CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 16, 1995, is between and
among XXXXXXX RESEARCH CORPORATION, a Delaware corporation ("Borrower"),
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a national banking
association ("SouthTrust"), FIRST ALABAMA BANK, an Alabama state banking
corporation ("First Alabama"), and CORESTATES BANK, N.A., a national banking
association ("Corestates") (SouthTrust, First Alabama and Corestates being
collectively referred to herein as the "Banks").
R E C I T A L S:
A. Borrower has requested that Banks make available to Borrower a
line of credit loan in the maximum principal amount of up to $73,500,000.
X. Xxxxx are willing to make such line of credit available to
Borrower on the terms and conditions set forth herein.
AGREEMENT:
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1. DEFINITIONS
1.1. Definitions. In addition to the terms defined in the
introductory paragraph hereof, the following terms shall have the following
respective meanings:
"Accelerated Reimbursement Obligation" means at any time the sum of the
undrawn portion of the Letters of Credit plus the amounts of all drawings
against the Letters of Credit for which Borrower has not reimbursed Lender.
"Accounts" mean all accounts, accounts receivable, chattel paper,
leases, promissory notes, contracts for receipt of money, conditional sales
contracts, and evidences of indebtedness of or owing to Borrower and/or any of
the Subsidiaries whether now existing or hereafter arising, including, without
limitation, (i) all accounts and other rights to payment of money which arise
or result from Borrower's or any of the Subsidiaries' selling or other
disposition of Borrower's goods or the providing of services by the Borrower
and/or any of the Subsidiaries, (ii) the proceeds of any insurance covering the
Accounts, (iii) the return of unearned insurance premiums, and (iv) amounts due
under contracts with the United States Government, subject to the provisions of
the Act.
"Account Debtor" means any Person who is or may become obligated under
or in connection with an Account.
"Act" means the United States Assignment of Claims Act of 1940, as
amended.
"Advance" means a disbursement by Banks to Borrower of principal of the
Line of Credit Loan pursuant to Article 2 hereof.
"Affiliate" means any director or officer of Borrower or any person
who, directly, indirectly or beneficially, owns 5% or more of the capital stock
of Borrower or any member of the immediate family of any such officer, director
or stockholder, or any corporation or other entity which is controlled by,
controls, or is under common control with the Borrower.
"Agreement" means this Credit Agreement.
"Applicable Environmental Law" means any statutory law or case law
pertaining to health or the environment, or petroleum products, or oil, or
hazardous substances, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, as
codified at 42 U.S.C. Section 9601, et. seq.; the Resource Conservation and
Recovery Act of 1976, as amended, as codified at 42 U.S.C. Section 6901, et
seq.; the Superfund Amendments and Reauthorization Act of 1986, as amended, as
codified at 42 U.S.C. Section 9671, et seq.; and any state or local law,
regulation or ordinance pertaining to such matters.
"Base Rate" means the rate of interest designated by SouthTrust
periodically as its Base Rate. The Base Rate is not necessarily the lowest
rate charged by SouthTrust. The Base Rate may be ascertained by calling (205)
254-5900. When an interest rate is tied to the Base Rate, such interest rate
will change, as and when the Base Rate changes.
"Borrowing Base Certificate" means the certificate executed by the
Borrower in the form attached hereto as Exhibit A.
"Business Day" means any day (other than a Saturday or Sunday) upon
which all the Banks are open for business and on which dealings in U.S. Dollars
are carried on in the Eurodollar Market.
"Capital Expenditures" mean expenditures made or liabilities incurred
for the acquisition of any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more than one
year, including the direct or indirect acquisition of such assets by way of
increased product or service charges, offset items or otherwise and the
principal portion of payments with respect to Capitalized Lease Obligations.
"Capitalized Lease Obligations" mean any Debt represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP, and the amount of such Debt shall be the
capitalized amount of such obligations determined in accordance with GAAP.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, together with all
amendments from time to time thereto, including any rules or regulations
promulgated thereunder.
"Collateral" means the Accounts, Inventory, General Intangibles,
Equipment, and other property and interests now or hereafter hypothecated to
Banks as security for the Obligations, and the proceeds and products thereof.
"Commitment Period" means the period of time during which Banks shall
be committed to make Advances to Borrower, and shall be from the Closing Date
until the Commitment Termination Date.
"Commitment Termination Date" means the first to occur of (1) March 31,
1997, or such later date as Borrower and Banks may agree upon in writing
pursuant to Section 2.11 hereof, it being agreed that Banks shall have no
obligation to extend the Commitment Termination Date, or (2) the date that
Banks, by reason of an Event of Default, suspends the making of further
Advances.
"CoreStates Note" means that certain Line of Credit Promissory Note of
even date herewith, in the principal amount of up to $20,000,000, executed and
delivered by Borrower to CoreStates, evidencing CoreStates' Proportionate Share
of the Line of Credit.
"Debt" means the sum of (i) indebtedness for borrowed money or for the
deferred purchase price of property or services, (ii) Capitalized Lease
Obligations, (iii) all other items which in accordance with GAAP would be
included in determining total liabilities as shown on a balance sheet of a
Person as at the date as of which Debt is to be determined.
"Default Rate" means two percent (2%) in excess of the Base Rate.
"Eligible Billed Accounts" mean billed Accounts arising in the ordinary
course of Borrower's or the Subsidiaries' business from the sale of finished
product Inventory or rendition of services, which Banks, in their reasonably
exercised credit judgment, deem to be Eligible Billed Accounts. Without
limiting the generality of the foregoing, no Account shall be an Eligible
Billed Account if: (i) it arises out of a sale made by Borrower or the
Subsidiaries to an Affiliate of Borrower or to a Person controlled by an
Affiliate or Subsidiary of Borrower; or (ii) it is due or unpaid more than
ninety (90) days after the original invoice date; or (iii) fifty percent (50%)
or more of the Accounts from the Account Debtor are not deemed Eligible Billed
Accounts hereunder; or (iv) the total unpaid Accounts of the Account Debtor
exceed twenty percent (20%) of the net amount of all Accounts, to the extent of
such excess; or (v) any covenant, representation or warranty contained in this
Agreement with respect to such Account has been breached; or (vi) the Account
Debtor is also Borrower's or one of the Subsidiaries' creditor or supplier, or
has disputed liability with respect to such Account, or has made any claim with
respect to any other Account due from such Account Debtor to Borrower or one of
the Subsidiaries, or the Account otherwise is or may become subject to any
right of setoff by the Account Debtor, provided, however, that such Account
shall be ineligible only to the extent of any setoff claimed by the Account
Debtor; or (vii) the Account Debtor has commenced a voluntary case, or has had
commenced against it, an involuntary case under the federal bankruptcy laws, as
now constituted or hereafter amended, or made an assignment for the benefit of
creditors, or a decree or order for relief under the federal bankruptcy laws
has been filed against the Account Debtor, or if the Account Debtor has failed,
suspended business, ceased to be Solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed of it or for all or
a significant portion of its assets or affairs; or (viii) it arises from a sale
to an Account Debtor outside the United States; or (ix) it arises from a sale
to the Account Debtor on a xxxx-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment or any other repurchase or return basis; or (x)
Banks believe, in their sole judgment, that collection of such Account is
insecure or that payment thereof is doubtful or will be delayed by reason of
the Account Debtor's financial condition; or (xi) the Account Debtor is located
in either the State of New Jersey or the State of Minnesota, unless Borrower or
the applicable Subsidiary has filed a Notice of Business Activities Report with
the appropriate officials in those states for the then current year; or (xii)
the Account is subject to a Lien, other than a Lien in favor of the Banks; or
(xiii) the goods giving rise to such Account have not been delivered to and
accepted by the Account Debtor or the services giving rise to such Account have
not been performed by Borrower or the Subsidiary and accepted by the Account
Debtor or the Account otherwise does not represent a final sale; or (xiv) the
total unpaid Accounts of the Account Debtor exceed a credit limit determined by
Banks, in their sole discretion, to the extent such Account exceeds such limit;
or (xv) the Account is evidenced by chattel paper, a note, or an instrument of
any kind, or has been reduced to judgment; or (xvi) Borrower or the Subsidiary
has made any agreement with the Account Debtor for any deduction therefrom,
except for discounts or allowances which are made in the ordinary course of
business for prompt payment and which discounts or allowances are reflected in
the calculation of the face value of each invoice related to such Account; or
(xvii) Borrower or the Subsidiary has made an agreement with the Account Debtor
to extend the time of payment thereof; or (xviii) the Account arises from a
retail sale of goods to a Person who is purchasing same primarily for personal,
family or household purposes; or (xix) the Account arises out of a shipment of
Inventory, goods, or products to an address other than an address in the United
States; or (xx) the Account Debtor is not a resident citizen of the United
States or a corporate entity or partnership formed and existing under the laws
of the United States or a political subdivision thereof.
"Eligible Unbilled Accounts" mean unbilled Accounts which, if billed,
would meet the definition of Eligible Billed Accounts, and which are not more
than ninety (90) days old measured from the date the goods giving rise to such
Account were delivered or the services giving rise to such Account were
performed by Borrower or one of the Subsidiaries, as the case may be.
"Employee Plan" means any plan subject to Title IV of ERISA and
maintained in whole or in part for employees of Borrower and/or the
Subsidiaries.
"ERISA" means the Employee Retirement Income security Act of 1974,
together with all amendments from time to time thereto, including any rules or
regulations promulgated thereunder.
