
Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:
SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest,
fees or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.
SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with generally accepted accounting principles consistently applied,
and permit any representative
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of Bank, at any reasonable time, to inspect, audit and examine such books and
records, to make copies of the same, and to inspect the properties of
Borrower.
SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following,
in form and detail satisfactory to Bank:
(a) not later than 90 days after and as of the end of each fiscal year,
an audited financial statement of Borrower, prepared by an independent certified
public accountant acceptable to Bank, to include balance sheet, income
statement, and footnotes;
(b) not later than 45 days after and as of each fiscal quarter-end, a
financial statement of Borrower, prepared by Borrower, to include a balance
sheet and income statement;
(c) contemporaneously with each borrowing requested under the Term
Commitment and at the end of each quarter, contemporaneously with the delivery
of the financial statement of Borrower required hereby, a certificate of the
president or chief financial officer of Borrower that said financial statements
are accurate, that there exists no Event of Default nor any condition, act or
event which with the giving of notice or the passage of time or both would
constitute an Event of Default, and that there does not exist, and any borrowing
then being requested would not, after giving effect thereto, result in, any
violation or any breach of or default under any contract, obligation, indenture
or other instrument to which any of the Companies is a party or by which any of
the Companies may be bound, including, without limitation, the Indenture and any
other agreements or obligations of any of the Companies related to or arising in
connection with the Parent Financing.
(d) not later than 45 days after each fiscal quarter-end, a schedule of
Borrower's equipment utilization on its rental fleet, in the form attached as
Exhibit E hereto;
(e) not later than 45 days after each fiscal quarter-end, a schedule of
assets sold during that quarter including the net book value and the sales
amount;
(f) not later than ten (10) days after the filing thereof, copies of all
proxy statements, financial statements, reports, and notices sent or made
available generally by Parent to its security holders or to any holders of its
debt and all regular, periodic and special reports, and all registration
statements filed with the Securities and Exchange Commission or any
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<PAGE> 12
governmental authority that may be substituted therefor, or with any national
securities exchange; and
(g) from time to time such other information as Bank may reasonably
request.
SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower's continued
existence and with the requirements of all laws, rules, regulations and orders
of any governmental authority applicable to Borrower and/or its business.
SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the
types and in amounts customarily carried in lines of business similar to that of
Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth all
insurance then in effect.
SECTION 4.6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, and from time to time make
necessary repairs, renewals and replacements thereto so that such properties
shall be fully and efficiently preserved and maintained.
SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any
and all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and local
property taxes and assessments, except such (a) as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank's satisfaction, for eventual payment thereof in the
event Borrower is obligated to make such payment.
SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower with a claim in excess of
$500,000.00.
SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows using generally accepted accounting principles consistently
applied and used consistently
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with prior practices (except to the extent modified by the definitions herein):
(a) Tangible Net Worth not less than $27,000,000.00 as of June 27, 1999,
then as of each fiscal quarter-end thereafter Tangible Net Worth not less than
the sum of (i) $27,000,000.00 plus (ii) 50% of Borrower's cumulative net income
after tax provision including every quarter ending after June 27, 1999 and
specifically excluding any quarter-end in which net income is negative. For
purposes of this Agreement, "Tangible Net Worth" shall be defined as the
aggregate of total stockholders' equity less any intangible assets measured at
and as of each fiscal quarter-end.
(b) Modified EBITDA Coverage Ratio not less than 1.00 to 1.00 as of each
fiscal quarter-end up to and including Borrower's fiscal quarter ending December
26, 1999; then not less than 1.10 to 1.00 as of each fiscal quarter-end ending
after December 26, 1999 and up to and including the fiscal quarter ending June
25, 2000; then not less than 1.25 to 1.00 as of each fiscal quarter-end ending
after June 25, 2000. The foregoing covenant shall be calculated on a trailing
four quarter basis with "Modified EBITDA" defined as earnings before interest,
taxes, depreciation, and amortization, minus dividends and taxes paid, and with
"Modified EBITDA Coverage Ratio" during Borrower's fiscal year 2000 defined as
Modified EBITDA divided by the aggregate of total interest expense plus the
current period current maturity of long-term debt and the current period current
maturity of subordinated debt, and "Modified EBITDA Coverage Ratio" for every
period after Borrower's fiscal year 2000 defined as Modified EBITDA divided by
the aggregate of total interest expense plus the prior period current maturity
of long-term debt and the prior period current maturity of subordinated debt.
(c) Ratio of Funded Debt to EBITDA not greater than 3.50 to 1.0 up to
and including the end of Borrower's fiscal year 2001 and not greater than 3.00
to 1.00 at all times thereafter, with Funded Debt defined as the aggregate
amount of all outstanding indebtedness of Borrower, excluding accruals and trade
payables and current liabilities incurred in the ordinary course of business,
and with "EBITDA" defined as net profit before tax plus interest expense (net of
capitalized interest expense), depreciation expense and amortization expense),
measured at the end of each fiscal quarter, on a trailing four quarter basis.
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<PAGE> 14
SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five
(5) days after the occurrence of each such event or matter) give written notice
to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or
any condition, event or act which with the giving of notice or the passage of
time or both would constitute an Event of Default; (b) any change in the name or
the organizational structure of Borrower, or any action, claim, investigation,
suit or proceeding pending or asserted by or before any governmental authority,
arbitrator, court or administrative agency challenging or denying Borrower's
qualification for tax treatment as if it were a partnership for income tax
purposes; (c) the occurrence and nature of any Reportable Event or Prohibited
Transaction, each as defined in ERISA, or any funding deficiency with respect to
any Plan; or (d) any termination or cancellation of any insurance policy which
Borrower is required to maintain, or any uninsured or partially uninsured loss
through liability or property damage, or through fire, theft or any other cause
affecting Borrower's property in excess of an aggregate of $500,000.00.
SECTION 4.11. YEAR 2000 COMPLIANCE. Perform all acts reasonably
necessary to ensure that Borrower and any business in which Borrower holds a
substantial interest become Year 2000 Compliant in a timely manner. Such acts
shall include, without limitation, performing a comprehensive review and
assessment of all of Borrower's systems and adopting a detailed plan, with
itemized budget, for the remediation, monitoring and testing of such systems. As
used herein, "Year 2000 Compliant" shall mean, in regard to any entity, that all
software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of such entity, will
properly perform date sensitive functions before, during and after the year
2000. Borrower shall, immediately upon request, provide to Bank such
certifications or other evidence of Borrower's compliance with the terms hereof
as Bank may from time to time require.
ARTICLE V
NEGATIVE COVENANTS
Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Bank's prior written
consent:
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<PAGE> 15
SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any of the Credits
except for the purposes stated in Article I hereof.
SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in
fixed assets in fiscal year 2000 in excess of an aggregate of $20,000,000.00,
and not in excess of $20,000,000.00 in fiscal year 2001 and each fiscal year
thereafter.
SECTION 5.3. OTHER INDEBTEDNESS. Create, incur, assume or permit to
exist any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the liabilities of Borrower to Bank,
and (b) any other liabilities of Borrower existing as of, and disclosed to Bank
prior to, the date hereof except for (i) existing indebtedness disclosed to the
Bank, (ii) indebtedness to trade creditors incurred in the ordinary course of
business; (iii) indebtedness with respect to capital leases which do not
otherwise exceed the aggregate limitations set forth in Section 5.2 hereunder
and indebtedness secured by Permitted Liens; (iv) indebtedness consisting of
guaranties (and other credit support) of the obligations of vendors and
suppliers of Borrower with respect to transactions entered into in the ordinary
course of business, provided that such guaranties (and other credit support) do
not exceed an aggregate of Fifty Thousand Dollars ($50,000.00); (v) indebtedness
subordinated to the obligations of Borrower to Bank pursuant to subordination
agreements in form and substance satisfactory to Bank; (vi) indebtedness not
otherwise authorized hereunder not exceeding Two Hundred Fifty Thousand Dollars
($250,000.00) in the aggregate outstanding at any time; and (vii) extensions of
any of the foregoing items listed in the foregoing clauses (i) through (v).
SECTION 5.4. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.
SECTION 5.5. GUARANTIES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments for deposit
or collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security
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for, any liabilities or obligations of any other person or entity, except any of
the foregoing in favor of Bank, and except for Borrower's subordinated guaranty
of the Parent Financing.
SECTION 5.6. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to
or investments in any person or entity, except any of the foregoing existing as
of, and disclosed to Bank prior to, the date hereof.
SECTION 5.7. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or
distribution during the period commencing upon the date of this Agreement and
continuing up to and including the date that this Agreement terminates either in
cash, stock or any other property on Borrower's stock now or hereafter
outstanding in excess of 50% of Borrower's cumulative net income after taxes for
the period commencing with Borrower's fiscal year 2000 and continuing thereafter
until the termination of this Agreement (with such cumulative net income after
taxes determined at and as of the time of such dividend or distribution), nor
redeem, retire, repurchase or otherwise acquire any shares of any class of
Borrower's stock now or hereafter outstanding; provided however, that
notwithstanding the foregoing provision and so long as no default or Event of
Default has occurred under this Agreement or the other Loan Documents, Borrower
may declare or pay a dividend or distribution (in addition to the amounts
otherwise payable under the limits described above) on Borrower's stock now or
hereafter outstanding in an amount not to exceed any additional paid in capital
which is invested in Borrower after the date of this Agreement.
SECTION 5.8. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, all or any portion of Borrower's
assets now owned or hereafter acquired, except any of the foregoing in favor of
Bank or which is existing as of, and disclosed to Bank in writing prior to, the
date hereof.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. The occurrence of any of the following shall constitute an
"Event of Default" under this Agreement:
(a) Borrower shall fail to pay when due any principal, interest, fees or
other amounts payable under any of the Loan Documents.
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(b) Any financial statement or certificate furnished to Bank in
connection with, or any representation or warranty made by Borrower or any other
party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.
(c) Any default in the performance of or compliance with any obligation,
agreement or other provision contained herein or in any other Loan Document
(other than those referred to in subsections (a) and (b) above), and with
respect to any such default which by its nature can be cured, such default shall
continue for a period of twenty (20) days from its occurrence.
(d) Any default in the payment or performance of any obligation, or any
defined event of default, under the terms of any contract or instrument (other
than any of the Loan Documents) pursuant to which Borrower has incurred any debt
or other liability to any person or entity, including Bank.
(e) With respect to judgments in excess of $100,000 in amount or
judgments issued after the date of this Agreement which when in the aggregate
with all other judgments issued after the date of this Agreement exceed the
cumulative sum of $250,000: (i) the filing of a notice of judgment lien against
Borrower; or (ii) the recording of any abstract of judgment against Borrower in
any county in which Borrower has an interest in real property; or (iii) the
service of a notice of levy and/or of a writ of attachment or execution, or
other like process, against the assets of Borrower; or (iv) the entry of a
judgment against Borrower.
(f) Borrower shall become insolvent, or shall suffer or consent to or
apply for the appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its debts as they
become due, or shall make a general assignment for the benefit of creditors;
Borrower shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors or
any other relief under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or under
any state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower, or Borrower shall file an answer admitting the
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jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower shall be adjudicated a bankrupt, or an order for relief
shall be entered against Borrower by any court of competent jurisdiction under
the Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors.
(g) There shall exist or occur an event or condition which has or is
substantially likely to have a material adverse effect on (i) the business,
assets, operations, prospects or financial or other condition of Borrower; (ii)
the ability of Borrower to pay or perform any of its obligations under any of
the Loan Documents; or (iii) the rights or remedies of Bank under this Agreement
or the other Loan Documents.
(h) The dissolution or liquidation of Borrower; or Borrower or any of
its directors, stockholders or members, shall take action seeking to effect the
dissolution or liquidation of Borrower.
(i) Any change in ownership during the term of this Agreement of an
aggregate of twenty-five percent (25%) or more of the common stock of Borrower.
SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a)
all indebtedness of Borrower under each of the Loan Documents, any term thereof
to the contrary notwithstanding, shall at Bank's option and without notice
become immediately due and payable without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by each Borrower;
(b) the obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any of the Credits and to exercise any or all of the rights of
a beneficiary or secured party pursuant to applicable law. All rights, powers
and remedies of Bank may be exercised at any time by Bank and from time to time
after the occurrence of an Event of Default, are cumulative and not exclusive,
and shall be in addition to any other rights, powers or remedies provided by law
or equity.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Bank of any breach of or default under any of the Loan Documents must be
in writing and shall be effective only to the extent set forth in such writing.
SECTION 7.2. NOTICES. All notices, requests and demands which any party
is required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:
BORROWER: HORIZON HIGH REACH, INC.
1540 E. Shaw, Suite 123
Fresno, CA 93710
BANK: WELLS FARGO BANK, NATIONAL ASSOCIATION
Fresno regional Commercial Banking office
8405 N. Fresno Street, Suite 200
Fresno, CA 93720
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.
SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys', fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of this
Agreement and the other Loan Documents, Bank's continued administration hereof
and thereof, and the preparation of any amendments and waivers hereto and
thereto, (b) the enforcement of Bank's rights and/or the collection of any
amounts which become due to Bank under any
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of the Loan Documents, and (c) the prosecution or defense of any action in any
way related to any of the Loan Documents, including without limitation, any
action for declaratory relief, whether incurred at the trial or appellate level,
in an arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought by Bank
or any other person) relating to any Borrower or any other person or entity.
SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however, that
Borrower may not assign or transfer its interest hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer, negotiate or
grant participations in all or any part of; or any interest in, Bank's rights
and benefits under each of the Loan Documents. In connection therewith, Bank may
disclose all documents and information which Bank now has or may hereafter
acquire relating to any of the Credits, Borrower or its business, [any guarantor
hereunder or the business of such guarantor,] or any collateral required
hereunder.
SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Loan Documents constitute the entire agreement between Borrower and Bank with
respect to the Credits and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This
Agreement may be amended or modified only in writing signed by each party
hereto.
SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and
entered into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.
SECTION 7.7. TIME. Time is of the essence of each and every provision of
this Agreement and each other of the Loan Documents.
SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating
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the remainder of such provision or any remaining provisions of this Agreement.
SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which when taken together shall constitute one and the
same Agreement.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
SECTION 7.11. ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this Agreement. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, any of the Loan Documents, or any
past, present or future extensions of credit and other activities, transactions
or obligations of any kind related directly or indirectly to any of the Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents. Any party may by summary proceedings
bring an action in court to compel arbitration of a Dispute. Any party who fails
or refuses to submit to arbitration following a lawful demand by any other party
shall bear all costs and expenses incurred by such other party in compelling
arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute
-21-
<PAGE> 22
being arbitrated. Judgment upon any award rendered in an arbitration may
be entered in any court having jurisdiction; provided however, that nothing
contained herein shall be deemed to be a waiver by any party that is a bank of
the protections afforded to it under 12 U.S.C. Section 91 or any similar
applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
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<PAGE> 23
(e) Judicial Review. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations, the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the state of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.
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<PAGE> 24
(g) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
WELLS FARGO BANK,
HORIZON HIGH REACH, INC. NATIONAL ASSOCIATION
By: /s/ Russell McKay, CFO By: /s/ Ben Hanson
--------------------------- ------------------------------
Ben Hanson
Title: CFO Vice President
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<PAGE> 1
EXHIBIT 10.22(ii)
WELLS FARGO BANK REVOLVING LINE OF CREDIT NOTE
- --------------------------------------------------------------------------------
$6,000,000.00 FRESNO, CA
AUGUST 26, 1999
FOR VALUE RECEIVED, the undersigned HORIZON HIGH REACH, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at FRESNO RCBO, 8405 N. FRESNO STREET, SUITE
200, FRESNO, CA 93720, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of $6,000,000.00, or so much thereof as may
be advanced and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement as set forth herein.
DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:
(a) "Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in California are authorized or required by
law to close.
(b) "Fixed Rate Term" means a period commencing on a Business Day
and continuing for 1, 2, 3, 6 OR 12 MONTHS, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than $500,000.00; and provided
further, that no Fixed Rate Term shall extend beyond the scheduled maturity date
hereof. If any Fixed Rate Term would end on a day which is not a Business Day,
then such Fixed Rate Term shall be extended to the next succeeding Business Day.
(c) "LIBOR" means the rate per annum (rounded upward, if necessary,
to the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a
percentage equal to 100% less any LIBOR Reserve Percentage.
(i) "Base LIBOR" means the rate per annum for United States
dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.
(d) "Prime Rate" means at any time the rate of interest most
recently announced within Bank at its principal office as its Prime Rate, with
the understanding that the Prime Rate is one of Bank's base rates and serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall
bear interest (computed on the basis of a 360-day year, actual days elapsed)
either (i) at a fluctuating rate per annum .25000% below the Prime Rate in
effect from time to time, or (ii) at a fixed rate per annum determined by Bank
to be 1.50000% above LIBOR in effect on the first day of the applicable Fixed
Rate Term. When interest is determined in relation to the Prime Rate, each
change in the rate of interest hereunder shall become effective on the date each
Prime Rate change is announced within Bank. With respect to each LIBOR selection
option selected hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and Fixed Rate Term applicable thereto and any payments
made thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be
prima facie evidence of the accuracy of the information noted.
(b) Selection of Interest Rate Options. At any time any portion of
this Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof,
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<PAGE> 2
and at the end of each Fixed Rate Term, Borrower shall give Bank notice
specifying: (i) the interest rate option selected by Borrower; (ii) the
principal amount subject thereto; and (iii) for each LIBOR selection, the length
of the applicable Fixed Rate Term. Any such notice may be given by telephone so
long as, with respect to each LIBOR selection, (A) Bank receives written
confirmation from Borrower not later than 3 Business Days after such telephone
notice is given, and (B) such notice is given to Bank prior to 10:00 a.m.,
California time, on the first day of the Fixed Rate Term. For each LIBOR option
requested hereunder, Bank will quote the applicable fixed rate to Borrower at
approximately 10:00 a.m., California time, on the first day of the Fixed Rate
Term. If Borrower does not immediately accept the rate quoted by Bank, any
subsequent acceptance by Borrower shall be subject to a redetermination by Bank
of the applicable fixed rate; provided however, that if Borrower fails to accept
any such rate by 11:00 a.m., California time, on the Business Day such quotation
is given, then the quoted rate shall expire and Bank shall have no obligation to
permit a LIBOR option to be selected on such day. If no specific designation of
interest is made at the time any advance is requested hereunder or at the end of
any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest
selection for such advance or the principal amount to which such Fixed Rate Term
applied.
(c) Additional LIBOR Provisions.
(i) If Bank at any time shall determine that for any reason
adequate and reasonable means do not exist for ascertaining LIBOR, then
Bank shall promptly give notice thereof to Borrower. If such notice is
given and until such notice has been withdrawn by Bank, then (A) no new
LIBOR option may be selected by Borrower, and (B) any portion of the
outstanding principal balance hereof which bears interest determined in
relation to LIBOR, subsequent to the end of the Fixed Rate Term
applicable thereto, shall bear interest determined in relation to the
Prime Rate.
(ii) If any law, treaty, rule, regulation or determination of
a court or governmental authority or any change therein or in the
interpretation or application thereof (each, a "Change in Law") shall
make it unlawful for Bank (A) to make LIBOR options available hereunder,
or (B) to maintain interest rates based on LIBOR, then in the former
event, any obligation of Bank to make available such unlawful LIBOR
options shall immediately be cancelled, and in the latter event, any
such unlawful LIBOR-based interest rates then outstanding shall be
converted, at Bank's option, so that interest on the portion of the
outstanding principal balance subject thereto is determined in relation
to the Prime Rate; provided however, that if any such Change in Law
shall permit any LIBOR-based interest rates to remain in effect until
the expiration of the Fixed Rate Term applicable thereto, then such
permitted LIBOR-based interest rates shall continue in effect until the
expiration of such Fixed Rate Term. Upon the occurrence of any of the
foregoing events, Borrower shall pay to Bank immediately upon demand
such amounts as may be necessary to compensate Bank for any fines, fees,
charges, penalties or other costs incurred or payable by Bank as a
result thereof and which are attributable to any LIBOR options made
available to Borrower hereunder, and any reasonable allocation made by
Bank among its operations shall be conclusive and binding upon Borrower.
(iii) If any Change in Law or compliance by Bank with any
request or directive (whether or not having the force of law) from any
central bank or other governmental authority shall:
(A) subject Bank to any tax, duty or other charge with
respect to any LIBOR options, or change the basis of
taxation of payments to Bank of principal, interest,
fees or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of
Bank); or
(B) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for
the account of, advances or loans by, or any other
acquisition of funds by any office of Bank; or
(C) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce any
amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available to
Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.
(d) Payment of Interest. Interest accrued on this Note shall be
payable on the 5TH day of each MONTH, commencing OCTOBER 5, 1999.
(e) Default Interest. From and after the maturity date of this Note,
or such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during
the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
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<PAGE> 3
conditions of this Note and of the Credit Agreement between Borrower and Bank
defined below; provided however, that the total outstanding borrowings under
this Note shall not at any time exceed the principal amount stated above. The
unpaid principal balance of this obligation at any time shall be the total
amounts advanced hereunder by the holder hereof less the amount of principal
payments made hereon by or for any Borrower, which balance may be endorsed
hereon from time to time by the holder. The outstanding principal balance of
this Note shall be due and payable in full on NOVEMBER 5, 2001.
(b) Advances. Advances hereunder, to the total amount of the
principal sum available hereunder, may be made by the holder at the oral or
written request of (i) RICK PENKERT OR RUSSEL MCKAY OR BECKY COUNCIL, any one
acting alone, who are authorized to request advances and direct the disposition
of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (ii) any person, with
respect to advances deposited to the credit of any account of any Borrower with
the holder, which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of each Borrower regardless of the fact
that persons other than those authorized to request advances may have authority
to draw against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by any
Borrower.
(c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.
PREPAYMENT:
(a) Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.
(b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of $250,000.00; provided however, that if the outstanding
principal balance of such portion of this Note is less than said amount, the
minimum prepayment amount shall be the entire outstanding principal balance
thereof. In consideration of Bank providing this prepayment option to Borrower,
or if any such portion of this Note shall become due and payable at any time
prior to the last day of the Fixed Rate Term applicable thereto by acceleration
or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is
the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated
as follows for each such month:
(i) Determine the amount of interest which would have
accrued each month on the amount prepaid at the interest rate applicable
to such amount had it remained outstanding until the last day of the
Fixed Rate Term applicable thereto.
