EXHIBIT 10.1
EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT is made and entered into as of June 24,
2005, by and among XXXXX SYSTEMS, INC. ("Borrower"), a South Dakota corporation;
XXXXX CORPORATION, an Indiana corporation ("Guarantor"); and SUNTRUST BANK
("Lender"), a Georgia banking corporation.
RECITALS:
Lender and Borrower entered into a certain Amended and Restated
Credit Agreement dated June 10, 2002 (as at any time amended, the "Credit
Agreement"), pursuant to which Lender made available a revolving credit and
letter of credit facility to Borrower, which revolving credit and letter of
credit facility is secured by security interests in and liens upon all or
substantially all of the assets of Borrower and are guaranteed unconditionally
by Guarantor.
Lender made a term loan (the "Term Loan") to Borrower as evidenced
by a certain Term Loan Promissory Note, dated August 4, 2003 in the original
principal amount of $498,000 (as at any time amended, the "Term Note"), payment
of which is secured by, among other things, a lien upon and security title to
certain real property of Borrower pursuant to the terms of a certain Security
Deed and Agreement made as of March 30, 2001, between Borrower and Lender (as at
any time amended, the "Security Deed"; together with the Term Note and all other
agreements and instruments executed in connection therewith, the "Term Loan
Documents").
Events of Default under (and as defined in) the Credit Agreement
exist and are continuing, in consequence of which Lender is entitled to
terminate further advances to Borrower, to declare the entire balance owing to
it from Borrower to be immediately due and payable, to enforce its liens and
security interests in the collateral securing its claims against Borrower, and
to enforce its claims against Guarantor.
All of the liabilities and obligations under the Credit Agreement
and the Term Note became due and payable on May 31, 2005.
Borrower and Guarantor desire that Lender extend the due date for
repayment of the Obligations to the Termination Date (as hereinafter defined);
continue to make credit available to Borrower prior to the Termination Date; and
allow Borrower to use Cash Collateral (as hereinafter defined) prior to the
Termination Date.
Lender is willing to extend the due date for repayment of the
Obligations, to continue making credit available to Borrower, and to allow
Borrower to use Cash Collateral under the terms and conditions of this
Agreement.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and in
consideration of the premises and the mutual covenants herein contained, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. DEFINITIONS; RULES OF CONSTRUCTION.
(a) Capitalized terms used in this Agreement, unless otherwise
defined, shall have the meaning ascribed to such terms in the Credit Agreement.
In addition, as used herein, the following terms shall have the meanings
ascribed to them:
"ACCEPTABLE COMMITMENT LETTER" shall mean a commitment letter
that is issued by a bank or other financial institution acceptable
to Lender, provides for Take-Out Financing on or before the last day
of the Extension Period and has no due diligence, credit approval or
other conditions precedent to funding other than customary
conditions relating to documentation and closing.
"AGREEMENT" shall mean this Agreement.
"APPLICABLE LAW" shall mean all laws, rules and regulations
applicable to the Person, conduct, transaction, covenant or Loan
Document in question, including all applicable common law and
equitable principles; all provisions of all applicable state,
federal and foreign constitutions, statutes, rules, regulations and
orders of governmental bodies; and all orders, judgments and decrees
of all courts and arbitrators.
"AVAILABILITY" shall mean, on any date, the sum of (i)
eighty-five percent (85%) of Borrower's aggregate Eligible
Receivables less taxes, discounts, credits, allowances and
Retainages, plus (ii) fifty percent (50%) of the value (at the lower
of cost or market and in accordance with GAAP) of Borrower's
Eligible Inventory.
"BORROWING BASE CERTIFICATE" shall mean a certificate executed by
Borrower in favor of Lender, in a form acceptable to Lender, by
which Borrower shall certify to Lender the amount of Availability on
the date of such certificate (and showing the calculation thereof,
including all Eligible Accounts and Eligible Inventory as of the
date of the certificate)
"CASH COLLATERAL" shall mean cash proceeds of Borrower's Accounts
Receivable collected by Borrower from its Account Debtors in the
ordinary course of business.
"COLLECTIONS" shall mean all proceeds received from a sale, lease
or other disposition of any of the Collateral, including payments by
Borrower's customers and any proceeds of insurance relating to any
of the Collateral.
