CREDIT AGREEMEENT
THIS CREDIT AGREEMENT is made and entered into as of this 10th day of November,
1997, by and between Flanders Corporation, a North Carolina corporation
("Borrower") the Lenders (as defined below), and SunTrust Bank, Tampa Bay, as a
Lender and Administrative Lender.
BACKGROUND
Borrower has applied to Lenders for a revolving line of credit availability in
the maximum principal amount of $30,000,000. Lenders are willing to establish on
their books such line of credit availability for Borrower upon the terms and
conditions described in this Agreement.
TERMS
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
covenants, and conditions herein, Borrower, Lenders and Administrative Lender
agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. Except as otherwise expressly provided in this Agreement, the
following capitalized terms shall have the respective meanings ascribed to them
for all purposes of this Agreement:
"Advance" means an advance made by a Lender to the Borrower pursuant to Section
2.01 hereof.
"Administrative Lender" means SunTrust Bank, Tampa Bay.
"Affiliate" means a Person that directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
another Person.
"Agreement" means this Credit Agreement, as the same may be amended,
supplemented, restated, replaced, or otherwise modified from time to time in
accordance with the provisions hereof.
"Applicable Margin" means with respect to LIBOR Advances, the following per
annum percentages applicable in the following situations:
Applicability Applicable Margin
(i) If the Ratio is less than 1.00 1.00%
(ii) If the Ratio is greater than 1.50%
or equal to 1.00 but is less than
or equal to 2.00
(iii) If the Ratio is greater than 1.95%
or equal to 2.00
The Applicable Margin payable by the Borrower shall be subject to reduction or
increase, as applicable and as set forth in the table above, on a quarterly
basis according to the performance of the Borrower as tested by the Ratio.
"Available Commitment" means $30,000,000, and as the same may be reduced from
time to time or terminated pursuant to the terms hereof.
"Base Advance" means an Advance bearing interest at the Base Rate.
"Base Rate" means a per annum interest rate equal to the lesser of (a) the
highest lawful rate, and (b) the Prime Rate.
"Borrower" has the meaning specified in the first sentence hereof.
"Business Day" means a day that is not a Saturday, a Sunday, or a day on which
Administrative Lender is closed pursuant to authorization or requirement of law.
"Capital Stock" means, as to any Person, the equity interests in such Person,
including, without limitation, the shares of each class of capital stock of any
Person that is a corporation and each class of partnership interests (including
without limitation, general, limited and preference units) in any Person that is
a partnership.
"Consequential Loss" with respect to (a) the Borrower's payment of all or any
portion of the then-outstanding principal amount of a LIBOR Advance on a day
other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) subject to Administrative Lenders' prior consent, a LIBOR Advance made
on a date other than the date on which the Advance is to be made according to
Section 2.02(a) or Section 2.07 hereof to the extent such Advance is made on
such other date at the request of the Borrower, or (c) any of the circumstances
specified in Section 2.04 hereof on which a Consequential Loss may be incurred,
means any loss, cost or expense incurred by any Lender as a result of the timing
of the payment or Advance or in liquidating, redepositing, redeploying or
reinvesting the principal amount so paid or affected by the timing
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of the Advance or the circumstances described in Section 2.04 hereof, which
amount shall be the same of (i) the interest that, but for the payment or timing
of Advance, such Lender would have earned in respect of that principal amount,
reduced, if such Lender is able to redeposit, redeploy, or reinvest the
principal amount, by the interest earned by such Lender as a result of
redepositing, redeploying or reinvesting the principal amount plus (ii) any
expense or penalty incurred by such Lender by reason of liquidating,
redepositing, redeploying or reinvesting the principal amount. Each
determination by each Lender of any Consequential Loss is, in the absence of
manifest error, presumptive evidence of the validity of such claim.
"Consistent Basis" means, in reference to the application of Generally Accepted
Accounting Principles that the accounting principles observed in the current
period are comparable in all material respects to those applied in the preceding
period.
"Continue," "Continuation" and "Continued" each refer to the continuation of a
LIBOR Advance from one Interest Period to the next Interest Period.
"Current Ratio" means the ratio of current assets to current liabilities of
Borrower and its Subsidiaries on a consolidated basis.
"EBITDA" means, for the Borrower and its Subsidiaries on a consolidated basis,
for any period of determination, the sum of (a) net income for such period, plus
(b) amortization and depreciation for such period, plus (c) non-cash charges
(minus extraordinary non-cash income) and other extraordinary items for such
period, plus (d) interest expense for such period, plus (f) income tax expense
for such period.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the same
may be supplemented or amended from time to time.
"Event of Default" means any of the events specified in Section 8 hereof.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight federal nds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of Dallas, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such date on such transactions
received by Administrative Lender from three federal funds brokers of recognized
standing selected by it.
"Fixed Charge Coverage Ratio" means the ratio of EBITDA to Fixed Charges.
"Fixed Charges" means for the Borrower and its Subsidiaries on a consolidated
basis the sum of (a) required or scheduled principal and interest payments, plus
(b) cash paid for taxes for such period.
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"Generally Accepted Accounting Principles" means those principles of accounting
set forth in opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances as of
the date of any report required herein or as of the date of an application of
such principles as required herein.
"Guarantor" and "Guarantors" means each currently owned or hereafter acquired
Subsidiary of Borrower.
"Guaranty" and "Guaranties" have the meaning specified in Subsection 3.2 hereof.
"Interest Period" means, with respect to any LIBOR Advance, the period beginning
on the date the Advance is made or Continued as a LIBOR Advance and ending one,
two, or three months thereafter (as the Borrower shall select), provided,
however, that:
(a) the Borrower may not select any Interest Period that ends after any
principal repayment date unless, after giving effect to such selection, the
aggregate principal amount of LIBOR Advances having Interest Periods that end on
or prior to such principal repayment date, shall be at least equal to the
principal amount of Advances due and payable on and prior to such date;
(b) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding, day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the'number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.
"Lenders" means SunTrust Bank, Tampa Bay and Zions First National Bank, their
successors and assigns.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Rate.
"LIBOR Rate" means a simple per annum interest rate equal to the lesser of (a)
the highest lawful rate, and (b) sum of the Applicable Margin plus the LIBOR
Rate Basis. The LIBOR Rate shall, with respect to LIBOR Advances subject to
reserve or deposit requirements under any law, be subject to premiums, assessed
therefor by each Lender, which are payable directly to each Lender in an amount
sufficient to compensate such Lender for any increased cost
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or reduced rate of return attributable to such reserve deposit requirements. Any
calculation by a Lender of such increased cost or reduced rate of return which
is in reasonable detail and submitted to Borrower shall, in the absence of
manifest error, be presumptive evidence of the validity of such claim. Once
determined for any LIBOR Advance, the LIBOR Rate shall remain unchanged during
the applicable Interest Period.
"LIBOR Rate Basis" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest I/ 1
00 of 1 %) appearing in The Wall Street Joumal as the London interbank offered
rate for deposits in U.S. dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR Rate Basis" shall mean, for any LIBOR Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1 %) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in U.S. dollars at approximately 1 1: 00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; J)rovided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic means of all such rates.
"Loan Documents" means this Agreement, the Notes, the Tax Indemnification
Agreement, the Guaranties, the Stock Pledge, and all other documents executed in
connection therewith.
"Material Adverse Effect" means (a) a material adverse effect upon the business,
operations, properties, assets, condition (financial or otherwise), or prospects
of Borrower and its Subsidiaries, taken as a whole or (b) the material
impairment of the ability of Borrower to perform, or of Administrative Lender or
Lenders to enforce, the obligations hereunder.
"Maturity Date" means November 10, 1999.
"Note" means each Note of the Borrower evidencing Advances hereunder, together-
with any extension, renewal or amendment thereof, or substitution therefor.
"Permitted Acquisition" means any acquisition by Borrower or any Subsidiary of
substantially all assets, Capital Stock or other equity interests of any Person
if: (a) as a consequence of such transaction, Borrower would not be in violation
of the provisions of Section 6.15 hereof, or any other terms or conditions of
this Agreement, (b) the total consideration for such acquisition (including
without limitation cash paid, stock issued, and debt assumed by Borrower or any
Subsidiary), when aggregated with the total consideration for all other such
acquisitions by Borrower or any of its Subsidiaries on or after the date of this
Agreement, does not exceed @-five percent (35 %) of the Tangible Net Worth of
Borrower and its Subsidiaries on a consolidated basis, and (c) if such
transaction involves a merger to which Borrower or any Subsidiary is a party,
Borrower (or the applicable Subsidiary) must be the survivor of such merger.
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"Permitted Indebtedness" means (a) indebtedness to Lenders pursuant to this
Agreement; (b) indebtedness now existing, in such amounts, and with such terms
as described in Schedule 1.l(a) attached hereto; and (c) indebtedness incurred
in connection with the purchase of equipment or vehicles and secured by purchase
money security interests therein in an aggregate amount not to exceed $500,000
outstanding at any time.
"Permitted Liens" means (a) mortgages or security interests that secure
Borrower's indebtedness to Lenders pursuant to the term of this Agreement; (b)
liens now existing and in such amounts as described in Schedule 1. l(b) attached
hereto; (c) purchase money security liens incurred in connection with purchase
money indebtedness constituting Permitted Indebtedness; (d) mechanics',
workmen's, materialmen's, or other like liens arising in the ordinary course of
business in respect of obligations which are not due or which are being
contested in good faith; (d) liens for taxes not yet due or being contested in
good faith by appropriate proceedings, and, in the case of those being
contested, as to which Borrower shall have set aside on its books adequate
reserves; and (e) easements, rights-of-way, restrictions, and other similar
encumbrances incurred in the ordinary course of business and not interfering
with the ordinary course of the business.
"Person" means any corporation, business entity, natural person, firm, joint
venture, partnership, trust, unincorporated organization, association,
government, or any department or agency of any government.
"Prime Rate" means the annual interest rate announced by SunTrust Banks, Inc.,
from time to time, as the "prime rate" (which interest rate is only a bench
xxxx, is purely discretionary, and is not necessarily the best or lowest rate
charged borrowing customers of any subsidiary bank of SunTrust Banks, Inc.
"Pro Rata" means, as to any Lender, in accordance with its Specified Percentage.
"Ratio" means the ratio of total liabilities of Borrower and its Subsidiaries
(on a consolidated basis) to Tangible Net Worth.
"Solvent" means, with respect to any Person, that as of the date of
determination, both (a)(i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
obligations) of such Person and (z) greater than the amount that will be
required to pay the probable liabilities of such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe or reasonably should believe that it will incur, debts beyond
its ability to pay such debts as they become due and (b) such Person is solvent
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers.
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"Specified Percentage" means, as to any Lender, the percentage indicated beside
its name on the signature pages hereof.
"Subsidiary" means, for any Person, any corporation, partnership, or other
entity of which fifty percent (50%) or more of the securities or other ownership
interests having ordinary voting power to elect the board or directors or having
direct power to perform functions similar to that of a board of directors is at
the time directly or indirectly owned or controlled by such Person. Unless the
context clearly indicates other-wise, the term "Subsidiary" refers to each
Subsidiary of Borrower currently owned or hereafter acquired.