(ii) Subtract from the amount determined in (i) above the
amount of interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term at LIBOR
in effect on the date of prepayment for new loans made for such term and
in a principal amount equal to the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater
than zero, discount that difference by LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed). Each change in the rate of interest on any such past due
prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions
of that certain Credit Agreement between Borrower and Bank dated as OF AUGUST
26, 1999, as amended from time to time (the "Credit Agreement"). Any default in
the payment or performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute an "Event of
Default" under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default as defined
in the Credit Agreement, the holder of this Note, at the holder's option, may
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by each Borrower, and the obligation, if any, of the holder
to extend any further credit hereunder shall immediately cease and terminate.
Each Borrower shall pay to the holder immediately upon demand the full amount of
all payments, advances,
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<PAGE> 4
charges, costs and expenses, including reasonable attorneys' fees (to include
outside counsel fees and all allocated costs of the holder's in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the
holder under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.
(c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the state of California.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay, CFO
---------------------------------
Title: CFO
------------------------------
Page 4
<PAGE> 1
EXHIBIT 10.22(iii)
TERM NOTE
$30,000,000.00 Fresno, California
August 26, 1999
FOR VALUE RECEIVED, the undersigned HORIZON HIGH REACH, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Fresno RCBO, 8405 N. Fresno Street, Suite
200, Fresno, California, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Thirty Million Dollars ($30,000,000.00),
with interest thereon as set forth herein.
DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:
(a) "Business Day" means any day except a Saturday, Sunday or any other
day on which commercial banks in California are authorized or required by law to
close.
(b) "Fixed Rate Term" means a period commencing on a Business Day and
continuing for 1, 2, 3, 6 or 12 months, as designated by Borrower, during which
all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than Five Hundred Thousand
Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall
extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would
end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.
(c) "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) and determined pursuant to the following formula:
<TABLE>
<S> <C> <C>
LIBOR = Base LIBOR
----------------------------------------------
100% - LIBOR Reserve Percentage
</TABLE>
(i) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed
-1-
<PAGE> 2
Rate Term for delivery of funds on said date for a period of time approximately
equal to the number of days in such Fixed Rate Term and in an amount
approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage prescribed
by the Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such reserve
percentage during the applicable Fixed Rate Term.
(d) "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Bank's base rates and serves as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day year, actual days elapsed) either
(i) at a fluctuation rate per annum equal to the Prime Rate in effect from time
to time, or (ii) at a fixed rate per annum determined by Bank to be one and
three quarters percent (1.75%) above LIBOR in effect on the first day of the
applicable Fixed Rate Term. When interest is determined in relation to the Prime
Rate, each change in the rate of interest hereunder shall become effective on
the date each Prime Rate change is announced within Bank. With respect to each
LIBOR selection hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and Fixed Rate Term applicable thereto and any payments
made thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be
prima facie evidence of the accuracy of the information noted.
(b) Selection of Interest Rate Options. At any time any portion of this
Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed
-2-
<PAGE> 3
Rate Term designated by Borrower. At the time this Note is disbursed or Borrower
wishes to select a LIBOR option for all or a portion of the outstanding
principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall
give Bank notice specifying: (i) the interest rate option selected by Borrower;
(ii) the principal amount subject thereto; and (iii) for each LIBOR selection,
the length of the applicable Fixed Rate Term. Any such notice may be given by
telephone so long as, with respect to each LIBOR selection, (A) Bank receives
written confirmation from Borrower not later than three (3) Business Days after
such telephone notice is given, and (B) such notice is given to Bank prior to
10:00 a.m., California time, on the first day of the Fixed Rate Term. For each
LIBOR option requested hereunder, Bank will quote the applicable fixed rate to
Borrower at approximately 10:00 a.m., California time, on the first day of the
Fixed Rate Term. If Borrower does not immediately accept the rate quoted by
Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate; provided however, that if
Borrower fails to accept any such rate by 11:00 a.m., California time, on the
Business Day such quotation is given, then the quoted rate shall expire and Bank
shall have no obligation to permit a LIBOR option to be selected on such day. If
no specific designation of interest is made at the time this Note is disbursed
or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a
Prime Rate interest selection for this Note or the principal amount to which
such Fixed Rate Term applied.
(c) Additional LIBOR Provisions.
(i) If Bank at any time shall determine that for any reason adequate and
reasonable means do not exist for ascertaining LIBOR, then Bank shall promptly
give notice thereof to Borrower. If such notice is given and until such notice
has been withdrawn by Bank, then (A) no new LIBOR option may be selected by
Borrower, and (B) any portion of the outstanding principal balance hereof which
bears interest determined in relation to LIBOR, subsequent to the end of the
Fixed Rate Term applicable thereto, shall bear interest determined in relation
to the Prime Rate.
(ii) If any law, treaty, rule, regulation or determination of a court or
governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for Bank
(A) to make LIBOR options available hereunder, or (B) to maintain interest rates
based on LIBOR, then in the former event, any obligation of Bank to make
available such unlawful LIBOR options shall immediately be cancelled, and in the
latter event, any such unlawful LIBOR-based interest rates then outstanding
shall be converted, at Bank's option, so that interest on the portion of the
outstanding principal balance subject thereto is determined in relation to the
Prime Rate; provided however, that if any such Change in Law shall permit any
LIBOR-based interest rates to remain in effect
-3-
<PAGE> 4
until the expiration of the Fixed Rate Term applicable thereto, then such
permitted LIBOR-based interest rates shall continue in effect until the
expiration of such Fixed Rate Term. Upon the occurrence of any of the foregoing
events, Borrower shall pay to Bank immediately upon demand such amounts as may
be necessary to compensate Bank for any fines, fees, charges, penalties or other
costs incurred or payable by Bank as a result thereof and which are attributable
to any LIBOR options made available to Borrower hereunder, and any reasonable
allocation made by Bank among its operations shall be conclusive and binding
upon Borrower.
(iii) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:
(A) subject Bank to any tax, duty or other charge with respect
to any LIBOR options, or change the basis of taxation of
payments to Bank of principal, interest, fees or any other
amount payable hereunder (except for changes in the rate
of tax on the overall net income of Bank); or
(B) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for
the account of, advances or loans by, or any other
acquisition of funds by any office of Bank; or
(C) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce any
amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available to
Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.
(d) Payment of Interest. Interest accrued on this Note shall be payable
on the 5th day of each month, commencing October 5, 1999.
(e) Default Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four
-4-
<PAGE> 5
percent (4%) above the rate of interest from time to time applicable to this
Note.
REPAYMENT AND PREPAYMENT:
(a) Repayment. Principal shall be payable on the 5th day of each month
in installments of Five Hundred Thousand Dollars ($500,000.00) each, commencing
October 5, 1999, and continuing up to and including August 5, 2004, with a final
installment consisting of all remaining unpaid principal due and payable in full
on September 5, 2004.
(b) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.
(c) Prepayment.
Prime Rate. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to the Prime Rate at any time, in
any amount and without penalty.
LIBOR. Borrower may prepay principal on any portion of this Note which
bears interest determined in relation to LIBOR at any time and in the minimum
amount of Five Hundred Thousand Dollars ($500,000.00); provided however, that if
the outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof. In consideration of Bank providing this prepayment option to
Borrower, or if any such portion of this Note shall become due and payable at
any time prior to the last day of the Fixed Rate Term applicable thereto by
acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a
fee which is the sum of the discounted monthly differences for each month from
the month of prepayment through the month in which such Fixed Rate Term matures,
calculated as follows for each such month:
(i) Determine the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to
such amount had it remained outstanding until the last day of
the Fixed Rate Term applicable thereto.
(ii) Subtract from the amount determined in (i) above the amount
of interest which would have accrued for the same month on
the amount prepaid for the remaining term of such Fixed Rate
Term at LIBOR in effect on
-5-
<PAGE> 6
the date of prepayment for new loans made for such term and in
a principal amount equal to the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater than
zero, discount that difference by LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum two percent (2.0%) above
the Prime Rate in effect from time to time (computed on the basis of a 360-day
year, actual days elapsed).
All prepayments of principal shall be applied on the most remote
principal installment or installments then unpaid.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions
of that certain Credit Agreement between Borrower and Bank dated as of August
26, 1999, as amended from time to time (the "Credit Agreement"). Any default in
the payment or performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute an "Event of
Default" under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower. Each
Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and all allocated costs of the holder's
in-house counsel), expended or incurred by the holder in connection with the
enforcement of the holder's rights and/or the collection of any amounts which
become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any
-6-
<PAGE> 7
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to any
Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
(c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date first written above.
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay
-----------------------------
Title: CFO
-7-
<PAGE> 8
ADDENDUM TO PROMISSORY NOTE
(LIBOR PRICING ADJUSTMENTS)
THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by HORIZON HIGH REACH, INC. ("Borrower") and payable to WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of August 26,
1999, in the principal amount of Thirty Millions Dollars ($30,000,000.00) (the
"Note").
The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:
INTEREST RATE ADJUSTMENTS:
(a) Initial LIBOR Margin. The initial LIBOR margin applicable to this
Note shall be as set forth in the "Interest" paragraph herein.
(b) LIBOR Rate Adjustments. Bank shall adjust the LIBOR margin used to
determine the rate of interest applicable to LIBOR options selected by Borrower
under this Note on a quarterly basis, commencing with Borrower's fiscal quarter
ending June 30, 1999, if required to reflect a change in Borrower's ratio of
Funded debt to EBITDA (as defined in the Credit Agreement referenced herein), in
accordance with the following grid:
<TABLE>
<CAPTION>
Applicable
Funded Debt To LIBOR
EBITDA Margin
------ ------
<S> <C> <C>
3.25 to 1.0 or greater 2.00%
at least 2.75 to 1.0 but 1.75%
less than 3.25 to 1.0
at least 2.00 to 1.0 but 1.50%
less than 2.75 to 1.0
less than 2.00 to 1.0 1.25%
</TABLE>
Each such adjustment shall be effective on the first Business Day of Borrower's
fiscal quarter following the quarter during which Bank receives and reviews
Borrower's most current fiscal quarter-end financial statements in accordance
with any requirements established by Bank for the preparation and delivery
thereof.
-1-
<PAGE> 9
IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay
----------------------------------
Title: CFO
------------------------------
-2-
<PAGE> 1
EXHIBIT 10.22(iv)
TERM COMMITMENT NOTE
$10,000,000.00 Fresno, California
August 26, 1999
FOR VALUE RECEIVED, the undersigned HORIZON HIGH REACH, INC.
("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Fresno RCBO, 8405 N. Fresno Street, Suite
200, Fresno, California, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Ten Million Dollars ($10,000,000.00), or
so much thereof as may be advanced and be outstanding, with interest thereon, to
be computed on each advance from the date of its disbursement as set forth
herein.
DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each, and any other term defined in this Note shall have the meaning set
forth at the place defined:
(a) "Business Day" means any day except a Saturday, Sunday or any
other day on which commercial banks in California are authorized or required by
law to close.
(b) "Fixed Rate Term" means a period commencing on a Business Day
and continuing for 1, 2, 3, 6, or 12 months, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears
interest determined in relation to LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than Five Hundred Thousand
Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall
extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would
end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.
(c) "LIBOR" means the rate per annum (rounded upward, if necessary,
to the nearest whole 1/8 of 1%) and determined pursuant to the following
formula:
LIBOR = Base LIBOR
--------------------------------
100% - LIBOR Reserve Percentage
<PAGE> 2
(i) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first day
of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market indicators of
the Inter-Bank Market as Bank in its discretion deems appropriate including, but
not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
(ii) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.
(d) "Prime Rate" means at any time the rate of interest most
recently announced within Bank at its principal office as its Prime Rate, with
the understanding that the Prime Rate is one of Bank's base rates and serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall
bear interest (computed on the basis of a 360-day year, actual days elapsed)
either (i) at a fluctuating rate per annum equal to the Prime Rate in effect
from time to time, or (ii) at a fixed rate per annum determined by Bank to be
one and three quarters percent (1.75%) above LIBOR in effect on the first day of
the applicable Fixed Rate Term. When interest is determined in relation to the
Prime Rate, each change in the rate of interest hereunder shall become effective
on the date each Prime Rate change is announced within Bank. With respect to
each LIBOR selection hereunder, Bank is hereby authorized to note the date,
principal amount, interest rate and Fixed Rate Term applicable thereto and any
payments made thereon on Bank's books and records (either manually or by
electronic entry)
2
<PAGE> 3
and/or on any schedule attached to this Note, which notations shall be prima
facie evidence of the accuracy of the information noted.
(b) Selection of Interest Rate Options. At any time any portion of
this Note bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for
all or a portion of the outstanding principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the
interest rate option selected by Borrower; (ii) the principal amount subject
thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed
Rate Term. Any such notice may be given by telephone so long as, with respect to
each LIBOR selection, (A) Bank receives written confirmation from Borrower not
later than three (3) Business Days after such telephone notice is given, and (B)
such notice is given to Bank prior to 10:00 a.m., California time, on the first
day of the Fixed Rate Term. For each LIBOR option requested hereunder, Bank will
quote the applicable fixed rate to Borrower at approximately 10:00 a.m.,
California time, on the first day of the Fixed Rate Term. If Borrower does not
immediately accept the rate quoted by Bank, any subsequent acceptance by
Borrower shall be subject to a redetermination by Bank of the applicable fixed
rate; provided however, that if Borrower fails to accept any such rate by 11:00
a.m., California time, on the Business Day such quotation is given, then the
quoted rate shall expire and Bank shall have no obligation to permit a LIBOR
option to be selected on such day. If no specific designation of interest is
made at the time any advance is requested hereunder or at the end of any Fixed
Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection
for such advance or the principal amount to which such Fixed Rate Term applied.
(c) Additional LIBOR Provisions.
(i) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining LIBOR, then Bank shall
promptly give notice thereof to Borrower. If such notice is given and until such
notice has
3
<PAGE> 4
been withdrawn by Bank, then (A) no new LIBOR option may be selected by
Borrower, and (B) any portion of the outstanding principal balance hereof which
bears interest determined in relation to LIBOR, subsequent to the end of the
Fixed Rate Term applicable thereto, shall bear interest determined in relation
to the Prime Rate.
(ii) If any law, treaty, rule, regulation or determination of a court
or governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for Bank
(A) to make LIBOR options available hereunder, or (B) to maintain interest rates
based on LIBOR, then in the former event, any obligation of Bank to make
available such unlawful LIBOR options shall immediately be cancelled, and in the
latter event, any such unlawful LIBOR-based interest rates then outstanding
shall be converted, at Bank's option, so that interest on the portion of the
outstanding principal balance subject thereto is determined in relation to the
Prime Rate; provided however, that if any such Change in Law shall permit any
LIBOR-based interest rates to remain in effect until the expiration of the Fixed
Rate Term applicable thereto, then such permitted LIBOR-based interest rates
shall continue in effect until the expiration of such Fixed Rate Term. Upon the
occurrence of any of the foregoing events, Borrower shall pay to Bank
immediately upon demand such amounts as may be necessary to compensate Bank for
any fines, fees, charges, penalties or other costs incurred or payable by Bank
as a result thereof and which are attributable to any LIBOR options made
available to Borrower hereunder, and any reasonable allocation made by Bank
among its operations shall be conclusive and binding upon Borrower.
(iii) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:
(A) subject Bank to any tax, duty or other charge with respect to
any LIBOR options, or change the basis of taxation of payments
to Bank of principal, interest, fees or any other amount payable
hereunder (except for changes in the rate of tax on the overall
net income of Bank); or
(B) impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances
or loans by, or any other acquisition of funds by any office of
Bank; or
4
<PAGE> 5
(C) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce any
amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available to
Borrower hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.
(d) Payment of Interest. Interest accrued on this Note shall be
payable on the 5th day of each month, commencing October 5, 1999.
(e) Default Interest. From and after the maturity date of this Note,
or such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to four percent (4%) above
the rate of interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during
the term of this Note to and including November 5, 2000 borrow, partially or
wholly repay its outstanding borrowings, and reborrow, subject to all of the
limitations, terms and conditions of this Note and of any document executed in
connection with or governing this Note; provided however, that the total
outstanding borrowings under this Note shall not at any time exceed the
principal amount stated above. The unpaid principal balance of this obligation
at any time shall be the total amounts advanced hereunder by the holder hereof
less the amount of principal payments made hereon by or for any Borrower, which
balance may be endorsed hereon from time to time by the holder. The outstanding
principal balance of this Note on November 5, 2000 shall be due and payable in
60 equal consecutive installments each equal to 1/60th of such outstanding
principal balance due and payable on the 5th day of each month, commencing
December 5, 2000 to and including November 5, 2005.
5
<PAGE> 6
(b) Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or written
request of (i) Rick Penkert or Russel McKay or Becky Council, any one acting
alone, who are authorized to request advances and direct the disposition of any
advances until written notice of the revocation of such authority is received by
the holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any account of any Borrower with the holder,
which advances, when so deposited, shall be conclusively presumed to have been
made to or for the benefit of each Borrower regardless of the fact that persons
other than those authorized to request advances may have authority to draw
against such account. The holder shall have no obligation to determine whether
any person requesting an advance is or has been authorized by any Borrower.
(c) Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.
PREPAYMENT:
(a) Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.
(b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of Five Hundred Thousand Dollars ($500,000.00); provided however,
that if the outstanding principal balance of such portion of this Note is less
than said amount, the minimum prepayment amount shall be the entire outstanding
principal balance thereof. In consideration of Bank providing this prepayment
option to Borrower, or if any such portion of this Note shall become due and
payable at any time prior to the last day of the Fixed Rate Term applicable
thereto by acceleration or otherwise, Borrower shall pay to Bank immediately
upon demand a fee which is the sum of the discounted monthly differences for
each month from the month of prepayment through the month in which such Fixed
Rate Term matures, calculated as follows for each such month:
6
<PAGE> 7
(i) Determine the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to
such amount had it remained outstanding until the last day of
the Fixed Rate Term applicable thereto.
(ii) Subtract from the amount determined in (i) above the amount of
interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term at
LIBOR in effect on the date of prepayment for new loans made for
such term and in a principal amount equal to the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater than
zero, discount that difference by LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum two percent (2.00%)
above the Prime Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed). Each change in the rate of interest on any
such past due prepayment fee shall become effective on the date each Prime Rate
change is announced within Bank.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions
of that certain Credit Agreement between Borrower and Bank dated as of August
26, 1999, as amended from time to time (the "Credit Agreement"). Any default in
the payment or performance of any obligation under this Note, or any defined
event of default under the Credit Agreement, shall constitute an "Event of
Default" under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default, the
holder of this Note, at the holder's option, may
7
<PAGE> 8
declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of
nonperformance, notice of protest, protest or notice of dishonor, all of which
are expressly waived by each Borrower, and the obligation, if any, of the holder
to extend any further credit hereunder shall immediately cease and terminate.
Each Borrower shall pay to the holder immediately upon demand the full amount of
all payments, advances, charges, costs and expenses, including reasonable
attorneys' fees (to include outside counsel fees and all allocated costs of the
holder's in-house counsel), expended or incurred by the holder in connection
with the enforcement of the holder's rights and/or the collection of any amounts
which become due to the holder under this Note, and the prosecution or defense
of any action in any way related to this Note, including without limitation, any
action for declaratory relief, whether incurred at the trial or appellate level,
in an arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought by Bank
or any other person) relating to any Borrower or any other person or entity.
(b) Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several.
(c) Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California.
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay
------------------------------
Title: CFO
---------------------------
8
<PAGE> 9
ADDENDUM TO PROMISSORY NOTE
(LIBOR PRICING ADJUSTMENTS)
THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by HORIZON HIGH REACH, INC. ("Borrower") and payable to WELLS
FARGO BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of August 26,
1999, in the principal amount of Ten Millions Dollars ($10,000,000.00) (the
"Note").
The following provisions are hereby incorporated into the Note to
reflect the interest rate adjustments agreed to by Bank and Borrower:
INTEREST RATE ADJUSTMENTS:
(a) Initial LIBOR Margin. The initial LIBOR margin applicable to
this Note shall be as set forth in the "Interest" paragraph herein.
(b) LIBOR Rate Adjustments. Bank shall adjust the LIBOR margin used
to determine the rate of interest applicable to LIBOR options selected by
Borrower under this Note on a quarterly basis, commencing with Borrower's fiscal
quarter ending June 30, 1999, if required to reflect a change in Borrower's
ratio of Funded Debt to EBITDA (as defined in the Credit Agreement referenced
herein), in accordance with the following grid:
<TABLE>
<CAPTION>
Funded Debt to Applicable LIBOR
EBITDA Margin
-------------- ----------------
<S> <C>
3.25 to 1.0 or greater 2.00%
at least 2.75 to 1.0 but less than 3.25 to 1.0 1.75%
at least 2.00 to 1.0 but less than 2.75 to 1.0 1.50%
less than 2.00 to 1.0 1.25%
</TABLE>
Each such adjustment shall be effective on the first Business Day of Borrower's
fiscal quarter following the quarter during which Bank receives and reviews
Borrower's most current fiscal quarter-end financial statements in accordance
with any
<PAGE> 10
requirements established by Bank for the preparation and delivery thereof.
IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.
HORIZON HIGH REACH, INC.
By: /s/Russell McKay
------------------------------
Title: CFO
---------------------------
<PAGE> 1
EXHIBIT 10.22(v)
August 26, 1999
Horizon High Reach, Inc.
1540 East Shaw Avenue, Ste. 123
Attention: Mr. Randall Fortell
Chief Financial Officer/Secretary
RE: Foreign Exchange Agreement
Ladies and Gentlemen:
You, the customer to whom this letter agreement (the "Agreement") is
addressed, may from time to time request that we, Wells Fargo Bank, National
Association, enter into foreign exchange contracts with you (each, a "Contract"
and collectively, "Contracts") for spot or forward delivery of foreign
currencies that you want to purchase from us or sell to us. When we receive each
request from you we will decide, in our sole discretion, whether to enter into a
Contract with you. This Agreement sets forth the terms and conditions governing
the Contracts we enter into and the transactions contemplated thereby.
1. REQUESTS TO ENTER INTO, AMEND OR CANCEL CONTRACTS. All requests to us
to enter into, amend or cancel Contracts must be made by telephone. Requests to
enter into Contracts must specify (a) whether the request is to purchase or sell
foreign currency, (b) the type of foreign currency, (c) the amount of foreign
currency, and (d) the value date for the Contract. Requests to amend or cancel
Contracts must identify the number of the Contract to be amended or cancelled.
Each request for a Contract for spot delivery of foreign currency also must
specify where and how the currency is to be delivered. With respect to each
request for a Contract for forward delivery of foreign currency, you also must
send us settlement instructions by telephone or facsimile transmission before
the settlement date informing us where and how the currency is to be delivered.