"Equipment" means all equipment now or hereafter used or useful in the
operation of the Borrower's and/or any of the Subsidiaries' business, together
with all accessories, parts and additions now or hereafter affixed thereto or
used in connection therewith; provided, however, that with respect to equipment
which is leased and not owned by the Borrower or the Subsidiary, the Equipment
shall include only the leasehold interest of Borrower or the Subsidiary,
together with any options to purchase and any greater or additional rights
thereto that Borrower or the Subsidiary may hereafter acquire, except for the
equipment and personal property referred to on Exhibit A to the Security
Agreement.
"Eurodollar Interest Period" means, with respect to any period in which
the Eurodollar Rate is in effect, a period of either one (1), two (2), three
(3), or six (6) months, as Borrower may elect by delivery of a Eurodollar Rate
Election Notice; provided that any Eurodollar Interest Period may not extend
beyond the last day of the Commitment Period; and provided further that if any
Eurodollar Interest Period would otherwise end on a day which is not a Business
Day, such Eurodollar Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
Eurodollar Interest Period beyond the last day of the Commitment Period, in
which event such Eurodollar Interest Period shall end on the immediately
preceding Business Day.
"Eurodollar Rate" means the London Interbank Offered Rate in effect
from time to time for the applicable Eurodollar Interest Period, as determined
by Lender from the financial press (currently quoted in the "Money Rates" table
contained in The Wall Street Journal) plus 125 basis points (1.25%).
"Eurodollar Rate Election" shall mean an election by Borrower to
convert the interest rate applicable to the outstanding principal balance of
the Line of Credit Loan to the Eurodollar Rate.
"Eurodollar Rate Election Notice" shall mean a written notice of
Borrower's Eurodollar Rate Election delivered to Lender, which notice must
specify (i) the Eurodollar Interest Period as either one (1), two (2), three
(3), or six (6) months, and (ii) the principal amount of the Line of Credit
Loan to bear interest at the Eurodollar Rate which must be at least $1,000,000
and any excess must be in increments of $100,000.
"Event of Default" means the events described in Article 7 hereof.
"Existing Letter of Credit" means the irrevocable letter of credit
number SB8775 dated January 11, 1995, issued by SouthTrust for Borrower's
account, in the aggregate amount of up to $2,287,300, for the benefit of
SouthTrust Bank of Alabama, National Association as Trustee under the Trust
Indenture dated as of January 1, 1995, between said trustee and the State
Industrial Development Authority, and any renewal or replacement thereof.
"First Alabama Note" means that certain Line of Credit Promissory Note
of even date herewith, in the principal amount of up to $25,000,000, executed
and delivered by Borrower to First Alabama, evidencing First Alabama's
Proportionate Share of the Line of Credit.
"Fixed Charge Coverage" means a fraction in which the numerator is the
sum of the net income of the Borrower (after provision for federal and state
taxes) for the twelve (12) month period preceding the applicable date plus the
interest, lease and rental expenses of the Borrower for said period plus the
sum of non-cash expenses or allowances for such period (including, without
limitation, amortization or write down of intangible assets, depreciation,
depletion, and deferred taxes and expenses) and the denominator is the sum of
the current portion of the long term debt of Borrower as of the applicable date
plus the interest, lease and rental expenses for the twelve (12) month period
preceding the applicable date.
"Funded Pension Plan" means a Plan that (a) covers any employee of the
Borrower and/or the Subsidiaries or that the Borrower otherwise has sponsored
or maintained or to which the Borrower and/or the Subsidiaries has made any
contributions within five (5) years preceding the date of this Agreement and
(b) is subject to the minimum funding standards of Section 301 et seq. of
ERISA.
"Future Letters of Credit" mean any irrevocable or standby letters of
credit hereafter issued by SouthTrust for the Borrower's account with an
expiration date prior to the Commitment Termination Date, expressly excluding
the Existing Letter of Credit.
"GAAP" means, as in effect from time to time, generally accepted
accounting principles consistently applied with respect to a corporation
conducting a business the same as or similar to that of the Borrower.
"General Intangibles" mean all general intangibles of Borrower and/or
of any of the Subsidiaries, whether now owned or hereafter acquired, including,
without limitation, all choses in action, causes of action, corporate or other
business records, deposit accounts, inventions, designs, patents, patent
applications, trademarks, trade names, trade secrets, goodwill, copyrights,
registrations, licenses, franchises, customer lists, tax refunds and tax refund
claims, computer programs, all claims under guaranties, security interests or
other security held by or granted to Borrower and/or any of the Subsidiaries to
secure payment of any of the Accounts by an Account Debtor, all rights to
indemnification, and all other intangible property of every kind and nature.
"Intercreditor Agreement" means that certain Intercreditor Agreement
among the Banks of even date herewith.
"Interest Coverage Ratio" means for any fiscal period the ratio of
Pretax Income for such period to Interest Expense for such period.
"Interest Expense" for any fiscal period means the amount properly
recorded or recordable as interest expense of the Borrower for such period
determined in accordance with GAAP, plus operating lease payments for such
period.
"Inventory" means all inventory of whatever kind or nature of Borrower
and/or of the Subsidiaries, now owned or hereafter acquired by Borrower and/or
by any of the Subsidiaries, and wherever located, including, without
limitation, all goods held for sale or lease or furnished or to be furnished
under contracts, and any raw materials, goods in transit, work in process or
finished goods, supplies, returned or repossessed goods, together with all
goods and materials used or consumed in Borrower's and/or any of the
Subsidiaries' business.
"Lender" means SouthTrust, as agent for the Banks pursuant to the
Intercreditor Agreement, or any Person appointed as successor agent pursuant to
the Intercreditor Agreement.
"Letters of Credit" mean, collectively, the Future Letters of Credit.
"Lien" means any voluntary or involuntary mortgage, security deed, deed
of trust, lien, pledge, assignment, charge, security interest, title retention
agreement, financing lease, levy, execution, seizure, judgment, attachment,
garnishment, charge or other encumbrance of any kind.
"Line of Credit Loan" means the $73,500,000 credit facility available
to Borrower pursuant to Article 2 of this Agreement, with accrued interest on
such principal and other agreed charges as shall be outstanding at any given
time.
"Loan Documents" means this Agreement, the Notes, the Security
Agreement, and any other documents or instruments now or hereafter executed
evidencing, securing, or relating to the Line of Credit Loan.
"Loan Value of Accounts" means an amount which, at any given time, is
not more than (i) 85% of the aggregate Eligible Billed Accounts plus (ii) 65%
of the aggregate of Eligible Unbilled Accounts, provided, that the aggregate
amount of Eligible Unbilled Accounts may not exceed $40,000,000 at any time and
the amount of the Subsidiaries' Eligible Billed Accounts may not exceed
$10,000,000 and the amount of the Subsidiaries' Eligible Unbilled Accounts may
not exceed $1,000,000 at any time.
"Multiemployer Plan" has the meaning set forth in Section 4001(a)(3) of
ERISA.
"Net Income" means for any fiscal period the gross revenues of the
Borrower for such period less all expenses and other proper charges (including
taxes on income), determined in accordance with GAAP on a consolidated basis,
but excluding in any event:
(a) any gains or losses on the sale or other disposition of investments or
fixed or capital assets other than in the ordinary course of business and any
taxes on such excluded gains and any tax deductions or credits on account of
any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any corporation substantially all the assets
of which have been acquired by the Borrower in any manner, realized by such
other corporation prior to the date of such acquisition;
(d) net earnings and losses of any corporation with which the Borrower
shall have consolidated or which shall have merged into or with the Borrower,
realized by such other corporation prior to the date of such consolidation or
merger;
(e) net earnings or losses of any business entity in which the Borrower has
an ownership interest unless such net earnings shall have actually been
received by the Borrower in the form of cash distributions;
(f) any gain arising from the acquisition of any securities of the
Borrower;
(g) any reversal of a contingency reserve which contingency reserve was
taken prior to the date of this Agreement; and
(h) any gain arising from the termination of any Funded Pension Plan.
"Notes" mean, collectively, the SouthTrust Note, the First Alabama
Note, and the CoreStates Note.
"Obligations" mean the Line of Credit Loan, the Accelerated
Reimbursement Obligation, the Reimbursement Obligation, and all other advances,
debts, liabilities, obligations, covenants and duties owing, arising, due or
payable from Borrower or Subsidiaries to Banks of any kind or nature, present
or future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under this Agreement or any of the other Loan Documents whether
direct or indirect (including those acquired by assignment), absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising and however evidenced or acquired. The term includes,
without limitation, all principal, interest, charges, expenses, fees,
attorneys' fees and any other sums chargeable to Borrower under any of the Loan
Documents and all rights Banks may at any time or times have to reimbursement
in connection with any Letters of Credit or guaranty issued for Borrower's
benefit.
"Organizational Documents" means the Borrower's and the Subsidiaries'
articles of incorporation and bylaws, with all amendments thereto,
respectively.
"Overadvance" means an Advance by Banks at any time when the aggregate
outstanding principal of the Line of Credit Loan plus the Accelerated
Reimbursement Obligation exceeds the Loan Value of Accounts, or will exceed the
Loan Value of Accounts if such Advance is made.
"Permitted Liens" means the Liens described on Exhibit B hereof, Liens
securing purchase money borrowing permitted by this Agreement, and financing
statements filed by lessors of personal property leases.
"Person" means an individual, corporation, partnership, association,
joint-stock company, trust, business trust, unincorporated organization or
joint venture, or a court or governmental authority.
"Plan" means an employee benefit plan now or hereafter maintained for
employees of Borrower or Subsidiaries that is covered by Title IV of ERISA.
"Potential Default" means an event, which with the giving of notice or
lapse of time or both, will constitute an Event of Default.