"Tangible Net Worth" means the aggregate amount of assets shown on the balance
sheet of Borrower and its Subsidiaries on a consolidated basis, excluding
capitalized organization and development costs, capitalized interest, goodwill,
patents, trademarks, copy rights, franchises, licenses, amounts due or to become
due from officers, employees, directors, stockholders, and affiliates, and such
other assets classified as "intangible assets" under Generally Accepted
Accounting Principles, less all liabilities of Borrower and its Subsidiaries on
a consolidated basis.
"Tax Indemnification Agreement" means the agreement between Borrower, Lenders
and Administrative Lender of even date regarding payment of and reimbursement
for documentary stamp taxes and intangible taxes, and any similar agreements
that may be entered into between Borrower, Lenders and Administrative Lender
from time to time.
1.2 Other Definitional Provisions. The terms "material" and "materially" shall
have the meanings ascribed to such terms under Generally Accepted Accounting
Principles as such would be applied to the business of Borrower or others,
except as the context shall clearly otherwise require; (b) all of the terms
defined in this Agreement shall have such defined meanings when used in other
documents issued under, or delivered pursuant to, this Agreement unless the
context shall otherwise require; (c) words in singular shall include the plural
and words in plural shall include the singular, unless the context clearly
requires otherwise; (d) accounting terms to the extent not otherwise defined
shall have the respective meanings given them under, and shall be construed in
accordance with, Generally Accepted Accounting Principles; (e) terms defined in,
or by reference to, Article 9 of the Uniform Commercial Code as adopted in
Florida to the extent not otherwise defined herein shall have the respective
meanings given to them in Article 9 with the exception of the word "document"
unless the context clearly requires such meaning; (f) the words "hereby, "
"hereto, " "hereof, " "herein, " "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement; (g) words of any gender shall include
all other genders; and (h) whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
assigns of such parties unless the context shall expressly provide otherwise.
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SECTION 2. TERMS OF ADVANCES
2.1 The Advances. Each Lender severally agrees, on the terms and subject to the
conditions hereinafter set forth, to make Advances to the Borrower on a Business
Day during the period from the date hereof to the Maturity Date, in an aggregate
principal amount not to exceed at any time outstanding such Lender's Specified
Percentage of the Available Commitment. Subject to the terms and conditions of
this Agreement, the Borrower may borrow, repay and reborrow the Advances;
provided, however, that at no time shall the sum of all outstanding Advances
ever exceed the Available Commitment.
2.2 Making Advances.
(a) Each borrowing of Advances shall be made upon the written notice of the
Borrower, received by Administrative Lender not later than (i) 10:00 a.m. two
Business Days prior to the date of the proposed borrowing in the case of LIBOR
Advances, and (ii) 10:00 a.m. on the date of such Borrowing, in the case of Base
Advance. Each such notice of a borrowing (a "Borrowing Notice") shall be by
telecopy or telephone, promptly confirmed by letter, in substantially the form
of Exhibit A hereto specifying therein:
(i) the date of such proposed borrowing, which shall be a Business Day;
(ii) the type of Advances of which the borrowing is to be comprised;
(iii) the amount of such proposed borrowing which: (A) shall not exceed the
unused portion of the Available Commitment, and (B) shall, in the case of a
borrowing of LIBOR Advances, be in an amount of not less than $100,000 or an
integral multiple of $50,000 in excess thereof; and
(iv) if the borrowing is to be comprised of LIBOR Advances, the duration of the
initial Interest Period applicable to such Advances.
If the Borrowing Notice fails to specify the duration of the initial Interest
Period for any Borrowing comprised of LIBOR Advances, such Interest Period shall
be three months. Administrative Lender shall promptly notify Lenders of each
such notice. Each Lender shall, before 1:00 p.m. on the date of each Advance
hereunder make available to Administrative Lender, at its office at 000 0xx
Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000, such Lender's Specified Percentage
of the aggregate Advances to be made on that day in immediately available funds.
(b) Unless any applicable condition specified in Section 5 has not been
satisfied, Administrative Under will make the funds promptly available to the
Borrower by
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wiring such amounts pursuant to any wiring instructions specified by the
Borrower to the Administrative Lender in writing.
(c) After giving effect to any borrowing, the aggregate principal amount of
outstanding Advances shall not exceed the Available Commitment.
(d) No Interest Period applicable to any Advance shall extend beyond the
Maturity Date
(e) Unless a Lender shall have notified Administrative Lender prior to the date
of any Advance that it will not make available its Specified Percentage of any
Advance, Administrative Lender may assume that such Lender has made the
appropriate amount available in accordance with Section 2.2(a) hereof, and
Administrative Lender may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If and to the extent any Lender shall not
have made such amount available to Administrative Lender, such Lender and the
Borrower severally agree to repay to Administrative Lender immediately on demand
such corresponding amount together with interest thereon, from the date such
amount is made available to the Borrower until the date such amount is repaid to
Administrative Lender, at (i) in the case of the Borrower, the Base Rate, and
(ii) in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Specified Percentage of any
Advance hereunder shall not relieve any other Lender of its obligation, if any,
to make available its Specified Percentage of any Advance. In no event, however,
shall any Lender be responsible for the failure of any other Lender to make
available any portion of any Advance.
(g) The Borrower shall indemnify each Lender against any Consequential Loss
incurred by each lender as a result of (i) any failure to fulfill, on or before
the date specified for the Advance, the conditions to the Advance set forth
herein or (ii) the Borrower's requesting that an Advance not be made on the date
specified in the Borrowing Notice.
2.3 Evidence of Debt
(a) The Advances made by each Lender shall be evidenced by a Note in the amount
of such Lender's Specified Percentage of the Aggregate Commitment in effect on
the date hereof.
(b) Administrative Lender's and each Lender's records shall be presumptive
evidence as to amounts owed Administrative Lender and such Lender under the
Notes and this Agreement.
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2.4 Optional Prepayments.
(a) The Borrower may, upon at least two Business Days prior written notice to
Administrative Lender stating the proposed date and aggregate principal amount
of the prepayment, prepay the outstanding principal amount of any Advances in
whole or in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid and any Consequential Loss, but without premium
or penalty other than any Consequential Loss; provided, however, that in the
case of a prepayment of a Base Advance, the notice of prepayment may be given by
telephone by 10:00 a.m. on the date of prepayment. Each partial prepayment
shall, in the case of Base Advances, be in an aggregate principal amount of not
less than $50,000 or a larger integral multiple of $50,000 in excess thereof
and, in the case of LIBOR Advances, be in an aggregate principal amount of not
less than $100,000 or a larger integral multiple of $50,000 in excess thereof.
If any notice of prepayment is given, the principal amount stated therein,
together with accrued interest on the amount prepaid and the amount, if any, due
under Section 2.11 hereof, shall be due and payable on the date specified in
such notice unless the Borrower revokes its notice, provided that, if the
Borrower revokes its notice of prepayment prior to such date specified, the
Borrower shall reimburse the Administrative Lender for the account of all
Lenders for all Consequential Losses suffered by each Lender as a result of the
Borrower's failure to repay. A certificate of each Lender claiming compensation
under this Section 2.4(a), setting forth in reasonable detail the calculation of
the additional amount or amounts to be paid to it hereunder shall be presumptive
evidence of the validity of such claim.
(b) As a condition precedent to any prepayment herein, each prepayment must be
in the amount of 100% of the principal amount to be prepaid, plus accrued
interest thereon, plus any other sums that have become due to Administrative
Lender and Lenders hereunder on or before the prepayment date but have not been
paid, plus any Consequential Loss.
2.5 Principal. The Borrower shall repay all Advances on the Maturity Date
2.6 Interest. The Borrower shall pay interest on the unpaid principal amount of
each Advance from the date of such Advance until such principal shall be paid in
full, at the following rates per annum:
(a) Base Advances. Base Advances shall bear interest at a rate per annum equal
to the Base Rate as in effect from time to time.
(b) LIBOR Advances. LIBOR Advances shall bear interest at the rate per annum
equal to the LIBOR Rate applicable to such Advance.
(c) Payment Dates. Accrued and unpaid interest on Base Advances shall be paid
monthly in arrears, and on the Maturity Date. Accrued and unpaid interest in
respect of each LIBOR Advance shall be paid on the last day of the appropriate
Interest Period and on the date of any prepayment or repayment of such Advance.
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2.7 Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to Administrative Lender
and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any portion of outstanding
Base Advances (in an aggregate amount not less than $100,000 or an integral
multiple of $50,000 in excess thereof) into LIBOR Advances; or
(ii) elect to convert at the end of any Interest Period therefor, all or any
portion of outstanding LIBOR Advances comprised in the same Borrowing (in an
aggregate amount not less than $100,000 or an integral multiple of $50,000 in
excess thereof) into Base Advances; or
(iii) elect to continue, at the end of any Interest Period therefor, any LIBOR
Advances;
provided, however, that if the aggregate amount of outstanding LIBOR Advances
comprised in the same Borrowing shall have been reduced as a result of any
payment, prepayment or conversion of part thereof to an amount less than
$100,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Advances at the end of each respective Interest Period.
Interest Period. (b) The Borrower shall deliver a notice of conversion or
continuation (a "Conversion or Continuation Notice"), in substantially the form
of Exhibit B hereto, to Administrative Lender not later than 10:00 a.m. (i) two
Business Days prior to the proposed date of conversion or continuation, if the
Advances or any portion thereof are to be converted into or continued as LIBOR
Advances; and (ii) on the Business Day of the proposed conversion, if the
Advances or any portion thereof are to be converted into Base Advances.
Each such Conversion or Continuation Notice shall be by telecopy or telephone,
promptly confirmed by letter, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Advances to be converted or continued;
(iii) the nature of the proposed conversion or continuation; and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR Advances,
the Borrower shall have failed to select a new Interest Period to be applicable
to such LIBOR Advances or if an Event of Default shall then have occurred and be
continuing, the
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Borrower shall be deemed to have elected to convert such LIBOR Advances into
Base Advances effective as of the expiration date of such current Interest
Period.
2.8 Fees.
(a) Facility Fee. The Borrower shall pay to Administrative Lender for the
account of each of the Lenders an origination and facility fee in the aggregate
amount of $45,000.00.
(b) Administrative Lender Fee. The Borrower shall pay to Administrative Lender
for its own account an administrative fee of $5,000 per annum for each year
during the term hereof, commencing on the date of this Agreement and continuing
on the like day of each year thereafter.
2.9 Reduction of the Available Commitment.
(a) Mandatory Termination of the Available Commitment. The Available Commitment
terminates on the Maturity Date.
(b) Voluntary Available Commitment Reductions. The Borrower may from time to
time, upon notice to Administrative Lender not later than 1:00 p.m., five
Business Days in advance, terminate in whole or reduce in part the Available
Commitment, as designated by the Borrower; provided, however, that the Borrower
shall pay the accrued interest on the amount of such reduction and all amounts
due, and any partial reduction shall be in an aggregate amount which is an
integral multiple of $500,000.
(c) Available Commitment Reductions, Generally. To the extent outstanding
Advances exceed the applicable Available Commitment after any reduction thereof,
the Borrower shall repay, on the date of such reduction, any such excess amount
and all accrued interest thereon, and all amounts due together with all
Consequential Losses. Once reduced or terminated, the Available Commitment may
not be increased or reinstated without the prior written consent of the Lenders.