Each request to enter into, amend or cancel a Contract and all settlement
instructions must be directed to your primary foreign exchange advisor or an
alternate advisor designated by us. You authorize us to rely on all information
and directions contained in each such request and settlement instruction. We
have no obligation to, and we will determine in our sole discretion whether or
not to, enter into, amend or cancel any Contract. If we do enter into, amend or
cancel any Contract at your request, we will not be obligated to enter into,
amend or cancel any other Contract.
2. CONFIRMATIONS OF CONTRACTS AND AMENDMENTS TO CONTRACTS. If we accept a
request to enter into or amend a Contract, we will mail or send you by facsimile
transmission a confirmation of the Contract or amendment within a reasonable
time after our acceptance. Immediately upon your receipt of each confirmation,
you will sign and return a copy to us by mail or facsimile transmission. The
definitive terms of each Contract and each amendment to a Contract will be found
only in the confirmation of such Contract or amendment. We will not be bound by
any Contract or amendment that is not confirmed by us as provided in this
Section. If you do not sign and return to us a copy of any confirmation we send
you pursuant to this Section, you will indemnify and reimburse us for, and hold
us harmless from and against, any and all losses, liabilities, claims, damages,
obligations, penalties, actions, judgments, suits, costs and expenses, of any
kind whatsoever and howsoever caused, including without limitation, attorneys'
fees (to include outside counsel fees and all allocated costs of our in-house
counsel) and other legal costs and expenses, (collectively, "Losses"), paid,
suffered or
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August 26, 1999
Page 2
incurred by, or imposed upon, us directly or indirectly as a result of, or in
any way connected with, your failure to sign and return such confirmation.
3. VERIFYING CONFIRMATIONS, REQUESTS TO ENTER INTO, AMEND OR CANCEL
CONTRACTS, AND SETTLEMENT INSTRUCTIONS. We will verify each request to enter
into, amend or cancel a Contract, each instruction for the settlement of a
Contract, and the signature on each confirmation of a Contract or amendment by
determining if the name used by the person requesting the Contract or the
amendment or cancellation of a Contract, giving us settlement instructions, or
signing the confirmation of a Contract or amendment is the name of one of the
persons you designate to us in writing as being authorized by you to make such
requests and instructions and to sign such confirmations. We have no obligation
to confirm in any other way the identify of any person making such requests or
instructions or signing such confirmations. You agree to be bound by each
request to enter into, amend or cancel a Contract, each instruction for the
settlement of a Contract, and each confirmation of a Contract or amendment if
such request, instruction or confirmation was (a) authorized or transmitted by
you, or (b) made in your name and accepted by us in good faith and in compliance
with the procedures in this Section, even if such request, instruction or
confirmation was not properly authorized by you. We shall have no liability to
you for any Losses you suffer or incur as a result of, and you will indemnify us
for any Losses we suffer or incur as a result of, any breach of your security
procedures in connection with any request to enter into, amend or cancel a
Contract, any instruction for the settlement of a Contract, and the signing of
any confirmation of a Contract or amendment. Any actions we take to detect
erroneous requests to enter into, amend or cancel Contracts or erroneous
instructions for the settlement of Contracts, or any actions we take beyond
those described above in an attempt to detect unauthorized requests,
instructions or confirmations, will be taken at our sole discretion. No matter
how many times we take these actions they will not become part of our standard
procedures for attempting to detect such erroneous or unauthorized requests,
instructions or confirmations, and we will not in any situation be liable for
failing to take or to correctly perform these actions.
4. WARRANTY CONCERNING LEGALITY OF CONTRACTS. Each request by you that we
enter into or amend a Contract shall be deemed a representation and warranty by
you that the terms of the Contract or such amendment are in conformity with all
applicable laws and regulations. You understand that we are not an investment
advisor. We do not give, and we hereby disclaim, all investment advice with
respect to any Contract or any amendment of a Contract. You bear the sole risk
of any and all market fluctuations in any currency traded pursuant to the terms
of this Agreement or any Contract.
5. LOSSES RESULTING FROM EXTENSIONS OR CANCELLATIONS OF CONTRACTS. In the
event that (a) you request that we cancel a Contract or amend a Contract by
extending its term, and (b) we, in our sole discretion agree to such request,
you will indemnify and reimburse us for, and hold us harmless from and against,
any and all Losses paid, suffered or incurred by, or imposed upon, us directly
or indirectly as a result of, or in any way connected with, our cancellation of,
or extension of the term of, the Contract, including without limitation, any and
all Losses resulting from the liquidation of our position in the currency of the
Contract.
6. EURO CURRENCY AND CONTRACT SETTLEMENTS. Contracts may be entered into
with respect to the currency of a country that later makes Euro currency its
sole or alternate currency of legal tender. If a Contract entered into in the
original national currency of such a
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Horizon High Reach, Inc.
August 26, 1999
Page 3
country (the "National Currency") is scheduled to settle during the period when
Euro currency is an alternate currency of legal tender in such country, the
Contract will be settled in the National Currency of such country unless you
give us with written instructions to settle the Contract in Euro currency. If a
Contract is scheduled to settle on a date when the National Currency of a
country is no longer legal tender, the Contract shall be converted from the
National Currency of such country into Euro currency on or before the date Euro
currency becomes that country's sole currency, and the Contract will be settled
in Euro currency.
7. DEFAULT AND REMEDIES. If you fail fully to perform your obligations
under this Agreement or under any Contract on the date such obligations are to
be performed, or if you breach any of your representations or warranties made to
us under this Agreement or any Contract, (a) we may, in our sole discretion and
without limitation of our rights and remedies under applicable law, cancel any
Contract and liquidate our position in the currency of such Contract; (b) you
will indemnify and reimburse us for, and defend and hold us harmless from and
against, any and all Losses paid, suffered or incurred by, or imposed upon, us
arising directly or indirectly as a result of, or in any way connected with, (i)
any such failure or breach, (ii) the exercise of our rights and remedies under
this Agreement and applicable law, (iii) the liquidation of our position in the
currencies of the Contracts affected by such failure or breach, and (iv)
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of our in-house counsel), expended or incurred by us in pursuance of our
rights and remedies under this Agreement and the Contracts; and (c) we may
setoff and apply against your liability to us any deposits you have with us or
any other obligations we have to you, without regard to the nature or due date
of such deposits or obligations, and notwithstanding that such setoff may give
rise to penalties for early withdrawal of funds.
8. LIMITATION OF LIABILITY AND INDEMNITY. We shall not be liable to you
for any Losses paid, suffered or incurred by or imposed upon you, and you shall
indemnify and reimburse us for and hold us harmless from and against any and all
Losses paid, suffered or incurred by or imposed upon us, arising directly or
indirectly as a result of, or in any way connected with, (a) any present or
future laws, regulations, guidelines or other directives of any government, (b)
the errors, acts or omissions of others, such as communications carriers or
correspondents through which we may perform, or receive or transmit information
in performing, our obligations under this Agreement or any Contract, (c) any
event or circumstances beyond our control, or (d) any actions performed by us
pursuant to the terms of this Agreement or any Contract. The limitation of our
liability and your indemnification set out in the preceding sentence shall not
apply to the extent any of your or our Losses result directly from our gross
negligence or willful misconduct. IN NO EVENT WILL WE BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, INDIRECT OR PUNITIVE DAMAGES, WHETHER ANY CLAIM IS
BASED ON CONTRACT OR TORT, WHETHER THE LIKELIHOOD OF SUCH DAMAGES WAS KNOWN TO
US AND REGARDLESS OF THE FORM OF THE CLAIM OR ACTION. Any action against us
under or related to this Agreement or any Contract must be brought within twelve
(12) months after the cause of action arises. The provisions of this Section
will survive the termination or expiration of this Agreement and all the
Contracts.
9. TERMINATION. Either of us may terminate this Agreement with or without
cause upon notice in writing to the other party at any time. Upon such
termination your obligations to us and our obligations to you under this
Agreement will also terminate, except for (a) any obligations in connection with
Contracts that are not cancelled at the time of such termination, and (b) any
obligations which, by the terms of this Agreement, survive such termination.
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August 26, 1999
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10. MODIFICATIONS, AMENDMENTS, AND WAIVERS. This Agreement may not be
modified or amended, or any provision hereof waived, except in a writing signed
by you and us.
11. NOTICES. All notices from either of us to the other shall be in
writing, or be made by a telecommunications device capable of creating a written
record, shall be delivered to the addressee at its address specified above, or
to any other address either of us may designate by written notice to the other,
and shall be effective upon receipt.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of each of our respective heirs, legal representatives,
successors and assigns; provided however, that you may not assign or otherwise
transfer any of your rights or obligations under this Agreement or any Contract
without our prior written consent.
13. GOVERNING LAW. This Agreement and all Contracts shall be governed by
and be construed in accordance with the laws of the State of California.
14. SEVERABILITY. If any provision of this Agreement shall be prohibited
or invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or any remaining provisions of this Agreement.
15. ENTIRE AGREEMENT. This Agreement, together with each Contract and any
writing referring specifically to this Agreement or any Contract or referring in
general to agreements or contracts which would include this Agreement or any
Contract, contains the entire and only agreement between you and us with respect
to your purchase from us or sale to us of foreign currencies and the terms of
all Contracts for any such purchase or sale.
Please indicate your acceptance of the terms and conditions of this
Agreement by signing, dating and returning a copy of this Agreement to us at our
address specified above.
Very truly yours,
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /S/ Ben Hanson
----------------------------------
Ben Hanson
Vice President
Agreed to and accepted as of
AUG. 26, 1999:
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay
----------------------------
Title: CFO
--------------------------
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EXHIBIT 10.22(vi)
SECURITY AGREEMENT
WELLS FARGO BANK EQUIPMENT
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1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned HORIZON HIGH REACH, Inc., or any of them ("Debtor"), hereby grants
and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a security
interest in all goods, tools, machinery, furnishings, furniture and other
equipment, now or at any time hereafter, and prior to the termination hereof,
owned or acquired by Debtor, wherever located, whether in the possession of
Debtor or any other person and whether located on Debtor's property or
elsewhere, and all improvements, replacements, accessions and additions thereto
(collectively called "Collateral"), together with whatever is receivable or
received when any of the Collateral or proceeds thereof are sold, leased,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, including without limitation, (a) all accounts,
contract rights, chattel paper, instruments, documents, general intangibles and
rights to payment of every kind now or at any time hereafter arising from any
such sale, lease, collection, exchange or other disposition of any of the
foregoing, (b) all rights to payment, including returned premiums, with respect
to any insurance relating to any of the foregoing, and (c) all rights to payment
with respect to any cause of action affecting or relating to any of the
foregoing (hereinafter called "Proceeds").
2. OBLIGATIONS SECURED. The obligations secured hereby are the
payment and performance of: (a) all present and future Indebtedness of Debtor to
Bank; (b) all obligations of Debtor and rights of Bank under this Agreement; and
(c) all present and future obligations of Debtor to Bank of other kinds. The
word "Indebtedness" is used herein in its most comprehensive sense and includes
any and all advances, debts, obligations and liabilities of Debtor, or any of
them, heretofore, now or hereafter made, incurred or created, whether voluntary
or. involuntary and however arising, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and whether
Debtor may be liable individually or jointly, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.
3. TERMINATION. This Agreement will terminate upon the performance
of all obligations of Debtor to Bank, including without limitation, the payment
of all Indebtedness of Debtor to Bank, and the termination of all commitments of
Bank to extend credit to Debtor, existing at the time Bank receives written
notice from Debtor of the termination of this Agreement.
4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants
to Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to grant a security interest
in the Collateral and Proceeds; (c) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except the lien created hereby or
as otherwise agreed to by Bank, or heretofore disclosed by Debtor to Bank, in
writing; (d) all statements contained herein are true and complete in all
material respects; (e) no financing statement covering any of the Collateral or
Proceeds, and naming any secured party other than Bank, is on file in any public
office; and (f) Debtor is not in the business of selling goods of the kind
included within the Collateral subject to this Agreement, and Debtor
acknowledges that no sale of any Collateral, including without limitation, any
Collateral which Debtor may deem to be surplus, has been or shall be consented
to or acquiesced in by Bank, except as specifically set forth in writing by
Bank.
6. COVENANTS OF DEBTOR.
(a) Debtor Agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's rights,
powers and remedies hereunder; (iv) to permit Bank to exercise its powers; (v)
to execute and deliver such documents as Bank deems necessary to create, perfect
and continue the security interests contemplated hereby; and (vi) not to change
its chief place of business (or personal residence, if applicable) or the places
where Debtor keeps any of the Collateral or Debtor's records concerning the
Collateral and Proceeds without first giving Bank written notice of the address
to which Debtor is moving same.
(b) Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) to insure the Collateral with Bank as loss
payee, in form, substance and amounts, under agreements, against risks and
liabilities, and with insurance companies satisfactory to Bank; (ii) to operate
the Collateral in accordance with all applicable statutes, rules and regulations
relating to the use and control thereof, and not to use the Collateral for any
unlawful purpose or in any way that would void any insurance required to be
carried in connection therewith; (iii) not to permit any security interest in or
lien on the Collateral or Proceeds, including without limitation, liens arising
from repairs to or storage of the Collateral, except in favor of Bank; (iv) to
pay when due all license fees, registration fees and other charges in connection
with any Collateral; (v) not to remove the Collateral from Debtor's premises
unless the Collateral consists of mobile goods as defined in the California
Uniform Commercial Code, in which case Debtor agrees not to remove or permit the
removal of the Collateral
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from its state of domicile for a period in excess of 30 calendar days; (vi) not
to sell, hypothecate or otherwise dispose of, nor permit the transfer by
operation of law of, any of the Collateral or Proceeds or any interest therein;
(vii) not to rent, lease or charter the Collateral; (viii) to permit Bank to
inspect the Collateral at any time; (ix) to keep, in accordance with generally
accepted accounting principles, complete and accurate records regarding all
Collateral and Proceeds, and to permit Bank to inspect the same and make copies
thereof at any reasonable time; (x) if requested by Bank, to receive and use
reasonable diligence to collect Proceeds, in trust and as the property of Bank,
and to immediately endorse as appropriate and deliver such Proceeds to Bank
daily in the exact form in which they are received together with a collection
report in form satisfactory to Bank; (xi) not to commingle Proceeds or
collections thereunder with other property; (xii) to give only normal allowances
and credits and to advise Bank thereof immediately in writing if they affect any
Collateral or Proceeds in any material respect; (xiii) in the event Bank elects
to receive payments of Proceeds hereunder, to pay all expenses incurred by Bank
in connection therewith, including expenses of accounting, correspondence,
collection efforts, reporting to account or contract debtors, filing, recording,
record keeping and expenses incidental thereto; and (xiv) to provide any service
and do any other acts which may be necessary to maintain, preserve and protect
all Collateral and, as appropriate and applicable, to keep the Collateral in
good and saleable condition and repair, to deal with the Collateral in
accordance with the standards and practices adhered to generally by owners of
like property, and to keep all Collateral and Proceeds free and clear of all
defenses, rights of offset and counterclaims.
7. POWERS OF BANK. Debtor appoints Bank its true attorney-in-fact to
perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, whether or not Debtor
is in default: (a) to perform any obligation of Debtor hereunder in Debtor's
name or otherwise; (b) to give notice to account debtors or others of Bank's
rights in the Collateral and Proceeds, to enforce the same and make extension
agreements with respect thereto; (c) to release persons liable on Proceeds and
to give receipts and acquittances and compromise disputes in connection
therewith; (d) to release security; (e) to resort to security in any order; (f)
to prepare, execute, file, record or deliver notes, assignments, schedules,
designation statements, financing statements, continuation statements,
termination statements, statements of assignment, applications for registration
or like papers to perfect, preserve or release Bank's interest in the Collateral
and Proceeds; (g) to receive, open and read mail addressed to Debtor; (h) to
take cash, instruments for the payment of money and other property to which Bank
is entitled; (i) to verify facts concerning the Collateral and Proceeds by
inquiry of obligors thereon, or otherwise, in its own name or a fictitious name;
(j) to endorse, collect, deliver and receive payment under instruments for the
payment of money constituting or relating to Proceeds; (k) to prepare, adjust,
execute, deliver and receive payment under insurance claims, and to collect and
receive payment of and endorse any instrument in payment of loss or returned
premiums or any other insurance refund or return, and to apply such amounts
received by Bank, at Bank's sole option, toward repayment of the Indebtedness or
replacement of the Collateral; (l) to exercise all rights, powers and remedies
which Debtor would have, but for this Agreement, with respect to all Collateral
and Proceeds subject hereto; (m) to enter onto Debtor's premises in inspecting
the Collateral; and (n) to do all acts and things and execute all documents in
the name of Debtor or otherwise, deemed by Bank as necessary, proper and
convenient in connection with the preservation, perfection or enforcement of its
rights hereunder.
8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS.
Debtor agrees to pay, prior to delinquency, all insurance premiums, taxes,
charges, liens and assessments against the Collateral and Proceeds, and upon the
failure of Debtor to do so, Bank at its option may pay any of them and shall be
the sole judge of the legality or validity thereof and the amount necessary to
discharge the same. Any such payments made by Bank shall be obligations of
Debtor to Bank, due and payable immediately upon demand, together with interest
at a rate determined in accordance with the provisions of Section 15 herein, and
shall be secured by the Collateral and Proceeds, subject to all terms and
conditions of this Agreement.
9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any default in the
payment or performance of any obligation, or any defined event of default, under
(i) any contract or instrument evidencing any Indebtedness, or (ii) any other
agreement between any Debtor and Bank, including without limitation any loan
agreement, relating to or executed in connection with any Indebtedness; (b) any
representation or warranty made by any Debtor herein shall prove to be incorrect
in any material respect when made; (c) any Debtor shall fail to observe or
perform any obligation or agreement contained herein; (d) any attachment or like
levy on any property of any Debtor; and (e) Bank, in good faith, believes any or
all of the Collateral and/or Proceeds to be in danger of misuse, dissipation,
commingling, loss, theft, damage or destruction, or otherwise in jeopardy or
unsatisfactory in character or value.
10. REMEDIES. Upon the occurrence of any Event of Default, Bank
shall have the right to declare immediately due and payable all or any
Indebtedness secured hereby and to terminate any commitments to make loans or
otherwise extend credit to Debtor. Bank shall have all other rights, powers,
privileges and remedies granted to a secured party upon default under the
California Uniform Commercial Code or otherwise provided by law, including
without limitation, the right to contact all persons obligated to Debtor on any
Collateral or Proceeds and to instruct such persons to deliver all Collateral
and/or Proceeds directly to Bank. All rights, powers, privileges and remedies of
Bank shall be cumulative. No delay, failure or discontinuance of Bank in
exercising any right, power, privilege or remedy hereunder shall affect or
operate as a waiver of such right, power, privilege or remedy; nor shall any
single or partial exercise of any such right, power, privilege or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power, privilege or remedy. Any waiver, permit,
consent or approval of any kind by Bank of any default hereunder, or any such
waiver of any provisions or conditions hereof, must be in writing and shall be
effective only to the extent set forth in writing. It is agreed that public or
private sales, for cash or on credit, to a wholesaler or retailer or investor,
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or user of property of the types subject to this Agreement, or public auction,
are all commercially reasonable since differences in the sales prices generally
realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales.
While an Event of Default exists: (a) Debtor will deliver to Bank from
time to time, as requested by Bank, current lists of all Collateral and
Proceeds; (b) Debtor will not dispose of any of the Collateral or Proceeds
except on terms approved by Bank; (c) at Bank's request, Debtor will assemble
and deliver all Collateral and Proceeds, and books and records pertaining
thereto, to Bank at a reasonably convenient place designated by Bank; and (d)
Bank may, without notice to Debtor, enter onto Debtor premises and take
possession of the Collateral.
11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all
or any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Bank hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred Bank shall retain all
rights, powers, privileges and remedies herein given. Any proceeds of any
disposition of any of the Collateral or Proceeds, or any part thereof, may be
applied by Bank to the payment of expenses incurred by Bank in connection with
the foregoing, including reasonable attorneys' fees, and the balance of such
proceeds may be applied by Bank toward the payment of the Indebtedness in such
order of application as Bank may from time to time elect.
12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been
paid in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale and all other rights, powers, privileges and
remedies granted to Bank hereunder shall continue to exist and may be exercised
by Bank at any time and from time to time irrespective of the fact that the
Indebtedness or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all Indebtedness
secured hereunder.
13. MISCELLANEOUS. (a) The obligations of Debtor are joint and
several; (b) Debtor hereby waives any right (i) to require Bank to make any
presentment or demand, or give any notice of nonpayment or nonperformance,
protest, notice of protest or notice of dishonor hereunder, (ii) to direct the
application of payments or security for Indebtedness of Debtor or indebtedness
of customers of Debtor, or (iii) to require proceedings against others or to
require exhaustion of security; and (c) Debtor hereby consents to extensions,
forbearances or alterations of the terms of Indebtedness, the release or
substitution of security, and the release of any guarantors; provided however,
that in each instance, Bank believes in good faith that the action in question
is commercially reasonable in that it does not unreasonably increase the risk of
nonpayment of the Indebtedness to which the action applies. Until all
Indebtedness shall have been paid in full, no Debtor shall have any right of
subrogation or contribution, and each Debtor hereby waives any benefit of or
right to participate in any of the Collateral or Proceeds or any other security
now or hereafter held by Bank.
14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or 3 days after deposit in the U. S. mail,
first class and postage prepaid; and (c) if sent by telecopy, upon receipt.
15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in exercising any right, power, privilege or remedy conferred
by this Agreement or in the enforcement thereof, whether incurred at the trial
or appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to Debtor or in any way
affecting any of the Collateral or Bank's ability to exercise any of its rights
or remedies with respect thereto. All of the foregoing shall be paid by Debtor
with interest from the date of demand until paid in full at a rate per annum
equal to the greater of ten percent (10%) or the Prime Rate in effect from time
to time. The "Prime Rate" is a base rate that Bank from time to time establishes
and which serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto.
16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.
17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs
this Agreement as Debtor hereby expressly agrees that recourse may be had
against his or her separate property for all his or her Indebtedness to Bank
secured by the Collateral and Proceeds under this Agreement.
18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of California.
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Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address: 1540 EAST SHAW AVE., SUITE
123, FRESNO,, CA 93710
Debtor warrants that the Collateral (except goods in transit) is located
or domiciled at the following additional addresses: NONE1 See attached Exhibit
"A".