"Pretax Income" for any fiscal period means the Net Income for such
period (a) minus any portion thereof constituting interest income, (b) plus the
sum of all amounts deducted in computing Net Income for (i) taxes, (ii)
interest expense or (iii) operating lease payments computed on a consolidated
basis.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Proportionate Share" means, with respect to Advances and payment of
interest, and principal, as appropriate under the Line of Credit Loan, the
following percentages:
SouthTrust 285/735
First Alabama 250/735
CoreStates 200/735
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Reimbursement Obligation" means Borrower's obligation to reimburse
SouthTrust for drawings under the Letters of Credit.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA.
"Security Agreement" means that certain Security Agreement, dated of
even date herewith, between the Borrower and the Subsidiaries and the Banks and
the Lender, wherein the Borrower and the Subsidiaries have granted a security
interest in the collateral described therein as security for the Line of Credit
Loan and the Accelerated Reimbursement Obligation.
"Solvent" as to any Person, means such Person (i) owns property, real,
personal, and mixed, whose aggregate fair saleable value is greater than the
amount required to pay all of such Person's Debt (including contingent debts),
and (ii) is able to pay all of its Debt as such Debt matures and (iii) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage.
"SouthTrust Note" means that certain Line of Credit Promissory Note of
even date herewith, in the principal amount of up to $28,500,000, executed and
delivered by Borrower to SouthTrust, evidencing SouthTrust's Proportionate
Share of the Line of Credit.
"Subsidiaries" mean Communications & Systems Specialists, Inc., a
Maryland corporation, Xxxxxx Computer Group, Inc., a Delaware corporation, CSC
Acquisitions, Inc., an Alabama corporation, and NRC Technical Services
Corporation, an Alabama corporation, all or a sufficient percentage of the
capital stock of each of which is owned by the Borrower and which are
consolidated for all accounting and tax purposes with the Borrower on the
Borrower's financial statements and federal income tax returns.
"Tangible Net Worth" means the aggregate of the (a) par or stated value
of all outstanding capital stock; (b) capital surplus; and (c) retained
earnings; less (x) any surplus resulting from any write up of assets subsequent
to the Closing Date; (y) the amount of any goodwill, patents, trademarks,
tradenames, customer lists, non-competition agreements, and copyrights
reflected on the books of the Borrower; and (z) the amount paid for any
treasury stock reflected as a reduction of the capital surplus or retained
earnings accounts.
1.2. Singular and Plural. Singular terms shall include the plural
forms and vice versa, as applicable, of the terms defined.
1.3. Amendments. All references to other documents or instruments
shall be deemed to refer to such documents or instruments as they may hereafter
be extended, renewed, modified, or amended and all replacements and
substitutions therefor.
ARTICLE 2. THE LINE OF CREDIT LOAN
2.1. Disbursement of Advances. Subject to the terms and
conditions of this Agreement, and for so long as no Event of Default or
Potential Default exists; Banks agree to make Advances of the Line of Credit
Loan to Borrower from time to time during the Commitment Period, in an
aggregate principal amount at any time outstanding not to exceed the lesser of
(i) $73,500,000 less an amount equal to the Accelerated Reimbursement
Obligation, or (ii) the Loan Value of Accounts as determined by Banks from the
last Borrowing Base Certificate submitted to Banks. During the Commitment
Period, Borrower may borrow, repay and reborrow the principal of the Line of
Credit Loan, all in accordance with the terms and conditions of this Agreement.
Each Advance shall be disbursed as provided in Article 8 hereof. Nothing in
this Section shall be construed to require a Bank to make an Advance in excess
of its Proportionate Share.
2.2. The Notes. The liability of the Borrower to pay the Line
of Credit Loan shall be evidenced by the Notes.
2.3. Payments.
(a) On the first (1st) day of each calendar month during the
Commitment Period, and at the expiration of any Eurodollar Interest Period,
Borrower shall pay to Lender all accrued and unpaid interest.
(b) At the expiration of the Commitment Period, the outstanding
principal balance of the Line of Credit Loan, plus all accrued but unpaid
interest thereon, shall be due and payable.
(c) All payments will be applied first to interest then due and
payable and any excess shall be applied in reduction of principal.
2.4. Interest Rate.
(a) The outstanding principal balance of the Line of Credit Loan
shall bear interest at the Base Rate, except that the Borrower may initially or
at any time thereafter elect the Eurodollar Rate in accordance with the
procedures set forth herein, and upon the expiration of any Eurodollar Interest
Period, this Note will bear interest at the Base Rate unless and until a new
Eurodollar Rate Election is made. Borrower shall exercise such Eurodollar Rate
Election by delivering to Lender a Eurodollar Rate Election Notice not less
than two (2) Business Days prior to the date on which the Borrower desires the
Eurodollar Interest Period to begin (unless Lender in its sole discretion,
elects to accept such election on a shorter notice from time to time).
(b) Borrower agrees that, notwithstanding anything to the contrary
herein, if at any time Banks determine, in accordance with reasonable and
ordinary commercial standards, that their acquisition of funds in the London
interbank market would be unsafe, impractical or in violation of any law,
regulation, guideline or order, Banks may so notify Borrower in writing or by
telephone, and upon the giving of such notice, any Eurodollar Rate Election
then in effect shall immediately terminate and the outstanding principal
balance hereof shall thereupon commence to bear interest at the Base Rate.
Borrower further agrees that, notwithstanding the fact that Banks may have
elected to base the interest rate applicable hereunder upon Lender's cost of
funds in the Eurodollar market, Banks shall not be required actually to obtain
funds from such source at any time; however, subject to the foregoing sentence,
the Eurodollar Rate will continue to be available to Borrower.
(c) All interest on the outstanding principal amount hereunder,
whether accruing at the Base Rate or the Eurodollar Rate, shall be calculated
on the basis of a 360-day year by multiplying the outstanding principal amount
by the applicable per annum rate, multiplying the product thereof by the actual
number of days elapsed, and dividing the product so obtained by 360.
2.5. Purpose. Borrower shall use the proceeds of the Line of Credit
Loan for general working capital purposes for itself and each of the
Subsidiaries.
2.6. Borrowing Base Certificate. Two (2) Business Days prior to the
date of the first Advance and on the tenth (10th) day of each month thereafter,
Borrower shall submit to Lender a Borrowing Base Certificate. Each Borrowing
Base Certificate shall be signed and certified as true and correct by the chief
executive officer or chief financial officer of the Borrower.
2.7. Mandatory Prepayments. If the sum of the outstanding principal
amount of the Line of Credit Loan plus the Accelerated Reimbursement Obligation
at any time exceeds the Loan Value of Accounts, the Borrower shall immediately
pay to the Lender, without need of notice or demand by Banks (and without
Banks' waiving the Potential Default or Event of Default which may arise as a
result of such excess), an amount sufficient to reduce said sum to the Loan
Value of Accounts then outstanding.
2.8. Mandatory Advances.
(a) The Banks shall make an Advance on the Line of Credit Loan for a
sum equal to a draw under any Future Letter of Credit, even if such Advance
would constitute an Overadvance.
(b) The Banks may in their sole discretion, but shall not be
obligated to, make an Advance on the Line of Credit Loan for a sum sufficient
to pay accrued interest on the Line of Credit Loan or other fees and expenses
under this Agreement if Borrower has failed to timely pay the same, even if
such Advance would constitute an Overadvance.
2.9. Prepayment. Borrower may prepay the outstanding principal
balance of the Line of Credit Note, in whole or in part, without premium or
penalty upon two (2) Business Days prior written notice to Banks; provided that
if such prepayment occurs during an Eurodollar Interest Period and if Banks
determine (which determination shall be conclusive) that they are unable to
prepay the deposits or borrowings by which they have funded any portion of the
principal amount of the Line of Credit Loan without incurring any loss, charge,
cost or penalty, Borrower shall, at the time of such prepayment, pay to Lender
the amount of any such loss, charge, cost or penalty; provided further, that if
such prepayment occurs during an Eurodollar Interest Period (as opposed to the
last day thereof), Borrower shall also pay to Banks a premium derived as
follows:
(i) Divide the principal amount of the Line of Credit Loan so prepaid by
the number of days in the Eurodollar Interest Period,
(ii) multiply the quotient obtained in (i) by the number of days remaining
in the Eurodollar Interest Period, and
(iii) multiply the product obtained in (ii) by the difference between the
Eurodollar Rate then in effect and the average Base Rate during such Eurodollar
Interest Period.
2.10. Late Charges; Interest on Overdue Installments; Collection
Costs.
(a) Borrower will pay to Lender a late charge equal to five percent
(5%) of any payment not received by Lender within ten (10) days after the due
date thereof in order to cover the additional expenses incident to the handling
and processing of delinquent payments. Collection or acceptance by Lender of
such late charge shall not constitute a waiver of any rights or remedies of
Banks provided herein.
(b) Upon the occurrence of an Event of Default, Borrower agrees to
pay interest to Lender at the Default Rate on Obligations, including accrued
interest, until the Obligations have been paid in full.
(c) Banks shall be entitled to recover all costs of collecting,
securing or attempting to collect or secure the Obligations, including, without
limitation, court costs and attorneys' fees, including attorneys' fees in any
appellate or bankruptcy proceedings.
2.11. Term. The Line of Credit Loan will mature at the expiration of
the Commitment Period, provided, however, that Banks may, in their sole
discretion, at the anniversary of the Closing Date and each anniversary
thereafter, elect to extend the Commitment Period for an additional one (1)
year. Banks shall give Borrower notice of their intention to extend or not
extend the Commitment Period by the last day of February of each year. In the
event Banks elect to extend the Commitment Period, Borrower agrees to execute
such documentation to reflect such extension as Banks may reasonably request.