2.10 Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the other Loan
Documents not later than 1:00 p.m. on the day when due in same day funds to
Administrative Lender, for the Pro Rata account of Lenders unless otherwise
specifically provided herein, at Administrative Lender's office at 000 xxx
Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000
(b) Unless Administrative Lender shall have received notice from the Borrower
prior to the date on which any payment is due hereunder that the Borrower will
not make payment in full, Administrative Lender may assume that such payment is
so made on such date
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and may, in reliance upon such assumption, make distributions to Lenders. If and
to the extent the Borrower shall not have made such payment in full, each Lender
shall repay to Administrative Lender forthwith on demand the applicable amount
distributed, together with interest thereon at the Federal Funds Rate, from the
date of distribution until the date of repayment. The Borrower hereby authorizes
each Lender, if and to the extent payment is not made when due hereunder, to
charge the amount so due against any account of the Borrower with such Lender.
Each Lender will provide Borrower written notice of any such charge.
(c) Interest on Advances under the Loan Documents shall be calculated on the
basis of actual days elapsed but computed as if each year consisted of 360 days.
All payments under the Loan Documents shall be made in U.S. dollars, and without
setoff, counterclaim, or other defense.
(d) Whenever any payment to be made hereunder or under any other Loan Documents
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, if applicable; provided,
however, if such extension would cause payment of interest on or principal of
LIBOR Advances to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(e) Reference to any particular index or reference rate for determining any
applicable interest rate under this Agreement is for purposes of calculating the
interest due and is not intended as and shall not be construed as requiring any
Lender to actually obtain funds for any Advance at any particular index or
reference rate.
2.11 Yield Protection; Changed Circumstances.
(a) If any Lender determines that either (i) the adoption, after the date
hereof, of any applicable law, rule, regulation or guideline regarding capital
adequacy and applicable to commercial banks or financial institutions generally
- or any change therein, or any change, after the date hereof, in the
interpretation or administration thereof by any tribunal, central bank or
comparable agency charged with the interpretation or administration thereof, or
(ii) compliance by any Lender with any request or directive made after the date
hereof applicable to commercial banks or financial institutions generally
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency has the effect of reducing the rate
of return on such Lender's capital as a consequence of its obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy) by an amount reasonably deemed by such Lender
to be material, then from time to time, within fifteen days after demand by such
Lender, the Borrower shall pay to such Lender such additional amount or amounts
as will adequately compensate such Lender for such reduction. Each Lender will
notify the Borrower of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section 2.11 (a)
as promptly as practicable after such Under obtains actual knowledge of such
event; provided, no
13
Lender shall be liable for its failure or the failure of any other Lender to
provide such notification. A certificate of such Lender claiming compensation
under this Section 2.11(a), setting forth in reasonable detail the calculation
of the additional amount or amounts to be paid to it hereunder and certifying
that such claim is consistent with such Lender's treatment of similar customers
having similar provisions generally in their agreements with such Lender shall
be presumptive evidence of the validity of such claim. Each Lender shall use
reasonable efforts to mitigate the effect upon the Borrower of any such
increased costs payable to such Lender under this Section 2.11(a).
(b) If, after the date hereof, any tribunal, central bank or other comparable
authority, at any time imposes, modifies or deems applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement against assets
of, deposits with or for the amount of, or credit extended by, any Lender, or
imposes on any Lender any other condition affecting a LIBOR Advance, the Notes,
or its obligation to make a LIBOR Advance; and the result of any of the
foregoing is to increase the cost to such Lender of making or maintaining its
LIBOR Advances, or to reduce the amount of any sum received or receivable by
such Lender under this Agreement or under the Notes, by an amount deemed by such
Lender, to be material, then, within five days after demand by such Lender, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. Each Lender will
notify the Borrower of any event occurring the date of this Agreement that
entitles such Lender to compensation pursuant to this Section 2.11(b), as
promptly as practicable after such Lender obtains actual knowledge of the event;
provided, no Lender shall be liable for its failure or the failure of any other
Lender to provide such notification. A certificate of such Lender claiming
compensation under this Section 2.11(b), setting forth in reasonable detail the
computation of the additional amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender shall be presumptive evidence of the validity of such claim. If such
Lender demands compensation under this Section 2.11(b), the Borrower may at any
time, on at least five Business Days' prior notice to such Lender (i) repay in
full the then outstanding principal amount of LIBOR Advances, of such Lender,
together with accrued interest thereon, or (ii) convert the LIBOR Advances to
Base Advances in accordance with the provisions of this Agreement; provided,
however, that the Borrower shall be liable for the Consequential Loss arising
pursuant to those actions.
(c) Notwithstanding any other provision of this Agreement, if the introduction
of or any change in or in the interpretation or administration of any law shall
make it unlawful, or any central bank or other tribunal shall assert that it is
unlawful, for a Lender to perform its obligations hereunder to make LIBOR
Advances or to continue to fund or maintain LIBOR Advances hereunder, then, on
notice thereof and demand therefor by such Lender to the Borrower, (i) each
LIBOR Advance will automatically, upon such demand, convert into a Base Advance,
(ii) the obligation of such Lender to make, or to convert Advances into, LIBOR
Advances shall be suspended until such Lender notifies Administrative Lender and
the Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist,
14
notifies Administrative Lender and the Borrower that such Lender has determined
that the circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or Event of
Default, (i) each LIBOR Advance will automatically, on the last day of the then
existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of each Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended.
(e) If any Lender notifies Administrative Lender that the LIBOR Rate for any
Interest Period for any LIBOR Advances will not adequately reflect the cost to
such Lender of making, funding or maintaining LIBOR Advances for such Interest
Period, Administrative Lender shall promptly so notify the Borrower, whereupon
(i) each such LIBOR Advance will automatically, on the last day of the then
existing Interest Period therefor, convert into a Base Advance and (ii) the
obligation of such Lender to make, or to convert Advances into, LIBOR Advances
shall be suspended until such Lender notifies Administrative Under that such
Lender has determined that the circumstances causing such suspension no longer
exist and Administrative Lender notifies the Borrower of such fact.
(f) Failure on the part of any Lender to demand compensation for any increased
costs, increased capital or reduction in amounts received or receivable or
reduction in return on capital pursuant to this Section 2. 1 1 with respect to
any period shall not constitute a waiver of any Lender's right to demand
compensation with respect to such period or any other period, subject, however,
to the limitations set forth in this Section 2.11.
(g) The obligations of the Borrower under this Section 2.11 shall survive any
termination of this Agreement, provided that, in no event shall the Borrower be
required to make a payment under this Section 2.11 with respect to any event of
which the Lender making such claim had knowledge more than twelve months prior
to demand for such payment.
(h) Determinations by Lenders for purposes of this Section 2.11 shall be
presumptively correct. Any certificate delivered to the Borrower by a Lender
pursuant to this Section 2.11 shall include in reasonable detail the basis for
such Lender's demand for additional compensation and a certification that the
claim for compensation is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender.
SECTION 3. SECURITY AND GUARANTIES
Payment of the loan or loans hereunder shall be secured and guaranteed as
provided in this Section 3.
3.1 Stock Pledge. Payment of the Notes, any other obligations under the Loan
Documents, and any other obligations of Borrower to Lenders, presently existing
or hereafter
14
arising, shall be secured by a pledge of all Capital Stock of the Subsidiaries
owned by Borrower. Borrower shall execute and deliver such pledge to
Administrative Lender in form and substance satisfactory to Lenders (the "Stock
Pledge"). The Stock Pledge shall be sufficient, when delivery of the stock
certificates and other security is made, to grant a first perfected security
interest in the Capital Stock of the Subsidiaries owned by Borrower, subject to
no prior liens or encumbrances. Borrower shall deliver into the actual physical
possession of Administrative Lender the stock certificates and securities which
Borrower has pledged as security, and shall execute stock powers for each
certificate or security. Borrower agrees to execute or otherwise provide to
Administrative Lender any and all modifications, fmancing statements, and other
agreements or consents required by Administrative Lender now or in the future in
connection therewith.
3.2 Guaranties. Payment of the Notes, and any other obligations under the Loan
Documents, presently existing or hereafter arising, shall be guaranteed by all
Guarantors, which guarantees shall be evidenced by the execution and delivery to
Administrative Lender by Guarantors of continuing and unconditional guaranties
in form and substance satisfactory to Lenders (individually, a "Guaranty" and
collectively, the "Guaranties").
SECTION 4. REPRESENTATIONS AND WARRANTEES.
To induce Lender to enter into this Agreement and to make the loan or loans
hereunder, Borrower represents and warrants to each Lender and Administrative
Lender (which representations and warranties shall survive the delivery of the
documents mentioned herein and the making of the loan or loans contemplated
hereby) as follows:
4.1 Corporate Existence; Compliance with Law; Name History. Borrower is a
corporation duly incorporated and organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation. Borrower has
all requisite power (corporate and otherwise) to own and operate its properties
and to carry on its business as now being conducted, is duly qualified as a
foreign corporation to do business in every jurisdiction in which the nature of
its business or the ownership of its properties makes such qualification
necessary and is in good standing in such jurisdictions, has all licenses and
permits necessary to carry on and conduct its business in all states and
localities wherein it now operates (except for such licenses and permits that
the failure to obtain would not cause a Material Adverse Effect), and is in
compliance with all other requirements of law, rule, or regulation applicable to
it and to its business. Borrower does not have any Subsidiaries, except as set
forth on the attached Schedule 4.1(a). Borrower has not merged, changed its
name, or done business under a fictitious name during the past five years,
except as set forth on the attached Schedule 4.1.
4.2 Corporate Power and Authorization to Execute Loan Documents; No Conflict; No
Consent. Borrower has the corporate power and authority and the legal right to
execute and deliver the Loan Documents to be executed by it and to perform its
obligations thereunder and has taken all corporate action necessary to authorize
the execution, delivery, and performance
16
of such Loan Documents and to authorize the transactions contemplated thereby.
The execution, delivery, and performance by Borrower of the Loan Documents to be
executed by it will not: (a) contravene, conflict with, result in the breach of,
or constitute a violation of or default under (i) the articles of incorporation
or bylaws of Borrower, (ii) any applicable law, rule, regulation, judgment,
order, writ, injunction, or decree of any court or governmental authority, or
(iii) any agreement or instrument to which Borrower is a party or by which
Borrower or its property may be bound or affected; or (b) result in the creation
of any lien, charge, or encumbrance upon any property or assets of Borrower
pursuant to any of the foregoing, except the liens created by the Loan
Documents. No consent, license, or authorization of, or filing with, or notice
to, any Person or entity (including, without limitation, any governmental
authority), is necessary or required in connection with the execution, delivery,
performance, validity, or enforceability of the Loan Documents and the
transactions as contemplated thereunder, except for consents, licenses,
authorizations, filings, and notices already obtained or performed and of which
Administrative Lender has been provided written notice, or referred to or
disclosed in the Loan Documents. Any such consents, licenses, authorizations,
filings, or notices remain in full force and effect.