IN WITNESS WHEREOF, this Agreement has been duly executed as of AUGUST
26, 1999.
HORIZON HIGH REACH, INC. [INITIALS]
BY: /S/ RUSSELL McKAY, CFO
---------------------------------
TITLE: CFO
------------------------------
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<PAGE> 5
[INITIALS]
EXHIBIT A TO CONTINUING SECURITY AGREEMENT: EQUIPMENT, DATED AUGUST 26, 1999,
EXECUTED BY HORIZON HIGH REACH, INC. AS DEBTOR, FOR THE BENEFIT OF WELLS FARGO
BANK, NATIONAL ASSOCIATION, AS BANK
1361 SOUTHLAND CIRCLE N.W. 4151 BARRINGER DRIVE
ATLANTA, GA 30318 CHARLOTTE, NC 28217
10525 WIRE WAY 9000 EMMOTT ROAD
DALLAS, TX 75220 HOUSTON, TX 77040
25 CHAMBERSBRIDGE ROAD 8417 SW 8TH STREET
LAKEWOOD, NJ 08701 OKLAHOMA CITY, OK 73128
222 BERGEN TURNPIKE 11250 SOMERSET AVENUE
RIDGEFIELD PARK, NJ 07660 BELTSVILLE, MD 20705
1540 E. SHAW AVE., SUITE 123 560 N. MICHIGAN AVE.
FRESNO, CA 93710 ELMHURST, IL 60126
1215 W. LAMBERT ROAD 22403 KATY FWY
BREA, CA 92821 KATY, TX 77450
181 NORTH ROAD 3317 DURHAM DRIVE
HIGHLAND, NY 12528 RALEIGH, NC 27603
4419 MARKET COURT 4238 LOZANO LANE
SACRAMENTO, CA 95834 SUISUN, CA 94585
7711 OAKPORT STREET
OAKLAND, CA 94621-2011
<PAGE> 1
EXHIBIT 10.22(vii)
CONTINUING SECURITY AGREEMENT
WELLS FARGO BANK RIGHTS TO PAYMENT AND INVENTORY
- --------------------------------------------------------------------------------
1. GRANT OF SECURITY INTEREST. For valuable consideration, the
undersigned HORIZON HIGH REACH, INC., or any of them ("Debtor"), hereby grants
and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") a security
interest in all accounts, deposit accounts, chattel paper, instruments,
documents and general intangibles (collectively called "Rights to Payment"), now
existing or at any time hereafter, and prior to the termination hereof, arising
(whether they arise from the sale, lease or other disposition of inventory or
from performance of contracts for service, manufacture, construction, repair or
otherwise or from any other source whatsoever), including all securities,
guaranties, warranties, indemnity agreements, insurance policies and other
agreements pertaining to the same or the property described therein, and in all
goods returned by or repossessed from Debtor's customers, together with a
security interest in all inventory, goods held for sale or lease or to be
furnished under contracts for service, goods so leased or furnished, raw
materials, component parts, work in process or materials used or consumed in
Debtor's business and all warehouse receipts, bills of lading and other
documents evidencing goods owned or acquired by Debtor, and all goods covered
thereby, now or at any time hereafter, and prior to the termination hereof,
owned or acquired by Debtor, wherever located, and all products thereof
(collectively called "Inventory"), whether in the possession of Debtor,
warehousemen, bailees or any other person, or in process of delivery and whether
located at Debtor's places of business or elsewhere (with all Rights to Payment
and Inventory referred to herein collectively as the "Collateral"), together
with whatever is receivable or received when any of the Collateral or proceeds
thereof are sold, leased, collected, exchanged or otherwise disposed of, whether
such disposition is voluntary or involuntary, including without limitation, all
Rights to Payment, including returned premiums, with respect to any insurance
relating to any of the foregoing, and all Rights to Payment with respect to any
cause of action affecting or relating to any of the foregoing (hereinafter
called "Proceeds").
2. OBLIGATIONS SECURED. The obligations secured hereby are the
payment and performance of: (a) all present and future Indebtedness of Debtor to
Bank; (b) all obligations of Debtor and rights of Bank under this Agreement; and
(c) all present and future obligations of Debtor to Bank of other kinds. The
word "Indebtedness" is used herein in its most comprehensive sense and includes
any and all advances, debts, obligations and liabilities of Debtor, or any of
them, heretofore, now or hereafter made, incurred or created, whether voluntary
or involuntary and however arising, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and whether
Debtor may be liable individually or jointly, or whether recovery upon such
Indebtedness may be or hereafter becomes unenforceable.
3. TERMINATION. This Agreement will terminate upon the performance
of all obligations of Debtor to Bank, including without limitation, the payment
of all Indebtedness of Debtor to Bank, and the termination of all commitments of
Bank to extend credit to Debtor, existing at the time Bank receives written
notice from Debtor of the termination of this Agreement.
4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans
hereunder. Any money received by Bank in respect of the Collateral may be
deposited, at Bank's option, into a non-interest bearing account over which
Debtor shall have no control, and the same shall, for all purposes, be deemed
Collateral hereunder.
5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants
to Bank that: (a) Debtor is the owner and has possession or control of the
Collateral and Proceeds; (b) Debtor has the right to grant a security interest
in the Collateral and Proceeds; (c) all Collateral and Proceeds are genuine,
free from liens, adverse claims, setoffs, default, prepayment, defenses and
conditions precedent of any kind or character, except the lien created hereby or
as otherwise agreed to by Bank, or heretofore disclosed by Debtor to Bank, in
writing; (d) all statements contained herein and, where applicable, in the
Collateral are true and complete in all material respects; (e) no financing
statement covering any of the Collateral or Proceeds, and naming any secured
party other than Bank, is on file in any public office; (f) all persons
appearing to be obligated on Rights to Payment and Proceeds have authority and
capacity to contract and are bound as they appear to be; (g) all property
subject to chattel paper has been properly registered and filed in compliance
with law and to perfect the interest of Debtor in such property; and (h) all
Rights to Payment and Proceeds comply with all applicable laws concerning form,
content and manner of preparation and execution, including where applicable
Federal Reserve Regulation Z and any State consumer credit laws.
6. COVENANTS OF DEBTOR.
(a) Debtor Agrees in general: (i) to pay Indebtedness secured hereby
when due; (ii) to indemnify Bank against all losses, claims, demands,
liabilities and expenses of every kind caused by property subject hereto; (iii)
to pay all costs and expenses, including reasonable attorneys' fees, incurred by
Bank in the perfection and preservation of the Collateral or Bank's interest
therein and/or the realization, enforcement and exercise of Bank's rights,
powers and remedies hereunder; (iv) to permit Bank to exercise its powers; (v)
to execute and deliver such documents as Bank deems necessary to create, perfect
and continue the security interests contemplated hereby; and (vi) not to change
its chief place of business (or personal residence, if applicable) or the places
where Debtor keeps any of the Collateral or Debtor's records concerning the
Collateral and Proceeds without first giving Bank written notice of the address
to which Debtor is moving same.
(b) Debtor agrees with regard to the Collateral and Proceeds, unless
Bank agrees otherwise in writing: (i) to insure Inventory and, where applicable,
Rights to Payment with Bank as loss payee, in form, substance and amounts, under
agreements, against risks and liabilities, and with insurance companies
satisfactory to Bank; (ii) not to use any Inventory for any unlawful purpose or
in any way that would void any insurance required to be carried in connection
therewith; (iii) not to remove Inventory from Debtor's premises, except for
deliveries to buyers in the ordinary course of Debtor's business and except
Inventory which consists of mobile goods as defined in the California Uniform
Commercial Code, in which case Debtor agrees not to remove or permit the removal
of the Inventory from its state of domicile for a
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<PAGE> 2
period in excess of 30 calendar days; (iv) not to permit any security interest
in or lien on the Collateral or Proceeds, including without limitation, liens
arising from the storage of Inventory, except in favor of Bank; (v) not to sell,
hypothecate or otherwise dispose of, nor permit the transfer by operation of law
of, any of the Collateral or Proceeds or any interest therein, except sales of
Inventory to buyers in the ordinary course of Debtor's business; (vi) to furnish
reports to Bank of all acquisitions, returns, sales and other dispositions of
the Inventory in such form and detail and at such times as Bank may require;
(vii) to permit Bank to inspect the Collateral at any time; (viii) to keep, in
accordance with generally accepted accounting principles, complete and accurate
records regarding all Collateral and Proceeds, and to permit Bank to inspect the
same and make copies thereof at any reasonable time; (x) if requested by Bank,
to receive and use reasonable diligence to collect Rights to Payment and
Proceeds, in trust and as the property of Bank, and to immediately endorse as
appropriate and deliver such Rights to Payment and Proceeds to Bank daily in the
exact form in which they are received together with a collection report in form
satisfactory to Bank; (x) not to commingle Rights to Payment, Proceeds or
collections thereunder with other property; (xi) to give only normal allowances
and credits and to advise Bank thereof immediately in writing if they affect any
Rights to Payment or Proceeds in any material respect; (xii) on demand, to
deliver to Bank returned property resulting from, or payment equal to, such
allowances or credits on any Rights to Payment or Proceeds or to execute such
documents and do such other things as Bank may reasonably request for the
purpose of perfecting, preserving and enforcing its security interest in such
returned property; (xiii) from time to time, when requested by Bank, to prepare
and deliver a schedule of all Collateral and Proceeds subject to this Agreement
and to assign in writing and deliver to Bank all accounts, contracts, leases and
other chattel paper, instruments, documents and other evidences thereof; (xiv)
in the event Bank elects to receive payments of Rights to Payment or Proceeds
hereunder, to pay all expenses incurred by Bank in connection therewith,
including expenses of accounting, correspondence, collection efforts, reporting
to account or contract debtors, filing, recording, record keeping and expenses
incidental thereto; and (xv) to provide any service and do any other acts which
may be necessary to maintain, preserve and protect all Collateral and, as
appropriate and applicable, to keep all Collateral in good and saleable
condition in accordance with the standards and practices adhered to generally by
users and manufacturers of like property, and to keep all Collateral and
Proceeds free and clear of all defenses, rights of offset and counterclaims.
7. POWERS OF BANK. Debtor appoints Bank its true attorney-in-fact
to perform any of the following powers, which are coupled with an interest, are
irrevocable until termination of this Agreement and may be exercised from time
to time by Bank's officers and employees, or any of them, whether or not Debtor
is in default: (a) to perform any obligation of Debtor hereunder in Debtor's
name or otherwise; (b) to give notice to account debtors or others of Bank's
rights in the Collateral and Proceeds, to enforce the same and make extension
agreements with respect thereto; (c) to release persons liable on Proceeds and
to give receipts and acquittances and compromise disputes in connection
therewith; (d) to release security; (e) to resort to security in any order; (f)
to prepare, execute, file, record or deliver notes, assignments, schedules,
designation statements, financing statements, continuation statements,
termination statements, statements of assignment, applications for registration
or like papers to perfect, preserve or release Bank's interest in the Collateral
and Proceeds; (g) to receive, open and read mail addressed to Debtor; (h) to
take cash, instruments for the payment of money and other property to which Bank
is entitled; (i) to verify facts concerning the Collateral and Proceeds by
inquiry of obligors thereon, or otherwise, in its own name or a fictitious name;
(j) to endorse, collect, deliver and receive payment under instruments for the
payment of money constituting or relating to Proceeds; (k) to prepare, adjust,
execute, deliver and receive payment under insurance claims, and to collect and
receive payment of and endorse any instrument in payment of loss or returned
premiums or any other insurance refund or return, and to apply such amounts
received by Bank, at Bank's sole option, toward repayment of the Indebtedness or
replacement of the Collateral; (l) to exercise all rights, powers and remedies
which Debtor would have, but for this Agreement, with respect to all Collateral
and Proceeds subject hereto; (m) to enter onto Debtor's premises in inspecting
the Collateral; (n) to make withdrawals from and to close deposit accounts or
other accounts with any financial institution, wherever located, into which
Proceeds may have been deposited, and to apply funds so withdrawn to payment of
the Indebtedness; (o) to preserve or release the interest evidenced by chattel
paper to which Bank is entitled hereunder and to endorse and deliver evidences
of title incidental thereto; and (p) to do all acts and things and execute all
documents in the name of Debtor or otherwise, deemed by Bank as necessary,
proper and convenient in connection with the preservation, perfection or
enforcement of its rights hereunder.
8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS.
Debtor agrees to pay, prior to delinquency, all insurance premiums, taxes,
charges, liens and assessments against the Collateral and Proceeds, and upon the
failure of Debtor to do so, Bank at its option may pay any of them and shall be
the sole judge of the legality or validity thereof and the amount necessary to
discharge the same. Any such payments made by Bank shall be obligations of
Debtor to Bank, due and payable immediately upon demand, together with interest
at a rate determined in accordance with the provisions of Section 15 herein, and
shall be secured by the Collateral and Proceeds, subject to all terms and
conditions of this Agreement.
9. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement: (a) any default in the
payment or performance of any obligation, or any defined event of default, under
(i) any contract or instrument evidencing any Indebtedness, or (ii) any other
agreement between any Debtor and Bank, including without limitation any loan
agreement, relating to or executed in connection with any Indebtedness; (b) any
representation or warranty made by any Debtor herein shall prove to be incorrect
in any material respect when made; (c) any Debtor shall fail to observe or
perform any obligation or agreement contained herein; (d) any attachment or like
levy on any property of any Debtor; and (e) Bank, in good faith, believes any or
all of the Collateral and/or Proceeds to be in danger of misuse, dissipation,
commingling, loss, theft, damage or destruction, or otherwise in jeopardy or
unsatisfactory in character or value.
10. REMEDIES. Upon the occurrence of any Event of Default, Bank
shall have the right to declare immediately due and payable all or any
Indebtedness secured hereby and to terminate any commitments to make loans or
otherwise extend credit to Debtor. Bank shall have all other rights, powers,
privileges and remedies granted to a secured party upon default under the
California Uniform Commercial Code or otherwise provided by law, including
without limitation, the right to contact all persons obligated to Debtor on any
Collateral or Proceeds and to instruct such persons to deliver all Collateral
and/or Proceeds directly to Bank. All rights, powers, privileges and remedies of
Bank shall be cumulative. No
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<PAGE> 3
delay, failure or discontinuance of Bank in exercising any right, power,
privilege or remedy hereunder shall affect or operate as a waiver of such right,
power, privilege or remedy; nor shall any single or partial exercise of any such
right, power, privilege or remedy preclude, waive or otherwise affect any other
or further exercise thereof or the exercise of any other right, power, privilege
or remedy. Any waiver, permit, consent or approval of any kind by Bank of any
default hereunder, or any such waiver of any provisions or conditions hereof,
must be in writing and shall be effective only to the extent set forth in
writing. It is agreed that public or private sales, for cash or on credit, to a
wholesaler or retailer or investor, or user of property of the types subject to
this Agreement, or public auction, are all commercially reasonable since
differences in the sales prices generally realized in the different kinds of
sales are ordinarily offset by the differences in the costs and credit risks of
such sales.
While an Event of Default exists: (a) Debtor will deliver to Bank from time to
time, as requested by Bank, current lists of all Collateral and Proceeds; (b)
Debtor will not dispose of any of the Collateral or Proceeds except on terms
approved by Bank; (c) at Bank's request, Debtor will assemble and deliver all
Collateral and Proceeds, and books and records pertaining thereto, to Bank at a
reasonably convenient place designated by Bank; and (d) Bank may, without notice
to Debtor, enter onto Debtor's premises and take possession of the Collateral.
With respect to any sale by Bank of any Collateral subject to this Agreement,
Debtor hereby expressly grants to Bank the right to sell such Collateral using
any or all of Debtor's trademarks, trade names, trade name rights and/or
proprietary labels or marks.
11. DISPOSITION OF COLLATERAL AND PROCEEDS. Upon the transfer of all
or any part of the Indebtedness, Bank may transfer all or any part of the
Collateral or Proceeds and shall be fully discharged thereafter from all
liability and responsibility with respect to any of the foregoing so
transferred, and the transferee shall be vested with all rights and powers of
Bank hereunder with respect to any of the foregoing so transferred; but with
respect to any Collateral or Proceeds not so transferred Bank shall retain all
rights, powers, privileges and remedies herein given. Any proceeds of any
disposition of any of the Collateral or Proceeds, or any part thereof, may be
applied by Bank to the payment of expenses incurred by Bank in connection with
the foregoing, including reasonable attorneys' fees, and the balance of such
proceeds may be applied by Bank toward the payment of the Indebtedness in such
order of application as Bank may from time to time elect.
12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been
paid in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale and all other rights, powers, privileges and
remedies granted to Bank hereunder shall continue to exist and may be exercised
by Bank at any time and from time to time irrespective of the fact that the
Indebtedness or any part thereof may have become barred by any statute of
limitations, or that the personal liability of Debtor may have ceased, unless
such liability shall have ceased due to the payment in full of all Indebtedness
secured hereunder.
13. MISCELLANEOUS. (a) The obligations of Debtor are joint and
several; (b) Debtor hereby waives any right (i) to require Bank to make any
presentment or demand, or give any notice of nonpayment or nonperformance,
protest, notice of protest or notice of dishonor hereunder, (ii) to direct the
application of payments or security for Indebtedness of Debtor or indebtedness
of customers of Debtor, or (iii) to require proceedings against others or to
require exhaustion of security; and (c) Debtor hereby consents to extensions,
forbearances or alterations of the terms of Indebtedness, the release or
substitution of security, and the release of any guarantors; provided however,
that in each instance, Bank believes in good faith that the action in question
is commercially reasonable in that it does not unreasonably increase the risk of
nonpayment of the Indebtedness to which the action applies. Until all
Indebtedness shall have been paid in full, no Debtor shall have any right of
subrogation or contribution, and each Debtor hereby waives any benefit of or
right to participate in any of the Collateral or Proceeds or any other security
now or hereafter held by Bank.
14. NOTICES. All notices, requests and demands required under this
Agreement must be in writing, addressed to Bank at the address specified in any
other loan documents entered into between Debtor and Bank and to Debtor at the
address of its chief executive office (or personal residence, if applicable)
specified below or to such other address as any party may designate by written
notice to each other party, and shall be deemed to have been given or made as
follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon
the earlier of the date of receipt or 3 days after deposit in the U. S. mail,
first class and postage prepaid; and (c) if sent by telecopy, upon receipt.
15. COSTS, EXPENSES AND ATTORNEYS' FEES. Debtor shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in exercising any right, power, privilege or remedy conferred
by this Agreement or in the enforcement thereof, whether incurred at the trial
or appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or
motion brought by Bank or any other person) relating to Debtor or in any way
affecting any of the Collateral or Bank's ability to exercise any of its rights
or remedies with respect thereto. All of the foregoing shall be paid by Debtor
with interest from the date of demand until paid in full at a rate per annum
equal to the greater of ten percent (10%) or the Prime Rate in effect from time
to time. The "Prime Rate" is a base rate that Bank from time to time establishes
and which serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto.
16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties, and may be amended or
modified only in writing signed by Bank and Debtor.
17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs
this Agreement as Debtor hereby expressly agrees that recourse may be had
against his or her separate property for all his or her Indebtedness to Bank
secured by the Collateral and Proceeds under this Agreement.
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18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or any
remaining provisions of this Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of California.
Debtor warrants that its chief executive office (or personal residence,
if applicable) is located at the following address:- 1540 EAST SHAW AVE., SUITE
123, FRESNO,, CA 93710
Debtor warrants that the Collateral (except goods in transit) is located
or domiciled at the following additional addresses: See attached Exhibit "A".
IN WITNESS WHEREOF, this Agreement has been duly executed as of AUGUST
26, 1999.
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay
----------------------------------
Title: CFO
-------------------------------
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EXHIBIT A TO CONTINUING SECURITY AGREEMENT: RIGHTS TO PAYMENT AND INVENTORY,
DATED AUGUST 26, 1999, EXECUTED BY HORIZON HIGH REACH, INC. AS DEBTOR, FOR THE
BENEFIT OF WELLS FARGO BANK, NATIONAL ASSOCIATION, AS BANK
1361 SOUTHLAND CIRCLE N.W. 4151 BARRINGER DRIVE
ATLANTA, GA 30318 CHARLOTTE, NC 28217
10525 WIRE WAY 9000 EMMOTT ROAD
DALLAS, TX 75220 HOUSTON, TX 77040
25 CHAMBERSBRIDGE ROAD 8417 SW 8TH STREET
LAKEWOOD, NJ 08701 OKLAHOMA CITY, OK 73128
222 BERGEN TURNPIKE 11250 SOMERSET AVENUE
RIDGEFIELD PARK, NJ 07660 BELTSVILLE, MD 20705
1540 E. SHAW AVE., SUITE 123 560 N. MICHIGAN AVE.
FRESNO, CA 93710 ELMHURST, IL 60126
1215 W. LAMBERT ROAD 22403 KATY FWY
BREA, CA 92821 KATY, TX 77450
181 NORTH ROAD 3317 DURHAM DRIVE
HIGHLAND, NY 12528 RALEIGH, NC 27603
4419 MARKET COURT 4238 LOZANO LANE
SACRAMENTO, CA 95834 SUISUN, CA 94585
7711 OAKPORT STREET
OAKLAND, CA 94621-2011
Page 5
<PAGE> 1
EXHIBIT 10.22(viii)
WELLS FARGO BANK SUBORDINATION AGREEMENT
(PAYMENTS PERMITTED)
- --------------------------------------------------------------------------------
THIS AGREEMENT is entered into by and among HORIZON HIGH REACH, INC.
("Borrower"), W. R. CARPENTER NORTH AMERICA, INC. ("Creditor"), and WELLS FARGO
BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
A. Borrower is indebted to Creditor, and Borrower proposes to
obtain credit or has obtained credit from Bank; and
B. Bank has indicated that it will extend or continue credit to
Borrower if certain conditions are met, including without limitation, the
requirement that Creditor execute this Agreement.
NOW, THEREFORE, as an inducement to Bank to extend or continue credit
and for other valuable consideration, the parties hereto agree as follows:
1. INDEBTEDNESS SUBORDINATED. Creditor subordinates all
Indebtedness now or at any time hereafter owing from Borrower to Creditor
(including without limitation, interest thereon which may accrue subsequent to
Borrower becoming subject to any state or federal debtor-relief statute)
("Junior Debt") to all Indebtedness now or at any time hereafter owing from
Borrower to Bank ("Senior Debt"). Creditor irrevocably consents and directs that
all Senior Debt shall be paid in full prior to Borrower making any payment on
any Junior Debt, except such payments as are expressly permitted by Section 3 of
this Agreement. Creditor will, and Bank is authorized in the name of Creditor
from time to time to, execute and file such financing statements and other
documents as Bank may require in order to give notice to other persons and
entities of the terms and provisions of this Agreement. As long as this
Agreement is in effect, Creditor will not take any action or initiate any
proceedings, judicial or otherwise, to enforce Creditor's rights or remedies
with respect to any Junior Debt, including without limitation, any action to
enforce remedies with respect to any collateral securing any Junior Debt or to
obtain any judgment or prejudgment remedy against Borrower or any such
collateral.
