EXHIBIT 10.1
WORKING CAPITAL LOAN AGREEMENT
BY AND BETWEEN
XXXXX ACQUISITION SUB, INC., as Lender
O2WIRELESS SOLUTIONS, INC., as Borrower
AND
o2WIRELESS, INC.
o2WIRELESS LIGHTING, INC.
o2WIRELESS SYSTEMS GROUP, INC.
o2WIRELESS DEPLOYMENT, INC.
o2WIRELESS SITE DEVELOPMENT, INC.
YOUNG & ASSOCIATES, INC.
o2WIRELESS MICHIGAN, INC., and
o2WIRELESS NORTH CAROLINA, INC., as Affiliate Guarantors
June 5, 2002
LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of June 5, 2002, by and between XXXXX
ACQUISITION SUB, INC. ("Lender") on the one hand, and o2WIRELESS SOLUTIONS, INC.
("Borrower") and o2WIRELESS, INC., o2WIRELESS LIGHTING, INC., o2WIRELESS SYSTEMS
GROUP, INC., o2WIRELESS DEPLOYMENT, INC., o2WIRELESS SITE DEVELOPMENT, INC.,
YOUNG & ASSOCIATES, INC., o2WIRELESS MICHIGAN, INC., and o2WIRELESS NORTH
CAROLINA, INC. (collectively, "Affiliate Guarantors") on the other hand.
WHEREAS, Lender is willing to provide working capital advances to
Borrower subject to the conditions and protections provided by this Working
Capital Loan Agreement.
IN CONSIDERATION of the foregoing and the mutual covenants, conditions
and agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, it is hereby
agreed as follows:
ARTICLE I
THE LOAN
1.1. Working Capital Advances/Use of Loan Proceeds/Structure of
Commitment. (a) From time to time prior to the date upon which Lender
determines to withdraw from its commitments under this Loan Agreement and
subject to the terms and conditions set forth in this Loan Agreement, Lender
agrees, for itself only, to extend Working Capital Advances to Borrower. All
Working Capital Advances shall be evidenced by a Working Capital Note the form
of which is attached hereto as Exhibit A, and Borrower is obligated to pay to
Lender the amount of Working Capital Advances actually made by Lender, together
with interest on the principal amount of the Working Capital Advances which
remain outstanding from time to time.
(b) Lender agrees that at a minimum it will initially
advance, upon satisfaction of all conditions precedent other than those
conditions Lender has determined to waive, if any, a minimum of Five Million
Dollars ($5,000,000). The proceeds of such initial advance shall be used as
provided in Schedule 1.1(b). In addition, no later than (i) the date Borrower
files its Form 10-Q for the quarter ended June 30, 2002 or (ii) August 15, 2002,
Lender shall advance to Borrower at least the lesser of (x) $3,000,000 or (y)
the amount of Borrower's Loss for the quarter ended June 30, 2002. If this Loan
Agreement is in effect as of the later of (i) the date Borrower files its Form
10-Q for the quarter ended September 30, 2002 or (ii) November 15, 2002, Lender
shall advance to Borrower, at its discretion, an amount equal to Borrower's Loss
for the quarter ended September 30, 2002. For purposes hereof, Loss shall mean
Borrower's consolidated earnings before interest, taxes, depreciation,
amortization, non-cash restructuring expenses and any accrued and unpaid
management fees due to Lender. In no event, however, will Lender have any
obligation or commitment to extend any Working Capital Advances to Borrower
under this Loan Agreement following the earliest of (i) the occurrence of an
Event of Default or (ii) November 15, 2002.
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1.2. Interest. (a) Prior to an Event of Default (and except as
otherwise provided herein), the unpaid principal balance of the Working Capital
Advances shall bear interest at the rate of two percent (2%) in excess of the
prime rate of interest as announced by CitiBank, N.A. from time to time. If all
the Working Capital Advances are not paid in full by November 15, 2002, the
interest rate shall thereupon increase by five percentage points.
(b) All interest due and other amounts due under this
Loan Agreement and a Working Capital Note shall be computed for the actual
number of days elapsed and on the basis of a 360-day year.
1.3. Notice of Requirement. Borrower, on behalf of itself and/or
the Affiliate Guarantors shall advise Lender from time to time of the specific
requirements it possesses for which additional working capital is needed to
operate its consolidated business. Upon such advice, Lender shall have the
right, but not the obligation, to advance funds to Borrower and to specify the
specific use of such funds; provided, however, that Lender shall be obligated to
fund the amount, up to $3,000,000, of Borrowers Loss for the quarter ended June
30, 2002. Lender also reserves the right to make advances to Borrower at such
time and in such amounts as Lender determines is necessary to enable Borrower
and the Affiliated Guarantors to meet the respective obligations of their
businesses.
1.4. Warranty. Borrower's receipt of an advance from Lender shall
automatically constitute a warranty by Borrower to the Lender that, on the date
of the advance: (a) all of the representations and warranties of Borrower
contained in this Loan Agreement shall be true and correct on such date as
though made on such date; and (b) no Default or Event of Default shall exist on
such date.
1.5. Payments. (a) The outstanding unpaid principal balance of all
Working Capital Advances, shall be paid in full on the earlier of Lender's
demand for payment, which in no event shall such demand be made prior to
November 15, 2002 or the occurrence of an Event of Default. Notwithstanding such
payment terms, while the Subordination Agreement of even date herewith among
Borrower, Lender and Wachovia Bank, National Association (the "Bank")
("Subordination Agreement") is in effect, no payments shall be made by Borrower
to Lender.
(b) All payments owed by Borrower to Lender under this
Loan Agreement and the Working Capital Advances, including without limitation,
such sums due under each Note shall be made without any counterclaim, offset,
recoupment, withholding, deduction or other reduction, deferment or abatement
for any reason whatsoever.
1.6. Affiliate Guaranty. (a) The Affiliate Guarantors hereby
jointly and severally guarantee to the Lender the prompt payment in full when
due (whether at stated maturity, by acceleration or otherwise) of all Working
Capital Advances (such advances herein called, collectively, the "Guaranteed
Obligations"), in each case strictly in accordance with the terms hereof. The
Affiliate Guarantors hereby further jointly and severally agree that if Borrower
shall fail to pay in full when due (whether at stated maturity, by acceleration
or otherwise) any of the Guaranteed Obligations, the Affiliate Guarantors will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due
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(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
(b) The obligations of the Affiliate Guarantors hereunder
are absolute and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the obligations of
Borrower under this Agreement, the Working Capital Notes or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor
(other than, subject to paragraph (c) below, full payment and satisfaction of
all Guaranteed Obligations), it being the intent of this section that the
obligations of the Affiliate Guarantors hereunder shall be absolute and
unconditional, joint and several, under any and all circumstances. Without
limiting the generality of the foregoing, it is agreed that, to the extent
permitted by applicable law, the occurrence of any one or more of the following
shall not alter or impair the liability of the Affiliate Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without
notice to any of the Affiliate Guarantors, the time
for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of this Agreement or the Note or any other
agreement or instrument referred to herein or therein
on the part of Borrower to be done shall fail to be
done or be omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the
Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right
under this Agreement or the Note shall be waived or
any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be
released or exchanged in whole or in part or
otherwise dealt with; or
(iv) any lien or security interest granted to, or
in favor of, the Lender as security for any of the
Guaranteed Obligations shall fail to be perfected.