4.3 Enforceable Obligations. The Loan Documents constitute legal, valid, and
binding agreements enforceable against the respective parties thereto and any
property described therein in accordance with their respective terms.
4.4 Financial Condition.
(a) The consolidated financial statements as of June 30, 1997, of Borrower and
its Subsidiaries, copies of which have been furnished to Administrative Lender,
are correct, complete, and fairly present the financial condition of Borrower
and its Subsidiaries as of the date of the financial statements and fairly
present the results of the operations of Borrower and its Subsidiaries for the
period covered thereby.
(b) The financial statements described above have been prepared in accordance
with Generally Accepted Accounting Principles applied on a Consistent Basis
maintained throughout the period involved. There has been no material adverse
change in the business, proper-ties, or condition, financial or otherwise, of
Borrower or its Subsidiaries since the date of such financial statements.
(c) Neither Borrower nor any of its Subsidiaries have any material direct or
contingent liabilities, liabilities for taxes, long-term leases, or unusual
forward or long-term commitments as of the date of this Agreement which are not
disclosed by, provided for, or reserved against in the foregoing financial
statements or referred to in notes thereto, and at the date of this Agreement
there are no material unrealized or anticipated losses from any unfavorable
commitments of Borrower or any of its Subsidiaries.
17
4.5 No Litigation. There is no suit or proceeding at law or in equity or other
proceeding or investigation (including proceedings by or before any court,
arbitrator, governmental or administrative commission, board, bureau, or other
administrative agency) pending, or to the best knowledge of Borrower threatened,
by or against or involving Borrower or against any of its Subsidiaries,
properties, existence, or revenues which, individually or in the aggregate, if
adversely determined, is reasonably likely to have a Material Adverse Effect on
the properties, assets, or business or on the condition, financial or
other-wise, of Borrower or impair the right or ability of Borrower to carry on
its operations substantially as now conducted or as anticipated to be conducted
in the future, or, regardless of outcome, which would be required to be
disclosed in notes to any balance sheet as of the date hereof of Borrower
prepared in reasonable detail in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis. Set forth on the attached Schedule 4.5
is a list of all suits or proceedings to which Borrower or any of its
Subsidiaries is a party.
4.6 Investment Company Act; Regulation.
(a) Borrower is not an "investment company," an "affiliated person" of, or
"promoter" or "principal under-writer" for, any "investment company," or a
company " controlled " by an " investment company, " and Borrower is not an "
investment advisor " or an "affiliated person" of an "investment advisor" (as
each of the quoted terms is defined or used in the Investment Company Act of
1940, as amended). Neither the making of the loans, nor the establishment of the
credits hereunder, nor the application of the proceeds or repayment thereof by
Borrower, nor the consummation of the other transactions contemplated hereby,
will violate the provisions of the foregoing Act or any rule, regulation, or
order promulgated thereunder.
(b) Borrower is not subject to regulation under any state or local public
utilities code or federal, state, or local statute or regulation limiting the
ability of Borrower to incur indebtedness for money borrowed or to pledge assets
of the type contemplated hereunder.
4.7 Disclosure and No Untrue Statements. No representation or warranty made by
Borrower in the Loan Documents or which will be made by Borrower from time to
time in connection with the Loan Documents (a) contains or will contain any
misrepresentation or untrue statement of any material fact, or (b) omits or will
omit to state any material fact necessary to make the statements therein not
misleading. There is no fact (excluding information relating to world or
national economic, social, or political conditions generally) known to Borrower
which materially adversely affects, or which might in the future materially
adversely affect, the business, assets, properties, or condition, financial or
other- wise, of Borrower, or the ability of Borrower to perform its obligations
under the Loan Documents, except as set forth or referred to in the Loan
Documents or otherwise disclosed in writing to Administrative Lender.
4.8 Title to Assets; Leases in Good Standing. Borrower has good and marketable
title in fee to such of its fixed assets as are real property and good and
marketable title to its other properties and assets, including the properties
and assets reflected in the financial statements and notes thereto described in
Subsection 4.4 hereof, except for such assets as have
18
been disposed of in the ordinary course of business, and all such properties and
assets are free and clear of all liens, mortgages, pledges, security interests,
charges, title retention agreements, or other encumbrances of any kind except
those permitted under Subsection 7.2. Borrower enjoys peaceful and undisturbed
possession under all leases under which it is now operating, none of which
contain any burdensome or unusual provisions which may affect its operations,
and all such leases are valid, subsisting, and in full force and effect and
Borrower is not in violation of any material term of any such lease.
4.9 Payment of Taxes. Borrower has filed or caused to be filed all federal,
state, and local tax returns which are required to be filed by it and has paid
or caused to be paid all taxes as shown on said returns or on any assessment
received by it, to the extent that such taxes have become due, other than taxes
being contested in good faith by appropriate proceedings diligently conducted
and for which adequate reserves have been established in accordance with
Generally Accepted Accounting Principles, and no controversy in respect of
additional taxes of Borrower is pending, or, to the knowledge of Borrower,
threatened.
4.10 Agreement or Contract Restrictions; No Default. Borrower is not a party to,
nor is bound by, any agreement, contract, or instrument or subject to any
charter or other corporate restriction which materially or adversely affects the
business, properties, assets, operations, or condition, financial or otherwise,
of Borrower except as disclosed in the financial statements and notes thereto
described in Subsection 4.4 hereof. Borrower is in full compliance with and is
not in default in the performance, observance, or fulfillment of any
obligations, covenants, or conditions contained in any agreement or instrument
to which it is a party.
4. 11 Patents, Trademarks, Licenses, Etc. Borrower owns, possesses, or has the
right to use, and holds free from burdensome restrictions or known conflicts
with the rights of others, all patents, patent rights, licenses, trademarks and
service marks, trademark and service xxxx rights, trade names, trade name
rights, and copyrights, and all rights with respect to the foregoing, necessary
to conduct its business as now conducted, and is in full compliance with the
terms and conditions, if any, of all such patents, patent rights, licenses,
trademarks and service marks, trademark and service xxxx rights, trade names,
trade name rights, or copyrights and the terms and conditions of any agreements
relating thereto.
4.12 Government Contract. Borrower is not subject to the renegotiation of any
government contract in any material amount.
4.13 ERISA Requirement. Except as previously disclosed to Lenders in writing,
Borrower does not have in force any written or oral bonus plan, stock option
plan, employee welfare, pension or profit sharing plan, or any other employee
benefit arrangement or understanding. In addition, Borrower and any predecessor
of Borrower is not now or was not formerly during the five year period
immediately preceding the effective date of this Agreement a participating
employer in any multi-employer or "multiple employer" plans within the meaning
of Sections 4001(l)(a)(3), 4063, and 4064 of ERISA. Each employee benefit plan
subject to the requirements of ERISA complies with all of the requirements of
ERISA and those plans which
19
are subject to being "qualified" under Sections 401(a) and 501(a) of the
Internal Revenue Code of 1986, as amended from time to time, have since their
adoption been "qualified" and have received favorable determination letters from
the Internal Revenue Service so holding. There is no matter which would
adversely affect the qualified tax exempt status of any such trust or plan, and
except as previously disclosed to Lenders there are no deficiencies or
liabilities for any such plan or trust. No employee benefit plan sponsored by
Borrower has engaged in a nonexempt "prohibited transaction" as defined in
ERISA.
4.14 Solvency. Borrower is, and on and after the consummation of the
transactions contemplated herein will be, Solvent.
4.15 Racketeer Influenced and Corrupt Organization(s) Act. Borrower has never
been and is not now engaged, and will not engage, directly or indirectly, in any
pattern of "racketeering activity" or in any "collection of any unlawful debt,"
as each of the quoted terms or phrases is defined or used by the Racketeer
Influenced and Corrupt Organization(s) Act of either the United States or the
Xxxxx xx Xxxxxxx, Xxxxx 00, Xxxxxx Xxxxxx Code, Section 1961 et seg.; Chapter
895, Florida Statutes, respectively, as each act now exists or is hereafter
amended (the "RICO Lien Acts"). None of Borrower's real property, none of
Borrower's interest or interests of any kind, including any beneficial interest
or interests, mortgages, and leases, in or on real property and none of
Borrower's personal property, including money, has ever been, is now, or is in
any way reasonably anticipated by Borrower to become, subject to any lien,
notice, civil investigative demand, action, suit, or other proceeding pursuant
to the RICO Lien Acts.
4.16 Location of Offices. The chief executive office, the principal place of
business, and the office where all books and records of Borrower are kept, and
all other offices of Borrower are described in Schedule 4.16 attached hereto.
SECTION 5. CONDITIONS OF LENDING.
The obligation of each Lender to make Advances or to permit any borrowings
hereunder is conditioned upon the performance of all agreements by Borrower
contained herein, as well as satisfaction of the following conditions precedent:
5.1 Continuing Accuracy of Representations and Warranties. At the time of each
borrowing hereunder, the representations and warranties set forth in Section 4
hereof shall be true, correct, and complete on and as of the date of the
borrowing with the same effect as though the representations and warranties had
been made on and as of the date of the borrowing, except to the extent that such
representations and warranties may expressly relate to an earlier date, in which
case they shall continue to be true as of such date.
5.2 No Default. At the time of each borrowing hereunder, Borrower shall be in
compliance with all terms and conditions set forth herein, and no Event of
Default, nor any
20
event which upon notice or lapse of time or both would constitute an Event of
Default, shall have occurred and be continuing at the time of such borrowing.
5.3 Opinion of Borrower's Counsel. On or prior to the date of this Agreement,
and to the extent required by Administrative Lender at the time of any borrowing
hereunder, each Lender and Administrative Lender shall have received the
favorable opinion of counsel for Borrower, in form and substance satisfactory to
each Lender and Administrative Lender, as to such matters as they may require.
5.4 Approval of Counsel. All legal matters in connection with the Loan Documents
and the transactions herein and therein contemplated and all documents and
proceedings shall be satisfactory in form and substance to Holland & Knight LLP,
counsel for SunTrust Bank, Tampa Bay.
5.5 Loan Documents. On or prior to the date of this Agreement, Administrative
Lender shall have received, duly executed, this Agreement and the other Loan
Documents, all in form and substance satisfactory to Administrative Lender and
its counsel.