"ELIGIBLE RECEIVABLE" shall mean each Eligible Export-Related
Accounts and each Accounts Receivable that is not an Export-Related
Account Receivable but that is acceptable to Lender and deemed to be
eligible by Lender in the exercise of its customary credit judgment;
PROVIDED, HOWEVER, that no Account Receivable shall qualify as an
Eligible Receivable if (a) it does not arise from the sale of goods
or the performance of services in the ordinary course of Borrower's
business, (b) it is not subject to a valid, perfected first priority
Lien in favor of Lender, (c) any covenant, representation or
warranty contained in the Credit Documents with respect to such
Account Receivable has been breached, (d) it is not owned by
Borrower or it is is subject to any right, claim or interest of
another Person other than the Lien in favor of Lender, (e) with
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respect to such Account Receivable an invoice has not been sent,
except in the case of Percentage of Completion Accounts Receivable,
(f) it arises from the sale of defense articles or defense services,
(g) it is due and payable more that one hundred eighty (180) days
from the date of the invoice, with the exception of an Account
Receivable for Retainage which may not (x) exceed ten percent (10%)
of the aggregate amount that Borrower is to receive under a
particular Domestic Contract and (y) be for a term greater than
thirteen (13) months, (h) it is not paid within sixty (60) calendar
days from its original due date, (i) it arises from a sale of goods
to or performance of services from an Affiliate of Borrower, an
employee of borrower, a stockholder of Borrower, a subsidiary of
Borrower, a Person with a controlling interest in Borrower or a
Person which shares common controlling ownership with Borrower, (j)
it is backed by a letter of credit unless the goods covered by the
subject letter of credit have been shipped, except in the case of
Percentage of Completion Accounts Receivable, (k) Lender, in its
reasonable judgment, deems such Account Receivable uncollectible for
any reason, (l) it is due and payable in a currency other than
Dollars, (m) it is due and payable from a military Account Debtor,
(n) it is due and payable from an Account Debtor who applies for,
suffers, or consents to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or calls a
meeting of its creditors; admits in writing its inability, or is
generally unable, to pay its debts as they become due or ceases
operations of its present business; makes a general assignment for
the benefit of creditors; commences a voluntary case under any state
or federal bankruptcy laws (as now or hereinafter in effect); is
adjudicated as bankruptcy or insolvent; files a petition seeking to
take advantage of any other petition which is filed against it in
any involuntary case under such bankruptcy laws; or takes any action
for the purpose of effecting any of the foregoing, (o) it arises
from a xxxx-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment or any other repurchase or return basis or is
evidenced by chattel paper, (p) the goods giving rise to such
Account Receivable have not been shipped to the Account Debtor or
the services giving rise to such Account Receivable have not been
performed by Borrower or the Account Receivable otherwise does not
represent a final sale, except in the case of Percentage of
Completion Accounts receivable, (q) it is subject to any offset,
deduction, defense, dispute, or counterclaim or the Account Debtor
is also a creditor or supplier of Borrower or the Account Receivable
is contingent in any respect or for any reason, (r) Borrower has
made any agreement with the Account Debtor for any deduction
therefrom, except for discounts or allowances made in the ordinary
course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of
each respective invoice releated thereto, or (s) any of the goods
giving rise to such Account Receivable have been returned, rejected
or repossesed.
"ELIGIBLE INVENTORY" shall mean all Eligible Export-Related
Inventory and all Inventory that is not Export-Related Inventory but
that is finished goods and is acceptable to Lender and deemed to be
eligible by Lender in the exercise of its customary credit judgment;
PROVIDED, HOWEVER, that no Inventory shall qualify as Eligible
Inventory if (a) it is not subject to a valid, perfected first
priority Lien in favor of Lender, (b) it is located at an address
that has not been disclosed to Lender in writing, (c) it is placed
by Borrower on consignment or held by Borrower on consignment from
another Person, (d) it consists of raw materials, work in process or
materials used or consumed or to be used or consumed in Borrower's
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business or in the processing, production, packaging, promotion,
delivery or shipping of Inventory, (e) it is in the possession of a
processor or bailee, or located on premises leased or subleased to
Borrower, or on premises subject to a mortgage in favor of a Person
other than Lender, unless such processor or bailee or mortgagee or
the lessor or sublessor of such premises, as the case may be, has
executed and delivered all documentation which Lender shall require
to evidence the subordination or other limitation or extinguishment
of such Person's rights with respect to such Inventory and Lender's
right to gain access thereto, (f) it is produced in violation of the
Fair Labor Standards Act or subject to the "hot goods" provisions
contained in 29 U.S.C. ss. 215 or any successor statute or section,
(g) as to such Inventory, any covenant, representation or warranty
with respect to such Inventory contained in the Credit Documents has
been breached, (h) it is not located in the United States, (i) it is
demonstration Inventory, (j) it consists of proprietary software
(i.e. software designed solely for Borrower's internal use and not
intended for resale), (k) it is damaged, obsolete, returned,
defective, recalled or unfit for further processing, (l) it has been
previously exported from the United States, (m) it constitutes
defense articles or defense services, or (n) it is to be
incorporated into goods whose sale would result in an Account
Receivable which would not be an Eligible Receivable.