The Affiliate Guarantors hereby expressly waive
diligence, presentment, demand of payment, protest
and all notices whatsoever, and any requirement that
Lender exhaust any right, power or remedy or proceed
against Borrower under this Agreement or the Note.
(c) The obligations of the Affiliate Guarantors hereunder
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by Lender or any subsequent holder of
any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Affiliate Guarantors jointly
and
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severally agree that they will indemnify Lender on demand for all reasonable
costs and expenses (including, without limitation, reasonable fees and
disbursements of legal counsel) incurred by Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
(d) Each Affiliate Guarantor hereby subordinates to
Lender all rights of subrogation or contribution against Borrower, whether
arising by contract or operation of law (including, without limitation, any such
right arising under the Bankruptcy Code) or otherwise by reason of any payment
by it pursuant to the provisions hereof until all Working Capital Advances
(other than any constituting contingent indemnity obligations) are fully paid
and satisfied.
(e) The Affiliate Guarantors jointly and severally agree
that, as between the Affiliate Guarantors and Lender, the Guaranteed Obligations
may be declared to be forthwith due and payable as provided herein (and shall be
deemed to have become automatically due and payable in the circumstances
provided herein) for purposes hereof, notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against Borrower and that, in the event of
such declaration in accordance with the terms hereof (whether or not due and
payable by the Borrower) shall forthwith become due and payable by the Affiliate
Guarantors for purposes hereof.
(f) Each Affiliate Guarantor hereby acknowledges that its
guaranty herein constitutes an instrument for the payment of money.
(g) The guaranty set forth herein is a continuing
guaranty, and shall apply to all Guaranteed Obligations, whenever and howsoever
arising.
(h) The Affiliate Guarantors hereby agree, as between
themselves, that if any Affiliate Guarantor shall become an "Excess Funding
Guarantor" (as defined below) by reason of the payment by such Affiliate
Guarantor of any Guaranteed Obligations, each other Affiliate Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Affiliate
Guarantor's "Pro Rata Share" (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the "Excess Payment" (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of an Affiliate Guarantor to any
Excess Funding Guarantor under this Section shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Affiliate Guarantor under the other provisions of this Section 1.11 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all such obligations. For
purposes hereof, (i) "Excess Funding Guarantor" means, in respect of any
Guaranteed Obligations, an Affiliate Guarantor that has paid an amount in excess
of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess Payment"
means, in respect of any Guaranteed Obligations, the amount paid by an Excess
Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations
(iii) "Pro Rata Share" means, for any Affiliate Guarantor, the ratio (expressed
as a percentage) of (x) the amount by which the aggregate present fair saleable
value of all assets of such Affiliate Guarantor (excluding any shares of stock
of any
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other Affiliate Guarantor) exceeds the amount of all the debts and liabilities
of such Affiliate Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Affiliate
Guarantor hereunder and any obligations of any other Affiliate Guarantor that
have been guaranteed by such Affiliate Guarantor) to (y) the amount by which the
aggregate fair saleable value of all assets of all of the Affiliate Guarantors
exceeds the amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of the Affiliate Guarantor hereunder) of the Affiliate Guarantors,
determined as of the date hereof.
(i) In any action or proceeding involving any state
corporate law, or any state or Federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of the
Affiliate Guarantors hereunder, after giving effect to the contribution rights
provided herein above, would otherwise be held or determined to be void, invalid
or unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability hereunder, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by any Affiliate Guarantor or Lender, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
1.7. Security Interest. (a) As security for the due and prompt
repayment and performance of any and all of the Working Capital Advances and the
performance of all other obligations and covenants of Borrower and Affiliated
Guarantors hereunder, certain or contingent, now existing or hereafter arising,
which are now, or may at any time or times hereafter be owing by Borrower or
Affiliated Guarantors, Borrower and each Affiliated Guarantor hereby pledges and
assigns to Lender and gives Lender a continuing security interest in and general
Lien upon and right of set-off against, all right, title and interest of
Borrower or Affiliated Guarantor in and to the Collateral, whether now owned or
hereafter acquired by Borrower or Affiliated Guarantor, and all proceeds and
products derived therefrom.
(b) Except as herein or by applicable law otherwise
expressly provided, Lender shall not be obligated to exercise any degree of care
in connection with any Collateral in its possession, to take any steps necessary
to preserve any rights in any of the Collateral or to preserve any rights
therein against prior parties, and Borrower or each Affiliated Guarantor agrees
to take such steps. In any case Lender shall be deemed to have exercised
reasonable care if it shall have taken such steps for the care and preservation
of the Collateral or rights therein as Borrower and each Affiliated Guarantor
may have reasonably requested Lender to take and Lender's omission to take any
action not requested by Borrower or an Affiliated Guarantor shall not be deemed
a failure to exercise reasonable care. In no event, however, shall Lender be
obligated to take any actions requested of it. No segregation or specific
allocation by Lender of specified items of Collateral against any liability of
Borrower and each Affiliated Guarantor shall waive or affect any security
interest in or Lien against other items of Collateral or any of Lender's
options, powers or rights under this Agreement or otherwise arising.
(c) Upon the occurrence and continuation of an Event of
Default, Lender may at any time and from time to time, with or without notice to
any Borrower or an Affiliated
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Guarantor, (i) transfer into the name of Lender or the name of Lender's nominee
any of the Collateral, (ii) notify any Account Debtor or other obligor of any
Collateral to make payment thereon direct to Lender of any amounts due or to
become due thereon and (iii) receive and after a Default or Event of Default
direct the disposition of any proceeds of any Collateral.
(d) Borrower and each Affiliated Guarantor authorizes
Lender at Borrower's expense to file any financing statements relating to the
Collateral and such other documents that are required for filing with the United
States Patent and Trademark Office in order to perfect Lender's security
interest (without Borrower's or Affiliated Guarantor's signatures thereon) which
Lender deems appropriate and Borrower and each Affiliated Guarantor irrevocably
appoints Lender as its attorney-in-fact to execute any such financing
statements, documents and/or control agreements in their name and to perform all
other acts, at their expense, which Lender deems appropriate to perfect and to
continue perfection of the security interest of Lender. Borrower and each
Affiliated Guarantor hereby appoints Lender as its attorney-in-fact to endorse,
present and collect on its behalf and in its name any draft, checks or other
documents necessary or desirable to collect any amounts which they may be owed.
The proceeds realized from the sale or other disposition of any Collateral may
be applied, after allowing two (2) Business Days for collection, first to the
reasonable costs, expenses and attorneys' fees and expenses incurred by Lender
for collection and for acquisition, completion, protection, removal, storage,
sale and delivering of the Collateral; secondly, to interest due upon any of the
Working Capital Advances; and thirdly, to the principal amount of the Working
Capital Advances. If any deficiency shall arise, Borrower and the Affiliated
Guarantor shall remain jointly and severally liable to Lender therefor.