5.6 UCC Filings and Stock Certificates. Termination of all UCC filings
identified on the attached Schedule 5.6, and delivery to Administrative Lender's
possession of all stock certificates encumbered by the Stock Pledge
5.7 Supporting Documents. On or prior to the date of this Agreement,
Administrative Lender shall have received all other documents and instruments
required hereunder or otherwise reasonably required by Lenders to be executed
and delivered or otherwise provided to Administrative Lender in form and
substance satisfactory to Lender and their counsel, including without
limitation:
(a) a certificate of good standing of Borrower and each Subsidiary certified by
the secretary of state, or other appropriate governmental authority, of the
state of incorporation of Borrower and each Subsidiary;
(b) a copy of the articles of incorporation of Borrower and each Subsidiary in
effect on the date hereof certified by the secretary of state, or other
appropriate governmental authority, of the state of incorporation of Borrower
and each Subsidiary, accompanied by a certificate from an appropriate officer of
Borrower and each Subsidiary that the copy is complete and that the articles of
incorporation have not been amended, annulled, rescinded, or revoked since the
date of the certificate of the secretary of state or other appropriate
governmental authority;
(c) a copy of the bylaws of Borrower and each Subsidiary in effect on the date
of this Agreement, accompanied by a certificate from an appropriate officer of
Borrower and each Subsidiary that the copy is true and complete and that the
bylaws have not been amended,
21
annulled, rescinded, or revoked since the date of the bylaws or the last
amendment reflected in the copy, if any;
(d) a copy of resolutions of the board of directors of Borrower and each
Subsidiary authorizing the execution, delivery, and performance of the Loan
Documents to which it is a party and the transactions thereunder, and specifying
the officer or officers of Borrower and each Subsidiary authorized to execute
the Loan Documents, accompanied by a certificate from an appropriate officer
that the resolutions are true and complete, were duly adopted at a duly called
meeting in which a quorum was present and acting throughout, or were duly
adopted by written action, and have not been amended, annulled, rescinded or
revoked in any respect and remain in full force and effect on the date of the
certificate, together with an incumbency certificate containing the names,
titles, and genuine signatures of all duly elected officers of Borrower and each
Subsidiary as of the date of this Agreement, accompanied by a certificate from
an appropriate officer that the information is true and complete; and
(e) such additional supporting documents as Lenders may request.
SECTION 6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that from the date of this Agreement until payment
in full of all present or future indebtedness hereunder and termination of all
present or future credit facilities established hereunder, unless Lenders shall
otherwise consent in writing, Borrower will fully comply with the following
provisions:
6.1 Financial Reports and Other Information. Borrower will deliver or cause to
be delivered to each Lender the following:
(a) As soon as practicable and in any event within sixty (60) days after the end
of each fiscal quarter, a consolidated and consolidating balance sheet as of the
last day of such quarter and the related consolidated and consolidating
statement of income for such quarter and cumulative year-to-date for Borrower,
setting forth in each case in comparative form figures for the corresponding
period in the preceding fiscal year, all in reasonable detail and satisfactory
in scope to Lenders and certified by the chief financial officer of Borrower as
to the fairness of such financial statements and that the same have been
prepared in accordance with Generally Accepted Accounting Principles applied on
a Consistent Basis, subject to changes resulting from normal, recurring year-end
adjustments;
(b) As soon as practicable and in any event within ninety (90) days after the
end of each fiscal year, the consolidated and consolidating balance sheet of
Borrower as of the end of such fiscal year, and related consolidated and
consolidating statements of income, and changes in financial position for such
fiscal year, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable detail and
satisfactory in scope to Lenders and certified by and containing an unqualified
opinion of
22
independent certified public accountants of recognized national standing
selected by Borrower and satisfactory to Lenders;
(c) Together with each delivery of those items required by clause 6(a) above, a
certificate executed by the chief financial officer of Borrower, containing
computations in reasonable detail indicating compliance with Sections 6 and 7
hereof, and stating that to the best of the officer's knowledge, (i) Borrower
has kept, observed, per-formed, and fulfilled each and every agreement binding
on it contained in the Loan Documents, and is not at the time in default of the
keeping, observance, performance, or fulfillment of any of the terms,
provisions, and conditions thereof, and (ii) none of the Events of Default or
events which upon notice or the lapse of time or both would constitute Events of
Default has occurred (or specifying all such defaults and events of which he may
have knowledge and what actions Borrower is taking or proposes to take with
respect thereto);
(d) Together with each delivery of the financial statements required by clause
6(b) above, a certificate of the independent certified accountants stating that
in making the examination necessary to said certification of the financial
statements, they obtained no knowledge of any condition or event pertaining to
financial or accounting matters, that constitutes an Event of Default or event
which after notice by Administrative Lender or lapse of time, or both, would
constitute an Event of Default; or if the accountants have obtained knowledge of
any Event of Default or other such event, a statement specifying the nature and
period of existence thereof. In addition, such accountants' certificate shall
state that with respect to the fulfillment of any of the terms, covenants,
provisions, or conditions of the Loan Documents, other than those relating to
financial or accounting matters, they have obtained no knowledge of any default
or Event of Default, or if the accountants have obtained knowledge of any such
default or Event of Default they shall make disclosure thereof, but the
accountants shall not be liable to Lenders for any failure to obtain knowledge
of any default or Event of Default referred to in this sentence;
(e) Within ten (10) days after receipt thereof, copies of any management audit
letters or other communications provided to Borrower by the independent
certified public accountant who prepared Borrower's financial statements;
(f) As soon as practicable and in any event within ten (10) days after the
filing thereof with the United States Securities and Exchange Commission, copies
of the quarterly 10-Q and annual 10-K reports, and any 8-K reports, filed by
Borrower;
(g) With reasonable promptness, such additional financial or other data
(including but not limited to consolidating financial statements) as Lenders may
from time to time reasonably request.
Lenders and Administrative Lender are hereby authorized to deliver a copy of any
financial statements or any other information relating to the business,
operations, properties, or financial condition of Borrower which may be famished
to it or come to its attention pursuant
23
to the Loan Documents or otherwise, to any regulatory body or agency having
jurisdiction over them or to any Person which shall, or shall have the right or
obligation to, succeed to all or any part their respective interests in the Loan
Documents.
6.2 Payment of Indebtedness; Performance of Other Covenants; Payment of Other
Obligations. (a) Borrower will make full and timely payment of the principal of
and interest on the indebtedness owed hereunder; (b) Borrower will duly comply
with all the terms and covenants contained in the Loan Documents; and (c)
Borrower will make full and timely payment of all other indebtedness of
Borrower, whether now existing or hereafter arising.
6.3 Conduct of Business; Maintenance of Existence and Rights. Borrower will do
or cause to be done all things necessary to preserve and to keep in full force
and effect its corporate existence and rights and privileges as a corporation
and its franchises, licenses, trade names, patents, trademarks, and permits
which are necessary for the continuance of its business, and continue to engage
principally in the business currently operated by Borrower.
6.4 Maintenance of Property. Borrower will maintain its property in good
condition and repair and, from time to time, make all necessary and proper
repairs, renewals, replacements, additions, and improvements thereto, so that
the business carried on may be properly and advantageously conducted at all
times in accordance with prudent business management.
6.5 Right of Inspection; Discussions. Borrower will permit any Person designated
by Lenders, to visit and inspect any of the properties, corporate books,
records, papers, and financial reports of Borrower, including the making of any
copies thereof and abstracts therefrom, and to discuss its affairs, finances,
and accounts with its principal officers, all at such reasonable times and as
often as Lenders may reasonably request. Borrower will also permit Lenders, or
its designated representative, to audit or appraise any of its assets or
financial and business records.
6.6 Notices. Borrower will promptly give notice to Administrative Lender of:
(a) The occurrence of any default or Event of Default (or event which would
constitute a default or Event of Default but for the requirement that notice be
given or time elapse or both) hereunder, in which case such notice shall specify
the nature thereof, the period of existence thereof, and the action that
Borrower proposes to take with respect thereto;
(b) the occurrence of any material casualty to any material facility of Borrower
or any other force majeure (including, without limitation, any strike or other
labor disturbance) materially affecting the operation or value of any such
facility, and whether or not such casualty or force majeure is covered by
insurance;
(c) the commencement or any material change in the nature or status of any
litigation, dispute, or proceeding that may involve a claim for damages,
injunctive relief,
24
enforcement, or other relief pending, being instituted, or threatened by,
against, or involving Borrower, or the institution of any attachment, levy,
execution, or other process by or against any assets of Borrower, which might
impair the conduct of Borrower's business or might adversely affect financially
or otherwise its business, operations, properties, condition, or prospects; and
(d) the occurrence of a material change in, modification to, cancellation or
early termination of, or default in (or event which would constitute a default
but for the requirement that notice be given or time elapse or both) any
material obligation, contract, or agreement of Borrower with any Person.
6.7 Payment of Taxes; Liens. Borrower will pay, or cause to be paid, when due,
subject to any permitted extensions, all taxes, assessments, and other
governmental charges which may lawfully be levied or assessed (a) upon the
income or profits of Borrower; (b) upon any property, real, personal or mixed,
belonging to Borrower, or upon any part thereof; or (c) by reason of employee
benefit plans sponsored by Borrower, and will also pay, or cause to be paid,
when due, subject to any permitted extensions, any lawful claims for labor,
material, or supplies which, if unpaid, might become a lien or charge against
any property of Borrower; provided, however, Borrower shall not be required to
pay any such tax, assessment, charge, levy, or claim so long as the validity
thereof shall be actively contested in good faith by appropriate proceedings and
Borrower shall have set aside on its books adequate reserves (determined in
accordance with Generally Accepted Accounting Principles) with respect to any
such tax, assessment, charge, levy, or claim so contested; but provided further
that any such tax, assessment, charge, levy, or claim shall be paid forthwith
upon the commencement of proceedings to foreclose any lien securing the same.
6.8 Insurance of Properties. Borrower will keep its business and properties
insured at all times by insurance companies acceptable to Lenders against the
risks for which provision for such insurance is usually made by other Persons
engaged in a similar business similarly situated (including without limitation
insurance for fire and other hazards and insurance against liability on account
of damage to persons or property and insurance under all applicable workmen's
compensation laws) and to the same extent thereto and carry such other types and
amounts of insurance as are usually carried by Persons engaged in the same or a
similar business similarly situated, and upon request deliver to Lenders a
certificate from the insurer setting forth the nature of the risks covered by
such insurance, the amount carried with respect to each risk, and the name of
the insurer.
6.9 True Books. Borrower will keep proper and true books of record and account,
satisfactory to Bank, in which full, true, and correct entries will be made of
all of its dealings and transactions, and establish on its books such reserves
as may be required by Generally Accepted Accounting Principles with respect to
all taxes, assessments, charges, levies, and claims referred to in Subsection
[6.7] hereof, and with respect to its business in general, and will include such
reserves in any interim as well as year-end financial statements.
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6.10 Observance of Laws. Borrower will conform to and duly observe all laws,
regulations, and other valid requirements of any governmental authority with
respect to the conduct of its business.
6.11 Further Assurances. At its cost and expense, upon request of any Lender,
Borrower will duly execute and deliver or cause to be duly executed and
delivered to Lenders such further instruments or documents and do and cause to
be done such further acts as may be reasonably necessary or proper in the
opinion of Lenders to carry out more effectively the provisions and purposes of
this Agreement.
6.12 ERISA Benefit Plans. Borrower will comply with all requirements of ERISA
applicable to it and will not materially increase its liabilities under or
violate the terms of any present or future benefit plans maintained by it
without the prior approval of Lenders. Borrower will furnish to Lenders as soon
as possible and in any event within 10 days after Borrower or a duly appointed
administrator of a plan (as defined in ERISA) knows or has reason to know that
any reportable event, funding deficiency, or prohibited transaction (as defined
in ERISA) with respect to any plan has occurred, a statement of the chief
financial officer of Borrower describing in reasonable detail such reportable
event, funding deficiency, or prohibited transaction and any action which
Borrower proposes to take with respect thereto, together with a copy of the
notice of such event given to the Pension Benefit Guaranty Corporation or the
Internal Revenue Service or a statement that said notice will be filed with the
annual report of the United States Department of Labor with respect to such plan
if such filing has been authorized.