2. INDEBTEDNESS DEFINED. The word "Indebtedness" is used herein in
its most comprehensive sense and includes any and all advances, debts,
obligations and liabilities of Borrower heretofore, now or hereafter made,
incurred or created, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether Borrower may be liable individually or
jointly with others, including without limitation, obligations and liabilities
arising from notes, repurchase agreements and trust receipts.
3. RESTRICTION OF PAYMENT OF JUNIOR DEBT; DISPOSITION OF PAYMENTS
RECEIVED BY CREDITOR. Borrower will not make, and Creditor will not accept or
receive, any payment or benefit in cash, by setoff or otherwise, directly or
indirectly, on account of principal, interest or any other amounts owing on any
Junior Debt, except such payments as are expressly permitted herein. Borrower is
permitted to make and Creditor to receive ALL SCHEDULED PAYMENTS OF PRINCIPAL
AND INTEREST on that certain promissory note held by Creditor, dated as of
AUGUST 26, 1999, in the principal amount of $18,000,000.00 (the "Note");
provided however, that (a) Borrower shall not make, nor Creditor receive, any
prepayment or accelerated payment on the Note, and (b) no payment of principal
or interest on the Note shall be made by Borrower, or received by Creditor,
after notice from Bank to Creditor that a default, or any condition, event or
act which with the giving of notice or the passage of time or both would
constitute a default, has occurred under the terms of any Senior Debt. If any
payment is made in violation of this Agreement, Creditor shall promptly deliver
the same to Bank in the form received, with any endorsement or assignment
necessary for the transfer of such payment or amounts setoff from Creditor to
Bank, to be either (in Bank's sole discretion) held as cash collateral securing
the Senior Debt or applied in reduction of the Senior Debt in such order as Bank
shall determine, and until so delivered, Creditor shall hold such payment in
trust for and on behalf of, and as the property of, Bank.
4. DISPOSITION OF EVIDENCE OF INDEBTEDNESS. If there is any
existing promissory note or other evidence of any of the Junior Debt, including
the Note, or if any promissory note or other evidence of Indebtedness is
executed at any time hereafter with respect thereto, then Borrower and Creditor
will mark the same with a legend stating that it is subject to this Agreement,
and if asked to do so, will deliver the same to Bank. Creditor shall not,
without Bank's prior written consent, assign, transfer, hypothecate or otherwise
dispose of any claim it now has or may at any time
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hereafter have against Borrower at any time that any Senior Debt remains
outstanding and/or Bank remains committed to extend any credit to Borrower.
5. AGREEMENT TO BE CONTINUING; APPLIES TO BORROWER'S EXISTING
INDEBTEDNESS AND ANY INDEBTEDNESS HEREAFTER ARISING. This Agreement shall be a
continuing agreement and shall apply to any and all Indebtedness of Borrower to
Bank or Creditor now existing or hereafter arising, including any Indebtedness
arising under successive transactions, related or unrelated, and notwithstanding
that from time to time all Indebtedness theretofore existing may have been paid
in full.
6. TERMINATION BY CREDITOR. Creditor may, to the extent provided
herein, terminate this Agreement by delivering written notice to Bank. Any such
notice must be sent to Bank by registered U.S. mail, postage prepaid, addressed
to its office at Fresno RCBO, 8405 N. FRESNO STREET, SUITE 200, FRESNO, CA
93720, or at such other address as Bank shall from time to time designate. If
such notice is received by Bank, this Agreement shall terminate as of the date
of receipt, except that the obligations of Creditor and the rights of Bank
hereunder shall continue with respect to all Senior Debt which existed at the
time of Bank's receipt of such notice, or thereafter arose pursuant to any
agreement to extend credit by which Bank is bound at the time of its receipt of
such notice, and any extensions, renewals or modifications of any such then
existing or committed Senior Debt, including without limitation, modifications
to the amount of principal or interest payable on any Senior Debt and the
release of any security for or any guarantors of all or any portion of any
Senior Debt.
7. REPRESENTATIONS AND WARRANTIES; INFORMATION. Borrower and
Creditor represent and warrant to Bank that: (a) no interest in the Junior Debt
has been assigned or otherwise transferred to any person or entity; (b) payment
of the Junior Debt has not been heretofore subordinated to any other creditor of
Borrower; and (c) Creditor has the requisite power and authority to enter into
and perform its obligations under this Agreement. Creditor further represents
and warrants to Bank that Creditor has established adequate, independent means
of obtaining from Borrower on a continuing basis financial and other information
pertaining to Borrower's financial condition. Creditor agrees to keep adequately
informed from such means of any facts, events or circumstances which might in
any way affect Creditor's risks hereunder, and Creditor agrees that Bank shall
have no obligation to disclose to Creditor information or material about
Borrower which is acquired by Bank in any manner. Bank may, at Bank's sole
option and without obligation to do so, disclose to Creditor any information or
material relating to Borrower which is acquired by Bank by any means, and
Borrower hereby agrees to and authorizes any such disclosure by Bank.
8. TRANSFER OF ASSETS OR REORGANIZATION OF BORROWER. If any
petition is filed or any proceeding is instituted by or against Borrower under
any provisions of the Bankruptcy Reform Act, Title 11 of the United States Code,
or any other or similar law relating to bankruptcy, insolvency, reorganization
or other relief for debtors, or generally affecting creditors' rights, or
seeking the appointment of a receiver, trustee, custodian or liquidator of or
for Borrower or any of its assets, any payment or distribution of any of
Borrower's assets, whether in cash, securities or any other property, which
would be payable or deliverable with respect to any Junior Debt, shall be paid
or delivered to Bank until all Senior Debt is paid in full. Creditor grants to
Bank the right to enforce, collect and receive any such payment or distribution
and to give releases or acquittances therefor, and Creditor authorizes Bank as
its attorney-in-fact to vote and prove the Junior Debt in any of the
above-described proceedings or in any meeting of creditors of Borrower relating
thereto.
9. OTHER AGREEMENTS; NO THIRD PARTY BENEFICIARIES. Bank shall have
no direct or indirect obligations to Creditor of any kind with respect to the
manner or time in which Bank exercises (or refrains from exercising) any of its
rights or remedies with respect to the Senior Debt, Borrower or any of
Borrower's assets. Creditor understands that there may be various agreements
between Bank and Borrower evidencing and governing the Senior Debt, and Creditor
acknowledges and agrees that such agreements are not intended to confer any
benefits on Creditor. Creditor further acknowledges that Bank may administer the
Senior Debt and any of Bank's agreements with Borrower in any way Bank deems
appropriate, without regard to Creditor or the Junior Debt. Creditor waives any
right Creditor might otherwise have to require a marshalling of any security
held by Bank for all or any part of the Senior Debt or to direct or affect the
manner or timing with which Bank enforces any of its security. Nothing in this
Agreement shall impair or adversely affect any right, privilege, power or remedy
of Bank with respect to the Senior Debt, Borrower or any assets of Borrower,
including without limitation, Bank's right to: (a) waive, release or subordinate
any of Bank's security or rights; (b) waive or ignore any defaults by Borrower;
and/or (c) restructure, renew, modify or supplement the Senior Debt, or any
portion thereof, or any agreement with Borrower relating to any Senior Debt. All
rights, privileges, powers and remedies of Bank may be exercised from time to
time by Bank without notice to or consent of Creditor.
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10. BREACH OF AGREEMENT BY BORROWER OR CREDITOR. In the event of any
breach of this Agreement by Borrower or Creditor, then and at any time
thereafter Bank shall have the right to declare immediately due and payable all
or any portion of the Senior Debt without presentment, demand, notice of
nonperformance, protest, notice of protest or notice of dishonor, all of which
are hereby expressly waived by Borrower and Creditor. No delay, failure or
discontinuance of Bank in exercising any right, privilege, power or remedy
hereunder shall be deemed a waiver of such right, privilege, power or remedy;
nor shall any single or partial exercise of any such right, privilege, power or
remedy preclude, waive or otherwise affect the further exercise thereof or the
exercise of any other right, privilege, power or remedy. Any waiver, permit,
consent or approval of any kind by Bank with respect to this Agreement must be
in writing and shall be effective only to the extent set forth in such writing.
11. LIQUIDATED DAMAGES. Inasmuch as the actual damages which could
result from a breach by Creditor of its duties under Section 3 hereof are
uncertain and would be impractical or extremely difficult to fix, Creditor shall
pay to Bank, in the event of any such breach by Creditor, as liquidated and
agreed damages, and not as a penalty, all sums received by Creditor in violation
of this Agreement on account of the Junior Debt, which sums represent a
reasonable endeavor to estimate a fair compensation for the foreseeable losses
that might result from such a breach.
12. COSTS, EXPENSES AND ATTORNEYS' FEES. If any party hereto
institutes any judicial or administrative action or proceeding to enforce any
provisions of this Agreement, or alleging any breach of any provision hereof or
seeking damages or any other judicial or administrative remedy, the losing party
or parties shall pay to the prevailing party or parties all costs and expenses,
including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of such prevailing party's in-house counsel ), expended or
incurred by the prevailing party or parties in connection therewith, whether
incurred at the trial or appellate level, in an arbitration proceeding or
otherwise, and including any of the foregoing incurred in connection with any
bankruptcy proceeding (including without limitation, any adversary proceeding,
contested matter or motion brought by Bank or any other person) relating to
Borrower, Creditor or any other person or entity.
13. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding
upon and inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. This Agreement may be
amended or modified only in writing signed by all parties hereto.
14. OBLIGATIONS JOINT AND SEVERAL; CONSTRUCTION. If this Agreement
is executed by more than one Creditor, it shall bind them jointly and severally.
All words used herein in the singular shall be deemed to have been used in the
plural where the context so requires.
15. SEVERABILITY OF PROVISIONS. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such waiver or other provision
or any remaining provisions of this Agreement.
16. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the state of California.
17. ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this Agreement. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, this Agreement and each other
document, instrument or contract required hereby or now or hereafter delivered
to Bank in connection herewith (collectively, the "Documents"), or any past,
present or future extensions of credit and other activities transactions or
obligations of any kind related directly or indirectly to any of the Documents,
including without limitation, any of the foregoing arising in connection with
the exercise of any self-help, ancillary or other remedies pursuant to any of
the Documents. Any party may by summary proceedings bring an action in court to
compel arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered
by the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act
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(Title 9 of the United States Code), notwithstanding any conflicting choice of
law provision in any of the Documents. The arbitration shall be conducted at a
location in California selected by the AAA or other administrator. If there is
any inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation applicable
to any Dispute shall apply to any arbitration proceeding. All discovery
activities shall be expressly limited to matters directly relevant to the
Dispute being arbitrated. Judgment upon any award rendered in an arbitration may
be entered in any court having jurisdiction; provided however, that nothing
contained herein shall be deemed to be a waiver by any party that is a bank of
the protections afforded to it under 12 U.S.C. Section 91 or any similar
applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must
be active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive law
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the
contrary, in any arbitration in which the amount in controversy exceeds
$25,000,000, the arbitrators shall be required to make specific, written
findings of fact and conclusions of law. In such arbitrations (i) the
arbitrators shall not have the power to make any award which is not supported by
substantial evidence or which is based on legal error, (ii) an award shall not
be binding upon the parties unless the findings of fact are supported by
substantial evidence and the conclusions of law are not erroneous under the
substantive law of the state of California, and (iii) the parties shall have in
addition to the grounds referred to in the Federal Arbitration Act for vacating,
modifying or correcting an award the right to judicial review of (A) whether the
findings of fact rendered by the arbitrators are supported by substantial
evidence, and (B) whether the conclusions of law are erroneous under the
substantive law of the state of California. Judgment confirming an award in such
a proceeding may be entered only if a court determines the award is supported by
substantial evidence and not based on legal error under the substantive law of
the state of California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance in the court in which such proceeding was commenced in accordance
with California Code of Civil Procedure Sections 644 and 645.
(g) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for
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disclosures of information by a party required in the ordinary course of its
business, by applicable law or regulation, or to the extent necessary to
exercise any judicial review rights set forth herein. If more than one agreement
for arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the Documents or the subject
matter of the Dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the Documents or any relationship
between the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of AUGUST 26, 1999.
BORROWER:
HORIZON HIGH REACH, INC.
By: /s/ Russell McKay
----------------------------------
Title: CFO
-------------------------------
CREDITOR:
W. R. CARPENTER NORTH AMERICA, INC.
By: /s/ Graham Croot
----------------------------------
Title: Chief Financial Officer
-------------------------------
BANK:
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ B. Hanson
----------------------------------
Title: Vice President
-------------------------------
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EXHIBIT 10.23(i)
SECOND AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED BUSINESS LOAN AGREEMENT ("Agreement") is made
and entered into as of __________, 1999, by and between UPRIGHT, INC., a
California corporation ("Borrower") and UNION BANK OF CALIFORNIA, N.A. ("Bank").
RECITALS
A. Borrower is currently obligated to Bank pursuant to the terms of that
certain Amended and Restated Business Loan Agreement dated as of May 3, 1999 (as
amended, supplemented, extended, restated, or renewed from time to time, "Loan
Agreement").
B. Bank and Borrower mutually desire to amend and restate the Loan
Agreement in its entirety as set forth in this Agreement.
SECTION 1. THE LOAN
1.1 REVOLVING LOAN/WORKING CAPITAL. Bank will loan to Borrower an amount not
to exceed (a) from the Closing Date (defined below) through January 30,
2000,TWENTY FIVE MILLION AND NO/100 DOLLARS ($25,000,000.00); and (b) from
January 31, 2000 through the Termination Date/Working Capital (defined below)
TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00), outstanding in the aggregate
at any one time for Borrower's general working capital requirements ("Revolving
Loan/Working Capital"). Borrower may borrow, repay and reborrow all or part of
the Revolving Loan/Working Capital in accordance with the terms of the Revolving
Note/Working Capital. The Revolving Loan/Working Capital shall be evidenced by a
promissory note ("Revolving Note/Working Capital") on the standard form used by
Bank for commercial loans. All borrowings of the Revolving Loan/Working Capital
must be made before October 15, 2000 ("Termination Date/Working Capital"), at
which time all unpaid principal and interest and other amounts due under the
Revolving Loan/Working Capital shall be due and payable.
1.2 REVOLVING LOAN/EQUIPMENT. Bank will loan to Borrower an amount not to
exceed TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), outstanding in the
aggregate at any one time to finance the acquisition of Borrower's Eligible
Equipment (defined below) ("Revolving Loan/Equipment "). Borrower may borrow,
repay and reborrow all or part of the Revolving Loan/Equipment in amounts of not
less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) in accordance
with the terms of the Revolving Note/Equipment. The Revolving Loan/Equipment
shall be evidenced by a promissory note ("Revolving Note/Equipment") on the
standard form used by Bank for commercial loans. All borrowings of the Revolving
Loan/Equipment must be made before June 30, 2000 ("Termination Date/Equipment"),
at which time all unpaid principal and interest and other amounts due under the
Revolving Loan/Equipment shall be due and payable.
1.3 REVOLVING LOAN/CONSTRUCTION. Bank will loan to Borrower an amount not to
exceed FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), outstanding in the
aggregate at any one time to provide interim funding for improvements to
Borrower's real property commonly known as (a) the UpRight Facility, Madera
California ("Madera Facility"); and (b) the UpRight Facility, Selma, California
("Selma Facility") ("Revolving Loan/Construction"). Borrower may borrow, repay
and reborrow all or part of the Revolving Loan/Construction in amounts of not
less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00) in accordance
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with the terms of the Revolving Note/Construction. The Revolving
Loan/Construction shall be evidenced by a promissory note (the "Revolving
Note/Construction") on the standard form used by Bank for commercial loans. All
borrowings of the Revolving Loan/Construction must be made before June 30, 2000
("Termination Date/Construction"), at which time all unpaid principal and
interest and other amounts due under the Revolving Loan/Construction shall be
due and payable.
1.4 FUTURE TERM LOANS. Construction of the Madera Facility and the Selma
Facility may be done in one or more phases to be completed on or before the
Termination Date/Construction. Upon earlier of the completion of one or more
phases of the Madera Facility, the Selma Facility or the Termination
Date/Construction; provided that Borrower is in compliance with all terms and
conditions of the Loan Documents and no Event of Default has occurred and is
continuing, upon request of Borrower, Bank agrees to convert principal of the
Revolving Note/Construction in an amount equal to the sum of eighty percent
(80%) of the appraised value of the completed improvements and the associated
real property which constitute one of more phases of construction to a term loan
(together with the Existing Term Loans, each a "Term Loan" and collectively, the
"Term Loans"). The proceeds of the Term Loan shall be used first to repay all
obligations of Borrower to Bank under the Revolving Note/Construction on or
before the Termination Date/Construction. If the proceeds of the Term Loan is
not sufficient, for any reason, to satisfy such obligations in full, Borrower
shall, without further demand from Bank or additional documentation, satisfy all
obligations to Borrower to Bank under the Revolving Loan/Construction no later
than the Termination Date/Construction. Each Term Loan shall be evidenced and
secured by any and all documents necessary or appropriate in Bank's sole
discretion to effectuate this Agreement and the grant, perfection and priority
of such documents and Bank's lien position, including without limitation all
environmental, real property appraisal, and flood documentation required by law,
regulation and Bank policy. Borrower shall reimburse Bank for all costs incurred
in connection therewith. Each Term Loan shall also be evidenced by and repayable
in accordance with the terms of a promissory note, in form and substance
satisfactory to Bank (together with the Existing Term Notes, each a "Term Note"
and collectively, the "Term Notes").
1.5 EXISTING TERM LOAN A. Borrower is further obligated to Bank pursuant to
the terms of that certain Commercial Promissory Note Secured by Deed of Trust
dated as of April 22, 1999, in the original principal amount of $5,800,000.00
("Existing Term Note A"), executed by Borrower to the order of Bank, the
proceeds of which were used to fund the first phase of construction costs for
Borrower's Madera Facility. Borrower hereby acknowledges that as of the Closing
Date, the outstanding principal indebtedness under Existing Term Note A is
$5,741,408.31, and that Existing Term Note A shall continue to evidence Existing
Term Loan A.
1.6 EXISTING TERM LOAN B. Borrower is further obligated to Bank pursuant to
the terms of that certain Term Note B dated as of May 3, 1999, in the original
principal amount of $800,000.00 ("Existing Term Note B", together with Existing
Term Note A, each an "Existing Term Note and collectively, the "Existing Term
Notes"), executed by Borrower to the order of Bank, the proceeds of which were
used to fund the first phase of construction costs for Borrower's Selma
Facility. Borrower hereby acknowledges that as of the Closing Date, the
outstanding principal indebtedness under Existing Term Note B is $792,600.36,
and that Existing Term Note B shall continue to evidence Existing Term Loan B
(together with Term Loan A, each an "Existing Term Loan" and collectively, the
"Existing Term Loans").
1.7 TERMINOLOGY. The definitions appearing in this Agreement or any
supplement or addendum to this Agreement, shall be applicable to both the
singular and plural forms of the defined terms:
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(a) "Closing Date" means the date of this Agreement.
(b) "GAAP" means generally accepted accounting principles and
practices consistent with those principles and practices promulgated or
adopted by the Financial Accounting Standards Board and the Board of the
American Institute of Certified Public Accountants, their respective
predecessors and successors. Each accounting term used but not otherwise
expressly defined herein shall have the meaning given it by GAAP.
(c) "Loan" shall mean, individually and collectively, all the credit
facilities described above.
(d) "Loan Documents" shall mean all documents executed in connection
with this Agreement.
(e) "Note" shall mean, individually and collectively, all the
promissory notes described herein.
1.8 PURPOSE OF LOAN. The proceeds of the Loans shall be used only for
purposes set forth in Section 1. of this Agreement; and not directly or
indirectly to purchase or carry any margin stock, as defined from time to time
by the Board of Governors of the Federal Reserve System in Federal Regulation U.
1.9 INTEREST. The unpaid principal balance of the Loans shall bear interest
at the rate or rates provided in each Note.
1.10 BALANCES. Borrower shall maintain its major depository accounts with
Bank until the Note and all sums payable pursuant to this Agreement have been
paid in full.
1.11 DISBURSEMENT/BANK RECORDS. Upon execution hereof, Bank shall disburse
the proceeds of the Loan as provided in Bank's standard form of authorization
executed by Borrower. Bank shall enter each amount borrowed and repaid in Bank's
records and such entries shall be deemed to be the amount of the Revolving Loan
outstanding. Omission of Bank to make any such entries shall not discharge
Borrower of its obligation to repay in full with interest all amounts borrowed.
1.12 SECURITY. Prior to any disbursement of the Loan, Borrower shall have
executed a security agreement, on Bank's standard form, and a financing
statement, suitable for filing in the office of the Secretary of State of the
State of California and any other state designated by Bank, granting to Bank a
first priority security interest in such of Borrower's property as is described
in said security agreement. At Bank's request, Borrower will also obtain
executed landlord's and mortgagee's waivers on Bank's form covering all of
Borrower's property located on leased or encumbered real property.
SECTION 2. CONDITIONS PRECEDENT
Bank shall not be obligated to disburse all or any portion of the proceeds of
the Loan unless at or prior to the time for the making of such disbursement, the
following conditions have been fulfilled to Bank's satisfaction:
2.1 COMPLIANCE. Borrower shall have performed and complied with all terms
and conditions required by this Agreement to be performed or complied with by it
prior to or at the date of the
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making of such disbursement and shall have executed and delivered to Bank the
Note and other documents deemed necessary by Bank.
2.2 SUBORDINATION. Certain other obligations of Borrower are and shall be
during the term of the Loan subordinated to the repayment of the Loan and all
other obligations of Borrower to Bank, pursuant to one or more subordination
agreement(s) in favor of Bank executed and delivered by W. R. Carpenter North
America, Inc., a Delaware corporation ("Parent").
2.3 AMENDMENTS TO OFFER TO EXCHANGE ITS 10-5/8% SENIOR SUBORDINATED NOTES
DUE 2007. Borrower shall have provided Bank with exact copies of all amendments
to the Parent's Senior Subordinated Notes, defined in Section 6.7 of this
Agreement.