(e) Borrower and each Affiliated Guarantor authorizes
Lender without affecting their joint and several obligations hereunder from time
to time (i) to take from any party and hold additional Collateral or guaranties
for the payment of the Working Capital Advances or any part thereof, and to
exchange, enforce or release such collateral or guaranty of payment of the
Working Capital Advances or any part thereof and to release or substitute any
endorser or guarantor or any party who has given any security interest in any
collateral as security for the payment of the Working Capital Advances or any
part thereof or any party in any way obligated to pay the Indebtedness or any
part thereof; and (ii) upon the occurrence of any Event of Default to direct the
manner of the disposition of the Collateral and the enforcement of any
endorsements, guaranties, letters of credit or other security relating to the
Indebtedness or any part thereof as Lender in its sole discretion may determine.
(f) Upon the occurrence and continuation of an Event of
Default, Lender may notify any Account Debtor of Lender's security interest and
may direct such Account Debtor to make payment directly to Lender for
application against the Working Capital Advances. Any such payments received by
or on behalf of Borrower at any time, whether before or after an Event of
Default, shall be the property of Lender, shall be held in trust for Lender and
not commingled with any other assets of any Person. Lender shall have the right
to apply any proceeds of Collateral to such of the Working Capital Advances as
it may determine.
(g) Borrower and each Affiliated Guarantor hereby waives
any right it may have to require marshaling of its assets.
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(h) Borrower and each Affiliated Guarantor will cooperate
with Lender in obtaining control of, or control agreements with respect to,
Collateral for which control or a control agreement is required for perfection
of the Lender's security interest.
(i) For purposes of this Loan Agreement "Collateral"
means the following property of Borrower and each Affiliate Guarantor, wherever
located and whether now owned by any Borrower or hereafter acquired: (a) all
Inventory; (b) all General Intangibles; (c) all Accounts and Chattel Paper and
any other instrument or intangible representing payment for goods or services;
(d) all Equipment (other than Equipment subject to a Permitted Lien); (e) all
Investment Property; (f) all shares of stock that Borrower holds in the
Affiliate Guarantors (subject to the prior pledging thereof to the Bank): and
(g) all parts, replacements, substitutions, profits, products and cash and
non-cash proceeds of any of the foregoing (including insurance proceeds payable
by reason of loss or damage thereto) in any form and wherever located.
Collateral shall include all written or electronically recorded books and
records relating to any such Collateral and other rights relating thereto. The
capitalized terms above shall have the meanings assigned thereto under the
Uniform Commercial Code as adopted in the State of Georgia.
ARTICLE II
CONDITIONS
2.1. General Conditions. The obligation of Lender to make any
advance hereunder is subject to the satisfaction, on the date hereof and on the
date of each advance, of the following conditions:
(a) The representations and warranties of Borrower
contained in this Loan Agreement shall be true and accurate on and as of such
date; and
(b) No event shall have occurred or be continuing that
would constitute a Default or Event of Default; and
(c) The making of the advance shall not cause the
Borrower to be in Default hereunder; and
(d) The execution and delivery to Lender of a Working
Capital Note representing each Working Capital Advance; and
(e) The execution and delivery to Lender of an officer's
certificate from an authorized officer of the Borrower, certifying to the
continued truth and accuracy of all representations and warranties contained in
this Agreement; and
(f) The execution by Borrower of the Agreement and Plan
of Merger by and among Borrower, Lender and Lender's subsidiary (`Merger
Agreement").
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2.2. Initial Funding Requirements. The obligation of Lender to
make the initial advance to Borrower of the Working Capital Loan is further
subject to the condition that Lender shall have received, on or before the date
hereof, each of the following:
(a) This Loan Agreement executed by the Borrower;
(b) The initial Working Capital Note, executed by
Borrower and dated the date hereof in form set forth in Exhibit B hereto;
(c) An executed Officer's Certificate, in the form of
Exhibit C attached to this Loan Agreement, containing information as of the date
hereof;
(d) A certificate of the Secretary of Borrower, dated the
date hereof and in the form of Exhibit D attached to this Loan Agreement, as to:
(i) the incumbency and signature of the officers of Borrower who have signed or
will sign this Loan Agreement, the Working Capital Notes, and any other
documents or materials to be delivered by Borrower to Lender pursuant to this
Loan Agreement; (ii) the adoption and continued effect of resolutions of the
board of directors of Borrower authorizing the execution, delivery and
performance of this Loan Agreement; and (iii) the accuracy and completeness of
copies of the articles or certificate of incorporation and bylaws of Borrower,
as amended to date;
(e) Such additional supporting documents and materials as
Lender or its counsel may reasonably request;
(f) An opinion of counsel to the Borrower in form and
substance satisfactory to each Lender; and
(g) Borrower shall have obtained all consents necessary
to enter into this Loan Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Borrower and each Affiliate Guarantor hereby jointly and severally
represent and warrant to Lender as follows:
3.1. Organization and Qualification. Borrower and each Affiliate
Guarantor is a corporation duly and validly organized and existing under the
laws of the state of its incorporation and has the corporate power and all
reasonably necessary licenses, permits and franchises to own its assets and
properties and to carry on its business as now conducted or presently
contemplated. Borrower and each Affiliate Guarantor is duly licensed or
qualified to do business and is in good standing in all jurisdictions in which
failure to do so would have a material adverse effect on its business or
financial condition.
3.2. Financial Statements. All of the financial statements of
Borrower heretofore furnished to Lender by Borrower (i) are accurate and
complete in all material respects and fairly
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present the financial condition, assets, liabilities, results of the
consolidated operations of Borrower, cash flow and other information included
therein for the periods covered thereby and as of the relevant dates thereof,
(ii) were prepared based upon true, correct and complete information that
borrower's management provided and (iii) were prepared in accordance with
generally accepted accounting principles applied on a consistent basis, subject
in the case of interim financial statements to audit and normal year-end
adjustments. There has been no material adverse change in the business,
properties or condition (financial or otherwise) of Borrower since the date of
the latest of such financial statements except for such matters otherwise
disclosed to Lender. There are no any material liabilities, indebtedness and
obligations of any nature (whether accrued, absolute, contingent or otherwise)
of Borrower or an Affiliate Guarantor not disclosed in writing to Lender.
3.3. Authorization; Enforceability. The making, execution,
delivery and performance of this Loan Agreement, the Working Capital Notes and
all other documents to be delivered by Borrower to the Lender in connection with
this Loan Agreement, have been duly authorized by all necessary corporate action
of Borrower and each of the Affiliate Guarantors. This Loan Agreement and the
initial Working Capital Note are, and subsequent Working Capital Notes will be,
the valid and binding obligations of Borrower and each Affiliate Guarantor and
are and will be enforceable against Borrower and each Affiliate Guarantor and
are and will be effective in accordance with their respective terms. No consent
or authorization is required in connection with this Loan Agreement or any
Working Capital Advances made hereunder other than the consent of the Bank which
consent has been obtained. This Loan Agreement grants and creates a valid
security interest in the Collateral for the benefit of Lender and such security
interest will be validly perfected upon appropriate filings of financing
statements, as to the collateral for which financing statements are required to
perfect security interests, and with the filing of requisite documents with the
United States Patent and Trademark Office to perfect the security interests in
registered trademarks, service marks and patents.