6.13 Withholding Taxes. Borrower will pay, as and when due, all employee
withholding, FICA, and other tax payments required by federal, state, and local
governments with respect to wages paid to employees.
6.14 Change of Name, Principal Place of Business, Office, or Agent. Borrower
will notify Lenders of any change in the name of Borrower, the principal place
of business of Borrower, the office where the books and records of Borrower are
kept, or any change in the registered agent of Borrower for the purposes of
service of process.
6.15 Financial Covenants. Borrower will, in accordance with Generally Accepted
Accounting Principles applied on a Consistent Basis, maintain:
(a) A Minimum Current Ratio at all times greater than or equal to 1.50 to 1.00.
(b) A minimum Tangible Net Worth greater than or equal to $60,000,000. Beginning
with Beginning with Borrower's fiscal quarter ending December 31, 1997, and
continuing each quarter thereafter during the term of this Agreement, the
required minimum Tangible Net Worth amount shall be increased by an amount equal
to the sum of 60% of net income of Borrower (on a consolidated basis) during the
preceding quarter.
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(c) A ratio of total liabilities to Tangible Net Worth less than or equal to (i)
2.50 to 1.00 during the first year following the date of this Agreement, and
(ii) 2.25 to 1.00 thereafter.
(d) A minimum Fixed Charge Coverage Ratio at all times greater than or equal to
1.30 to 1.00.
SECTION 7. NEGATRVE COVENANTS.
Borrower covenants and agrees that from the date of this Agreement until payment
in full of all present or future indebtedness hereunder and termination of all
present or future credit facilities established hereunder, unless Lenders shall
otherwise consent in writing, Borrower will fully comply with the following
provisions:
7.1 Indebtedness. Borrower will not, directly or indirectly, create, incur,
assume, or permit to exist any indebtedness for borrowed money, except Permitted
Indebtedness.
7.2 Limitations on Mortgages, Liens, Etc. Borrower will not, directly or
indirectly, create, incur, assume, or suffer or permit to exist any mortgage,
pledge, lien, security interest, or other charge or encumbrance (including the
lien or retained security title of a conditional vendor or lessor) upon or with
respect to any of its assets, or assign or otherwise convey any right to receive
income, except Permitted Liens.
7.3 Guaranties. Borrower will not, directly or indirectly, guarantee, assume,
endorse, become a surety or accommodation party for, or otherwise in any way
extend credit or become responsible for or remain liable or contingently liable
in connection with any indebtedness or other obligations of any other Person or
entity except guaranties and endorsements made in connection with the deposit of
negotiable instruments and other items for collection or credit in the ordinary
course of business.
7.4 Merger, Sale of Assets, Dissolution, Etc. Borrower will not, and will not
permit any Subsidiary, to directly or indirectly: (a) enter into any transaction
of merger or consolidation, except pursuant to a Permitted Acquisition; (b)
transfer, sell, assign, lease, or otherwise dispose of all or a substantial part
of its properties or assets; (c) transfer, sell, assign, discount, lease, or
otherwise dispose of any of its notes or other instruments, accounts receivable,
or contract rights with or without recourse, except for collection in the
ordinary course of business, or any assets or properties necessary or desirable
for the proper conduct of its business; (d) change the scope or nature of its
business; (e) enter into any arrangement, directly or indirectly, with any
Person whereby Borrower shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property which Borrower intends to use for
substantially the same purpose or purposes as the property being sold or
transferred; (f) invest in, acquire assets or stock of, transfer any assets to,
or do business through any Subsidiary not described in
27
Subsection [4-1] hereof except for Subsidiaries formed by Borrower for the
purpose of consummating a Permitted Acquisition, which Subsidiaries will survive
any such Permitted Acquisition; (g) wind up, liquidate, or dissolve itself or
its business; or (h) agree to any of the foregoing.
7.5 Acquisitions. Borrower will not, and will not permit any Subsidiary, to
acquire all or substantially all assets, or Capital Stock (or other equity
interest) of any Person except pursuant to Permitted Acquisitions.
7.6 Prohibitions on Dividends, Redemptions, Distributions and Other Payments.
Borrower will not, directly or indirectly, declare allocate or pay any dividends
on any shares of stock of any class of Borrower, now or hereafter outstanding,
or purchase, redeem, or otherwise acquire or retire any shares of stock of any
class of Borrower or apply or set apart any of its assets therefor or make any
other distribution (by redemption of capital or otherwise) in respect of any
such shares.
7.7 Limitations on Loans, Advances, Investments, Transfer of Assets, and
Acquisition of Assets. Borrower will not, directly or indirectly, make or have
outstanding a loan or advance to or an investment in, or transfer assets to, or
acquire all or a substantial part of the assets or proper-ties of, or own or
acquire stock or other securities of, any Person, except: (a) stock or other
securities received in settlement of a debt that was created in the ordinary
course of business; (b) travel advances in the ordinary course of business to
its officers and employees; (c) readily marketable securities issued by the
United States of America; and (d) certificates of deposit or repurchase
agreements of Lenders or of any other financial institution of comparable
standing; (e) such outstanding matters as are set forth on the attached Schedule
7.7; and (f) loans and advances to, and investments in, Subsidiaries.
7.8 Regulation U. Borrower will not permit any part of the proceeds of the loan
or loans made pursuant to this Agreement to be used to purchase or carry or to
reduce or retire any loan incurred to purchase or carry any margin stock (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System) or to extend credit to others for the purpose of purchasing or carrying
any such margin stock, or to be used for any other purpose which violates, or
which would be inconsistent with, the provisions of Regulation U or other
applicable regulation. Borrower covenants that it is not engaged and will not
become engaged as one of its principal or important activities in extending
credit for the purpose of purchasing or carrying such margin stock. If requested
by Lenders, Borrower will furnish to Lenders in connection with any loan or
loans hereunder, a statement in conformity with the requirements of Federal
Reserve Form U-1 referred to in said regulation. In addition, Borrower covenants
that no part of the proceeds of the loan or loans hereunder will be used for the
purchase of commodity future contracts (or margins therefor for short sales) for
any commodity not required for the normal raw material inventory of Borrower.
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7.9 Insider Transactions. Borrower will not, directly or indirectly, purchase,
acquire, or lease any property or services from, or sell, provide, or lease any
property or services to, or otherwise deal with, in the ordinary course of
business or otherwise, (i) any stockholder or (ii) any business entity,
corporation, partnership, or association in which a stockholder owns a
controlling interest, except upon terms and conditions not less favorable to
Borrower than if no such relationship existed, and except for such outstanding
matters as are set forth on the attached Schedule 7.9.
7.10 Loans to Officers, Stockholders, Employees, Etc. Borrower will not,
directly or indirectly, lend or advance or permit to be outstanding any loans or
advances of money, credit, or property to officers, stockholders, employees,
agents, or consultants of Borrower (other than travel advances in the ordinary
course of business) in an aggregate amount in excess of $50,000 for each fiscal
year, except for such outstanding loans or advances as are set forth on the
attached Schedule 7.10.
7.11 Changes in Governing Documents, Accounting Methods, Fiscal Year. Borrower
will not amend in any respect its articles of incorporation or bylaws from that
in existence on the date of this Agreement or change its accounting methods or
practices, its depreciation or amortization policy or rates, or its fiscal year
end from that in existence as of the date of the financial statements provided
to Lenders pursuant to Subsection 4.4 hereof, except as required to comply with
law or with Generally Accepted Accounting Principles.
SECTION 8. EVENTS OF DEFAULT.
The following events shall constitute "Events of Default" hereunder.
8.1 Payment of Obligations Under Loan Documents. Borrower fails to make payment
of any principal, interest, or other amount due on any indebtedness owed any
Lender under the Loan Documents, or fails to make any other payment to any
Lender as contemplated thereunder either by the terms hereof or otherwise.
8.2 Representation or Warranty. Any representation or warranty made or deemed
made by Borrower or any other Person herein or in any writing furnished in
connection with or pursuant to the Loan Documents, or any report, certificate,
financial statement, or other information provided by Borrower or any other
Person to any Lender in connection with or pursuant to the Loan Documents, shall
be false or misleading in any material respect on the date when made or when
deemed made, and continues to be false or misleading for a period of thirty (30)
days.
8.3 Covenants Under the Loan Documents. Borrower or any other Person fails to
fully and promptly perform when due any agreement, covenant, term, or condition
binding on it contained in this Agreement or any other Loan Document, or
otherwise a part of the transactions covered hereby, and with respect to
agreements, covenants, terms or conditions
29
other than payment obligations (a) set forth in Section 6.15, such failure to
perform continues for a period of fifteen (15) days, and (b) and other than
those set forth in Section 6.15, such failure to perform continues for a period
of thirty (30) days.
8.4 Other Defaults under the Loan Documents. A default or event of default
occurs under any other Loan Document, other than with respect to any matters
described in Subsection 8.1, 8.2, or 8.3 above, and such default continues for a
period of thirty (30) days.
8.5 Cross-Default. A default or event of default occurs under any present or
future indebtedness of Borrower to any Lender not evidenced by the Loan
Documents or a default or event of default occurs under any guaranty or security
document executed by any Person in connection therewith, and any such default or
event of default continues beyond the expiration of any applicable grace or cure
period. An Event of Default hereunder shall constitute a default under any such
indebtedness, guaranty, or security document.
8.6 Payment, Performance, or Default of Other Monetary0bligations.Borrower fails
to make payment on any contract obligation or of principal or interest on any
indebtedness other than that created under the Loan Documents or other-wise owed
to any Lender, or Borrower fails to fully and promptly perform any other
obligation, agreement, term, or condition contained in any agreement under which
any such other indebtedness is created or there is otherwise a default or event
of default thereunder.
8.7 Other Covenants or Defaults to Lenders or Others. Borrower fails to fully
and promptly perform when due any agreement, covenant, term, or condition
involving an amount in excess of $100,000, binding on it contained in any lease,
contract, or other agreement to which it is a party or in respect of which it is
obligated, other than the Loan Documents and other than those containing
monetary obligations (as described in Subsections 8.5 and 8.6 above), or there
is otherwise a default or event of default thereunder, and such failure to
perform continues for a period of thirty (30) days.
8.8 Liquidation; Dissolution; Bankruptcy; Etc. Borrower liquidates or dissolves;
the business of Borrower is suspended; Borrower files or commences a voluntary
petition, case, proceeding, or other action seeking reorganization, arrangement,
readjustment of its debts, or any other relief under any existing or future law
of any jurisdiction, domestic or foreign, state or federal, relating to
bankruptcy, insolvency, reorganization, or relief of debtors, or Borrower takes
any other action indicating its consent to, approval of, or acquiescence in, any
such petition, case, proceeding, or other action seeking to have an order for
relief entered with respect to it or its debts; Borrower applies for, or
consents to or acquiescence in, the appointment of a receiver, trustee,
custodian, or other similar official for Borrower or for all or a substantial
part of its property; Borrower makes an assignment for the benefit of creditors;
or Borrower is unable to pay its debts as they mature or admits in writing its
inability to pay its debts as they mature.