2.4 CONTINUING COMPLIANCE. At the time any disbursement is to be made, there
shall not exist any event, condition or act which constitutes an event of
default under Section 6 hereof or any event, condition or act which with notice,
lapse of time or both would constitute such event of default; nor shall there be
any such event, condition, or act immediately after the disbursement were it to
be made.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
3.1 BUSINESS ACTIVITY. The principal business of Borrower is the
manufacturing of portable work platforms.
3.2 AFFILIATES AND SUBSIDIARIES. Borrower is not a majority owner of or in a
control relationship with any other business entity.
3.3 AUTHORITY TO BORROW. The execution, delivery and performance of this
Agreement, the Note and all other agreements and instruments required by Bank in
connection with the Loan are not in contravention of any of the terms of any
indenture, agreement or undertaking to which Borrower is a party or by which it
or any of its property is bound or affected.
3.4 FINANCIAL STATEMENTS. The financial statements of Borrower, prepared and
attested by a responsible financial officer of Borrower as being complete and
correct and fairly presenting Borrowers financial condition and the results of
Borrower's operations, including both a balance sheet at June 27, 1999, together
with supporting schedules, and an income statement for the twelve (12) months
then ended, have heretofore been furnished to Bank, and are true and complete
and fairly represent the financial condition of Borrower during the period
covered thereby, and since that date, there has been no material adverse change
in the financial condition or operations of Borrower.
3.5 TITLE. Except for assets which may have been disposed of in the ordinary
course of business, Borrower has good and marketable title to all of the
property reflected in its financial statements delivered to Bank and to all
property acquired by Borrower since the date of said financial statements, free
and clear of all liens, encumbrances, security interests and adverse claims
except those specifically referred to in said financial statements.
3.6 LITIGATION. There is no litigation or proceeding pending or threatened
against Borrower or any of its property which is reasonably likely to affect the
financial condition, property or business of Borrower in a materially adverse
manner or result in liability in excess of Borrower's insurance coverage.
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3.7 DEFAULT. Borrower is not now in default in the payment of any of its
material obligations, and there exists no event, condition or act which
constitutes an event of default under Section 6 hereof and no condition, event
or act which with notice or lapse of time, or both, would constitute an event of
default.
3.8 ORGANIZATION. Borrower is duly organized and existing under the laws of
the state of its organization, and has the power and authority to carry on the
business in which it is engaged and/or proposes to engage.
3.9 POWER. Borrower has the power and authority to enter into this Agreement
and to execute and deliver the Note and all of the other Loan Documents.
3.10 AUTHORIZATION. This Agreement and all things required by this Agreement
have been duly authorized by all requisite action of Borrower.
3.11 QUALIFICATION. Borrower is duly qualified and in good standing in any
jurisdiction where such qualification is required.
3.12 COMPLIANCE WITH LAWS. Borrower is not in violation with respect to any
applicable laws, rules, ordinances or regulations which materially affect the
operations or financial condition of Borrower.
3.13 ERISA. Any defined benefit pension plans as defined in the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), of Borrower meet,
as of the date hereof, the minimum funding standards of Section 302 of ERISA,
and no Reportable Event or Prohibited Transaction as defined in ERISA has
occurred with respect to any such plan.
3.14 CONTINUING REPRESENTATIONS. These representations shall be considered to
have been made again at and as of the date of each disbursement of the Loan and
shall be true and correct as of such date or dates.
SECTION 4. AFFIRMATIVE COVENANTS
During the term of this Agreement and until its performance of all obligations
to Bank, Borrower will, unless Bank otherwise consents in writing:
4.1 USE OF PROCEEDS. Use the proceeds of the Loan only as provided in
Section 1. above.
4.2 PAYMENT OF OBLIGATIONS. Pay and discharge promptly all taxes,
assessments and other governmental charges and claims levied or imposed upon it
or its property, or any part thereof, provided, however, that Borrower shall
have the right in good faith to contest any such taxes, assessments, charges or
claims and, pending the outcome of such contest, to delay or refuse payment
thereof provided that adequately funded reserves are established by it to pay
and discharge any such taxes, assessments, charges and claims.
4.3 MAINTENANCE OF EXISTENCE. Maintain and preserve its existence and assets
and all rights, franchises, licenses and other authority necessary for the
conduct of its business and will maintain and preserve its property, equipment
and facilities in good order, condition and repair. Bank may, at reasonable
times, visit and inspect any of the properties of Borrower.
4.4 RECORDS. Keep and maintain full and accurate accounts and records of its
operations according to generally accepted accounting principles and will permit
Bank to have access
Page 5
<PAGE> 6
thereto, to make examination and photocopies thereof, and to make audits during
regular business hours. Costs for such audits shall be paid by Borrower.
4.5 INFORMATION FURNISHED. Furnish to Bank, in form and substance
satisfactory to Bank:
(a) Within forty-five (45) days after the close of each fiscal
quarter of each fiscal year, its unaudited balance sheet as of the close
of such fiscal quarter, its unaudited income and expense statement with
supportive schedules and statement of retained earnings for that fiscal
quarter, prepared in accordance with GAAP.
(b) Within one hundred twenty (120) days after the close of each
fiscal year, a copy of its statement of financial condition including at
least its balance sheet as of the close of such fiscal year, its income
and expense statement and retained earnings statement for such fiscal
year, examined and prepared on an audited basis by independent certified
public accountants selected by Borrower and satisfactory to Bank, in
accordance with GAAP.
(c) Within forty-five (45) days after the close of each fiscal
quarter of each fiscal year, and, if requested by Bank more often, at
the time so requested, a statement executed by Borrower showing the
aging and reconciliation of Borrower's accounts receivable and
collections as of the end of such period, or as of the date requested.
(d) Within forty-five (45) days after the close of each fiscal
quarter of each fiscal year, and, if requested by Bank more often, at
the time so requested, a statement executed by Borrower showing the
aging of Borrower's accounts payable as of the last day of such period,
or as of the date requested.
(e) Within fifteen (15) days after the close of each month, a
statement showing the individual dollar amount of Borrower's accounts
receivable related to each Consolidator. "Consolidator" one of
Borrower's clients receiving extended terms and price concessions, whose
accounts receivable may be sold to factors whose agreements are approved
by Bank under Section 5.2 of this Agreement ("Designated Factors").
(f) Within fifteen (15) days after the close of each month, a
statement showing the terms and dollar amount of accounts receivable of
Borrower's accounts receivable sold to Designated Factors.
(g) Promptly, but no later than forty-five (45) days after the close
of each fiscal quarter, a statement executed by Borrower showing
Borrower's inventory, including work in process, raw materials, finished
goods and back log of contracts (and upon request by Bank which shall
identify each contract, include original contract amount, amounts billed
to date, retainage and other relevant information as of the close of
such period) as of the close of such period.
(h) Within one hundred twenty (120) days after the close of each
fiscal year, Borrower shall deliver or cause to be delivered to Bank a
complete copy of Parent's annual financial statement.
(i) As soon as available, copies of such financial statements as
Borrower may file with any state or federal agency, and within 30 days
after filing, copies of all federal income tax returns.
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<PAGE> 7
(j) Such other financial statements and information as Bank may
reasonably request from time to time.
(k) In connection with each financial statement provided hereunder,
a statement executed by the president, chief financial officer or
general manager of Borrower, certifying that no default has occurred and
after due inquiry and consultation with counsel, to the best of
Borrower's knowledge, no event exists which with notice or the lapse of
time, or both, would result in a default hereunder.
(l) In connection with each fiscal year-end statement required
hereunder, promptly upon request of Bank, any management letter of
Borrower's or Parent's certified public accountants.
(m) Within forty five (45) days after each fiscal quarter, a
certification of compliance with all covenants under this Agreement,
executed by Borrower's chief financial officer or other duly authorized
of Borrower.
(n) Prompt written notice to Bank of all events of default under any
of the terms or provisions of this Agreement or of any other agreement,
contract, document or instrument entered, or to be entered into with
Bank; and of any litigation which, if decided adversely to Borrower,
would have a material adverse effect on Borrower's financial condition;
and of any other matter which has resulted in, or is likely to result
in, a material adverse change in its financial condition or operations.
(o) Prior written notice to Bank of any changes in Borrower's
officers and other senior management; Borrower's name; and location of
Borrower's assets, principal place of business or chief executive
office.
(p) Within thirty (30) days after the effective date thereof, a copy
of all amendments to the Senior Subordinated Notes, as defined in
Section 6.7 of this Agreement.
(q) Within thirty (30) days after the effective date thereof, a copy
of (i) all contracts between Borrower and any designated factor, or (ii)
any amendment thereto.
4.6 FINANCIAL COVENANTS. At all times maintain:
(a) A ratio of current assets to current liabilities of at least (a)
1.1:1.0 through December 31, 1999; and (ii) thereafter 1.2:1.0. In the
calculation of compliance with this ratio, the principal amount
outstanding from time to time under the Revolving Loan/Equipment and
Revolving Loan/Construction shall not be deemed to be current
liabilities.
(b) A ratio of total liabilities to Tangible Net Worth of not
greater than 3.0:1.00. "Tangible Net Worth" means net worth increased by
indebtedness of Borrower subordinated to Bank and decreased by patents,
licenses, trademarks, trade names, goodwill and other similar intangible
assets, organizational expenses, and monies due from affiliates
(including officers, shareholders and directors) and excluding trade
account receivables from affiliates that are not paid by the affiliate
account debtor within ninety (90) days of its due date.
(c) A ratio of EBITDA to CPLTD of at least 1.20:1:0. "EBITDA" means
earnings before interest, taxes, depreciation and amortization. "CPLTD"
means the sum of that portion of term obligations (including lease
obligations) coming due during the 12 months
Page 7
<PAGE> 8
preceding the date of calculation, plus interest and dividends. In the
calculation of compliance with this covenant EBITDA and interest and
dividends paid shall be measured for the previous four (4) rolling
quarters.
4.7 INTERCREDITOR AGREEMENTS. (a) Deliver to Bank exact copies of all
agreements with all factors and leasing companies doing business with Borrower,
and as approved by Bank under Section 5.2 of this Agreement ("Creditors") and
all amendments thereto; and (b) Deliver, acknowledge or execute, as required by
Bank, all intercreditor or subordination agreements with Creditors, in form and
substance satisfactory to Bank.
4.8 INSURANCE. Keep all of its insurable property, real, personal or mixed,
insured by companies and in amounts approved by Bank against fire and such other
risks, and in such amounts, as is customarily obtained by companies conducting
similar business with respect to like properties. Borrower will furnish to Bank
statements of its insurance coverage, will promptly furnish other or additional
insurance deemed necessary by and upon request of Bank to the extent that such
insurance may be available and hereby assigns to Bank, as security for
Borrower's obligations to Bank, the proceeds of any such insurance. Prior to any
disbursement of the Loan, Bank will be named loss payee on all policies insuring
collateral. Borrower will maintain adequate worker's compensation insurance and
adequate insurance against liability for damage to persons or property. All
policies shall require at least ten (10) days' written notice to Bank before any
policy may be altered or canceled.
4.9 ADDITIONAL REQUIREMENTS. Promptly, upon demand by Bank, take such
further action and execute all such additional documents and instruments in
connection with this Agreement as Bank in its reasonable discretion deems
necessary, and promptly supply Bank with such other information concerning its
affairs as Bank may request from time to time.
4.10 LITIGATION AND ATTORNEYS' FEES. Pay promptly to Bank upon demand,
reasonable attorneys' fees (including but not limited to the reasonable estimate
of the allocated costs and expenses of in-house legal counsel and legal staff)
and all costs and other expenses paid or incurred by Bank in collecting,
modifying or compromising the Loan or in enforcing or exercising its rights or
remedies created by, connected with or provided for in this Agreement or any of
the Loan Documents, whether or not an arbitration, judicial action or other
proceeding is commenced. If such proceeding is commenced, only the prevailing
party shall be entitled to attorneys' fees and court costs.
4.11 BANK EXPENSES. Pay or reimburse Bank for all costs, expenses and fees
incurred by Bank in preparing and documenting this Agreement and the Loan, and
all amendments and modifications thereof, including but not limited to all
filing and recording fees, costs of appraisals, insurance and attorneys' fees,
including the reasonable estimate of the allocated costs and expenses of
in-house legal counsel and legal staff.
4.12 REPORTS UNDER PENSION PLANS. Furnish to Bank, as soon as possible and in
any event within 15 days after Borrower knows or has reason to know that any
event or condition with respect to any defined benefit pension plans of Borrower
described in Section 3 above has occurred, a statement of an authorized officer
of Borrower describing such event or condition and the action, if any, which
Borrower proposes to take with respect thereto.
SECTION 5. NEGATIVE COVENANTS
During the term of this Agreement and until the performance of all obligations
to Bank, Borrower will not, without the prior written consent of Bank:
Page 8
<PAGE> 9
5.1 ENCUMBRANCES AND LIENS. Create, assume or suffer to exist any mortgage,
pledge, security interest, encumbrance, or lien (other than for taxes not
delinquent and for taxes and other items being contested in good faith) on
property of any kind, whether real, personal or mixed, now owned or hereafter
acquired, or upon the income or profits thereof, except to Bank and except for
minor encumbrances and easements on real property which do not affect its market
value, and except for existing liens on Borrower's personal property and future
purchase money security interests encumbering only the personal property
purchased.
5.2 BORROWINGS/TRANSFERS. Sell, discount our otherwise transfer any account
receivable or note, or draft or other evidence of indebtedness, except to Bank
or a Creditor under the terms of an agreement which is in form and substance
satisfactory to Bank. After the date of this Agreement, Borrower will not borrow
any money, become contingently liable to borrow money, nor enter into any
agreement to directly or indirectly obtain borrowed money, other than pursuant
to agreements made with Bank, except for indebtedness secured only by Borrower's
commercial real property, not to exceed FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) for the purpose of acquisition of or improvements to commercial
real property; and except for indebtedness secured only by Borrower's plant and
equipment, not to exceed FIFTEEN MILLION EIGHT HUNDRED THOUSAND AND NO/100
DOLLARS ($15,800,000.00) for the purpose of acquisition of gross fixed or
capital assets, in the aggregate at any time.
5.3 AMENDMENT(S) TO FACTOR AGREEMENT(S). Agree to or permit any amendment or
modification to any agreement with any Designated Factor which would affect the
monies to be paid to Bank in connection therewith without the prior written
consent of Bank.
5.4 SALE OF ASSETS, LIQUIDATION OR MERGER. Neither liquidate, dissolve,
enter into any consolidation, merger, partnership or other combination; nor
convey, sell or lease all or the greater part of its assets or business; nor
purchase or lease all or the greater part of the assets or business of another;
except in respect to acquisitions funded by the proceeds of bonds issued by
Borrower's Parent not to exceed the aggregate sum of $15,000,000.00, outstanding
at any one time.
5.5 LOANS, ADVANCES AND GUARANTIES. Except in the ordinary course of
business as currently conducted, make any loans or advances, become a guarantor
or surety, pledge its credit or properties in any manner or extend credit.
5.6 INVESTMENTS. Purchase the debt or equity of another person or entity
except for savings accounts and certificates of deposit of Bank, direct U.S.
Government obligations and commercial paper issued by corporations with the top
ratings of Moody's or Standard & Poor's, provided all such permitted investments
shall mature within one year of purchase.
5.7 RETIREMENT OF STOCK. Acquire or retire any share of its capital stock
for value.
5.8 PARENT AND SUBSIDIARY PROPERTY. Transfer any property to its parent or
any affiliate of its parent, except for value received in the normal course of
business as business would be conducted with an unrelated or unaffiliated
entity. In no event shall management fees or fees for services be paid by
Borrower to any such direct or indirect affiliate without Bank's prior written
approval.
5.9 LIMITATION OF CAPITAL EXPENDITURES/LEASES. Except as otherwise provided
in the Agreement, expend or be committed to expend any monies for the
acquisition of gross fixed or capital assets during any financial reporting
year; or for the lease or rental of real or personal property during any
financial reporting year.
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<PAGE> 10
SECTION 6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default") shall
terminate any obligation on the part of Bank to make or continue the Loan and
automatically, unless otherwise provided under the Note, shall make all sums of
interest and principal and any other amounts owing under the Loan immediately
due and payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or any other notices or demands:
6.1 Borrower shall default in the due and punctual payment of the principal
of or the interest on any Note or any of the other Loan Documents.
6.2 Any default shall occur under any Note.
6.3 Borrower shall default in the due performance or observance of any
covenant or condition of the Loan Documents, or any agreement with any factor or
consolidator.
6.4 Any subordination agreement required hereunder is breached or becomes
ineffective, or any subordinating creditor, disavows or attempts to revoke or
terminate such subordination agreement.
6.5 There is a change in ownership or control of ten percent (10%) or more
of the issued and outstanding stock of Borrower.
6.6 Parent shall have failed to add TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) in cash or cash equivalents to Borrower's equity prior to
November 1, 1999.
6.7 Any Default or Event of Default shall occur under that certain Offer to
Exchange Parent's 10-5/8% Senior Subordinated Notes due 2007, dated October 27,
1997, as amended from time to time, an exact copy of which has been delivered to
Bank ("Senior Subordinated Notes").
SECTION 7. MISCELLANEOUS PROVISIONS
7.1 ADDITIONAL REMEDIES. The rights, powers and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other person, including but not limited to Bank's rights of setoff or banker's
lien.
7.2 NONWAIVER. Any forbearance or failure or delay by Bank in exercising any
right, power or remedy hereunder shall not be deemed a waiver thereof and any
single or partial exercise of any right, power or remedy shall not preclude the
further exercise thereof. No waiver shall be effective unless it is in writing
and signed by an officer of Bank.
7.3 INUREMENT. The benefits of this Agreement shall inure to the successors
and assigns of Bank and the permitted successors and assignees of Borrower, and
any assignment of Borrower without Bank's consent shall be null and void.
7.4 APPLICABLE LAW. This Agreement and all other agreements and instruments
required by Bank in connection therewith shall be governed by and construed
according to the laws of the State of California.
7.5 SEVERABILITY. Should any one or more provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective.
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7.6 CONSTRUCTION. The section and subsection headings herein are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
7.7 AMENDMENTS. This Agreement may be amended only in writing signed by all
parties hereto.
7.8 COUNTERPARTS. Borrower and Bank may execute one or more counterparts to
this Agreement, each of which shall be deemed an original.
7.9 NOTICES. Any notices or other communications provided for or allowed
hereunder shall be effective only when given by one of the following methods and
addressed to the respective party at its address given with the signatures at
the end of this Agreement and shall be considered to have been validly given:
(a) upon delivery, if delivered personally; (b) upon receipt, if mailed, first
class postage prepaid, with the United States Postal Service; (c) on the next
business day, if sent by overnight courier service of recognized standing; and
(d) upon telephoned confirmation of receipt, if telecopied.
7.10 The addresses to which notices or demands are to be given may be changed
from time to time by notice delivered as provided above.
7.11 INTEGRATION CLAUSE. Except for documents and instruments specifically
referenced herein, this Agreement constitutes the entire agreement between Bank
and Borrower regarding the Loan and all prior communications verbal or written
between Borrower and Bank shall be of no further effect or evidentiary value.
THIS AGREEMENT is executed on behalf of the parties by duly authorized officers
as of the date first above written.
INTENTIONALLY LEFT BLANK
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UPRIGHT, INC., a California corporation UNION BANK OF CALIFORNIA, N.A.
By: /s/ Barris J. Evulich
--------------------------------
Title: V.P.
------------------------------
By: /s/ Phil Lacey
---------------------------------
Title: Vice President
------------------------------
Address for Notice to Borrower:
Address for Notice to Bank:
1775 Park Street
Selma, California 93662 7108 North Fresno Street, Suite 200
Attn:______________________________ Fresno, California 93720
Telephone No. (___) _______________ Attn: Phil Lacey, Vice President
FAX No. (___) _____________________ Telephone No. (559) 436-2739
FAX No. (559) 436-2713
Acknowledged:
W. R. Carpenter North America, Inc.
By:
---------------------------------
Title:
------------------------------
Page 12
<PAGE> 1
UNION EXHIBIT 10.23(ii)
BANK OF
CALIFORNIA
SECURITY AGREEMENT
This Agreement executed at 7108 North Fresno Street, Suite 200, Fresno, CA
93720, on August 30, 1999, by UpRight, Inc. (herein called "Debtor").
As security for the payment and performance of all of Debtor's obligations to
UNION BANK OF CALIFORNIA, N.A. (herein called "Bank"), irrespective of the
manner in which or the time at which such obligations arose or shall arise, and
whether direct or indirect, alone or with others, absolute or contingent, Debtor
does hereby grant a continuing security interest to Bank in all personal
property (herein called "Collateral"), whether now or hereafter owned or in
existence described as
A. MOTOR VEHICLES:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
NEW NUMBER
OR OF
YEAR TRADE NAME BODY TYPE SERIAL NUMBER USED CYLINDERS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
</TABLE>
B. OTHER:
- --------------------------------------------------------------------------------
"Collateral", as defined in Schedule 1 hereto, all terms of which are
incorporated herein by reference.
- --------------------------------------------------------------------------------
The Collateral described above will be maintained at 1775 Park Street, Selma, CA
93662, and any other location.
C. ALL PERSONAL PROPERTY OF ANY KIND WHICH IS DELIVERED TO OR IN THE
POSSESSION OR CONTROL OF BANK OR ITS AGENTS;
D. PROCEEDS OF ANY OF THE ABOVE-DESCRIBED PROPERTY. The grant of a security
interest in proceeds does not imply the right of Debtor to sell or
dispose of any Collateral described herein without the express consent
in writing by Bank.
The maximum amount of indebtedness to be secured at any one time is unlimited
unless an amount is inserted here N/A ($N/A).
-----------------------
maximum amount
(To be completed only if an accommodation)______________________________________
- --------------------------------------------------------------------------------
OWNER(S) OF COLLATERAL
is executing this Agreement as an Accommodation Debtor only and his liability is
limited to the security interest created in Collateral described herein. The
Debtor being accommodated is N/A.
All terms and conditions on the reverse side hereof are incorporated herein as
though set forth in full.
UpRight, Inc.
/s/ Barris J. Evulich
- ---------------------------------- ----------------------------------------
Barris Evulich
Vice President
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
- ----------------------------------
<PAGE> 2
AGREEMENT
1. The term credit is used throughout this Agreement in its broadest and most
comprehensive sense. Credit may be granted at the request of any one Debtor
without further authorization or notice to any other Debtor, including an
Accommodation Debtor. Collateral shall be security for all obligations of Debtor
to Bank in accordance with the terms and conditions herein.