"EXTENSION CONDITIONS" shall mean the conditions to Lender's
extension of the due date of the Obligations set forth in Section 4
of this Agreement.
"EXTENSION PERIOD" shall mean the period commencing on the date
of this Agreement and ending at 5:00 o'clock p.m. on the close of
business on August 31, 2005; provided that if Borrower delivers to
Lender an Acceptable Commitment Letter after July 31, 2005, but
before August 31, 2005, and each of the Extension Conditions remains
satisfied, the Extension Period shall be deemed to have been
extended to 5:00 o'clock p.m. on the close of business on the date
that is 30 days after the date of Lender's receipt of the Acceptable
Commitment Letter.
"INSOLVENCY PROCEEDING" shall mean any action, case or proceeding
commenced by or against a Person, or any agreement of such Person,
for (a) the entry of an order for relief under any chapter of the
Bankruptcy Code or other insolvency or debt adjustment law (whether
state, federal or foreign); (b) the appointment of a receiver,
trustee, liquidator or other custodial for such Person or any part
of its property; (c) an assignment or trust mortgage for the benefit
of creditors of such Person; or (d) the liquidation, dissolution or
winding up of the affairs of such Person.
"LOAN DOCUMENTS" shall mean the Credit Documents and the Term
Loan Documents.
"OBLIGATIONS" shall mean all liabilities, indebtedness and
obligations at any time owing by Borrower to Lender, whether direct
or indirect, absolute or contingent, due or to become due, secured
or unsecured or liquidated or unliquidated, including all of the
Revolver Obligations and all of the Term Loan Obligations.
"OBLIGORS" shall mean Borrower and Guarantor.
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"OVERADVANCE" shall mean, on any date of determination, the
amount by which the outstanding Revolver Obligations (including all
undrawn Letters of Credit at 102% of the face amount of such Letters
of Credit and all fees and expenses incurred by Lender) exceeds the
Availability.
"PAID IN FULL" shall mean, with reference to the Obligations, the
full, final and indefeasible payment in full of all of such
Obligations, the termination of all commitments and any other
obligations that Lender may have under any of the Credit Documents
to extend or renew credit, and the depositing with Lender by
Borrower of cash in an amount equal to 102% of the aggregate undrawn
amount of all Letters of Credit outstanding and all other contingent
obligations at the time due and owing Lender.
"PAYROLL TAXES" shall mean all taxes and deposits required to be
paid or withheld from the wages or salaries of Borrower's employees.
"REVOLVER OBLIGATIONS" shall mean all of the "Obligations" under
(and as defined in) the Credit Agreement.
"STIPULATED DEFAULTS" shall mean the Events of Default referenced
in Section 2(c) of this Agreement.
"TAKE-OUT FINANCING" shall mean financing procured by Borrower
from a third-party financing source in an amount sufficient to cause
all of the Obligations to be Paid in Full at or before the end of
the Extension Period.
"TERMINATION DATE" shall mean the sooner to occur of (a) 5:01
o'clock p.m. on the last day of the Extension Period or (b) the date
on which the Extension Period terminates as provided in Section 5 of
this Agreement.
"TERM LOAN OBLIGATIONS" shall mean all indebtedness, liabilities
and obligations at any time owed by Borrower to Lender under any of
the Term Loan Documents.