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8.9 Involuntary Bankruptcy, Etc. An involuntary petition, case, proceeding, or
other action is commenced against Borrower under the Bankruptcy Code or seeking
reorganization, arrangement, readjustment of its debts, or any other relief
under any existing or future law of any jurisdiction, domestic or foreign, state
or federal, relating to bankruptcy, insolvency, reorganization, or relief of
debtors; a receiver, trustee, custodian, or other similar official is
involuntarily appointed for Borrower or for all or a substantial part of
Borrower's property or assets; or any case, proceeding, or other action seeking
issuance of a warrant of attachment, execution, distraint, or similar process
against all or a substantial part of Borrower's assets or property results in
the entry of an order for such relief; and any of the foregoing continues for
sixty (60) days without being vacated, discharged, stayed, bonded, or dismissed.
8. 10 Judgments. A judgment is entered against Borrower for the payment of
damages or money in excess of $100,000, if the same is not discharged or if a
writ of execution or similar process is issued with respect thereto and is not
stayed within the time allowed by law for filing notice of appeal of the final
judgment.
8.11 Attachment, Garnishment, Liens Imposed by Law. A writ of attachment or
garnishment is issued against, or a lien is imposed by operation of law on, any
property of Borrower, if the amount of the claim or the value of the affected
property is in excess of $100,000, if the lien is not discharged within thirty
(30) days after it has attached.
8.12 Corporate Existence, Transfer of Property. Any act or omission (formal or
informal) of Borrower or its officers, directors, or shareholders leading to, or
resulting in: (a) the termination, invalidation (partial or total), revocation,
suspension, interruption, or unenforceability of (i) its corporate existence, or
(ii) any rights, licenses, franchises, or permits the failure of which to retain
would have a Material Adverse Effect; or (b) the transfer or disposition
(whether by sale, lease, or otherwise) to any Person of all or a substantial
part of its property.
8.13 Invalidity of Security Interest and Liens; Transfer of Collateral. For any
reason after the execution and delivery thereof, any document delivered pursuant
hereto that creates, or was intended to create, a security interest, or other
lien to secure indebtedness created hereunder, for a period of thirty (30) days:
(a) ceases to be in full force and effect; or (b) the liens intended to be
created thereby cease to be or are not valid and perfected first liens subject
to no other liens except as expressly permitted herein; (c) or the party
executing such document contests the validity or enforceability thereof or the
lien created thereby; or (d) any collateral covered thereby is transferred to
another Person without the prior written consent of Lenders.
8.14 Invalidity of Guaranty. For any reason after the execution and delivery
thereof, any document that gives rise to or was intended to give rise to a
guaranty of the indebtedness created hereunder, for a period of thirty (30)
days: (a) ceases to be in full force and effect; or (b) the party executing such
document contests the validity or enforceability of its guaranty or
31
denies that it has further liability with respect to any portion thereof,
including without limitation with respect to future loans.
8.15 Subsidiaries. Any of the matters described at Subsections 8.8 or 8.9 hereof
occur with respect to any Subsidiary and continues beyond any applicable cure
period; or any of the matters described at Subsection 8.6, 8.7, 8.10, 8.11, or
8.12 hereof occur with respect to any Subsidiary and such occurrence results in
a Material Adverse Effect with respect to Borrower, and continues beyond any
applicable cure period.
SECTION 9. RIGHTS AND REMEDIES.
9.1 Remedies Available Under Loan Documents and Otherwise. Lenders and
Administrative Lender shall have, in addition to the rights and remedies
contained in this Agreement and the other Loan Documents, all of the rights and
remedies of a creditor and, to the extent applicable, of a secured party, now or
hereafter available at law or in equity. Administrative Lender may, at its
option, exercise any one or more of such rights and remedies individually,
partially, or in any combination from time to time. No right, power, or remedy
conferred by the Loan Documents shall be exclusive of any other right, power, or
remedy referred to therein or now or hereafter available at law or in equity.
9.2 Remedies Upon Event of Default. Without limiting the generality of the
foregoing, if an Event of Default shall occur: (a) All commitments of Lenders to
make advances shall terminate; (b) Administrative Lenders may declare the
indebtedness owed to Lenders or Administrative Lender by Borrower hereunder and
any or all of any other indebtedness owed by Borrower to Lenders or
Administrative Lender, whether direct or indirect, contingent or certain, to be
accelerated and due and payable at once, whereupon such indebtedness, together
with interest thereon, shall forthwith become due and payable, all without
presentment, demand, protest, or other notice of any kind, all of which are
hereby expressly waived; and (c) Administrative Lender may proceed to do other
all things provided by law, equity, or contract to enforce its rights under such
indebtedness and to collect all amounts owing hereunder.
SECTION 10. THE ADMINISTRATIVE LENDER
10.1 Authorization and Action. Each Lender hereby appoints and authorizes
Administrative Lender to take such action as Administrative Lender on its behalf
and to exercise such powers under this Agreement and the other Loan Documents,
as are delegated to the Administrative Lender by the terms of the Loan
Documents, together with such powers as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement and the other Loan
Documents (including without limitation enforcement or collection of the Notes),
Administrative Lender shall not be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from acting) upon the
instructions of any Lender, and Administrative Lender shall not be required to
take any action which exposes Administrative
32
Lender to personal liability or which is contrary to any Loan Documents or
applicable law. Administrative Lender agrees to give to each Lender notice of
each notice given to it by the Borrower pursuant to the terms of this Agreement,
and to distribute to each applicable Lender in like funds all amounts delivered
to Administrative Lender by Borrower for the Pro Rata or individual account of
any Lender. Functions of the Administrative Lender are administerial in nature
and in no event shall the Administrative Lender have a fiduciary or trustee
relationship in respect of any Lender by reason of this agreement or any Loan
Document.
10.2 Administrative Lender's Reliance, Etc. Neither Administrative Lender, nor
any of its directors, officers, agents, employees, or representatives shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Loan Document, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Lender (a) may treat the payee of
any Note as the holder thereof until Administrative Lender receives written
notice of the Lender; (b) may consult with legal counsel (including counsel for
the Borrower or any of its Subsidiaries), independent public accountants, and
other experts selected by it, and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants, or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
warranties, or representations made in or in connection with this Agreement or
any other Loan Documents; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants, or
conditions of this Agreement or any other Loan Documents on the part of any
obligor or its Subsidiaries or to inspect the property (including the books and
records) of any obligor or its subsidiaries; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement, any other Loan Documents, or any other
instrument or document furnished pursuant hereto; and (f) shall incur no
liability under or in respect of this Agreement or any other Loan Documents by
acting upon any notice, consent, certificate, or other instrument or writing
believe by it to be genuine and signed or sent by the proper party or parties.
10.3 SunTrust Bank, Tampa Bay and Affiliates. With respect to its Available
Commitment, its Advances, and any Loan Documents, SunTrust Bank, Tampa Bay has
the same rights under this Agreement as any other Lender and may exercise the
same as though it were not Administrative Lender. SunTrust Bank, Tampa Bay and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, any obligor,
any Affiliate thereof, and any Person who may do business therewith, all as if
SunTrust Bank, Tampa Bay were not Administrative Lender and without any duty to
account therefor t any Lender.
10.4 Lender Credit Decision. Each Lender acknowledges that it has, independently
and without reliance upon Administrative Lender or any other Lender, and based
on the financial statements provided by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Administrative
33
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.5 Indemnification by Lenders. Lenders shall indemnify Administrative Lender,
Pro Rata, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Administrative Lender in any way relating to or arising out of
any Loan Documents or any action taken or omitted by Administrative Lender
thereunder, including any negligence of Administrative Lender; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from Administrative Lender's gross
negligence or willful misconduct. Without limitation of the foregoing, Lenders
shall reimburse Administrative Lender, Pro Rata, promptly upon demand for any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by
Administrative Lender in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through
negotiation, legal proceedings or other-wise) of, or legal and other advice in
respect of rights or responsibilities under, the Loan Documents. The indemnity
provided in this Section 10.5 shall survive the termination of this Agreement.
10.6 Successor Administrative Lender. Administrative Lender may resign any time
by giving written notice thereof to Lenders and the Borrower, and may be removed
at any time with or without cause by the action of all Lenders (other than
Administrative Lender, if it is a Lender). Upon any such resignation, Lenders
shall have the right to appoint a successor Administrative Lender. If no
successor Administrative Lender shall have been so appointed and shall have
accepted such appointment within thirty days after the retiring Administrative
Lender's giving of notice of resignation, then the retiring Administrative
Lender may, on behalf of Lenders, appoint a successor Administrative Lender,
which shall be a commercial bank organized under the laws of the United States
of America or of any state thereof and having a combined capital and surplus of
at least $50,000,000. Upon the acceptance of any appointment as Administrative
Lender hereunder by a successor Administrative Lender, such successor
Administrative Lender shall thereupon succeed to and become vested with all the
Rights and duties of the retiring Administrative Lender, and the retiring
Administrative Lender shall be discharged from its duties and obligations under
the Loan Documents, provided that if the retiring or removed Administrative
Lender is unable to appoint a successor Administrative Lender, Administrative
Lender shall, after the expiration of a sixty day period from the date of
notice, be relieved of all obligations as Administrative Lender hereunder.
Notwithstanding any Administrative Lender's resignation or removal hereunder,
the provisions of this Section shall continue to inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Lender
under this Agreement.
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SECTION 11. MISCELLANEOUS.
11.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement or any other Loan Documents, nor consent to any departure by the
Borrower or any obligor therefrom, shall be effective unless the same shall be
in writing and signed by the Borrower and the Administrative Lender with the
consent of SunTrust Bank, Tampa Bay, and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, waiver, or consent shall (and
the result of action or failure to take action shall not), unless in writing and
signed by all of Lenders and Administrative Lender, (a) increase the Available
Commitment, (b) reduce any principal, interest, fees, or other amounts payable
hereunder, or waive or result in the waiver of any Event of Default, (c)
postpone any date fixed for any payment of principal, interest, fees, or other
amounts payable hereunder, (d) release any collateral or guaranties securing any
obligor's obligations hereunder, other than releases contemplated hereby and by
the Loan Documents, (e) change the meaning of "Specified Percentage" or the
number of Lenders required to take any action hereunder, or change the
definitions of "Available Commitment, " or "Maturity Date, " or (f) amend
Section 2 or this Section 11.1. No amendment, waiver, or consent shall affect
the rights or duties of Administrative Lender under any Loan Documents, unless
it is in writing and signed by Administrative Lender in addition to the
requisite Lenders.
11.2 Sharing of Payments. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any Right of set-off, or
otherwise) on account of its Advances in excess of its Pro Rata share of
payments made by the Borrower, such Lender shall forthwith purchase
participations in Advances made by the other Lenders as shall be necessary to
share the excess payment Pro Rata with each of them, provided, however, that if
any of such excess payment is thereafter recovered from the purchasing Lender,
its purchase from each Lender shall be rescinded and each Lender shall repay the
purchase price to the extent of such recovery together with a Pro Rata share of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 11.2
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) with respect to such participation as full as if
such Lender were the direct creditor of the Borrower in the amount of such
participation.