2.12. Commitment Fee. Borrower agrees to pay Lender a line of credit
fee equal to one-eighth of one percent (1/8 of 1%) per annum of the average
monthly unused (unfunded) portion of the Line of Credit Loan, which such line
of credit fee shall be payable quarterly, in arrears, over the term of the Line
of Credit Loan, commencing on December 1, 1995, and shall be shared
proportionately by the Banks according to their Proportionate Share. This line
of credit fee shall be fully earned at the closing of the Line of Credit Loan,
and shall be payable within five (5) days of the end of each quarter.
2.13. Security. The Line of Credit Loan and the Reimbursement
Obligation are secured by a security interest in the Collateral.
2.14 Future Letters of Credit.
(a) SouthTrust will issue Future Letters of Credit upon application
therefor by Borrower and the Borrower's execution of applications and
agreements for letters of credit in form and substance satisfactory to
SouthTrust and the payment of letter of credit fees to SouthTrust. Such Future
Letters of Credit shall be issued for the benefit of Borrower in connection
with its normal business activities. The outstanding face amount of Future
Letters of Credit shall not exceed $20,000,000 at any time.
(b) The letter of credit fees paid to SouthTrust by Borrower in
connection with Future Letters of Credit shall be remitted to the Banks by
SouthTrust according to their Proportionate Share.
ARTICLE 3. CONDITIONS PRECEDENT TO MAKING ADVANCES
The obligations of Banks to make any Advance to Borrower shall be
subject to the satisfaction by Borrower of the following conditions precedent,
as of the date of the requested Advance:
(a) There shall exist no Event of Default or Potential Default.
(b) The representations and warranties of Borrower made in this
Agreement or in any certificate executed and delivered pursuant hereto shall be
true and accurate in all material respects.
(c) Borrower shall have performed or observed all agreements,
covenants, and conditions required by Banks to be performed or observed by
Borrower, including, without limitation, the submission of any required
Borrowing Base Certificate.
(d) Borrower shall have duly executed the Loan Documents (and the
Subsidiaries shall have duly executed the Security Agreement), together with
any and all other documents that Banks or their legal counsel, in their
reasonable discretion, shall deem necessary to complete the transactions
contemplated hereunder.
(e) Any proceedings taken in connection with the performance and
observance of the provisions of this Agreement shall be reasonably satisfactory
to Banks and their legal counsel.
(f) Borrower shall have delivered to Lender landlord consents, in
form and content satisfactory to Banks, with respect to any Collateral which is
located on property leased by the Borrower or the Subsidiaries which is
designated from time to time by Lender.
(g) Prior to the first Advance, Lender shall have received, in form
and substance satisfactory to Banks and their counsel:
(i) Copies of the Organizational Documents of the Borrower and
of the Subsidiaries, certified on the Closing Date by the appropriate Persons on
behalf of the Borrower and the Subsidiaries.
(ii) Certificates of existence and good standing for Borrower
and of the Subsidiaries, all certified on or within thirty (30) days of the
Closing Date by the Secretaries of State of Delaware, Alabama and Maryland, as
applicable.
(iii) Copies of the resolutions of the Board of Directors of
Borrower and of the Subsidiaries, certified as of the Closing Date by the
appropriate Persons on behalf of the Borrower and of the Subsidiaries,
authorizing (A) the transactions contemplated by this Agreement and (B) the
execution, delivery and performance by the Borrower of the Loan Documents and
the execution and delivery of all other documents to be delivered by the
Borrower and the Subsidiaries in connection with the transactions herein
contemplated.
(iv) An opinion of counsel to the Borrower and the Subsidiaries
in form and content satisfactory to Banks.
(v) Payment to Lender of a commitment fee equal to one-
sixteenth of one percent (1/16 of 1%) of the principal amount of the Line of
Credit Loan, to be shared by Banks proportionately in accordance with their
Proportionate Shares.
(vi) Payment to Lender of a $5,000 agent fee to be retained by
Lender.
(vii) Such other agreements, instruments, approvals, payments,
opinions and other documents as Banks may reasonably request.
Each request for Advance shall constitute Borrower's representation and
warranty that each of the foregoing conditions is satisfied on the date of such
request, and will continue to be satisfied on the date the requested Advance is
made, and that all representations and warranties contained in the Loan
Documents are true and correct and that Borrower is in compliance with all
terms and conditions of the Loan Documents and that the Subsidiaries are in
compliance with all the terms and conditions of the Security Agreement as of
the date of such request.
In the event Banks, at their option, elect to make one (1) or more
Advances prior to receipt and approval of all items required by this Article 3,
such election shall not obligate Banks to make any subsequent Advances without
full compliance with this Article 3.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
To induce Banks to enter into this Agreement and to make Advances
hereunder, Borrower represents and warrants to Banks that:
4.1. Existence, Power and Qualification. The Borrower is duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and is duly qualified as a foreign corporation and is in good
standing under the laws of the State of Alabama and of each jurisdiction where
its ownership of property or conduct or proposed conduct of its business
requires such qualification, and has the power and authority and the legal
right to own its property and to conduct its business in the manner in which it
is now conducted or hereafter contemplates conducting its business.
4.2. Authority to Borrow Hereunder. Borrower has the power and
authority and the legal right to make, deliver and perform the Loan Documents.
Borrower has taken all necessary action on its part to authorize the execution,
delivery and performance of the Loan Documents, and the borrowing contemplated
thereby. No consent or authorization of, or filing with, any federal, state,
county or municipal government, or any department or agency of any such
government, is required of Borrower in connection with the execution, delivery,
performance, validity or enforceability of the Loan Documents, or the borrowing
contemplated hereby.
4.3. Due Execution and Enforceability. The Loan Documents have
been duly executed and delivered on behalf of Borrower, and constitute the
legal, valid and binding obligation of Borrower enforceable against Borrower in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditor's rights generally, and general
principles of equity which may limit the availability of equitable remedies.
4.4. No Conflict. The execution, delivery and performance of
the Loan Documents, and the consummation of the transactions contemplated
therein, will not (a) conflict with or be in contravention of any law,
regulation, rule, order or judgment applicable to Borrower or its
Organizational Documents, or any other agreement, instrument, mortgage, deed of
trust, lien, lease, judgment, decree or order to which Borrower is a party or
is subject or by which Borrower or its properties are bound or affected, or (b)
result in the creation of any Lien upon any of the properties of Borrower.
4.5. Material Claims. There is no litigation, claim, lawsuit,
investigation, action or other proceeding pending or, to the knowledge of
Borrower, threatened before any court, agency, arbitrator or other tribunal
which individually or in the aggregate might result in any material adverse
change in the financial condition, operations, businesses or prospects of
Borrower.
4.6. Financial Statements Accurate. All financial statements
heretofore or hereafter provided by the Borrower are and will be true and
complete in all material respects as of their respective dates and will fairly
present the financial condition of the Borrower, and there are no liabilities,
direct or indirect, fixed or contingent, as of the dates of such statements
which are not reflected therein or in the notes thereto or in a written
certificate delivered with such statements. All financial statements have been
or will be prepared in accordance with GAAP. There has been no material adverse
change in the financial condition, operations, or prospects of the Borrower,
since the date of such statements except as fully disclosed in writing with the
delivery of such statements.
4.7. No Defaults or Restrictions. There is no declared default
under any agreement or instrument nor does there exist any restriction in the
Organizational Documents of Borrower that causes or would cause a material
adverse effect on the business, properties, operations or condition, financial
or otherwise, of Borrower.
4.8. Payment of Taxes. Borrower has filed all federal, state,
and local tax returns which are required to be filed and has paid, or made
adequate provision for the payment of, all taxes which have or may become due
pursuant to said returns or to assessments received by Borrower.
4.9. Necessary Permits, Etc. Borrower possesses all franchises,
trademarks, permits, licenses, consents, agreements and governmental approvals
that are necessary or required by any authority to carry on its businesses as
now conducted. Borrower has received no notice of default or termination of
any material agreement or any notice of noncompliance with any law, rule or
regulation by which it is bound, which would cause a material adverse effect
upon the business, properties, operations or condition, financial or otherwise,
of Borrower.
4.10. Disclosure. Neither this Agreement nor any other
document, financial statement, credit information, certificate or statement
required herein to be furnished to Banks by Borrower in connection with this
Agreement contains any untrue, incorrect or misleading statement of material
fact, and all of these documents taken as a whole do not omit to state a fact
material to this Agreement, to Banks' decision to enter into this Agreement or
to the transactions contemplated hereunder. All representations and warranties
made herein or any certificate or other document delivered to Banks by or on
behalf of Borrower, pursuant to or in connection with this Agreement, shall be
deemed to have been relied upon by Banks notwithstanding any investigation
heretofore or hereafter made by Banks or on their behalf, and shall survive the
making of Advances as contemplated hereby.
4.11. Regulation U. Borrower is not engaged and will not
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" (as each of the quoted terms is defined or used in Regulation U), and no
part of the Line of Credit Loan will be used for so "purchasing" or "carrying"
"margin stock" or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation U. If requested by Banks,
Borrower will furnish to Banks a statement in conformity with the requirements
of Regulation U to the foregoing effect.
4.12. Title to Assets. Borrower has good and marketable title
to all of its assets, subject to no Lien except for Permitted Liens. The
Borrower enjoys peaceable and undisturbed possession under all leases under
which it is operating, and none of said leases contain any provisions which are
unduly burdensome or which may materially affect or impair the operations of
the Borrower, and all of such leases are in full force and effect.