2. Debtor will: (a) execute such Financing Statement and other documents and do
such other acts and things, all as Bank may from time to time require, to
establish and maintain a valid security interest in Collateral, including
payment of all costs and fees in connection with any of the foregoing when
deemed necessary by Bank; (b) pay promptly when due all indebtedness to Bank;
(c) furnish Bank such information concerning Debtor and Collateral as Bank may
from time to time request, including but not limited to current financial
statements; (d) keep Collateral separate and identifiable and at the location
described herein and permit Bank and its representatives to inspect Collateral
and/or records pertaining thereto from time to time during normal business
hours; (e) not sell, assign or create or permit to exist any lien on or security
Interest in Collateral in favor of anyone other than the Bank unless Bank
consents thereto in writing and at Debtor's expense upon Bank's request remove
any unauthorized lien or security interest and defend any claim affecting the
collateral; (f) pay all charges against Collateral prior to delinquency
including but not limited to taxes, assessments, encumbrances, insurance and
diverse claims, and upon Debtor's failure to do so Bank may pay any such charge
as it deems necessary and add the amount paid to the indebtedness of Debtor
hereunder; (g) reimburse Bank for any expenses including but not limited to
reasonable attorneys' fees and legal expenses Incurred by Bank in seeking to
protect, collect or enforce any rights in Collateral; (h) when required, provide
insurance in form and amounts and with companies acceptable to Bank and when
required assign the policies or the rights thereunder to Bank; (i) maintain
Collateral in good condition and not use Collateral for any unlawful purpose;
(j) at its own expense, upon request of Bank, notify any parties obligated to
Debtor on any Collateral to make payment to Bank and Debtor hereby irrevocably
grants Bank power of attorney to make said notifications and collections; (k)
and does hereby authorize Bank to perform any and all acts which Bank in good
faith deems necessary for the protection and preservation of Collateral or its
value or Bank's security interest therein, including transferring any Collateral
Into its own name and receiving the income thereon as additional security
hereunder. Bank may not exercise any right under any corporate security which
might constitute the exercise of control by Bank so as to make any such
corporation an affiliate of Bank within the meaning of the banking laws until
after default.
3. The term default shall mean the occurrence of any of the following events:
(a) non-payment of any indebtedness when due or non-performance of any
obligation when due, whether required hereunder or otherwise; (b) deterioration
or impairment of the value of Collateral; (c) non-performance by Debtor under
this Agreement, default by Debtor of any other agreements with Bank dealing with
the extension of credit or with debt owing Bank or any misrepresentation of
Debtor or Its representative to Bank whether or not contained herein; (d) a
change in the composition of any Debtor which is a business entity; or (e)
belief by Bank in good faith that there exists, or the actual existence of, any
deterioration or impairment in the, ability of Debtor to meet its obligations to
Bank.
4. Whenever a default exists, Bank, at its option may: (a) without notice
accelerate the maturity of any part or all of the secured obligations and
terminate any agreement for the granting of further credit to Debtor; (b) sell,
lease or otherwise dispose of Collateral at public or private sale; unless
Collateral is perishable and threatens to decline speedily in value or is a type
customarily sold on a recognized market, Bank will give Debtor at least five (5)
days prior written notice of the time and place of any public sale or of the
time after which any private sale or any other intended disposition may be made;
(c) transfer any Collateral into its own name or that of Its nominee; (d) retain
Collateral in satisfaction of obligations secured hereby, with notice of such
retention sent to Debtor as required by law; (e) notify any parties obligated on
any Collateral consisting of accounts, instruments, chattel paper, chooses in
action or the like to make payment to Bank and enforce collection of any
Collateral herein; (f) require Debtor to assemble and deliver any Collateral to
Bank at a reasonable convenient place designated by Bank; (g) apply all sums
received or collected from or on account of Collateral including the proceeds of
any sales thereof to the payment of the costs and expenses incurred in
preserving and enforcing rights of Bank Including but not limited to reasonable
attorneys' fees, and Indebtedness secured hereby in such order and manner as
Bank in Its sole discretion determines; Bank shall account to Debtor for any
surplus remaining thereafter, and shall pay such surplus to the party entitled
thereto, including any second secured party who has made a proper demand upon
Bank and has furnished proof to Bank as requested in the manner provided by law;
in like manner, Debtor, unless an Accommodation Debtor only, agrees, to pay to
Bank without demand any deficiency after any Collateral has been disposed of and
proceeds applied as aforesaid; and (h) exercise its banker's lien or right of
setoff In the same manner as though the credit were unsecured. Bank shall have
all the rights and remedies of a secured party under the Uniform Commercial Code
of California in any jurisdiction where enforcement is sought, whether in said
state or elsewhere. All rights, powers and remedies of Bank hereunder shall be
cumulative and not alternative. No delay on the part of Bank In the exercise of
any right or remedy shall constitute a waiver thereof and no exercise by Bank of
any right or remedy shall preclude the exercise of any other right or remedy or
further exercise of the same remedy.
<PAGE> 3
5. Debtor waives: (a) all right to require Bank to proceed against any other
person including any other Debtor hereunder or to apply any Collateral Bank may
hold at any time or to pursue any other remedy; Collateral, endorsers or
guarantors may be released, substituted or added without affecting the liability
of Debtor hereunder; (b) the defense of the Statute of Limitations in any action
upon any obligations of Debtor secured hereby; (c) if debtor is an Accommodation
Debtor, all rights under Uniform Commercial Code Section 9112; and (d) any right
of subrogation and any right to participate in Collateral until all obligations
hereby secured have been paid In full.
6. Debtor warrants: (a) that it is or will be the lawful owner of all Collateral
free of all claims, liens or encumbrances whatsoever, other than the security
interest granted pursuant hereto; (b) all information, including but not limited
to financial statements furnished by Debtor to Bank heretofore or hereafter,
whether oral or written, is and will be correct and true as of the date given;
and (c) if Debtor is a business entity, the execution, delivery and performance
hereof are within its powers and have been duly authorized.
7. The right of Bank to have recourse against Collateral shall not be affected
In any way by the fact that the credit is secured by a mortgage, deed of trust
or other lien upon real property.
8. Debtor may terminate this Agreement at any time upon written notice to Bank
of such termination; provided however, that such termination shall not affect
his obligations then outstanding, any extensions or renewals thereof, nor the
security Interest granted herein which shall continue until such outstanding
obligations are satisfied in lull. Such termination shall not affect the
obligations of other Debtors If more than one executes this Agreement.
9. If more than one Debtor executes this Agreement, the obligations hereunder
are joint and several. All words used herein in the singular shall be deemed to
have been used in the plural when the context and construction so require. Any
married persons who sign this Agreement expressly agree that recourse may be had
against his/her separate property for all of his/her obligations to Bank.
10. This Agreement shall inure to the benefit of and bind Bank, its successors
and assigns and each of the undersigned, their respective heirs, executors,
administrators and successors in interest. Upon transfer by Bank of any part of
the obligations secured hereby, Bank shall be fully discharged from all
liability with respect to Collateral transferred therewith.
11. Whenever possible each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but, if any
provision of this Agreement shall be prohibited or Invalid under applicable law,
such provisions shall be ineffective to the extent of such prohibition or
invalidity without Invalidating the remainder of such or the remaining
provisions of this Agreement.
<PAGE> 4
UNION
BANK OF
CALIFORNIA
SCHEDULE 1
SCHEDULE 1 to that certain Security Agreement dated August 30, 1999 executed by
UpRight, Inc. ("Debtor") in favor of UNION BANK OF CALIFORNIA, N.A.
For value received and in consideration of advances, present and future, and
other obligations, debtor hereby grants Union Bank of California, N.A. a
security interest in all of the following property:
All accounts, deposit accounts, instruments, chattel paper, documents, general
intangibles, inventory, equipment, furniture, and fixtures, now or hereafter
owned or acquired by debtor, all proceeds and insurance proceeds of the
foregoing, all guarantees and other security therefor, and all of debtor's
present and future books and records relating thereto (including computer-stored
information and all software relating thereto) and all contract rights with
third parties relating to the maintenance of any such books, records and
information.
<PAGE> 1
UNION EXHIBIT 10.23(iii)
BANK OF
CALIFORNIA
PROMISSORY NOTE
(BASE RATE)
================================================================================
Borrower Name UpRight, Inc.
================================================================================
Borrower Address
1775 Park Street Office 649 Loan Number 9391662640
Selma, CA 93662
---------------------------------------------
Maturity Date June 30, 2000 Amount
$5,000,000.00
================================================================================
$5,000,000.00 Date August 30, 1999
FOR VALUE RECEIVED, on June 30, 2000, the undersigned ("Debtor) promises to pay
to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below, the
principal sum of Five Million and No/100 Dollars ($5,000,000.00), or so much
thereof as is disbursed, together with interest on the balance of such principal
from time to time outstanding, at the per annum rate or rates and at the times
set forth below.
1. INTEREST PAYMENTS. Debtor shall pay interest on the 1st day of each month
(commencing October 1, 1999). Should interest not be paid when due, it shall
become part of the principal and bear interest as herein provided. All
computations of interest under this note shall be made on the basis of a year of
360 days, for actual days elapsed.
a. BASE INTEREST RATE. At Debtor's option, amounts outstanding hereunder
in minimum amounts of at least $100,000.00 shall bear interest at a
rate, based on an index selected by Debtor, which is 1.200% per annum in
excess of Bank's LIBOR Rate for the Interest Period selected by Debtor,
acceptable to Bank.
No Base Interest Rate may be changed, altered or otherwise modified
until the expiration of the Interest Period selected by Debtor. The
exercise of interest rate options by Debtor shall be as recorded in
Bank's records, which records shall be prima facie evidence of the
amount borrowed under either interest option and the interest rate;
provided, however, that failure of Bank to make any such notation in its
records shall not discharge Debtor from its obligations to repay in full
with interest all amounts borrowed. In no event shall any Interest
Period extend beyond the maturity date of this note.
To exercise this option, Debtor may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and
on the expiration of any Interest Period with respect to principal
outstanding on which a Base Interest Rate has been accruing, select an
index offered by Bank for a Base Interest Rate Loan and an Interest
Period by telephoning an authorized lending officer of Bank located at
the banking office identified below prior to 10:00 a.m., Pacific time,
on any Business Day and advising that officer of the selected index, the
Interest Period and the Origination Date selected (which Origination
Date, for a Base Interest Rate Loan based on the LIBOR Rate, shall
follow the date of such selection by no more than two (2) Business
Days).
Bank will mail a written confirmation of the terms of the selection to
Debtor promptly after the selection is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the
rate selected. If, on the date of the selection, the index selected is
unavailable for
<PAGE> 2
any reason, the selection shall be void. Bank reserves the right to fund
the principal from any source of funds notwithstanding any Base Interest
Rate selected by Debtor.
b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is
not bearing interest at a Base Interest Rate shall bear interest at a
rate per annum of 0.50% below the Reference Rate, which rate shall vary
as and when the Reference Rate changes.
If any interest rate defined in this note ceases to be available from
Bank for any reason, then said interest rate shall be replaced by the
rate then offered by Bank, which, in the sole discretion by Bank, most
closely approximates the unavailable rate.
At any time prior to the maturity of this note, subject to the
provisions of paragraph 4, below, of this note, Debtor may borrow, repay
and reborrow hereon so long as the total outstanding at any one time
does not exceed the principal amount of this note. Debtor shall pay all
amounts due under this note in lawful money of the United States at
Bank's Fresno Commercial Banking Center, or such other office as may be
designated by Bank, from time to time.
2. LATE PAYMENTS. If any payment required by the terms of this note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in subparagraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.
4. PREPAYMENT.
a. Amounts outstanding under this note bearing interest at a rate based
on the Reference Rate may be prepaid in whole or in part at any time,
without penalty or premium. Debtor may prepay amounts outstanding under
this note bearing interest at a Base Interest Rate in whole or in part
provided Debtor has given Bank not less than five (5) Business Days
prior written notice of Debtor's intention to make such prepayment and
pays to Bank the liquidated damages due as a result. Liquidated Damages
shall also be paid, if Bank, for any other reason, including
acceleration or foreclosure, receives all or any portion of principal
bearing interest at a Base Interest Rate prior to its scheduled payment
date. Liquidated Damages shall be an amount equal to the present value
of the product of: (i) the difference (but not less than zero) between
(a) the Base Interest Rate applicable to the principal amount which is
being prepaid, and (b) the return which Bank could obtain if it used the
amount of such prepayment of principal to purchase at bid price
regularly quoted securities issued by the United States having a
maturity date most closely coinciding with the relevant Base Rate
Maturity Date and such securities were held by Bank until the relevant
Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the numerator
of which is the number of days in the period between the date of
prepayment and the relevant Base Rate Maturity Date and the denominator
of which is 360; and (iii) the amount of the principal so prepaid
(except in the event that principal payments are required and have been
made as scheduled under the terms of the Base Interest Rate Loan being
prepaid, then an amount equal to the lesser of (A) the amount prepaid or
(B) 50% of the sum of (1) the amount prepaid and (2) the amount of
principal scheduled under the terms of the Base Interest Rate Loan being
prepaid to be outstanding at the relevant Base Rate Maturity Date).
Present value under the note is determined by discounting the above
product to present value using the Yield Rate as the annual discount
factor.
b. In no event shall Bank be obligated to make any payment or refund to
Debtor, nor shall Debtor be entitled to any setoff or other claim
against Bank, should the return which Bank could obtain under this
prepayment formula exceed the interest that Bank would have received if
no
-2-
<PAGE> 3
prepayment had occurred. All prepayments shall include payment of
accrued interest on the principal amount so prepaid and shall be applied
to payment of interest before application to principal. A determination
by Bank as to the prepayment fee amount, if any, shall be conclusive. In
the event of partial prepayment, such prepayments shall be applied to
principal payments in the inverse order of their maturity.
c. Bank shall provide Debtor a statement of the amount payable on
account of prepayment. Debtor acknowledges that (i) Bank establishes a
Base Interest Rate upon the understanding that it apply to the Base
Interest Rate Loan for the entire Interest Period, and (ii) any
prepayment may result in Bank incurring additional costs, expenses or
liabilities; and Debtor agrees to pay these liquidated damages as a
reasonable estimate of the costs, expenses and liabilities of Bank
associated with such prepayment.
/s/ BJE
-------- -------- -------- --------
initials initials initials initials
5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgement, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.
6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are not
paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Debtor and any endorsers of this note, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment, demand,
notice of nonpayment, protest, notice of protest, and notice of every kind; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this note. If this note is signed by more
than one party, the term "Debtor' includes each of the undersigned and any
successors in interest thereof; all of whose liability shall be joint and
several. Any married person who signs this note agrees that recourse may be had
against the separate property of that person for any obligations hereunder. The
receipt of any check or other item of payment by Bank, at its option, shall not
be considered a payment on account until such check or other item of payment is
honored when presented for payment at the drawee bank. Bank may delay the credit
of such payment based upon Bank's schedule of funds availability, and interest
-3-
<PAGE> 4
under this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any Obligor, including
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, except as provided in any
alternative dispute resolution agreement executed between Debtor and Bank, and
consent to service of process by any means authorized by said state's law. The
term "Bank" includes, without limitation, any holder of this note. This note
shall be construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.
7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "BASE INTEREST RATE" means a rate of interest
based on the LIBOR Rate. "BASE INTEREST RATE LOAN" means amounts outstanding
under this note that bear interest at a Base Interest Rate. "BASE RATE MATURITY
DATE" means the last day of the Interest Period with respect to principal
outstanding under a Base Interest Rate Loan. "BUSINESS DAY" means a day on which
Bank is open for business for the funding of corporate loans, and, with respect
to the rate of interest based on the LIBOR Rate, on which dealings in U.S.
dollar deposits outside of the United States may be carried on by Bank.
"INTEREST PERIOD" means any calendar period of 1, 3, 6, 9, or 12 months. In
determining an Interest Period, a month means a period that starts on one
Business Day in a month and ends on and includes the day preceding the
numerically corresponding day in the next month. For any month in which there is
no such numerically corresponding day, then as to that month, such day shall be
deemed to be the last calendar day of such month. Any Interest Period which
would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day. "LIBOR RATE" means
a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100
of 1%) at which dollar deposits, in immediately available funds and in lawful
money of the United States would be offered to Bank, outside of the United
States, for a term coinciding with the Interest Period selected by Debtor and
for an amount equal to the amount of principal covered by Debtor's interest rate
selection, plus Bank's costs, including the costs, if any, of reserve
requirements. "ORIGINATION DATE" means the first day of the Interest Period.
"REFERENCE RATE" means the rate announced by Bank from time to time at its
corporate headquarters as its "Reference Rate." The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank at
any given time.
UpRight, Inc.
/s/ Barris J. Evulich
- --------------------------------------
Barris Evulich
Vice President
-4-
<PAGE> 5
UNION
BANK OF
CALIFORNIA
PROMISSORY NOTE
(BASE RATE)
================================================================================
Borrower Name UpRight, Inc.
================================================================================
Borrower Address
1775 Park Street Office 649 Loan Number 9391662640
Selma, CA 93662
---------------------------------------------
Maturity Date June 30, 2000 Amount
$10,000,000.00
================================================================================
$10,000,000.00 Date August 30, 1999
FOR VALUE RECEIVED, on June 30, 2000, the undersigned ("Debtor") promises to pay
to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below, the
principal sum of Ten Million and No/100 Dollars ($10,000,000.00), or so much
thereof as is disbursed, together with interest on the balance of such principal
from time to time outstanding, at the per annum rate or rates and at the times
set forth below.
1. INTEREST PAYMENTS. Debtor shall pay interest on the 1st day of each month
(commencing October 1, 1999). Should interest not be paid when due, it shall
become part of the principal and bear interest as herein provided. All
computations of interest under this note shall be made on the basis of a year of
360 days, for actual days elapsed.
a. BASE INTEREST RATE. At Debtor's option, amounts outstanding hereunder
in minimum amounts of at least $100,000.00 shall bear interest at a
rate, based on an index selected by Debtor, which is 1.200% per annum in
excess of Bank's LIBOR Rate for the Interest Period selected by Debtor,
acceptable to Bank.
No Base Interest Rate may be changed, altered or otherwise modified
until the expiration of the Interest Period selected by Debtor. The
exercise of interest rate options by Debtor shall be as recorded in
Bank's records, which records shall be prima facie evidence of the
amount borrowed under either interest option and the interest rate;
provided, however, that failure of Bank to make any such notation in its
records shall not discharge Debtor from its obligations to repay in full
with interest all amounts borrowed. In no event shall any Interest
Period extend beyond the maturity date of this note.
To exercise this option, Debtor may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and
on the expiration of any Interest Period with respect to principal
outstanding on which a Base Interest Rate has been accruing, select an
index offered by Bank for a Base Interest Rate Loan and an Interest
Period by telephoning an authorized lending officer of Bank located at
the banking office identified below prior to 10:00 a.m., Pacific time,
on any Business Day and advising that officer of the selected index, the
Interest Period and the Origination Date selected (which Origination
Date, for a Base Interest Rate Loan based on the LIBOR Rate, shall
follow the date of such selection by no more than two (2) Business
Days).
Bank will mail a written confirmation of the terms of the selection to
Debtor promptly after the selection is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the
rate selected. If, on the date of the selection, the index selected is
unavailable for
<PAGE> 6
any reason, the selection shall be void. Bank reserves the right to fund
the principal from any source of funds notwithstanding any Base Interest
Rate selected by Debtor.
b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is
not bearing interest at a Base Interest Rate shall bear interest at a
rate per annum of 0.50% below the Reference Rate, which rate shall vary
as and when the Reference Rate changes.
If any interest rate defined in this note ceases to be available from
Bank for any reason, then said interest rate shall be replaced by the
rate then offered by Bank, which, in the sole discretion by Bank, most
closely approximates the unavailable rate.
At any time prior to the maturity of this note, subject to the
provisions of paragraph 4, below, of this note, Debtor may borrow, repay
and reborrow hereon so long as the total outstanding, at any one time
does not exceed the principal amount of this note. Debtor shall pay all
amounts due under this note in lawful money of the United States at
Bank's Fresno Commercial Banking Center, or such other office as may be
designated by Bank, from time to time.
2. LATE PAYMENTS. If any payment required by the terms of this note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in subparagraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.
4. PREPAYMENT.
a. Amounts outstanding under this note bearing interest at a rate based
on the Reference Rate may be prepaid in whole or in part at any time,
without penalty or premium. Debtor may prepay amounts outstanding under
this note bearing interest at a Base Interest Rate in whole or in part
provided Debtor has given Bank not less than five (5) Business Days
prior written notice of Debtor's intention to make such prepayment and
pays to Bank the liquidated damages due as a result. Liquidated Damages
shall also be paid, if Bank, for any other reason, including
acceleration or foreclosure, receives all or any portion of principal
bearing interest at a Base Interest Rate prior to its scheduled payment
date. Liquidated Damages shall be an amount equal to the present value
of the product of: (i) the difference (but not less than zero) between
(a) the Base Interest Rate applicable to the principal amount which is
being prepaid, and (b) the return which Bank could obtain if it used the
amount of such prepayment of principal to purchase at bid price
regularly quoted securities issued by the United States having a
maturity date most closely coinciding with the relevant Base Rate
Maturity Date and such securities were held by Bank until the relevant
Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the numerator
of which is the number of days in the period between the date of
prepayment and the relevant Base Rate Maturity Date and the denominator
of which is 360; and (iii) the amount of the principal so prepaid
(except in the event that principal payments are required and have been
made as scheduled under the terms of the Base Interest Rate Loan being
prepaid, then an amount equal to the lesser of (A) the amount prepaid or
(B) 50% of the sum of (1) the amount prepaid and (2) the amount of
principal scheduled under the terms of the Base Interest Rate Loan being
prepaid to be outstanding at the relevant Base Rate Maturity Date).
Present value under the note is determined by discounting the above
product to present value using the Yield Rate as the annual discount
factor.
b. In no event shall Bank be obligated to make any payment or refund to
Debtor, nor shall Debtor be entitled to any setoff or other claim
against Bank, should the return which Bank could obtain under this
prepayment formula exceed the interest that Bank would have received if
no
-2-
<PAGE> 7
prepayment had occurred. All prepayments shall include payment of
accrued interest on the principal amount so prepaid and shall be applied
to payment of interest before application to principal. A determination
by Bank as to the prepayment fee amount, if any, shall be conclusive. In
the event of partial prepayment, such prepayments shall be applied to
principal payments in the inverse order of their maturity.
c. Bank shall provide Debtor a statement of the amount payable on
account of prepayment. Debtor acknowledges that (i) Bank establishes a
Base Interest Rate upon the understanding that it apply to the Base
Interest Rate Loan for the entire Interest Period, and (ii) any
prepayment may result in Bank incurring additional costs, expenses or
liabilities; and Debtor agrees to pay these liquidated damages as a
reasonable estimate of the costs, expenses and liabilities of Bank
associated with such prepayment.