11.3 Liens; Set-Off. Borrower hereby grants to each Lender and Administrative
Lender a continuing lien to secure all indebtedness of Borrower whether created
hereunder, pursuant hereto, or otherwise upon any and all monies, securities and
other property of Borrower and the proceeds thereof, now or hereafter held or
received by or in transit to, the Lender or Administrative Lender, if
applicable, from or for Borrower, and also upon any and all deposits (general or
special) and credits of Borrower, if any, at Bank, at any time existing. Upon
the occurrence of any Event of Default, each Lender is hereby authorized at any
time and from time to time, without notice to Borrower, to set off, appropriate,
and apply any or all items hereinabove referred to against all indebtedness of
Borrower owed to it, whether under the Loan
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Documents or otherwise, whether now existing or hereafter arising. A Lender
shall be deemed to have exercised such right of set-off and to have made a
charge against such items immediately upon the occurrence of such Event of
Default although made or entered on its books subsequent thereof.
11.4 Payment of Expenses, Including Attorneys' Fees and Taxes. Borrower agrees:
(a) to pay or reimburse Lenders and Administrative Lender for all their
respective reasonable and customary out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation, execution, and delivery of, and
any amendment, supplement, or modification to, or waiver or consent under, the
Loan Documents, and the consummation of the transactions contemplated thereby,
including, without limitation, the reasonable and customary fees and
disbursements of their counsel, taxes, and all recording or filing fees; (b) to
pay or reimburse Lenders and Administrative Lender for all of its costs and
expenses incurred in connection with the administration, supervision,
collection, or enforcement of, or the preservation of any rights under, the Loan
Documents, including, without limitation, the fees and disbursements of their
counsel, including attorneys' fees out of court, in trial, on appeal, in
bankruptcy proceedings, or otherwise; (c) without limiting the generality of
provision (a) hereof, to pay or reimburse Lenders and Administrative Lender for,
and indemnify and hold them harmless against liability for, any and all
documentary stamp taxes, nonrecurring intangible taxes, or other taxes, together
with any interest, penalties, or other liabilities in connection therewith, that
Lenders and Administrative Lender now or hereafter determines are payable with
respect to the Loan Documents, the obligations evidenced by the Loan Documents,
any advances under the Loan Documents, and any guaranties or security
instruments; and (d) to pay, indemnify, and hold Lenders and Administrative
Lender harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance, and administration of the Loan Documents.
The agreements in this Subsection shall survive repayment of all other amounts
payable hereunder or pursuant hereto, now or in the future, and shall be secured
by all collateral that secures the loan or loans described herein.
11.5 Notices. Unless otherwise expressly agreed herein, and notwithstanding any
provisions to the contrary contained in the other Loan Documents, all notices,
requests, and demands to or upon the parties hereto pursuant to any Loan
Document shall be deemed to have been given or made when delivered by hand or by
courier service, when provided to a nationally recognized overnight delivery
service for overnight delivery, when transmitted to a receiving telecopier, or
three days after deposit in the mail, postage prepaid by registered or certified
mail, return receipt requested, addressed as follows or to such other address as
may be hereafter designated in writing by one party to the other:
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Borrower: Flanders Corporation
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Administrative Lender: SunTrust Bank, Tampa Bay
000 0xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxx
Telecopy: (000) 000-0000
Any Lender: The address shown opposite its name
on the signature pages hereof
11.6 Governing Law. The validity, interpretation, and enforcement of the Loan
Documents and the rights and obligations of the parties thereto, shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Florida excluding those laws relating to the resolution of conflicts
between laws of different jurisdictions.
11.7 Venue; Personal Jurisdiction. In any litigation in connection with or to
enforce any of the Loan Documents, Borrower irrevocably consents to and confers
personal jurisdiction on the courts of the State of Florida or the United States
courts located within the State of Florida, expressly waives any objections as
to venue in any of such courts, and agrees that service of process may be made
on Borrower by mailing a copy of the summons and complaint by registered or
certified mail, return receipt requested, to the address set forth herein (or
otherwise expressly provided in writing). Nothing contained herein shall,
however, prevent Administrative Lender or Lenders from bringing any action or
exercising any rights within any other state or jurisdiction or from obtaining
personal jurisdiction by any other means available by applicable law.
11.8 Severability and Enforceability of Provisions. In the event that any one or
more of the provisions of the Loan Documents is determined to be invalid,
illegal, or unenforceable in any respect as to one or more of the parties, all
remaining provisions nevertheless shall remain effective and binding on the
parties thereto and the validity, legality, and enforceability thereof shall not
be affected or impaired thereby. If any such provision is held to be illegal,
invalid, or unenforceable, there will be deemed added in lieu thereof a
provision as similar in terms to such provision as is possible, that is legal,
valid, and enforceable. To the extent permitted by applicable law, the parties
hereby waive any law that renders any such provision invalid, illegal, or
unenforceable in any respect.
11.9 Failure of Party to Execute. Any party executing any of the Loan Documents
shall be bound by the terms thereof without regard to execution by any other
party, and the
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failure of any party to execute any of the Loan Documents shall not release or
other-wise affect the obligations of the party or parties who do sign the other
Loan Documents.
I 1. 10 Counterparts; Facsimile Signatures; Effective Date. The Loan Documents
and any amendments, waivers, consents, or supplements hereto may be signed in
original counterparts and by facsimile transmission of signed counterparts, in
any number, each of which shall be deemed an original, no one of which need
contain all of the signatures of the parties, and as many of such counterparts
as shall together contain all of the signatures of the parties shall be deemed
to constitute one and the same instrument. A set of the counterparts of this
Agreement signed by all parties hereto shall be lodged with Administrative
Lender. This Agreement shall become effective upon the receipt by Administrative
Lender of original signed counterparts or facsimile confirmation of signed
counterparts of this Agreement, each of which shall be deemed an original, from
each of the parties hereto.
11.11 No Waiver. No omission or failure of Administrative Lender or any Lender
to exercise and no delay in exercising of any right, power, or privilege under
any of the Loan Documents shall impair such right, power, or privilege, shall
operate as a waiver thereof or be construed to be a waiver thereof; nor shall
any single or partial exercise of any right, power, or privilege preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege.
11.12 Cumulative Remedies. The rights and remedies provided in the Loan
Documents are cumulative, and not exclusive of any rights or remedies provided
by law or in equity, and may be pursued singularly, successively, or together,
and may be exercised as often as the occasion therefor shall arise. The
warranties, representations, covenants, and agreements made herein and therein
shall be cumulative, except in the case of irreconcilable inconsistency, in
which case the provisions of this Agreement shall control.
11.13 Course of Dealing; Amendment; Supplemental Agreements. No course of
dealing between the parties hereto shall be effective to amend, modify, or
change any provision of the Loan Documents. The Loan Documents may not be
amended, modified, 'or changed in any respect except by an agreement in writing
signed by the party against whom such change is to be enforced. The parties may,
subject to the provisions of this Subsection, from time to time, enter into
written agreements supplemental to the Loan Documents for the purpose of adding
any provisions to the Loan Documents or changing in any manner the rights and
obligations of the parties thereunder. Any such supplemental agreement shall be
binding upon the parties thereto.
11.14 Time of Essence. Time is of the essence in the performance of the Loan
Documents.
11.15 Successors and Assigns. The Loan Documents shall be binding upon the
parties thereto and their respective successors and assigns, and shall inure to
the benefit of the parties thereto, and, to the extent permitted herein, their
respective successors and assigns. Borrower
38
may not assign any of its rights or obligations under the Loan Documents without
the prior written consent of Lenders.
11.16 Reliance Upon, Survival of and Materiality of Representations and
Warranties, Agreements, and Covenants. All representations and warranties,
agreements, and covenants made in the Loan Documents are material and shall be
deemed to have been relied upon by Lenders, notwithstanding any investigation
heretofore or hereafter made by any Lender or Administrative Lender, and shall
survive the execution and delivery of the Loan Documents and the making of the
loan or loans herein contemplated, and shall continue in full force and effect
so long as any indebtedness is owed to any Lender or Administrative Lender
pursuant hereto or so long as there shall be any commitment to make loans
hereunder. All statements contained in any certificate or other paper delivered
to Lenders at any time pursuant to the Loan Documents shall constitute
representations and warranties under the Loan Documents.
11.17 Legal or Governmental Limitations. Anything contained in the Loan
Documents to the contrary notwithstanding, no Lender shall be obligated to
extend credit or make loans to Borrower in an amount in violation of any
limitations or prohibitions provided by any applicable statute or regulation.
11.18 WAIVER OF TRIAL BY JURY. BORROWER, LENDERS AND ADMINISTRATIVE LENDER
HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OTHER DOCUMENT EXECUTED IN
CONJUNCTION WITH THE TRANSACTIONS CONTEMPLATED THEREUNDER, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETI[IER ORAL OR WRITTEN), OR ACTION OF
ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDERS AND
ADMINISTRATIVE LENDER TO ENTER INTO THE TRANSACTIONS EVIDENCED HEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
BORROWER: FLANDERS CORPORATION,
a North Carolina Corporation
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Vice President
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ADMINISTRATIVE LENDER: SUNTRUST BANK, TAMPA BAY,
a Florida banking corporation
By: /s/ Xxxxx X. Xxx
Xxxxx X. Xxx
Vice President
LENDERS:
Specified Percentage: 66.667% SUNTRUST BANK, TAMPA BAY,
Address: Corporate Banking, Tampa Bay a Florida banking corporation
000 0xx Xxxxxx Xxxxx, 0xx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
By: /s/ Xxxxx X. Xxx
Xxxxx X. Xxx
Vice President
Specified Percentage: 33.333% ZIONS FIRST NATIONAL BANK,
Address: Xxx Xxxxx Xxxx Xxxxxx a national banking association
Xxxx Xxxx Xxxx, Xxxx 00000
By: /s/ Xxxxx X. Xxxxxxx,
Xxxxx X. Xxxxxxx,
Relationship Manager
STATE OF UTAH
COUNTY OF Salt Lake
Execution of the foregoing instrument was acknowledged before me this 10th of
November, 1997, by Xxxxxx X. Xxxxx, as Vice President of Flanders Corporation, a
North Carolina corporation, on behalf of the corporation. He is either
personally known to me or has produced ______________________________________ as
identification.
/s/ Xxxx X. Call
Notar Public, State of Utah
(Name) Xxxx X. Call
Commission Number:_____________________ My Commission Expires:
40
STATE OF UTAH
COUNTY OF Salt Lake
Execution of the foregoing instrument was acknowledged before me this 10th of
November, 1997, by Xxxxx X. Xxx, as Vice President, of SunTrust Bank, Tampa Bay,
a Florida banking corporation, on behalf of the corporation. He is either
personally known to me or has produced ______________________________________ as
identification.
/s/ Xxxx X. Call
Notar Public, State of Utah
(Name) Xxxx X. Call
Commission Number:_____________________ My Commission Expires:
STATE OF UTAH
COUNTY OF Salt Lake
Execution of the foregoing instrument was acknowledged before me this 10th of
November, 1997, by Xxxxx X. Xxxxxxx, as Relationship Manager, of Zions First
National Bank, a national banking association, on behalf of the association. He
is either personally known to me or has produced
______________________________________ as identification.
/s/ Xxxx X. Call
Notar Public, State of Utah
(Name) Xxxx X. Call
Commission Number:_____________________ My Commission Expires:
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