4.13. Compliance with Applicable Environmental Law. Borrower
represents and warrants to Lender that Borrower and its properties are not in
violation of or subject to any existing, pending or threatened investigation or
inquiry by any governmental authority or any response costs or remedial
obligations under any Applicable Environmental Law, and this representation and
warranty would continue to be true and correct following disclosure to the
applicable governmental authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Borrower and its properties; that
Borrower has not obtained and is not required to obtain any permits, licenses
or similar authorizations to construct, occupy, operate or use any buildings,
improvements, fixtures or equipment owned or operated by Borrower by reason of
any Applicable Environmental Law; that Borrower has taken all steps necessary
to determine and has determined that no petroleum products, oil, hazardous
substances, or solid wastes have been disposed of or otherwise released on the
Borrower's properties; and that the use which Borrower has made, makes or
intend to make of its properties will not result in the location on or disposal
or other release of any petroleum products, oil, hazardous substances or solid
waste on such properties. Borrower hereby agrees to pay any fines, charges,
fees, expenses, damages, losses, liabilities, or response costs arising from or
pertaining to the application of any such Applicable Environmental Law to the
Borrower and to indemnify and forever save Banks harmless from any and all
judgments, fines, charges, fees, expenses, damages, losses, liabilities,
response costs, or attorneys' fees and expenses arising from the application of
any such Applicable Environmental Law to Borrower, its properties, or Banks.
The Borrower agrees to notify Banks in the event that any governmental agency
or other entity notifies it that it may not be in compliance with any
Applicable Environmental Law. Borrower agrees to permit Banks to have access
to its properties at all reasonable times in order to conduct, at Borrowers'
expense, any tests which Banks deem are necessary to ensure that Borrower and
its properties are in compliance with all Applicable Environmental Laws. Terms
used in this Section 4.13 which are defined in any Applicable Environmental Law
shall have the meanings given therein.
4.14. Controlled Companies. The Borrower is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
nor is subject to regulation under the Public Utility Holding Act of 1935, the
Federal Power Act, or any other law or regulation which relates to the
incurring of debt, including, but not limited to, laws and regulations
regulating common or contract carriers or the sale of electricity, gas, steam,
water or other public utility services.
4.15. Title to Collateral. Except for the security interests
granted herein or except for Permitted Liens, Borrower is, or as to Collateral
to be acquired after the date hereof will be, the sole owner, either in fee
simple or leasehold, of the Collateral free from any adverse Liens, security
interests or other encumbrances. Borrower shall defend the Collateral against
all claims and demands of all other parties who at any time claim any
interest in the Collateral.
4.16. Place of Business. Borrower's chief executive office is
located at 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx, 00000. The
locations of the chief executive offices of the Subsidiaries are set forth in
the Security Agreement. The Equipment and Inventory is and shall be located
only at the locations listed on Exhibit C to this Agreement. Borrower has
separately furnished or will furnish to Banks true and correct copies of the
lease agreements for the leased parcels which have been requested by the Banks.
4.17. Borrower's Name. Borrower has not changed its name or been
known by any other name within the last five (5) years, nor has it been the
surviving corporation in a merger effected within the last five (5) years.
4.18. Existing Debt. Borrower is not in default with respect to
any of its existing Debt or with respect to any material agreement to which
Borrower is a party.
4.19. Insolvency. Borrower is now and, after giving effect to the
transactions contemplated hereby, at all times will be, Solvent.
4.20. Subsidiaries. Borrower has no subsidiaries except for the
Subsidiaries and except as indicated on Exhibit D to this Agreement. Each of
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and is duly qualified
as a foreign corporation and is in good standing under the laws of each
jurisdiction where its ownership of property or conduct or proposed conduct of
its business requires such qualification.
4.21. Inventory. All Inventory has been produced, and during the term
hereof will be produced, in compliance with the requirements of the Federal
Fair Labor Standards Act. No Inventory is now, nor shall any Inventory at any
time or times hereafter be, stored with a bailee, warehouseman or similar party
without Banks' prior written consent and, if Banks give such consent, Borrower
will concurrently therewith cause any such bailee, warehouseman, or similar
party to issue and deliver to Banks, in form and substance acceptable to Banks,
warehouse receipts therefor in Banks' name. No Inventory is or will be
consigned to any Person without Banks' prior written consent, and, if such
consent is given, Borrower shall, prior to the delivery of any Inventory on
consignment, (i) provide Banks with all consignment agreements to be used in
connection with such consignment, all of which shall be acceptable to Banks,
(ii) prepare, execute and file appropriate financing statements with respect to
any consigned inventory, showing Banks as assignee, (iii) conduct a search of
all filings made against the consignee in all jurisdictions in which any
consigned Inventory is to be located and deliver to Banks copies of the results
of all such searches and (iv) notify, in writing, all the creditors of the
consignee which are or may be holders of Liens in the Inventory to be consigned
that Borrower expects to deliver certain Inventory to the consignee, all of
which Inventory shall be described in such notice by item or type.
4.22. ERISA. Borrower is in compliance with all applicable
material provisions of ERISA. Neither Borrower nor any of the Subsidiaries has
received any notice to the effect that it is not in full compliance with any of
the requirements of ERISA and the regulations promulgated thereunder. No fact
or situation that could result in a material adverse change in the financial
condition of Borrower, including, but not limited to, any Reportable Event or
Prohibited Transaction, exists in connection with any Plan. Neither Borrower
nor any of the Subsidiaries has any withdrawal liability in connection with a
Multiemployer Plan.
ARTICLE 5. AFFIRMATIVE COVENANTS
Borrower agrees and covenants that until the Line of Credit Loan has
been paid in full, the Commitment Period has expired, and all Letters of Credit
have expired and the Reimbursement Obligations have been paid, Borrower shall
comply with each of the following affirmative covenants:
5.1. Payment of Line of Credit Loan and Maintenance of Loan Values.
Borrower will duly and punctually pay the principal and interest of the Line of
Credit Loan in accordance with the terms of this Agreement and the Notes.
Borrower will maintain the Loan Value of Accounts at an amount that at all
times equals or exceeds the sum of the outstanding principal balance of the
Line of Credit Loan plus the Accelerated Reimbursement Obligation.
5.2. Maintenance of Existence. Borrower will maintain its existence
and, in each jurisdiction in which the character of the properties owned by it
or in which the transaction of its business makes qualification necessary,
maintain such qualification and good standing.
5.3. Compliance with Laws; Payment of Claims. Borrower will comply
in all material respects with all applicable laws, rules, regulations and
orders such compliance to include without limitation, compliance with ERISA and
Applicable Environmental Laws; paying before the same become delinquent all
taxes, assessments and governmental charges or levies imposed upon Borrower or
upon its income or profits or upon any of its properties; and paying all lawful
claims, which if unpaid, might become a Lien upon any of its properties, except
to the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the nonperformance or
nonpayment thereof and with respect to which adequate reserves have been set
aside for payment thereof.
5.4. Accrual and Payment of Taxes. Borrower will accrue all current
tax liabilities of all kinds, all required withholdings of income taxes of
employees, all required old age and unemployment contributions, and pay the
same when they become due, unless appropriate extensions are obtained.
5.5. Other Indebtedness. Borrower will duly and punctually pay or
cause to be paid all principal and interest of any Debt to other creditors,
comply with and perform all conditions, terms and obligations of the notes or
other instruments evidencing such indebtedness and the mortgages, deeds of
trust, security agreements and other instruments evidencing security for such
indebtedness.
5.6. Examination and Visitation By Banks. Subject only to federal
security requirements, at any reasonable time and from time to time during
normal business hours, Borrower will permit Banks or their representatives to
examine and make copies and abstracts from the records and books of account of,
and visit the properties of, Borrower, and to discuss the affairs, finances and
accounts of Borrower with any of its officers, directors or employees.
5.7. Accounting Records. Borrower will keep adequate records and
books of account, with complete entries made in accordance with GAAP,
reflecting all of its financial transactions.
5.8. Maintenance of Permits, Etc. Borrower will obtain, maintain and
preserve all permits, licenses, authorizations, approvals, certificates and
accreditation which are necessary for the proper conduct of its businesses.
5.9. Conduct Business. Borrower will conduct its business as now
conducted and do all things necessary to preserve, renew and keep in full force
and effect its rights and franchises necessary to continue such businesses.
5.10. Correction of Defect, Etc. On request of Banks, Borrower will
promptly correct any scrivener's error which may be discovered in the contents
of the Loan Documents, or in the execution thereof, and execute and deliver
such further instruments and do such further acts as may be necessary or as may
be requested by Lender to carry out more effectively the purposes of this
Agreement or the Loan Documents.
5.11. Quarterly Reporting Requirements. Borrower will furnish to Banks
as soon as available and in any event within forty-five (45) days after the end
of each fiscal quarter of Borrower, the balance sheet of Borrower as at the end
of such quarter and statements of income and retained earnings of Borrower,
certified by the treasurer or chief financial officer of the Borrower as true
and correct, and otherwise in form and substance satisfactory to Banks, and
consistent with those quarterly statements previously provided to Banks. Such
statements shall be accompanied by a certificate of Borrower's chief financial
officer certifying that (i) to the best of his knowledge no Potential Default
exists and (ii) no Event of Default exists under the Loan Documents, or if such
is not the case, the actions which the Borrower proposes to take with respect
thereto.
5.12. Annual Audited Reporting Requirements. For the fiscal year
ending August 31, 1995, and for each fiscal year thereafter, Borrower shall
provide Banks, as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Borrower, the balance sheets, statements
of income and retained earnings, and a statement of cash flow of Borrower for
such year, all of which such financial statements shall be audited and
certified by a nationally or regionally recognized independent certified public
accounting firm as (i) fairly presenting the financial condition of Borrower as
at the end of such fiscal year and the results of the operations of Borrower
for such period and (ii) having been prepared in accordance with GAAP on a
consolidated basis. Such statements shall be accompanied by a certificate of
Borrower's chief financial officer certifying that (i) to the best of his
knowledge no Potential Default exists and (ii) no Event of Default exists under
the Loan Documents, or, if such is not the case, the actions which the Borrower
proposes to take with respect thereto. Banks reserve the right to require such
additional information of the Borrower at such times as it deems necessary in
its sole discretion.