(b) The terms "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision. Any pronoun used shall be deemed to cover all
genders. All references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations; to any of the
Loan Documents shall include any and all modifications thereto and any and all
restatements, extensions or renewals thereof; to any Person shall mean and
include the successors and permitted assigns of such Person; to "including" and
"include" shall be understood to mean "including, without limitation" (and, for
purposes of this Agreement and each other Loan Document, the parties agree that
the rule of ejusdem generis shall not be applicable to limit a general
statement, which is followed by or referable to an enumeration of specific
matters to matters similar to the matters specifically mentioned); or to the
time of day shall mean the time of day on the day in question in Atlanta,
Georgia, unless otherwise expressly provided in this Agreement.
2. ACKNOWLEDGMENTS AND STIPULATIONS BY OBLIGORS. Each Obligor
acknowledges, stipulates and agrees that (a) as of the opening of business on
June 20, 2005, the aggregate principal balance of Loans outstanding totaled
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$1,756,096.50, the aggregate undrawn amount of Letters of Credit outstanding
totaled $2,322,762.40, and the unpaid principal balance of the Term Loan
Obligations totaled $406,005.53, in each case exclusive of interest, fees, other
charges and attorneys' fees at any time payable by Borrower under any of the
Loan Documents; (b) all of the Obligations (other than contingent obligations
with respect to the undrawn amount of Letters of Credit) are absolutely due and
payable by Obligors to Lender without any defense, deduction, offset or
counterclaim (and, to the extent Obligors had any defense, deduction, offset or
counterclaim on the date hereof, the same is hereby waived); (c) Events of
Default have occurred and now exist under the Credit Documents and are
continuing by reason of Borrower's failure to cause the Obligations to be Paid
in Full on May 31, 2005, and Borrower's breach of its obligations under Section
8.07 of the Credit Agreement (and, such Event of Default under the Credit
Agreement is also a default under the Term Note); (d) the Loan Documents
executed by Borrower are legal, valid and binding obligations of Borrower and
are enforceable against Borrower in accordance with their terms; (e) the
security interests and other liens granted by Borrower to Lender in the
Collateral are duly perfected, first priority security interests and liens; (f)
the Guaranty is a legal, valid and binding obligation of the Guarantor and is
enforceable against Guarantor in accordance with its terms; (g) each of the
recitals contained at the beginning of this Agreement are true and correct; and
(h) prior to executing this Agreement, each Obligor consulted with and had the
benefit of advice of legal counsel of its own selection and each has relied upon
the advice of such counsel, and in no part upon any representation of Lender
concerning the legal effects of this Agreement or any provision hereof.
3. AGREEMENT TO EXTEND. If and for so long as each of the Extension
Conditions is satisfied, Lender agrees that during the Extension Period it will
not, solely by reason of the existence on this date of the Stipulated Defaults,
(i) exercise any default remedy available to Lender under any of the other Loan
Documents or Applicable Law to enforce collection from Obligors of any of the
Obligations or to foreclose its security interest in any of the Collateral
during the Extension Period; or (ii) enforce Section 10.14 of the Credit
Agreement, which requires the deposit to the Cash Collateral Account of monies
equal to 102% of the undrawn amount of outstanding Letters of Credit, but the
foregoing shall not in any event be deemed to constitute a waiver of any
Lender's right to require the deposit of such monies to the Cash Collateral
Account on or after the Termination Date or in accordance with the provisions of
Section 6 of this Agreement. Nothing in this Agreement shall be construed to
alter the demand nature of that portion of the Obligations payable on demand
under the terms of any of the Loan Documents.
4. EXTENSION CONDITIONS. The following conditions shall constitute
Extension Conditions, the timely satisfaction of each and every one of which
during the Extension Period shall be a condition to all agreements of Lender
hereunder:
(a) Each Obligor duly and punctually observes, performs and
discharges each and every obligation and covenant on its part to be performed
under this Agreement;
(b) No Event of Default occurs or exists (other than the
Stipulated Defaults that are in existence on the date hereof) and each Obligor
strictly complies with all of the terms, conditions and covenants contained in
each of the Loan Documents that are applicable to such Obligor;
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(c) No Insolvency Proceeding is commenced by or against either
Obligor;
(d) No material adverse change occurs in either Obligor's
business, prospects or financial condition after the date hereof;
(e) All of the Obligations are Paid in Full on or before the last
day of the Extension Period;
(f) Guarantor does not attempt to revoke or terminate, or dispute
Guarantor's liability under, Guarantor's Guaranty;
(g) No representation or warranty made by either Obligor in this
Agreement proves to have been false or misleading in any material respect;
(h) Borrower timely deducts from the wages of its employees and
makes timely and proper deposits for all Payroll Taxes as the same became due
and payable, and if, as and when requested to do so by Lender, provides Lender
with proof of all deposits for Payroll Taxes;
(i) Borrower is able to pay and does pay, as the same shall
become due and payable, all debts incurred by Borrower on or after the date
hereof;
(j) No Person to whom Borrower is indebted for money borrowed
accelerates the maturity or demands payment of such indebtedness, in whole or in
part; and
(k) Borrower diligently and in good faith attempts to procure
Take-Out Financing on or before the last day of the Extension Period and
periodically apprises Lender of the status of its attempts to procure such
Take-Out Financing.