3.4 Compliance with Other Instruments, etc. Borrower and each
Affiliate Guarantor is not now, nor after given effect to the Working Capital
Loan will be, in violation of its articles of incorporation or by-laws. Borrower
is not, nor after giving effect to the Working Capital Loan will be, in material
violation of any term of any agreement or instrument to which it is a party or
by which it or any of its properties or assets is bound, or any term of any
applicable Law, ordinance, rule or regulation of any governmental authority or
any term of any applicable order, judgment or decree of any court, arbitrator or
governmental authority, the consequences of any which violation (or all such
violations in the aggregate) would reasonably be expected to have a material
adverse effect; and the execution, delivery and performance of this Agreement
and the Working Capital Notes will not result in any material violation of or be
in material conflict with or constitute a default under any such term or result
in the creation of (or impose any obligation on the Borrower to create) any Lien
upon any of the properties or assets of the Borrower pursuant to any such term.
3.5. Taxes. Borrower and each Affiliate Guarantor has filed all
federal, state, foreign and local tax returns which were required to be filed
(subject to any valid extensions of the time for filing), and has paid, or made
provision for the payment of, all taxes owed by it where the failure to so file
or pay such taxes would have any material adverse effect on the assets or
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properties of the Borrower or such Affiliate Guarantor or cause any material
adverse change in the financial condition of the Borrower or such Affiliate
Guarantor, and no tax deficiencies have been assessed or, to Borrower's
knowledge, proposed against Borrower or an Affiliate Guarantor.
3.6. Accuracy of Information. All information, certificates or
statements by Borrower and each Affiliate Guarantor given in, or pursuant to,
this Loan Agreement shall be accurate, true and complete when given in all
material respects.
3.7. Title to Property. Borrower has good title to, or a valid
leasehold interest in, all assets and properties shown on Borrower's most
recently delivered financial statements and necessary to conduct its business as
now conducted or proposed to be conducted, and there are no Liens on any of the
assets or properties of Borrower other than Permitted Liens. Borrower and each
Affiliate Guarantor has all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, reasonably necessary to conduct
its business as now conducted or proposed to be conducted, and Borrower does not
know of any conflict with or violation of any valid rights of others with
respect thereto.
3.8. ERISA. Borrower has no knowledge that any Plan is in
noncompliance in any material respect with the applicable provisions of ERISA or
the Internal Revenue Code. Borrower has no knowledge of any pending or
threatened litigation or governmental proceeding or investigation against or
relating to any Plan, nor has any knowledge of any reasonable basis for any
material proceedings, claims or actions against or relating to any Plan.
Borrower has no knowledge that Borrower has incurred any "accumulated funding
deficiency" within the meaning of Section 302(a)(2) of ERISA in connection with
any Plan. Borrower has no knowledge that there has been any Reportable Event or
Prohibited Transaction (as such terms are defined in ERISA) with respect to any
Plan, the occurrence of which would have a material adverse effect on the
business or condition (financial or otherwise) of Borrower, or that Borrower has
incurred any liability to the PBGC under Section 4062 of ERISA in connection
with any Plan.
3.9. Fiscal Year. Borrower's fiscal year ends on December 31.
3.10. Compliance With Laws. Neither Borrower or any Affiliate
Guarantor nor any of the assets of Borrower or an Affiliate Guarantor is in
violation of any Law to which Borrower or any Affiliate Guarantor or their
assets is subject which would have a material adverse effect on Borrower, an
affiliate Guarantor or their assets.
3.11. Other Environmental Conditions. To the best of Borrower's
knowledge after reasonable investigation, there are no conditions existing
currently or likely to exist during the term of this Loan Agreement that would
reasonably be expected to subject Borrower or any Affiliate Guarantor to
damages, penalties, injunctive relief or clean-up costs under any Environmental
Laws, or that would reasonably be expected to require investigation, clean-up,
removal or some other remedial action by Borrower or any Affiliate Guarantor
under Environmental Laws which remedial action would materially and adversely
affect the business or financial condition of the Borrower or an Affiliate
Guarantor, cause any material adverse change
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in the assets and properties of the Borrower or an Affiliate Guarantor or cause
any material impairment of the right to carry on the business of the Borrower or
an Affiliate Guarantor.
3.12. Environmental Judgments, Decrees and Orders. No materially
adverse judgment, decree, order or citation related to or arising out of
Environmental Laws is applicable to or binds Borrower or an Affiliate Guarantor,
or its Facilities or the owner of any of the Facilities.
3.13. No Claims. Borrower represents, warrants and agrees that
neither Borrower nor to its knowledge any of its shareholders whose beneficial
ownership is reflected in Borrower's latest annual report or proxy statement
filed with the Securities and Exchange Commission, directors, officers, agents
or representatives possess any lawsuit, demand, claim, cause of action, right to
money or damages, right of offset or recoupment or any other right or claim
whatsoever against the Lender. Borrower has also not received any notice that
any shareholders of Borrower are contemplating taking any action against the
Company that arises under federal or state securities laws.
ARTICLE IV
NEGATIVE COVENANTS
From and after the date of this Loan Agreement and until the entire
amount of principal of and interest due on the Working Capital Advances, and all
other fees and payments due under this Loan Agreement, and the Working Capital
Notes, and any other obligations of Borrower to Lender are paid in full,
Borrower shall not do or engage (and shall prevent any Affiliate Guarantor from
doing or engaging) in any of the following without the prior written consent of
Lender; provided, however, that if any of the following limitations or
restrictions imposed on Borrower and the Affiliate Guarantors are more
restrictive than the covenants set forth in the Credit Agreement, the
limitations and restrictions in this Article IV shall be deemed automatically
amended to be consistent in all material respects with such covenants:
4.1. Liens. Incur, create, assume or permit to be created or
allow to exist any Lien upon or in any of its assets or properties (including
facilities) except Permitted Liens.
4.2. Indebtedness. Incur, create, assume, permit to be extended
or allow to exist, guarantee, endorse or otherwise become directly or indirectly
or contingently responsible or liable for any Indebtedness, except Indebtedness
of Borrower to the Lender and the Bank or any financial institution that
succeeds such bank.
4.3. Consolidation or Merger. Consolidate with or merge into any
other Person, other than under the Merger Agreement, acquire substantially all
of the assets of any other Person, or permit another Person to merge into or
consolidate with Borrower or acquire substantially all of the assets of
Borrower, whether in one or a series of transactions.
4.4. Disposition of Assets. Sell, lease, assign, transfer or
otherwise dispose of any of its now owned or hereafter acquired assets or
properties or any real estate or real estate improvements (including facilities)
except for sales of inventory in the ordinary course of business.
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4.5. Sale and Leaseback. Enter into any agreement, directly or
indirectly, to sell or transfer any real or personal property used in its
business and thereafter to lease back the same or similar property.
4.6. Investments, Loans and Advances. Make any investments, in
loans or advances to other Persons, including: (a) any transfer or delivery of
cash, stock or other property or value in exchange for Indebtedness, stock or
any other security of another Person; (b) any loan, advance or capital
contribution to or in any other Person; (c) any guaranty, creation or assumption
of any liability or obligation of any other Person; or (d) any investment in any
fixed property or fixed assets other than fixed properties and fixed assets
acquired and used in the ordinary course of the business of Borrower; provided,
however, Borrower may make the following investments, loans and/or advances: (i)
investments in insured savings accounts and certificates of deposit and (ii)
investments in money market instruments.