5.13. Employee Plan Reports and Notices. Borrower will, upon request,
promptly furnish to Banks after the filing or receipt thereof, copies of all
reports and notices, if any, which Borrower files under the Code or ERISA with
the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor, or which Borrower receives from any such agency, with
respect to any Plan, if any of the information therein could form the basis of,
or any dispute referred to therein which, if determined adversely to Borrower,
could constitute or give rise to an Event of Default or Potential Default.
5.14. SEC Reports. Borrower shall furnish to Lender, at the same time
it supplies the same to the Securities and Exchange Commission, copies of all
quarterly and annual reports and other reports required to be submitted under
applicable securities laws and regulations.
5.15. Insurance. Maintain insurance with insurance companies
satisfactory to Banks on such of its properties, in such amounts and against
such risks as is customarily maintained in similar businesses operating in the
same vicinities, and file with Banks, upon request, from time to time, a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, dates of
expiration thereof, and the properties and risks covered thereby, and within
ten (10) days after notice in writing from Banks, shall obtain additional
insurance customarily carried by businesses similar to Borrower as Banks may
reasonably request. Such insurance shall name Banks as additional insureds and
provide that any losses payable thereunder shall (pursuant to a lender's loss
payable endorsement) be payable to the Banks, as their interest may appear, and
shall provide that insurance provided thereby, as to the interest of the Banks,
shall not be invalidated by any act or neglect of the Borrower, nor by the
commencing of any proceedings by or against the Borrower in bankruptcy,
insolvency, receivership or any other proceedings for the relief of a debtor,
nor by any foreclosure, repossession or other proceedings relating to the
property insured, nor by any occupation of such property or the use of such
property for purposes more hazardous than permitted in the policy. With
respect to all insurance on the Collateral, Borrower hereby assigns to the
Banks all right to receive proceeds, directs any insurer to pay all proceeds
directly to the Banks, and authorizes the Lender to endorse any check or draft
for such proceeds and apply the same toward satisfaction of the Obligations.
The Borrower shall furnish to the Banks insurance certificates, in form and
substance satisfactory to the Banks, evidencing compliance by it with the terms
of this Section and, upon the request of the Banks at any time, the Borrower
shall furnish the Banks with certified photostatic copies of the policies
required by the terms of this Section. The Borrower will cause each insurer
under each of the policies to agree (either by endorsement upon such policy or
by letter addressed to the Banks) to give the Banks at least 30 days' prior
written notice of the cancellation of such policies in whole or in part or the
lapse of any coverage thereunder. Borrower agrees that it will not take any
action or fail to take any action which action or inaction would result in the
invalidation of any insurance policy required hereunder. At least 10 days
prior to the date the premiums on each such policy or policies shall become due
and payable, the Borrower shall furnish to the Banks evidence of the payment of
such premises. Borrower shall furnish to the Banks evidence of insurance as
Banks may require.
5.16. Accounts Aging Reports. Within forty-five (45) days after the
end of each quarter, Borrower will provide Banks with an Accounts aging report,
in form acceptable to Banks.
5.17. Maintenance of Bank Accounts. Borrower will maintain its
primary bank accounts with SouthTrust or one of its Affiliates.
5.18. Financial Covenants. Borrower will maintain on a consolidated
basis:
(a) a Tangible Net Worth of not less than $55,000,000;
(b) a ratio of total Debt to Tangible Net Worth of not more
than 1.8 to 1.0;
(c) a Fixed Charge Coverage of at least 1.75 to 1.0;
(d) working capital of not less than $35,000,000; and
(e) as of the last day of each fiscal quarter for the
preceding twelve (12) month period an Interest Coverage Ratio of at least 2.0
to 1.0.
5.19. Maintenance of Properties. The Borrower will keep the
Equipment, Inventory, and its other properties in good repair, working order
and condition, reasonable wear and tear excepted, and from time to time make
all needed and proper repairs, renewals, replacements, additions, and
improvements thereto as is necessary for items that have become obsolete or
worn in the ordinary course of business, and comply with the provisions of all
leases to which Borrower is a party or under which it occupies property so as
to prevent any loss or forfeiture thereof or thereunder.
5.20. Notice to Banks. Immediately notify the Banks of any event
causing a material loss or depreciation in value of the Collateral and the
amount of such loss or depreciation, any event which may have a materially
adverse effect on the Borrower's operations or financial condition, or if
Borrower becomes aware of the occurrence of any Event of Default or Potential
Default.
5.21. Collection of Accounts. Diligently pursue collection of all
Accounts and other amounts due Borrower by others, including Affiliates of
Borrower.
5.22. Landlord and Storage Agreements. Upon Banks' request, provide
Banks with copies of all agreements between Borrower and any landlord or
warehouseman which owns any premises at which any Collateral may, from time to
time, be kept.
5.23. Litigation. Immediately notify Banks of any material lawsuit
involving Borrower.
5.24. ERISA Compliance. (a) At all times make prompt payment of
contributions required to meet the minimum funding standards set forth in ERISA
with respect to each Plan; (b) at the request of any of the Banks, furnish to
Banks copies of an annual report required to be filed pursuant to ERISA in
connection with each Plan and any other employee benefit plan of it and its
Affiliates subject to said Section; (c) notify Banks as soon as practicable of
any Reportable Event and of any additional act or condition arising in
connection with any Plan which Borrower believes might constitute grounds for
the termination thereof by the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States district court of a trustee to
administer the Plan; and (d) furnish to Banks, promptly upon Banks' request
therefor, such additional information concerning any Plan or any other such
employee benefit plan as may be reasonably requested.
5.25. Auditors Letters. Furnish the Banks with a copy of each letter
written to the Borrower by its independent certified public accountant
concerning internal controls and management review immediately upon receipt of
same.
5.26. Compliance with Act. Promptly upon Banks' written request,
Borrower will execute any and all documentation required by Banks so as to
comply with the Act with respect to all or any of the Accounts subject to the
Act.
ARTICLE 6. NEGATIVE COVENANTS
Borrower agrees and covenants that until the Line of Credit Loan has
been paid in full the Commitment Period has expired, and all Letters of Credit
have expired and all Reimbursement Obligations have been paid, Borrower shall
abide by and observe the following negative covenants:
6.1. Indebtedness. Except as permitted or contemplated by this
Agreement, Borrower will not create, incur, assume or suffer to exist any Debt
or obligation for money borrowed, or guarantee, or endorse, or otherwise be or
become contingently liable in connection with the obligations of any person,
firm, or corporation (including, without limitation, any affiliates)
aggregating in excess of $500,000, except:
(a) Indebtedness for taxes not at the time due and payable or
which are being actively contested in good faith by appropriate proceedings and
against which reserves deemed adequate by Banks have been established by
Borrower, but only if the nonpayment of such taxes does not result in a lien
upon any property of Borrower;
(b) Contingent liabilities arising out of the endorsement of
negotiable instruments in the ordinary course of collection or similar
transactions in the ordinary course of business;
(c) Debt, other than for borrowed money, incurred in the
ordinary course of business, including that evidenced by trade promissory notes
with a maturity of less than one year;
(d) Debt for money borrowed from the Banks pursuant to this
Agreement;
(e) Debt incurred prior to the date of this Agreement and
reflected on the financial statements referred to in Section 4.6 hereof,
including, without limitation, money borrowed from SouthTrust under a term note
dated February 9, 1994;
(f) Debt incurred in connection with the Existing Letter of
Credit and the obligations of Borrower in connection therewith; and
(g) Debt to Persons who are not Affiliates for purchase money
borrowing incurred in connection with the purchase of capital assets used in
the business of Borrower not to exceed $1,000,000 during any fiscal year.
6.2. No Liens; Exceptions. Borrower will not create, incur,
assume or suffer to exist any lien upon or with respect to any of its
properties, rights, income or other assets, whether now owned or hereafter
acquired, other than:
(a) Liens at any time existing in favor of the Banks pursuant
to this Agreement;
(b) Permitted Liens;
(c) Inchoate Liens arising by operation of law to secure claims
for the purchase of labor, services, materials, equipment or supplies to the
extent that payment thereof shall not at the time be delinquent;
(d) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for money borrowed or
for credit received in respect of property acquired) entered into in the
ordinary course of business as presently conducted or to secure obligations for
surety or appeal bonds, excluding, however, in any such case any lien arising
in favor of the Pension Benefit Guaranty Corporation; or
(e) Liens for taxes, assessments or governmental charges or
levies provided payment thereof shall not be delinquent.
6.3. Merger, Etc. Borrower will not enter into any merger or
similar transaction unless the Borrower is the surviving corporation, and
Borrower will not form any Subsidiary, whether wholly or partially owned, or
enter into any joint venture without giving the Banks prior written notice
thereof.
6.4. Sale or Disposition of Substantially All Assets. Borrower will
not sell, assign, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether
now or hereafter acquired), without the prior written consent of Banks, which
may be granted or refused by Banks in Banks' sole discretion.
6.5. Other Disposition of Assets. Borrower will not sell,
lease, transfer or otherwise dispose of assets, unless any such disposition
shall be in the ordinary course of business for a full and fair consideration,
which in no event shall include a transfer for full or partial satisfaction of
a pre-existing debt.
6.6. ERISA Funding and Termination. Borrower will not permit
(a) the funding requirements of ERISA with respect to any Plan ever to be less
than the minimum required by ERISA or (b) any Plan ever to be subject to
involuntary termination proceedings.