5. TERMINATION OF EXTENSION. If any one or more of the Extension
Conditions is not satisfied, then (i) Lender's agreement to extend the maturity
of the Obligations shall at Lender's election, but without further notice to or
demand upon Obligors, terminate, (ii) all of the Obligations shall be
immediately due and payable without any further notice to or demand upon
Obligors, all of which notice and demand each Obligor hereby waives, (iii) all
Cash Collateral and other Collections in the possession of Borrower shall be
immediately remitted by Borrower to Lender, and (iv) Lender shall thereupon have
and may exercise from time to time all of the remedies available to it under the
Loan Documents and Applicable Law as a consequence of an Event of Default. On
and after the Termination Date, all of the Obligations shall be immediately due
and payable and Lender shall be authorized, at any time and without further
notice to or demand upon Obligors or any other Person, to enforce all of its
remedies under the Loan Documents and Applicable Law.
6. FINANCING DURING EXTENSION PERIOD; USE OF CASH COLLATERAL.
(a) During the period from the date hereof through the
Termination Date, Borrower shall not be permitted to obtain any Loans pursuant
to the Credit Agreement or otherwise, but may obtain renewals or extensions of
existing Letters of Credit and may obtain the issuance of new Letters of Credit,
provided that (i) each Letter of Credit that is renewed, extended or issued on
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or after the date hereof is secured by a deposit with Lender of cash collateral
in an amount equal to 102% of the undrawn amount of such Letter of Credit, (ii)
each Letter of Credit that is renewed, extended or issued after the date of this
Agreement has an expiry date that does not extend beyond August 31, 2005 and
(iii) the aggregate undrawn amount of all Letters of Credit issued after the
date hereof does not exceed $200,000. Except as expressly stated above, Lender
shall have no obligation to extend credit to Borrower at any time.
(b) During the period from the date hereof through the
Termination Date, but only for so long as each of the Extension Conditions is
and remains satisfied, Borrower shall be permitted to utilize Cash Collateral in
the ordinary course of business to pay costs and expenses of its operations, but
not for any purpose for which Borrower would be prohibited from using proceeds
of Loans; PROVIDED, HOWEVER, that Borrower shall cease spending, using or
otherwise disposing of any Cash Collateral and shall turn over all Cash
Collateral then or thereafter in its possession to Lender on the earlier to
occur of (i) the Termination Date or (ii) the date on which any of the Extension
Conditions is not satisfied; and PROVIDED, FURTHER, that on any date that an
Overadvance exists, Borrower shall use all Cash Collateral then or thereafter
coming into its possession to repay such Overadvance prior to using Cash
Collateral for any other purpose.
7. APPLICABLE RATE OF INTEREST.
(a) From and after the date of this Agreement, and except as
otherwise provided in this Section 7, interest shall accrue (i) on the principal
amount of the Revolver Obligations outstanding from time to time at a variable
rate per annum equal to the Adjusted Monthly LIBOR Index Rate (adjusted on the
first LIBOR Business Day of each LIBOR period) plus 200 basis points, all as
more fully set forth in the Credit Agreement, and (ii) on the unpaid principal
balance of the Term Loan Obligations outstanding at the rate of 5-1/2% per
annum, calculated and paid in accordance with the terms of the Term Note.
(b) If by June 30, 2005, Borrower has not delivered to Lender a
term sheet, proposal letter or other writing definitively evidencing the fact
that Borrower is engaged in active discussions with a bank or other financial
institution to provide Take-Out Financing, then the otherwise applicable rate of
interest with respect to the principal balance of the Revolver Obligations and
the Term Loan Obligations shall be increased by 100 basis points, effective July
1, 2005.