/s/ BJE
-------- -------- -------- --------
initials initials initials initials
5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgement, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f or g, all principal and interest shall automatically become
immediately due and payable.
6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are not
paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Debtor and any endorsers of this note, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment, demand,
notice of nonpayment, protest, notice of protest, and notice of every kind; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this note. If this note is signed by more
than one party, the term "Debtor" includes each of the undersigned and any
successors in interest thereof; all of whose liability shall be joint and
several. Any married person who signs this note agrees that recourse may be had
against the separate property of that person for any obligations hereunder. The
receipt of any check or other item of payment by Bank, at its option, shall not
be considered a payment on account until such check or other item of payment is
honored when presented for payment at the drawee bank. Bank may delay the credit
of such payment based upon Bank's schedule of funds availability, and interest
-3-
<PAGE> 8
under this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any Obligor, including
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, except as provided in any
alternative dispute resolution agreement executed between Debtor and Bank, and
consent to service of process by any means authorized by said state's law. The
term "Bank" includes, without limitation, any holder of this note. This note
shall be construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.
7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "BASE INTEREST RATE" means a rate of interest
based on the LIBOR Rate. "BASE INTEREST RATE LOAN" means amounts outstanding
under this note that bear interest at a Base Interest Rate. "BASE RATE MATURITY
DATE" means the last day of the Interest Period with respect to principal
outstanding under a Base Interest Rate Loan. "BUSINESS DAY" means a day on which
Bank is open for business for the funding of corporate loans, and, with respect
to the rate of interest based on the LIBOR Rate, on which dealings in U.S.
dollar deposits outside of the United States may be carried on by Bank.
"INTEREST PERIOD" means any calendar period of 1, 3, 6, 9, or 12 months. In
determining an Interest Period, a month means a period that starts on one
Business Day in a month and ends on and includes the day preceding the
numerically corresponding day in the next month. For any month in which there is
no such numerically corresponding day, then as to that month, such day shall be
deemed to be the last calendar day of such month. Any Interest Period which
would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day. "LIBOR RATE" means
a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100
of 1%) at which dollar deposits, in immediately available funds and in lawful
money of the United States would be offered to Bank, outside of the United
States, for a term coinciding with the Interest Period selected by Debtor and
for an amount equal to the amount of principal covered by Debtor's interest rate
selection, plus Bank's costs, including the costs, if any, of reserve
requirements. "ORIGINATION DATE" means the first day of the Interest Period.
"REFERENCE RATE" means the rate announced by Bank from time to time at its
corporate headquarters as its "Reference Rate." The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank at
any given time.
UpRight, Inc.
/s/ Barris J. Evulich
- -------------------------------------
Barris Evulich
Vice President
-4-
<PAGE> 9
UNION
BANK OF
CALIFORNIA
PROMISSORY NOTE
(BASE RATE)
================================================================================
Borrower Name UpRight, Inc.
- --------------------------------------------------------------------------------
Borrower Address Office 649 Loan Number 9391662640\
1775 Park Street 0081010000 0081010001
Selma, CA 93662 ---------------------------------------------
Maturity Date October 15, 2000 Amount
$25,000,000.00
================================================================================
$25,000,000.00 Date August 30, 1999
FOR VALUE RECEIVED, on October 15, 2000, the undersigned ("Debtor) promises to
pay to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below,
the principal sum of Twenty-Five Million and No/100 Dollars ($25,000,000.00), or
so much thereof as is disbursed, together with interest on the balance of such
principal from time to time outstanding, at the per annum rate or rates and at
the times set forth below.
1. INTEREST PAYMENTS. Debtor shall pay interest on the 1st day of each month
(commencing October 1, 1999). Should interest not be paid when due, it shall
become part of the principal and bear interest as herein provided. All
computations of interest under this note shall be made on the basis of a year of
360 days, for actual days elapsed.
a. BASE INTEREST RATE. At Debtor's option, amounts outstanding hereunder
in minimum amounts of at least $100,000.00 shall bear interest at a
rate, based on an index selected by Debtor, which is 1.200% per annum in
excess of Bank's LIBOR Rate for the Interest Period selected by Debtor,
acceptable to Bank.
No Base Interest Rate may be changed, altered or otherwise modified
until the expiration of the Interest Period selected by Debtor. The
exercise of interest rate options by Debtor shall be as recorded in
Bank's records, which records shall be prima facie evidence of the
amount borrowed under either interest option and the interest rate;
provided, however, that failure of Bank to make any such notation in its
records shall not discharge Debtor from its obligations to repay in full
with interest all amounts borrowed. In no event shall any Interest
Period extend beyond the maturity date of this note.
To exercise this option, Debtor may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and
on the expiration of any Interest Period with respect to principal
outstanding on which a Base Interest Rate has been accruing, select an
index offered by Bank for a Base Interest Rate Loan and an Interest
Period by telephoning an authorized lending officer of Bank located at
the banking office identified below prior to 10:00 a.m., Pacific time,
on any Business Day and advising that officer of the selected index, the
Interest Period and the Origination Date selected (which Origination
Date, for a Base Interest Rate Loan based on the LIBOR Rate, shall
follow the date of such selection by no more than two (2) Business
Days).
Bank will mail a written confirmation of the terms of the selection to
Debtor promptly after the selection is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the
rate selected. If, on the date of the selection, the index selected is
unavailable for
<PAGE> 10
any reason, the selection shall be void. Bank reserves the right to fund
the principal from any source of funds notwithstanding any Base Interest
Rate selected by Debtor.
b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is
not bearing interest at a Base Interest Rate shall bear interest at a
rate per annum of 0.50% below the Reference Rate, which rate shall vary
as and when the Reference Rate changes.
If any interest rate defined in this note ceases to be available from
Bank for any reason, then said interest rate shall be replaced by the
rate then offered by Bank, which, in the sole discretion by Bank, most
closely approximates the unavailable rate.
1.1 AVAILABILITY/PRINCIPAL REDUCTIONS. At any time prior to the maturity of this
note, subject to the provisions of paragraph 4 below, Debtor may borrow, repay
and reborrow hereunder so long as the maximum principal amounts outstanding do
not exceed: (i) $25,000,000.00 from the date of the Note to and including
January 30, 2000; and (ii) $20,000,000.00 from January 31, 2000 to and including
October 15, 2000. On or before January 31, 2000, Debtor shall repay principal
under this note such that the maximum principal amounts outstanding under the
note on such date do not exceed the sums set forth above for the periods set
forth above. Debtor shall pay all amounts due under this note in lawful money of
the United States at Bank's Fresno Commercial Banking Center, or such other
office as may be designated by Bank, from time to time.
2. LATE PAYMENTS. If any payment required by the terms of this note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in subparagraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.
4. PREPAYMENT.
a. Amounts outstanding under this note bearing interest at a rate based
on the Reference Rate may be prepaid in whole or in part at any time,
without penalty or premium. Debtor may prepay amounts outstanding under
this note bearing interest at a Base Interest Rate in whole or in part
provided Debtor has given Bank not less than five (5) Business Days
prior written notice of Debtor's intention to make such prepayment and
pays to Bank the liquidated damages due as a result. Liquidated Damages
shall also be paid, if Bank, for any other reason, including
acceleration or foreclosure, receives all or any portion of principal
bearing interest at a Base Interest Rate prior to its scheduled payment
date. Liquidated Damages shall be an amount equal to the present value
of the product of: (i) the difference (but not less than zero) between
(a) the Base Interest Rate applicable to the principal amount which is
being prepaid, and (b) the return which Bank could obtain if it used the
amount of such prepayment of principal to purchase at bid price
regularly quoted securities issued by the United States having a
maturity date most closely coinciding with the relevant Base Rate
Maturity Date and such securities were held by Bank until the relevant
Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the numerator
of which is the number of days in the period between the date of
prepayment and the relevant Base Rate Maturity Date and the denominator
of which is 360; and (iii) the amount of the principal so prepaid
(except in the event that principal payments are required and have been
made as scheduled under the terms of the Base Interest Rate Loan being
prepaid, then an amount equal to the lesser of (A) the amount prepaid or
(B) 50% of the sum of (1) the amount prepaid and (2) the amount of
principal scheduled under the terms of the Base Interest Rate Loan being
prepaid to be outstanding at the relevant Base Rate Maturity Date).
Present value under the note is determined by discounting the above
product to present value using the Yield Rate as the annual discount
factor.
-2-
<PAGE> 11
b. In no event shall Bank be obligated to make any payment or refund to
Debtor, nor shall Debtor be entitled to any setoff or other claim
against Bank, should the return which Bank could obtain under this
prepayment formula exceed the interest that Bank would have received if
no prepayment had occurred. All prepayments shall include payment of
accrued interest on the principal amount so prepaid and shall be applied
to payment of interest before application to principal. A determination
by Bank as to the prepayment fee amount, if any, shall be conclusive. In
the event of partial prepayment, such prepayments shall be applied to
principal payments in the inverse order of their maturity.
c. Bank shall provide Debtor a statement of the amount payable on
account of prepayment. Debtor acknowledges that (i) Bank establishes a
Base Interest Rate upon the understanding that it apply to the Base
Interest Rate Loan for the entire Interest Period, and (ii) any
prepayment may result in Bank incurring additional costs, expenses or
liabilities; and Debtor agrees to pay these liquidated damages as a
reasonable estimate of the costs, expenses and liabilities of Bank
associated with such prepayment.
/s/ BJE
-------- -------- -------- --------
initials initials initials initials
5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgement, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.
6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are not
paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Debtor and any endorsers of this note, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment, demand,
notice of nonpayment, protest, notice of protest, and notice of every kind; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this note. If this note is signed by more
than one party, the term "Debtor" includes each of the undersigned and any
successors in interest thereof; all of whose liability shall be joint and
several. Any married person
-3-
<PAGE> 12
who signs this note agrees that recourse may be had against the separate
property of that person for any obligations hereunder. The receipt of any check
or other item of payment by Bank, at its option, shall not be considered a
payment on account until such check or other item of payment is honored when
presented for payment at the drawee bank. Bank may delay the credit of such
payment based upon Bank's schedule of funds availability, and interest under
this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any Obligor, including
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, except as provided in any
alternative dispute resolution agreement executed between Debtor and Bank, and
consent to service of process by any means authorized by said state's law. The
term "Bank" includes, without limitation, any holder of this note. This note
shall be construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.
7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "BASE INTEREST RATE" means a rate of interest
based on the LIBOR Rate. "BASE INTEREST RATE LOAN" means amounts outstanding
under this note that bear interest at a Base Interest Rate. "BASE RATE MATURITY
DATE" means the last day of the Interest Period with respect to principal
outstanding under a Base Interest Rate Loan. "BUSINESS DAY" means a day on which
Bank is open for business for the funding of corporate loans, and, with respect
to the rate of interest based on the LIBOR Rate, on which dealings in U.S.
dollar deposits outside of the United States may be carried on by Bank.
"INTEREST PERIOD" means any calendar period of 1, 3, 6, 9, or 12 months. In
determining an Interest Period, a month means a period that starts on one
Business Day in a month and ends on and includes the day preceding the
numerically corresponding day in the next month. For any month in which there is
no such numerically corresponding day, then as to that month, such day shall be
deemed to be the last calendar day of such month. Any Interest Period which
would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day. "LIBOR RATE" means
a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100
of 1%) at which dollar deposits, in immediately available funds and in lawful
money of the United States would be offered to Bank, outside of the United
States, for a term coinciding with the Interest Period selected by Debtor and
for an amount equal to the amount of principal covered by Debtor's interest rate
selection, plus Bank's costs, including the costs, if any, of reserve
requirements. "ORIGINATION DATE" means the first day of the Interest Period.
"REFERENCE RATE" means the rate announced by Bank from time to time at its
corporate headquarters as its "Reference Rate." The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank at
any given time.
UpRight, Inc.
/s/ Barris J. Evulich
- --------------------------------------
Barris Evulich
Vice President
-4-
<PAGE> 1
UNION EXHIBIT 10.23(iv)
BANK OF
CALIFORNIA
SUBORDINATION AGREEMENT
("AGREEMENT")
TO: UNION BANK OF CALIFORNIA, N.A.
7108 North Fresno Street, Suite 200
Fresno, CA 93720
The undersigned, W.R. Carpenter North America, Inc. ("Creditor"), is
interested in the financial success of UpRight, Inc. ("Debtor") and acknowledges
that UNION BANK OF CALIFORNIA, N.A. ("Bank") has entered or is presently
intending to enter into certain financing arrangements with Debtor. Creditor
agrees that the financing arrangements between Bank and Debtor are in Debtor's
and Creditor's best interest and, in order to induce Bank to enter into or
continue such financing arrangements, Creditor agrees as follows:
1. The term "Obligations" is used in this Agreement in its broadest and
most comprehensive sense and shall mean all present and future indebtedness of
Debtor which may be, from time to time, incurred by Debtor, including, but not
limited to, any negotiable instruments evidencing the same, all guaranties,
debts, demands, monies, indebtedness, liabilities and obligations owed or to
become owing, including interest, principal, costs and other charges, and all
claims, rights, causes of action, judgments, decrees, remedies, or other
obligations of any kind whatsoever and howsoever arising, whether voluntary,
involuntary, absolute, contingent, direct, indirect, or by operation of law.
2. The term "Creditor Obligations" shall mean all Obligations owing at
anytime by Debtor to Creditor.
3. Except as provided in section 5, below, the Creditor Obligations are
hereby subordinated and subject, in the manner and to the extent described
below, to any and all Obligations owed by Debtor to Bank, Including, but not
limited to, Obligations arising pursuant to any agreements between Bank and
Debtor, now or hereafter existing, whether matured or not ("Bank Obligations"),
so long as any Bank Obligations shall remain unpaid, in whole or in part, or
Bank is committed or otherwise obligated to extend credit to Debtor.
4. So long as any of the Bank Obligations remain unpaid, in whole or in
part, or so long as Bank is committed or otherwise obligated to extend credit to
Debtor, Creditor agrees that, except to the extent that payments under the
Creditor Obligations are permitted under Section 5 below, Creditor shall not:
(a) collect, or receive payment upon, by setoff or in any other manner, all or
any portion of the Creditor Obligations now or hereafter existing; (b) sell,
assign, transfer, pledge, or give a security interest in the Creditor
Obligations (except subject expressly to this Agreement); (c) declare or in any
other manner find or hold Debtor in default under the Creditor Obligations; (d)
enforce or apply any security, now or hereafter existing for the Creditor
Obligations; (e) commence, prosecute or participate in any administrative,
legal, or equitable action against Debtor concerning the Creditor Obligations;
(f) join in any petition for bankruptcy, assignment for the benefit of
creditors, or creditors' agreement; (g) take, maintain or enforce any lien or
security, which is senior to Bank's interest, in any property, real or personal,
to secure the Creditor Obligations; or (h) Incur any obligation to, or receive
any loans, advances, dividends, payments of any kind or gifts from Debtor.
5. Notwithstanding the preceding section, so long as Debtor has made
each and every payment of principal and interest due and owing to Bank, and is
not in default under any of Debtor's agreements with Bank and none of the
following payments would cause such default, then: (a) Creditor shall be
entitled to receive regularly scheduled payments of principal and interest.
6. Except as otherwise expressly agreed to herein, all of the Bank
Obligations now or hereafter existing shall be first paid by Debtor before any
payment shall be made by Debtor on the Creditor Obligations. This priority of
payment shall apply at all times until all of the Bank Obligations have been
repaid in full. In the event of any assignment by Debtor for the benefit of
Debtor's creditors, any bankruptcy proceedings instituted by or against Debtor,
the appointment of any receiver for Debtor or Debtor's business or assets, or
any dissolution or other winding up of the affairs of Debtor or of Debtor's
business, and in all such cases, the officers of Debtor and any assignee,
trustee in bankruptcy, receiver or other person or persons in charge,
respectively, are hereby directed to pay to Bank the full amount of the Bank
Obligations before making any payments to Creditor.
7. Creditor agrees that if part or all of the Creditor Obligations are
evidenced, now or in the future, by a promissory note or other instrument,
Creditor shall place or cause to be placed on its face a legend stating that the
payment thereof is subject to the terms of this Agreement and is subordinate to
the payment of all the Bank Obligations. Creditor agrees to deliver to Bank a
certification in form requested by Bank; and, at any time during the term of
this Agreement, at the Bank's request, to deliver the original promissory note
or instrument to Bank. Creditor agrees to mark all books of account in such
manner as to indicate that payment thereof is subordinated pursuant to the terms
of this Agreement. Creditor agrees to execute any recordable subordination
agreements, financing statement amendments or other documents reasonably
required by Bank to provide notice to others of this Agreement, and agrees to
the recording of any such documents as Bank may require.
<PAGE> 2
8. Creditor agrees that Bank shall have absolute power and discretion,
without notice to Creditor, to deal in any manner with the Bank Obligations,
including, interest, costs, and expenses payable by Debtor to Bank, and any
security and guaranties therefor including, but not limited to, release,
surrender, extension, renewal, acceleration, compromise, or substitution.
Creditor hereby waives and agrees not to assert against Bank any rights which a
guarantor or surety could exercise; but nothing in this Agreement shall
constitute Creditor a guarantor or surety. Creditor hereby waives the right, if
any, to require that Bank marshal, or otherwise proceed to dispose of or
foreclose upon, collateral Bank may have in any manner or order.
9. If, at any time hereafter, Bank shall, in its own judgment, determine
to discontinue the extension of credit to or on behalf of Debtor, Bank may do
so. This Agreement, the obligations of Creditor owing to Bank, and Bank's rights
and privileges hereunder shall continue until payment in full of all of the
Obligations owing to Bank by Debtor notwithstanding any action or non-action by
Bank with respect to the Obligations or with respect to any collateral therefor
or any guaranties thereof. All rights, powers and remedies hereunder shall apply
to all past, present and future Bank Obligations, including under successive
transactions, any of which may continue, renew, increase, decrease or from time
to time create new Bank Obligations and notwithstanding that from time to time
Bank Obligations theretofore existing may have been paid in full.
10. Creditor further agrees that in case Creditor should, contrary to
Section 4 above, take or receive any additional security interest in, or
additional lien by way of attachment, execution, or otherwise on any property,
real or personal, or should take or join in any other measure or advantage
contrary to this Agreement, at any time prior to the payment in full of all of
the Bank Obligations, Bank shall be entitled to have the same vacated, dissolved
and set aside by such proceedings at law, or otherwise, as Bank may deem proper,
and this Agreement shall be and constitute full and sufficient grounds therefor
and shall entitle Bank to become a party to any proceedings at law, or
otherwise, initiated by Bank or by any other party, in or by which Bank may deem
it proper to protect its interest hereunder. Creditor agrees that if Creditor
violates this Agreement, Creditor shall be liable to Bank for all losses and
damages sustained by Bank by reason of such breach.
11. Except as otherwise expressly agreed to herein, if Creditor shall
receive any payments, security interests, or other rights in any property of
Debtor in violation of this Agreement, such payment or property shall be
received by Creditor in trust for Bank and shall forthwith be delivered and
transferred to Bank.
12. Creditor represents and warrants that Creditor has not previously
subordinated the Creditor obligations for the benefit of any other party, and
agrees that any such subordinations hereafter executed shall be expressly made
subject and subordinate to the terms of this Agreement. Creditor further
warrants having established with Debtor adequate means of obtaining, on an
ongoing basis, such information as Creditor may require which may affect the
ultimate satisfaction by Debtor of the Creditor Obligations. Bank shall have no
duty to provide any such information to Creditor.
13. This Agreement shall be binding upon the successors and assigns of
Creditor, and shall inure to the benefit of Bank's successors and assigns.
14. This Agreement and all rights and liabilities of the parties hereto
shall be governed as to validity, interpretation, enforcement and effect by the
laws of the State of California.
15. In the event of any dispute under this Agreement, the prevailing
party shall be entitled to recover its reasonable attorneys' fees and costs
whether or not suit is brought.
16. This Agreement shall remain in full force and effect until and
unless Creditor delivers to Bank written notice that this Agreement has been
revoked as to credit granted by Bank subsequent to the delivery of such notice,
but delivery of such notice shall not affect any of Creditor's obligations
hereunder with respect to credit granted by Bank prior to such delivery.
17. This Agreement hereby incorporates any alternative dispute
resolution agreement previously, concurrently or hereafter executed between
Creditor and Bank.
Dated: _______________
W.R. Carpenter North America, Inc.
/s/ Graham D. Croot /s/ Randall Fortel
- ------------------------------------ ----------------------------------------
Graham Croot Randy Fortel
Chief Financial Officer Vice President - Finance
The undersigned, being the Debtor named in the foregoing Agreement,
hereby waives its confidentiality rights with respect to such Agreement, accepts
and consents to such Agreement, and
-2-
<PAGE> 3
agrees to be bound by all of the provisions thereof and to recognize all
priorities and other rights granted thereby to UNION BANK OF CALIFORNIA, N.A.
and to pay its Obligations only in accordance therewith.
Dated: _______________
UpRight, Inc.
/s/ Barris J. Evulich
- ----------------------------------- ----------------------------------------
Barris Evulich
Vice President
-3-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-25-2000
<PERIOD-START> JUN-28-1999
<PERIOD-END> SEP-26-1999
<CASH> 9,862
<SECURITIES> 0
<RECEIVABLES> 48,018
<ALLOWANCES> 516
<INVENTORY> 38,699
<CURRENT-ASSETS> 102,056
<PP&E> 158,419
<DEPRECIATION> 38,719
<TOTAL-ASSETS> 231,551
<CURRENT-LIABILITIES> 40,893
<BONDS> 154,411
0
25
<COMMON> 60
<OTHER-SE> 27,042
<TOTAL-LIABILITY-AND-EQUITY> 231,551
<SALES> 56,832
<TOTAL-REVENUES> 56,832
<CGS> 44,685
<TOTAL-COSTS> 10,561
<OTHER-EXPENSES> (177)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,875
<INCOME-PRETAX> (2,112)
<INCOME-TAX> 846
<INCOME-CONTINUING> (1,266)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,266)
<EPS-BASIC> (21)
<EPS-DILUTED> (21)
</TABLE>