6.7. Transactions with Affiliates. Borrower will not, without
the prior written consent of Banks, enter into any transaction with any Person
affiliated with Borrower other than in the ordinary course of Borrower's
business and on fair and reasonable terms no less favorable to Borrower than
those that Borrower would obtain in a comparable arms-length transaction with a
Person not an affiliate; provided, Borrower may make advances or loans to the
Subsidiaries and have outstanding at any time such advances or loans
aggregating up to $1,000,000 in principal amount to any one Subsidiary.
6.8. Change in Business. Make any material change in the nature
of the business of the Borrower as carried on at the date hereof.
6.9. Change Principal Places of Business. Change the principal
places of business or chief executive office without thirty (30) days' prior
written notice to Banks.
6.10. Changes in Accounting. Change the methods of accounting of the
Borrower, unless such change is permitted by GAAP and provided such change does
not have the effect of curing or preventing what would otherwise be an Event of
Default or Potential Default had such change not taken place.
6.11. Sale and Lease-Back. Enter into any arrangement whereby the
Borrower shall sell or transfer all or any substantial part of its property
then owned by it and shall thereupon within one year thereafter rent or lease
the property so sold or transferred.
6.12. Distributions to Shareholders. At any time after and during the
continuance of a Potential Default or an Event of Default, pay any cash
dividends or otherwise make any cash distributions to any of its shareholders.
6.13. Amendments. Amend any instrument evidencing a Lien, charge or
encumbrance, except in the ordinary course of business.
6.14. Loans to Employees and Other Persons. Make any loans or other
advances to any employee or any other Person, except in the ordinary course of
Borrower's business in accordance with its historical practices and except as
permitted by Section 6.7 of this Agreement.
ARTICLE 7. EVENTS OF DEFAULT AND REMEDIES
7.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default hereunder:
(a) Nonpayment of principal or interest on the Line of Credit
Loan, nonpayment of any sum due under the Reimbursement Obligation, or nonpay-
ment of any other sum payable under this Agreement or any of the other Loan
Documents, when and as the same shall become due and payable, whether on demand,
at their stated maturities, by acceleration or otherwise which nonpayment shall
continue for five (5) days after written notice thereof shall have been
given to Borrower by Lender (a "Monetary Default").
(b) Any representation or warranty made by or on behalf of
Borrower, under or in connection with this Agreement shall be materially false
as of the date on which made.
(c) Borrower shall fail to perform or observe any term,
covenant or agreement (other than a Monetary Default) contained in any Loan
Document to be performed or observed by Borrower or any of the Subsidiaries
shall fail to perform or observe any terms, covenants, or agreement contained
in the Security Agreement to be performed or observed by the Subsidiaries, and
such failure shall remain unremedied for thirty (30) days after written notice
thereof shall have been given to Borrower by Lender (a "Non-Monetary Default").
(d) Borrower shall be generally not paying its debts as they
become due or shall make a general assignment for the benefit of creditors; or
any petition shall be filed by or against the Borrower under the federal
bankruptcy laws, or any other proceeding shall be instituted by or against
Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the appoint-
ment of a receiver, trustee, custodian or other similar official for Borrower or
any substantial part of its property (provided, that as to any involuntary
proceeding, such shall not constitute an Event of Default unless the same is
not dismissed or vacated within sixty (60) days of the date of such filing); or
the Borrower shall take any action to authorize or effect any of the
transactions set forth above in this Section 7.1(d).
(e) Failure of the Borrower to pay when due any Debt owing to
another creditor or the default by the Borrower, in the performance of any
term, provision or condition contained in the agreement under which any such
indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such indebtedness, upon the giving of notice or
lapse of time, or both, to cause such indebtedness to become due prior to its
stated maturity.
(f) Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all or any
substantial portion of the property of Borrower.
(g) Borrower shall fail within thirty (30) days to pay, bond,
or otherwise discharge any judgment or order for the payment of money which is
not stayed on appeal or while otherwise being appropriately contested in good
faith, or for which the Borrower is not fully insured.
(h) If a Reportable Event shall occur which Banks, in their sole
discretion, shall determine in good faith constitutes grounds for the
termination by the Pension Benefit Guaranty Corporation of any Plan or for the
appointment by the appropriate United States district court of a trustee shall
be requested or appointed, or if Borrower is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from Borrower's complete or partial withdrawal from such Plan.
(i) An event of default (as defined or used therein) under any
reimbursement agreement relating to the Letters of Credit, under any
reimbursement agreement relating to the Existing Letter of Credit, or under any
other indebtedness now or hereafter owing by Borrower to one or more of the
Banks, including, without limitation, the indebtedness owed by Borrower to
SouthTrust under that term note dated February 9, 1994.
(j) A material adverse change in the financial condition of the
Borrower.
Notwithstanding anything in this section, all requirements of notice shall be
deemed eliminated if Lender is prevented from giving such notice by bankruptcy
or other applicable law. In such event, the cure period, if any, shall then
run from the occurrence of the event or condition of default rather than from
the date of notice.
7.2. Remedies. If any Event of Default occurs, Banks may, at their
option:
(a) By written notice to Borrower, terminate the Commitment
Period, and thereby terminate (i) their obligation to make further Advances
hereunder (except pursuant to then outstanding Future Letters of Credit)
and (ii) SouthTrust's obligation to issue Future Letters of Credit.
(b) Declare the entire Obligations (expressly including the
Accelerated Reimbursement Obligation), together with the interest accrued
thereon, to be, and the same shall thereupon become, immediately due and
payable, without presentment, protest or further demand or notice of any kind,
all of which are hereby expressly waived.
(c) Proceed to protect and enforce its rights by action at law
(including, without limitation, bringing suit to reduce any claim to judgment),
suit in equity and other appropriate proceedings including, without limitation,
for specific performance of any covenant or condition contained in this
Agreement or the other Loan Documents.
(d) Exercise any and all rights and remedies afforded by the
laws of the United States, the State of Alabama or any other appropriate
jurisdiction as may be available for the collection of debts and enforcement
of covenants and conditions such as those contained in this Agreement and in
the other Loan Documents.
(e) Exercise the rights and remedies of setoff and/or banker's
lien against the interest of Borrower in and to every account and other property
of Borrower which is in the possession of Banks or any Person which then owns a
participating interest in the Line of Credit Loan, to the extent of the full
amount of the Line of Credit Loan.
ARTICLE 8. DISBURSEMENT OF ADVANCES.
8.1. Procedure for Advances Under Line of Credit Loan. Borrower may
request Advances of the Line of Credit Loan on any Business Day during the
Commitment Period, provided that the Borrower shall have given to Lender
irrevocable written notice in the form attached as Exhibit E hereto, signed by
a duly authorized officer of the Borrower (which such notice may be sent via
teletransmission) on or before 9:00 a.m., Birmingham, Alabama time, two (2)
Business Days preceding the requested borrowing date (or irrevocable oral
notice on or before 9:00 a.m., Birmingham, Alabama time two (2) Business Days
preceding the requested borrowing date confirmed in writing in the form
attached as Exhibit E hereto signed by a duly authorized officer of the
Borrower (which writing may be sent via teletransmission)) no later than 5:00
p.m., Birmingham, Alabama time, on the same Business Day) specifying (i) the
aggregate amount to be borrowed under the Line of Credit Loan, and (ii) the
requested borrowing date. Lender shall, upon receipt of Borrower's requisition
for an Advance, notify Banks of such requisition in the manner specified in the
Intercreditor Agreement. Each Bank shall provide the Lender with funds, on or
before 1:00 p.m., Birmingham, Alabama time, on each borrowing date in an amount
equal to such Bank's Proportionate Share of the requested borrowing by wire
transferring same day or immediately available funds to such account as the
Lender shall specify from time to time by notice to the Banks. Subject to the
provisions of this Agreement on the date requested in Borrower's notice, the
Lender shall make the proceeds of the Advance available to the Borrower in
immediately available funds by depositing the same into Borrower's checking
account maintained with SouthTrust or otherwise disbursed in a manner
acceptable to Banks and Borrower; provided, however, that the Lender shall be
obligated to make the proceeds of such Advance available only to the extent
that the Lender shall have received the Proportionate Shares thereof from the
Banks. No Bank's obligation to fund its Proportionate Share of an Advance
shall be affected by any other Bank's failure to fund its Proportionate Share
of an Advance, nor shall any Bank's Proportionate Share be increased as a
result of any such failure of any other Bank.
8.2. Banks' Obligations Several. The obligations of the Banks
hereunder are several and not joint. None of the Banks shall be liable to the
Borrower due to the failure of any Bank to fund its Proportionate Share.
8.3. Place, Manner, Time and Extension of Payment. All sums
payable hereunder and under the Notes shall be paid to Lender at Lender's
principal office in Birmingham, Alabama, not later than noon Birmingham,
Alabama time on the date due in immediately available funds. If any payment
falls due on a day during which banks are not open for ordinary banking
business in Birmingham, Alabama, and Philadelphia, Pennsylvania, then such due
date shall be extended to the next succeeding day during which banks in
Birmingham, Alabama and Philadelphia, Pennsylvania are so open for ordinary
banking business, but during any such extension all unpaid principal of the
Line of Credit Loan and other sums bearing interest shall continue to bear
interest at the rates herein provided. The Lender shall send Borrower
statements of all amounts due hereunder, which statements shall be considered
correct and conclusively binding on the Borrower absent manifest error unless
the Borrower notifies the Lender to the contrary within ten (10) days of its
receipt of any statement which it deems to be incorrect. The Banks may, in
their sole discretion, charge against any deposit account of the Borrower
maintained at any of the Banks, all or any part of any amount due under this
Agreement, the Notes, or the other Loan Documents. Any payment made by
Borrower to Lender pursuant to this Section 8.3 shall, to the extent such
payment is required to be transmitted by Lender to the other Banks pursuant to
the Intercreditor Agreement, discharge that portion of Borrower's obligation
under the Notes.