4.7. Loans and Advances. Make any loan or advance to any Person,
except: (a) extensions of credit in the ordinary course of business by Borrower
to its customers; (b) advances to officers and employees of Borrower for
business travel and other expenses in the ordinary course of business; and (c)
loans and advances permitted pursuant to Section 4.6 of this Loan Agreement.
4.8. Transactions with Affiliates. Engage in any transaction with
an Affiliate, except that (a) the Borrower may pay compensation and benefits to
employees who are Affiliates in accordance with the Borrower's past practices
and subject to Section 4.10 hereof, and (b) the Borrower and its Affiliates may
conduct business transactions between themselves substantially on the same terms
and conditions as such companies have in the last year subject to the other
provisions of this Loan Agreement.
4.9. Restricted Payments. (a) Declare or pay any non-cash
dividends; or (b) purchase, redeem, retire, or otherwise acquire for value any
of its capital stock now or hereafter outstanding; or (c) make any distribution
of non-cash assets to Borrower's stockholders as such, whether in assets or in
obligations of Borrower; or (d) allocate or otherwise set apart any sum for the
purchase, redemption, or retirement of any shares of Borrower's capital stock;
or (e) make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock; or (f) pay any cash dividends to any
stockholders; or (g) make any management, consulting, noncompete, or other
payment to any shareholder, officer or director of Borrower or of any Affiliate
or Subsidiary of Borrower.
4.10. Compensation. Without the prior consent of Lender, increase
the salary or benefit levels of any employee, officer or director of Borrower or
of an Affiliate Guarantor or institute any new employee benefit plan covering
any of employee, director or officer.
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ARTICLE V
AFFIRMATIVE COVENANTS
From and after the date of this Loan Agreement and until the entire
amount of principal of and interest due on the Working Capital Loan, and all
other amounts of fees and payments due under this Loan Agreement, the Working
Capital Notes, and any other obligations of Borrower or an Affiliate Guarantor
to Lender are paid in full, Borrower shall (and the Borrower shall cause each
Affiliate Guarantor) to comply with the following covenants; provided, however,
that if any of the following obligations imposed on Borrower and the Affiliate
Guarantors are greater than the covenants imposed on them under the Credit
Agreement, the obligations under this Article V shall be deemed automatically
amended to be consistent in all material respects with such covenants:
5.1. Corporate Existence; Properties. (a) Maintain its corporate
existence; (b) maintain all assets (other than assets no longer used or useful
in the conduct of its business) in good repair, working order and condition,
ordinary wear and tear excepted; (c) maintain accurate records and books of
account in accordance with GAAP consistently applied throughout all accounting
periods; and (d) maintain insurance of such nature and in such amounts as is
customarily maintained by companies engaged in the same or similar business,
including but not limited to hazard, general liability and workers' compensation
insurance.
5.2. Licenses. Maintain in good standing and in full force and
effect each license, permit and franchise granted or issued by any federal,
state or local governmental agency or regulatory authority that is reasonably
necessary to Borrower's or Affiliate Guarantor's business.
5.3. Reporting Requirements. Furnish to Lender such information
respecting the business, assets and financial condition of Borrower as Lender
may reasonably request and, without request, furnish to the Lender (a) within
thirty (30) days after the end of each month in each Fiscal Year or forty-five
(45) days in the case of the last month of a fiscal quarter, a balance sheet of
Borrower as of the end of each month and Year and consolidated statements of
profit and loss of Borrower for each such month and for that part of the Fiscal
Year ending with each such month, all in reasonable detail and certified as true
and correct (subject to audit and normal year-end adjustments), by an officer of
Borrower; and
(b) As soon as received, but in any event not later than
two days after receipt, copies of all management letters submitted to Borrower
by independent certified public accountants in connection with any examination
of the financial statements of Borrower and notify Lender promptly of any
proposed change in any accounting method used by Borrower in the preparation of
the financial statements to be delivered to Lender pursuant to this Section.
5.4. Payment of Taxes and Claims. Pay all Taxes, assessments and
other governmental charges imposed upon it or any of its properties or assets in
respect of any of its franchises, business, income or profits as and when due
and all claims (including, without limitation, claims for labor, services,
materials and supplies) for sums which have become due and payable and which by
law have or might become a Lien upon any of its properties or assets; provided
that (i) no such charge or claim need be paid if being contested in good faith
by
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appropriate proceedings diligently conducted, if reserves or other appropriate
provision, if any, as shall be required by GAAP, shall have been made therefor
and (ii) there shall be no default pursuant to this section if the failure to
pay any of the foregoing could not reasonably be expected to have material
adverse effect.
5.5. Inspection of Properties and Records. Permit the Lender or
any of its agents or representatives the right upon reasonable notice to visit
any of its properties and examine any of its books and records and all
Collateral pledged to Lender at any time during normal business hours and as
often as may be desired, and Borrower shall facilitate each such inspection and
examination. This right of inspection shall include the right to audit the books
and records of the Borrower at its expense with the assistance of third parties
upon 24 hours notice.
5.6. Compliance with Laws. (a) Comply with all applicable
Environmental Laws, and orders of regulatory and administrative authorities with
respect thereto, where, in either case, the failure to do so could reasonably be
expected to cause a material adverse effect on the business or financial
condition of the Borrower or an Affiliate Guarantor, or its properties or assets
or cause any material impairment of the right to carry on the business of the
Borrower or an Affiliate Guarantor; and (b) comply with all other Laws
applicable to Borrower or an Affiliate Guarantor, its assets or operations where
the failure to do so could reasonably be expected to cause a material adverse
effect on the business or financial condition of the Borrower or an Affiliate
Guarantor or its assets or properties or cause any material impairment of the
right to carry on the business of the Borrower or an Affiliate Guarantor.
5.7. Compliance with Agreements. From and after the date hereof,
perform and comply in all respects with the provisions of any agreement,
license, regulatory approval, permit and franchise binding upon Borrower, or an
Affiliate Guarantor or its assets, if the failure to so perform or comply would
have a material adverse effect on the condition (financial or otherwise) of the
business, or assets of Borrower or an Affiliate Guarantor.