(c) If by July 31, 2005, Borrower has not delivered to Lender an
Acceptable Commitment Letter, then the otherwise applicable rate of interest
with respect to the Revolver Obligations and Term Loan Obligations shall be
increased by an additional 100 basis points (in addition to and after giving
effect to any increase provided for in paragraph (b) of this Section 7),
effective August 1, 2005.
(d) During the Extension Period, and provided that each of the
Extension Conditions is satisfied, Lender shall not be authorized to charge or
collect any default rate of interest that Lender would otherwise be entitled to
charge or collect in the absence of this Agreement, but on and after the
Termination Date Lender may charge and collect such default rate of interest to
the extent authorized by the Loan Documents.
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8. ADDITIONAL COVENANTS. During the Extension Period and thereafter
for so long as any of the Obligations is outstanding, Borrower shall not pay any
cash or distribute any other property to or for the benefit of Parent, any
Subsidiary of Borrower or any Affiliate of Borrower, Parent or any Subsidiary,
whether as a dividend or other distribution or as payment of any management,
consulting or other fees at any time incurred by Borrower to or in favor of any
of such Persons; and Borrower shall not incur any Indebtedness for borrowed
money unless at the time of such incurrence, and from the proceeds thereof, all
of the Obligations are Paid in Full. If an Overadvance occurs or exists at any
time during the Extension Period, then without further notice to or demand upon
the Obligors, Borrower shall pay to Lender the amount of such Overadvance in
immediately available funds.
9. APPLICATION OF PROCEEDS. Each Obligor hereby waives the right, if
any, to direct the manner in which Lender applies any payments, Collections or
other Collateral proceeds to the Obligations and agrees that notwithstanding
anything to the contrary in the Credit Agreement, Lender may apply and reapply
all such payments, Collections or proceeds to the Obligations as Lender in its
sole and absolute discretion elects from time to time.
10. BORROWING BASE CERTIFICATES; AUDITS AND INSPECTION OF
COLLATERAL. On or before June 15, 2005, June 30, 2005, July 15, 2005 and August
15, 2005, and in addition not later than five (5) Business Days after Borrower's
receipt of a written request for a Borrowing Base Certificate from Lender,
Borrower shall provide to Lender a current, duly completed and executed
Borrowing Base Certificate. Without limiting Lender's audit and inspection
rights under the Loan Documents, Borrower shall permit Lender and Lender's
representatives and agents to inspect, evaluate and audit the Collateral and to
inspect, audit and make copies of any of Borrower's books and records (including
computer records) maintained by or on behalf of Borrower at any time.
11. REPRESENTATIONS AND WARRANTIES OF OBLIGORS. Each Obligor
represents and warrants that (a) no Default or Event of Default exists under the
Loan Documents, except for the Stipulated Defaults that are in existence on the
date hereof; (b) subject to the existence of the Stipulated Defaults, the
representations and warranties of Borrower contained in the Loan Documents were
true and correct in all material respects when made and continue to be true and
correct in all material respects on the date hereof; (c) the execution, delivery
and performance by Obligors of this Agreement and the consummation of the
transactions contemplated hereby are within the corporate powers of Obligors and
have been duly authorized by all necessary corporate action on the part of
Obligors, do not require any approval or consent, or filing with, any
governmental agency or authority, do not violate any provisions of any law, rule
or regulation or any provision of any order, writ, judgment, injunction, decree,
determination or award presently in effect in which either Obligor is named or
any provision of the charter documents of either Obligor and do not result in a
breach of or constitute a default under any agreement or instrument to which
either Obligor is a party or by which it or any of its properties are bound; (d)
this Agreement constitutes the legal, valid and binding obligation of each
Obligor, enforceable against such Obligor in accordance with its terms; (e) all
Payroll Taxes required to be withheld from the wages of Borrower's employees
have been paid or deposited when due; (f) each Obligor is entering into this
Agreement freely and voluntarily with the advice of legal counsel of his or its
own choosing; and (g) each Obligor has freely and voluntarily agreed to the
releases, waivers and undertakings set forth in this Agreement.