8.4 Discontinuance of Advances. Notwithstanding any other provision
of this Article 8 and in addition to any other remedy available to the Banks,
if the Banks request the Borrower to comply with the Act, as provided for in
Section 5.26 of this Agreement and Borrower fails to do so within 15 days of
such request, the Banks may, in their sole discretion, refuse to make any
future Advances to Borrower (and SouthTrust may refuse to issue any Future
Letters of Credit) until Borrower complies with such request.
ARTICLE 9. GENERAL PROVISIONS
9.1. Notices. All notices and other communications provided for
hereunder shall be in writing and, if mailed by certified mail, return receipt
requested, shall be deemed to have been received on the earlier of the date
shown on the receipt or three (3) days after the postmarked date thereof, or,
if sent by overnight courier, shall be deemed to have been received on the next
business day following dispatch, or, if delivered by hand, shall be deemed
effective when delivered. In addition, notices may be sent by facsimile
provided that a copy of such notice is simultaneously given by mail or hand
delivery as hereinabove provided and any such notice shall be deemed received
in accordance with the foregoing provisions. Notice of change of address shall
also be governed by this Section. Notices shall be addressed as follows:
To Borrower:
Xxxxxxx Research Corporation
0000 Xxxxx Xxxxxxxx Xxxxxxx (35802)
Xxxx Xxxxxx Xxx 000000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
To SouthTrust:
SouthTrust Bank of Alabama,
National Association
SouthTrust Xxxxx--00xx Xxxxx
000 Xxxxx 00xx Xxxxxx (35203)
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Regional Corporate Banking
Facsimile: (000) 000-0000
To First Alabama:
First Alabama Bank
000 Xxxx Xxxx Xxxxxx (35801)
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx, Vice President
Facsimile: (000) 000-0000
To CoreStates:
CoreStates Bank, N.A.
FCI-8-3-16
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Vice President
Facsimile: (000) 000-0000
9.2. No Control By Banks. None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give
Lender or Banks the rights or power to exercise control over the affairs and/or
management of Borrower, the power of Lender or Banks being limited to the right
to exercise the remedies provided for herein.
9.3. No Waiver By Banks, Etc. The acceptance by Lender or Banks
at any time and from time to time of part payment on the Line of Credit Loan
shall not be deemed to be a waiver of any Event of Default then existing. No
waiver by Lender or Banks of any particular Event of Default shall be deemed to
be a waiver of any Event of Default other than said particular Event of
Default. No delay or omission by Lender or Banks in exercising any right or
remedy under the Loan Documents or otherwise shall impair such right or remedy
or be construed as a waiver thereof or an acquiescence therein, nor shall any
single or partial exercise of any such right or remedy preclude other or
further exercise thereof, or the exercise of any other right or remedy under
the Loan Documents or otherwise. The rights and remedies of Lender or Banks in
this Agreement are cumulative and are in addition to, and are not exclusive of,
any rights or remedies provided by law. The rights of Lender or Banks under
this Agreement against Borrower are not conditional or contingent on any
attempt by Lender or Banks to exercise any of their rights under the Loan
Documents, or against Borrower or any other Person.
9.4. Banks' Expenses; Indemnification. Whether or not any
Advances are advanced hereunder or the transactions contemplated hereby are
consummated, Borrower will pay on demand all reasonable fees, costs and
expenses in connection with the preparation, execution, and delivery of the
Loan Documents and the other documents to be delivered under this Agreement,
including, without limitation, the fees, out-of-pocket expenses and other
disbursements of Banks and their counsel. Borrower shall pay on demand all
reasonable costs and expenses (including, without limitation, attorneys' fees,
accountants' fees and expenses), if any, of Banks in connection with the
enforcement, collection, restructuring, refinancing and "work-out" (including
with respect to any waiver or amendment) of this Agreement and the Loan
Documents.
Borrower will save Banks harmless from and against any and all claims,
damages, actions, costs, expenses and liabilities asserted by Borrower or any
other Person (i) with respect to or resulting from any breach by Borrower of
any of the covenants under the Loan Documents or any misrepresentation or
breach of warranty by Borrower under the Loan Documents, or in connection with
the performance by Lender of the provisions of the Loan Documents to be
performed by Borrower, (ii) in connection with the execution, delivery and
performance of the Loan Documents by Borrower and/or the Subsidiaries, (iii) as
a result of the conduct of the Borrower and/or the Subsidiaries; and (iv) in
connection with any violation or alleged violation by Borrower, the
Subsidiaries, or their predecessors in interest of any Applicable Environmental
Law, except for the gross negligence or wilful misconduct of the Bank(s)
seeking indemnity hereunder.
All sums payable to Banks by Borrower under the provisions of this
Section 9.4 shall bear interest at the Default Rate, which interest shall be
payable by Borrower to Banks on demand.
9.5. GAAP. All accounting and financial terms used herein, and
compliance with each covenant contained herein, which relates to financial
matters, shall be determined in accordance with GAAP, except to the extent that
a deviation therefrom is expressly stated herein.
9.6. Number and Gender. Whenever herein the singular number is
used, the same shall include the plural where appropriate, and words of any
gender shall include each other gender where appropriate.
9.7. Headings. The headings, captions and arrangements used in
this Agreement are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify or modify the terms of this Agreement, nor
affect the meaning thereof.
9.8. Survival of Covenants, Etc. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the Loan Documents. All statements contained in
any certificate or other instrument delivered by or on behalf of Borrower shall
be deemed to constitute representations and warranties made by Borrower.
9.9. Successors and Assigns; Participation. All covenants and
agreements contained in this Agreement shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto, except that
Borrower may not assign any rights hereunder without the prior written consent
of Banks. Banks (and each of them) may assign to one or more Persons all or
any part of, or may grant participations to one or more Persons, in all or any
part of the Line of Credit Loan, and to the extent of any assignment or
participation the assignee or participant of such assignment or participation
shall have the rights and benefits hereunder as if it were a Bank hereunder,
except that Borrower shall be entitled to deal exclusively with Banks and rely
upon documents, consents and writings signed solely by Banks, without the
necessity of any such participant joining in. Borrower authorizes Banks (and
each of them) to disclose to any purchaser or participant, or any prospective
purchaser or participant of an interest in the Loans, any financial or other
information pertaining to Borrower.
9.10. Severability of Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under present or
future laws during the term hereof, such provision shall be fully severable,
and this Agreement, as the case may be, shall be construed and enforced as if
such illegal, invalid or unenforceable provisions had never comprised a part
hereof, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance therefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision there shall be added
automatically as a part of this Agreement, a provision as similar in terms to
the illegal, invalid or unenforceable provision as may be possible which is
legal, valid and enforceable.
9.11. Entire Agreement, Amendments, Counterparts. This
Agreement and the Loan Documents embody the entire agreement and understanding
between Borrower and Banks relating to the subject matter hereof. The
provisions of this Agreement may not be amended, modified or waived except by
written agreement of Borrower and Banks. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument.
9.12. Governing Law; Jurisdiction. THE LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ALABAMA. LENDER'S PRINCIPAL PLACE OF BUSINESS IS LOCATED IN JEFFERSON COUNTY,
ALABAMA, AND BORROWER AGREES THAT THE LOAN DOCUMENTS SHALL BE DELIVERED TO,
HELD BY AND FUNDED BY LENDER AT SUCH PRINCIPAL PLACE OF BUSINESS, AND THE
HOLDING OF THE LOAN DOCUMENTS THEREAT SHALL CONSTITUTE SUFFICIENT MINIMUM
CONTACTS OF BORROWER WITH JEFFERSON COUNTY, ALABAMA FOR PURPOSES OF CONFERRING
JURISDICTION UPON THE STATE AND FEDERAL COURTS PRESIDING IN SUCH COUNTY AND
STATE. BORROWER AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING HEREUNDER
MAY BE BROUGHT IN THE CIRCUIT COURT OF THE STATE OF ALABAMA, IN JEFFERSON
COUNTY, ALABAMA, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ALABAMA, AND CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF
ANY SUCH COURTS IN ANY ACTION OR PROCEEDING.
9.13. Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM,
COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING OUT OF OR
IN ANY WAY PERTAINING OR RELATING TO THIS CREDIT AGREEMENT OR THE LOAN
DOCUMENTS, OR (II) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR
INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS CREDIT
AGREEMENT OR THE LOAN DOCUMENTS OR IN CONNECTION WITH THE TRANSACTIONS RELATED
THERETO OR CONTEMPLATED THEREBY OR THE EXERCISE OF ANY PARTIES' RIGHTS AND
REMEDIES THEREUNDER, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
BORROWER AGREES THAT BANKS MAY FILE A COPY OF THIS WAIVER WITH ANY COURT AS
WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF BORROWER
IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN
BORROWER AND BANKS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, Borrower and Banks have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
XXXXXXX RESEARCH CORPORATION,
a Delaware corporation
/s/ Xxxxx X. Xxxxxxx
---------------------------------
Chief Financial Officer
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION, a national
banking association
/s/ Xxxxxx X. Xxxxx
---------------------------------
Vice President
FIRST ALABAMA BANK, an Alabama
state banking corporation
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Vice President
CORESTATES BANK, N.A., a national
banking association
/s/ Xxxxx X. Xxxxxxxx
---------------------------------
Vice President