5.8. Notices. (a) As soon as possible and in any event within two
(2) days after becoming aware of the occurrence of any Default or Event of
Default, notify Lender in writing of such Default or Event of Default and set
forth the details thereof and the action which is being taken or proposed to be
taken by Borrower with respect thereto;
(b) Promptly notify Lender of the commencement or threat
of any litigation or administrative proceeding of a material nature against the
Borrower or an Affiliate Guarantor or its properties or assets;
(c) Promptly notify Lender: (i) of the occurrence of any
Reportable Event or Prohibited Transaction (as such terms are defined in ERISA)
that has occurred with respect to any Plan; and (ii) of the institution by the
PBGC or Borrower of proceedings under Title IV of ERISA to terminate any Plan;
(d) Unless prohibited by applicable Law, notify Lender,
and provide copies, immediately upon receipt, of any notice, pleading, citation,
indictment, complaint, order or decree from any federal, state or local
government agency or regulatory body, or any other source, asserting or alleging
violation of any Law or a circumstance or condition that requires or
-15-
may require a financial contribution by Borrower or an Affiliate Guarantor under
Environmental Laws or an investigation, clean-up, removal, remedial action or
other response by or on the part of Borrower or an Affiliate Guarantor under
Environmental Laws or which seeks damages or civil, criminal or punitive
penalties from or against Borrower or an Affiliate Guarantor for an alleged
violation of Environmental Laws;
(e) Promptly notify Lender of the commencement of any
investigation, litigation, or administrative or regulatory proceeding by, or the
receipt of any notice, citation, pleading, order, decree or similar document
issued by, any federal, state or local governmental agency or regulatory
authority that results in, or may result in, the termination or suspension of
any license, permit or franchise of Borrower's or an Affiliate Guarantor's
business, or that imposes, or may result in the imposition of, a fine or penalty
on Borrower or an Affiliate Guarantor; and
(f) Promptly notify Lender in writing in the event of any
damage to, or loss of, any of the assets or properties of the Borrower or any
Affiliate Guarantor if the net book value of the damaged or lost asset or
property at the time of such damage or loss exceeds $150,000.
5.9 Use of Proceeds. Borrower shall use the proceeds of any
Working Capital Advance solely for the uses approved by Lender.
5.10 Further Documents. Borrower shall execute and deliver such
other and further documents and assurances and take such actions that Lender may
from time to time request as being necessary or desirable to carry out more
effectively the intent and purposes of this Loan Agreement and establish and
protect the rights and remedies created or intended to be created in favor of
Lender.
ARTICLE VI
REMEDIES
6.1. Acceleration. Upon the occurrence of an Automatic Event of
Default, then, without notice, demand or action of any kind by Lender: (i) the
necessity of the Lender to make any Working Capital Advances under this Loan
Agreement shall automatically and immediately terminate; and (ii) the entire
unpaid principal of and interest accrued on the Working Capital Notes and any
other amount due under or pursuant to this Loan Agreement, shall be
automatically and immediately due and payable.
(b) Upon the occurrence and during the continuance of a
Notice Event of Default: (i) Lender shall have the right to immediately
terminate its obligation to make any Working Capital Advances under this Loan
Agreement; and (ii) Lender may declare the entire unpaid principal of and
interest accrued on, the Working Capital Notes, and any other amount due under
or pursuant to this Loan Agreement, immediately due and payable.
6.2. Remedies. Upon an Event of Default, Lender shall be entitled
to immediately exercise all rights and remedies under (i) this Loan Agreement
and (ii) all applicable Law without any interference or hindrance from the
Borrower or an Affiliate Guarantor. No remedy
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herein conferred upon the Lender is intended to be exclusive of any other remedy
and each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Loan Agreement, the Working Capital Notes,
and existing at law or in equity. No failure or delay on the part of Lender in
exercising any right or remedy shall operate as a waiver thereof nor shall any
single or partial exercise of any right preclude other or further exercise
thereof or the exercise of any other right or remedy.
6.3. Setoff. Borrower agrees that Lender shall have all rights of
setoff provided by applicable Law, and in addition thereto, Borrower agrees that
if at any time any payment or other amount owing by Borrower under the Working
Capital Notes or this Loan Agreement is then due to Lender, then Lender may
apply to each such payment or other amount any and all balances, credits,
deposits, accounts or moneys of Borrower then or thereafter with the Lender.
Lender shall give the Borrower prompt notice of any such application after such
Lender has applied any such funds provided that failure to give such notice
shall not affect the obligations of the Borrower hereunder.
6.4. Application of Payments. All payments and collections
received from Borrower and all proceeds from the sale or disposition of any
property upon which the Lender possesses a Lien shall be paid and applied as
follows:
(a) First, to the payment of any outstanding costs and
expenses (including reasonable attorneys fees) incurred by Lender (i) in
monitoring, verifying, protecting, preserving or enforcing any Collateral, and
(ii) in protecting, preserving or enforcing rights under this Loan Agreement and
the Working Capital Notes;
(b) Second, to the payment of all outstanding interest
and other fees or amounts accruing or due under the Working Capital Notes;
(c) Third, to the payment of the entire outstanding
principal balance and interest due under the Working Capital Notes; and
(d) Fourth, to Borrower or to whoever is lawfully
entitled thereto.
6.5 Indemnification. The Borrower and each Affiliate Guarantor
hereby jointly and severally agree to indemnify, defend and hold harmless the
Lender, its affiliates, officers, employees, agents, successors and assigns, and
all persons, firms and corporations, that may now claim, or at any future time
claim, under any of them (collectively, "Indemnitee") from and against any and
all losses, claims, damages, judgments, penalties, liabilities and deficiencies,
and agrees to reimburse the Indemnitee for all out-of-pocket expenses (including
the fees and expenses of legal counsel), in each case promptly as incurred by
them to the extent arising out of or in connection with any misrepresentation,
omission of fact or breach of any of the Borrower's and/or any Affiliate
Guarantor's representations, warranties or covenants contained in this Loan
Agreement.
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ARTICLE VII
DEFINITIONS
When used in this Loan Agreement, the following terms shall have the
meanings specified:
"Affiliate" shall mean any Person: (a) that directly or indirectly
controls, or is controlled by, or is under common control with, Borrower; (b)
that directly or indirectly beneficially owns or holds five percent (5%) or more
of any class of voting stock of Borrower; (c) five percent (5%) or more of the
voting stock of which Person is directly or indirectly beneficially owned or
held by Borrower; (d) that is an officer or director of Borrower; (e) of which
an Affiliate is an officer or director; or (f) who is related by blood, adoption
or marriage to an Affiliate. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Automatic Event of Default" shall mean any one or more of the
following:
(a) Borrower or an Affiliate Guarantor files a petition
in bankruptcy or has a petition in bankruptcy filed against it that is granted
or not dismissed within ninety (90) days after being filed or Borrower or an
Affiliate Guarantor makes a general assignment for the benefit of creditors or
otherwise takes action to avail itself of the benefits of any insolvency or
similar type of law;
(b) Any lawsuit or adversary proceeding is commenced
against Lender by or on behalf of the Borrower or any shareholder of Borrower or
any Affiliate Guarantor;
(c) Borrower or an Affiliate Guarantor that conducts any
material business operations ceases to conduct its business as a going concern;
or
(d) Borrower shall breach any material covenant under the
Merger Agreement that provides Lender with the right to terminate the Merger
Agreement or if the Merger Agreement shall be terminated.
"Bankruptcy Code" shall mean Title 00 Xxxxxx Xxxxxx Code Section 101
et. seq.
"Business Day" shall mean any day other than a Saturday, Sunday, public
holiday or other day when commercial banks in Georgia are authorized or required
by Law to close.
"Credit Agreement" shall mean the Amended and Restated Credit Agreement
dated as of September 29, 2000, as amended, to which Borrower, the Bank and
others are parties.
"Default" shall mean any event which would constitute an Event of
Default but for the requirement that notice be given or time elapse or both.