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12. REAFFIRMATION OF OBLIGATIONS. Borrower hereby ratifies and
reaffirms the Loan Documents and all of its obligations and liabilities
thereunder. Guarantor hereby ratifies and reaffirms the validity, legality and
enforceability of the Guaranty and agrees that such Guaranty is and shall remain
in full force and in effect until all the Obligations have been paid in full.
13. SPECIFIC WAIVERS. Each Obligor hereby waives, to the fullest
extent permitted by Applicable Law, (a) any and all rights to receive notice in
connection with the enforcement by Lender of its liens and security interests
with respect to any of the Collateral, including notices under or in connection
with O.C.G.A. Sections 11-9-610 through 613 and Section 11-9-623, and (b) the
benefit of any statute of limitations that might otherwise bar the recovery of
any of the Obligations from any one or more of them.
14. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARIES. Nothing
in this Agreement shall be construed to alter the existing debtor-creditor
relationship between Borrower and Lender, nor is this Agreement intended to
change or affect in any way the relationship between Lender and Guarantor to one
other than a debtor-creditor relationship. This Agreement is not intended, nor
shall it be construed, to create a partnership or joint venture relationship
between or among any of the parties hereto. No Person other than a party hereto
is intended to be a beneficiary hereof and no Person other than a party hereto
shall be authorized to rely upon or enforce the contents of this Agreement.
15. ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT. This Agreement and
the other Loan Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof. This Agreement may not be
modified, altered or amended except by agreement in writing signed by all the
parties hereto.
16. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Georgia.
17. NON-WAIVER OF DEFAULT. Neither this Agreement, nor Lender's
agreements hereunder nor Lender's continued providing of extensions of credit at
any time extended to Borrower to Borrower in accordance with this Agreement and
the Loan Documents shall be deemed a waiver of or consent to the Stipulated
Defaults or any of other Event of Default. Obligors agree that such Events of
Default shall not be deemed to have been waived, released or cured by virtue of
extensions of credit at any time extended to Borrower, Lender's agreements or
the execution of this Agreement.
18. NO NOVATION, ETC. This Agreement is not intended to be, nor
shall it be construed to create, a novation or accord and satisfaction and the
Credit Agreement and the other Loan Documents shall remain in full force and
effect. Notwithstanding any prior mutual temporary disregard of any of the terms
of any of the Loan Documents, the parties agree that the terms of each of the
Loan Documents shall be strictly adhered to on and after the date hereof, except
as expressly modified by this Agreement.
19. COUNTERPARTS; WAIVERS OF NOTICE OF ACCEPTANCE. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall constitute an
original, but all of which taken together shall be one and the same instrument.
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In proving this Agreement or any of the other Loan Documents, it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought. Notice of Lender's acceptance hereof
is hereby waived.
20. REIMBURSEMENT FOR LEGAL EXPENSES. Borrower agrees to reimburse
Lender for all reasonable costs and expenses, including legal fees, incurred by
Lender in connection with the drafting, negotiation, execution and closing of
this Agreement.
21. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
22. RELEASE OF CLAIMS. TO INDUCE LENDER TO ENTER INTO THIS
AGREEMENT, EACH OBLIGOR HEREBY RELEASES, ACQUITS AND FOREVER DISCHARGES LENDER,
AND LENDER'S OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS,
FROM ALL LIABILITIES, CLAIMS, DEMANDS, ACTIONS OR CAUSES OF ACTION OF ANY KIND
(IF ANY THERE BE), WHETHER ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE,
DISPUTED OR UNDISPUTED, LIQUIDATED OR UNLIQUIDATED, AT LAW OR IN EQUITY, OR
KNOWN OR UNKNOWN, THAT ANY ONE OR MORE OF THEM NOW HAVE OR EVER HAVE HAD AGAINST
LENDER, WHETHER ARISING UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS OR
OTHERWISE.
23. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
ANY OF THE LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
ATTEST: XXXXX SYSTEMS, INC.
("Borrower")
/s/ By: /s/
-------------------------------- ----------------------------
Secretary Title: ____________________________
ATTEST: XXXXX CORPORATION
("Guarantor")
/s/
---------------------------------- By:
Witness Title: /s/
----------------------------
____________________________
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Accepted on June 29, 2005.
SUNTRUST BANK
("Lender")
By:
Title: /s/
----------------------------
____________________________
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