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"Environmental Laws" shall mean all Laws, judgments, decrees, permits,
licenses, agreements and other governmental restrictions, now or at any time
hereafter in effect, relating to (a) the emission, discharge or release of
pollutants, petroleum or petroleum products, chemicals or industrial, toxic or
hazardous substances, materials or wastes into the environment, or (b) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, petroleum or petroleum products, chemicals
or industrial, toxic or hazardous substances or wastes, or (c) the
investigation, clean-up or remediation thereof. These Environmental Laws shall
include but not be limited to the Federal Solid Waste Disposal Act, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act of 1986, regulations of the Environmental Protection Agency,
regulations of the Nuclear Regulatory Agency, regulations of any state
department of natural resources or state environmental protection agency now or
at any time hereafter in effect and local health department ordinances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended and as in effect from time to time.
"Event of Default" shall mean any Automatic Event of Default or any
Notice Event of Default.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time.
"Indebtedness" shall mean all liabilities or obligations of Borrower or
an Affiliate Guarantor, whether primary or secondary or absolute or contingent:
(a) for borrowed money or for the deferred purchase price of property or
services (excluding trade obligations incurred in the ordinary course of
business, which are not the result of any borrowing); (b) as lessee under leases
that have been or should be capitalized according to GAAP; (c) evidenced by
notes, bonds, debentures or similar obligations; or (d) secured by any Liens on
assets of Borrower or Affiliate Guarantor, whether or not the obligations
secured have been assumed by Borrower or an Affiliate Guarantor.
"Law" shall mean any federal, state, local or other law, rule,
regulation or governmental requirement of any kind, and the rules, regulations,
written interpretations and orders promulgated thereunder.
"Lien" shall mean, with respect to any asset: (a) any mortgage, pledge,
lien, charge, security interest or encumbrance of any kind in respect of such
asset; or (b) the interest of a vendor or lessor under any conditional sale
agreement, financing lease or other title retention agreement relating to such
asset.
"Loan Agreement" shall mean this Loan Agreement, together with any
Exhibits and Schedules attached hereto, as the same shall be amended from time
to time in accordance with the terms hereof.
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"Notice Event of Default" shall mean any one or more of the following:
(a) (i) Borrower shall fail to pay when due the principal
of, or interest on, the Working Capital Notes, or (ii) the Borrower shall fail
to pay within five (5) calendar days after written notice (from Lender to
Borrower specifying the amount), the amount of any other fee, expense or other
amount due under this Loan Agreement, the Working Capital Notes, or any other
agreement or instrument evidencing any debt, liability or obligation of Borrower
to Lender; or
(b) Borrower shall default in the performance or
observance of any of the covenants and agreements contained in this Loan
Agreement and shall fail to cure such default within ten (10) days after
receiving written notice from Lender; or
(c) Any representation or warranty made by Borrower or an
Affiliate Guarantor or any of its directors, officers, employees or agents in
this Loan Agreement or in any certification, document or financial statement
delivered pursuant to this Loan Agreement shall prove to have been false in any
material respect as of the time when made or given; or
(d) Any final judgment shall be entered against Borrower
in the amount of at least $750,000 or which, when aggregated with other final
judgments against Borrower, causes the total of all judgments to exceed
$1,500,000 in amount, and shall remain outstanding and unsatisfied, unbonded or
unstayed after sixty (60) days from the date of entry thereof; provided that no
final judgment shall be included in the calculation under this subsection to the
extent that the claim underlying such judgment is covered by insurance and
defense of such claim has been tendered to and accepted by the insurer without
reservation; or
(e) (i) Any Reportable Event (as defined in ERISA) shall
have occurred which constitutes grounds for the termination of any Plan by the
PBGC or for the appointment of a trustee to administer any Plan, or any Plan
shall be terminated within the meaning of Title IV of ERISA, or a trustee shall
be appointed by the appropriate court to administer any Plan, or the PBGC shall
institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan, or Borrower or any trade or business which together with
Borrower would be treated as a single employer under Section 4001 of ERISA shall
withdraw in whole or in part from a multiemployer Plan, and (ii) the aggregate
amount of Borrower's liability for all such occurrences, whether to a Plan, the
PBGC or otherwise, may exceed $150,000, and such liability is not covered for
the benefit of Borrower by insurance; or
(f) Any challenge shall be made by Borrower or any other
Person to the Lender's rights and benefits under this Loan Agreement, and the
Working Capital Notes, or the validity or enforceability thereof shall be
questioned in any respect.
"Permitted Liens" shall mean: (a) Liens in favor of the Lender to
secure the obligations under this Loan Agreement; (b) Liens for taxes,
assessments, or governmental charges, or levies that are not yet due and payable
or that are being contested in good faith by appropriate proceedings and for
which adequate reserves have been established; (c) easements, restrictions,
minor title irregularities and similar matters which have no material adverse
effect as a practical matter upon the ownership and use of the affected
property; (d) Liens or deposits in connection
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with workmen's compensation, unemployment insurance, social security, ERISA or
similar legislation or to secure customs' duties, public or statutory
obligations in lieu of surety, stay or appeal bonds, or to secure performance of
contracts or bids (other than contracts for the payment of borrowed money) or
deposits required by law as a condition to the transaction of business or other
liens or deposits of a like nature made in the ordinary course of business; (e)
Purchase Money Liens securing purchase money Indebtedness to Lender; and (f)
liens in favor of the Bank or any financial institution that succeeds such bank.
"Person" shall mean and include an individual, partnership,
corporation, business enterprise, trust, unincorporated association, any
committee of creditors, and any unit, department or agency of government.
"Plan" shall mean each pension, profit sharing, stock bonus, thrift,
savings and employee stock ownership plan established or maintained, or to which
contributions have been made, by Borrower or any trade or business which
together with Borrower would be treated as a single employer under Section 4001
of ERISA.
"Purchase Money Liens" shall mean Liens securing purchase money
Indebtedness incurred in connection with the acquisition of capital assets by
Borrower or an Affiliate Guarantor in the ordinary course of business; provided
that such Liens do not extend to or cover assets or properties other than those
purchased in connection with the purchase in which such Indebtedness was
incurred and that the obligation secured by any such Lien so created shall not
exceed 100% of the cost of the property covered thereby.
"Working Capital Loan" shall mean the advances made from time to time
to Borrower by the Lender pursuant to this Loan Agreement.
"Working Capital Notes" shall mean the Working Capital Notes from the
Borrower payable to the order of Lender.
ARTICLE VIII
SUBORDINATION
8.1 Subordination. The indebtedness represented by the Working
Capital Notes, any other obligations otherwise existing by Borrower to Lender
under this Loan Agreement and any Lien in favor of Lender arising hereunder,
shall be and remain subordinate and subject to the prior interests of the Bank,
all as further set forth in the Subordination Agreement. Any and all rights
granted to Lender under Section 1.7, 6.2 and 6.3 of this Loan Agreement are
subject to the provisions of the Subordination Agreement. In the event of any
conflict between the provisions of this Loan Agreement and the provisions of the
Subordination Agreement, the provisions of the Subordination Agreement shall
control.
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ARTICLE IX
WARRANTS
9.1. Warrants. In consideration of Lender's execution of this Loan
Agreement and the extension of the initial Working Capital Advance to Borrower,
Borrower shall issue to Lender 5,559,610 three year warrants at an exercise
price of $.45 per share.
ARTICLE X
MISCELLANEOUS
10.1 Assignability; Successors. The rights and liabilities of
Borrower under this Loan Agreement are not assignable or delegable, in whole or
in part, without the prior written consent of Lender. The rights and liabilities
of the Lender are assignable, in whole or in part, without the prior written
consent of Borrower.
10.2. Survival. All covenants, agreements, representations and
warranties made in this Loan Agreement or in any document delivered pursuant to
this Loan Agreement shall survive the execution and delivery of this Loan
Agreement, the issuance of the Working Capital Notes, the delivery of any such
document and the repayment of the Working Capital Loan pursuant to the terms of
this Loan Agreement.
10.3. Governing Law. This Loan Agreement, the Working Capital
Notes, and the other instruments, agreements and documents issued pursuant to
this Loan Agreement shall be governed by, and construed and interpreted in
accordance with, the Laws of the State of Georgia applicable to agreements made
and wholly performed within such state.
10.4. Counterparts. This Loan Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement. A duplicate copy of
this Agreement, signed by all parties shall be valid and binding as if one
original of the Agreement was signed by all parties. A photographic, facsimile
(fax), or carbon copy of the signature(s) of the undersigned will be deemed to
be equivalent to the original hereof and/or may be used as a duplicate original.
The execution and delivery of signature pages by facsimile shall be sufficient
to cause this Loan Agreement to become operative, provided original execution
pages are to be delivered no later than two days from the effective date hereof.
10.5. Conflicts. In the event of any conflict between this Loan
Agreement and any other agreement of Lender and Borrower, this Agreement shall
supercede and control.
10.6. Notices. All communications or notices required or permitted
by this Loan Agreement shall be in writing and shall be deemed to have been
given (a) upon delivery if hand delivered, or (b) five days after deposit in the
United States mail, postage prepaid, or (c) upon deposit with a nationally
recognized overnight commercial carrier, airbill prepaid, or (d) upon
transmission if by facsimile, and each such communication or notice shall be
addressed as follows, unless and until any party notifies the other in
accordance with this Section 10.6 of a change of address:
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If to Borrower: 000 Xxxxxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: CEO
With a copy to: Xxxxx Xxxxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
If to Lender: Xxxxx Xxxxx
0 Xxxxxx xx. Xxxxxxxxxx Xxxx
Xxxx 00000, Xxxxxx
Attn: Avi Raviv
With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC
One Fountain Square
00000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
10.7. Amendments; Etc. No amendment, modification, termination or
waiver of, or consent to Borrower's or an Affiliate Guarantor's noncompliance
with or departure from, any provision of this Loan Agreement, or the Working
Capital Notes, shall be effective unless in writing and signed by Borrower and
Lender.
10.8. Accounting Terms. All accounting terms used in this Loan
Agreement shall be construed in accordance with generally accepted accounting
principles consistent with those used in the preparation of the financial
statements referred to in Section 5.3 of this Loan Agreement.
10.9. Severability. Any provision of this Loan Agreement or any
other agreement between Lender and Borrower which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Loan Agreement in such jurisdiction or affecting the validity
or enforceability of any provision in any other jurisdiction.
10.10. Time is of the Essence. Time is of the essence with respect
to all payments and performance due from Borrower pursuant to this Loan
Agreement and the Working Capital Notes.
10.11. Enforceability. Borrower and each Affiliate Guarantor
represents, warrants and agrees that this Loan Agreement, the Working Capital
Notes, and all other documents delivered by Borrower and each Affiliate
Guarantor to Lender are lawful and binding obligations of the Borrower and are
effective and enforceable in accordance with their terms and shall at all times
remain in full force and effect.
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10.12. Entire Agreement. Subject to the provisions of the Merger
Agreement, this Loan Agreement and the Working Capital Notes contain the entire
understanding of the parties with respect to the subject matter hereof, were
voluntarily entered into, and there are no promises and/or inducements which
have been made to any party to cause such party to enter into this Loan
Agreement other than those which are expressly set forth herein. No statement or
writing subsequent to the date hereof purporting to modify, alter or amend any
portion hereof, shall be effective unless consented to in writing, which makes
specific reference to this Loan Agreement, and which has been signed by the
party against whom enforcement thereof is sought.
10.13 Waiver of Jury Trial. LENDER, BORROWER AND EACH AFFILIATE
GUARANTOR KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY LAWSUIT (I) ARISING OUT OF OR WITH RESPECT TO THE LOAN AGREEMENT,
ANY OF THE TRANSACTIONS THEREUNDER AND THE WORKING CAPITAL NOTES OR (II)
RELATING TO ANY ACTS OR OMISSIONS OF LENDER IN CONNECTION WITH THE
ADMINISTRATION ENFORCEMENT OF OR THE EXERCISE OF LENDER'S RIGHTS OR REMEDIES
UNDER THE LOAN AGREEMENT, THE WORKING CAPITAL NOTES OR AGAINST THE COLLATERAL.
SIGNATURES FOLLOW
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IN WITNESS WHEREOF, the parties hereto have executed this Loan
Agreement as of the day and year first above written.
XXXXX ACQUISITION SUB, INC. o2WIRELESS SOLUTIONS, INC.
By: /s/ Xxxx Xxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------- ---------------------------------
Name: Xxxx Xxx Name: Xxxxxx X. Xxxxxx
----------------------------- -------------------------------
Title: Chairman & CEO Title: President, Chairman & CEO
---------------------------- ------------------------------
Attest: Attest: /s/ Xxxxxx Xxxxxxx
------------------------ -----------------------------
Name: Name: Xxxxxx Xxxxxxx
------------------------ -------------------------------
Title: Title: Secretary
------------------------ ------------------------------
ADDITIONAL SIGNATURES OF AFFILIATE GUARANTORS
ARE ON THE FOLLOWING PAGE
Signature Page
to
Working Capital Loan Agreement
o2WIRELESS, INC. o2WIRELESS LIGHTING, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
----------------------------- -------------------------------
Title: President and CEO Title: President and CEO
---------------------------- ------------------------------
o2WIRELESS SYSTEMS GROUP, INC. o2WIRELESS DEPLOYMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
----------------------------- -------------------------------
Title: President and CEO Title: President and CEO
---------------------------- ------------------------------
o2WIRELESS SITE DEVELOPMENT, INC. YOUNG & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
----------------------------- -------------------------------
Title: President and CEO Title: President and CEO
---------------------------- ------------------------------
o2WIRELESS MICHIGAN, INC. o2WIRELESS NORTH CAROLINA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxx
----------------------------- -------------------------------
Title: Secretary and Treasurer Title: President and CEO
---------------------------- ------------------------------
Affiliate Guarantor Signature Page
to
Working Capital Loan Agreement
EXHIBITS AND SCHEDULE
Exhibit A Form of Working Capital Note
Exhibit B Initial Working Capital Note
Exhibit C Form of Officer's Certificate
Exhibit D Form of Secretary's Certificate
Schedule 1.1(b) Use of Proceeds
Exhibits and Schedule
