LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement"), dated as of the 7th day of May,
1997, is made and entered into on the terms and conditions hereinafter set
forth, by and between AMERICAN CONSOLIDATED LABORATORIES, INC., a Florida
corporation ("Borrower"), and SIRROM INVESTMENTS, INC., a Tennessee corporation
("Lender").
RECITALS:
WHEREAS, Borrower has requested that Lender make available to Borrower
a term loan in the original principal amount of One Million Five Hundred
Seventy-Five Thousand and No/100 Dollars ($1,575,000.00) (the "Loan") on the
terms and conditions hereinafter set forth, and for the purpose(s) hereinafter
set forth; and
WHEREAS, in order to induce Lender to make the Loan to Borrower,
Borrower has made certain representations to Lender; and
WHEREAS, Lender, in reliance upon the representations and inducements
of Borrower, has agreed to make the Loan upon the terms and conditions
hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the agreement of Lender to make the
Loan, the mutual covenants and agreements hereinafter set forth, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
ARTICLE 1
THE LOAN
1.1 Evidence of Loan Indebtedness and Repayment. Subject to the terms
and conditions hereof, the Lender shall make the Loan to Borrower by wire
transfer in immediately available funds. The Loan shall be evidenced by a
Secured Promissory Note in the original principal amount of One Million Five
Hundred Seventy-Five Thousand and No/100ths Dollars ($1,575,000.00),
substantially in the form of Exhibit A attached hereto and incorporated herein
by this reference (the "Note"), dated as of the date hereof, executed by
Borrower, in favor of Lender. The Loan shall be payable in accordance with the
terms of the Note. The Note, this Agreement and any other instruments and
documents executed by Borrower, any guarantor of Borrower, or any shareholder,
subsidiary or
affiliate of Borrower, now or hereafter evidencing, securing or in any way
related to the indebtedness evidenced by the Note are herein individually
referred to as a "Loan Document" and collectively referred to as the "Loan
Documents."
1.2 Processing Fee. Borrower shall pay Lender a processing fee of
Thirty-Nine Thousand Three Hundred Seventy-Five and No/100 Dollars ($39,375.00),
which shall be paid on the date the Loan is funded.
1.3 Partial Prepayment. Borrower may prepay the indebtedness evidenced
by the Note in whole or in part at any time and from time to time.
1.4 Purpose. The purpose of the Loan shall be to retire Borrower's
existing debt to Fidelity Funding Group, Inc. in the principal amount of
approximately $500,000 plus a $60,000 prepayment fee and for working capital.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Borrower's Representations. Borrower hereby represents and
warrants to Lender as follows:
(a) Organizational Status. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida and has the power as such a corporation to own and
operate its properties, to carry on its business as now conducted and
to enter into and to perform its obligations under this Agreement and
the other Loan Documents to which it is a party. Borrower is duly
qualified to do business and in good standing in each state in which a
failure to be so qualified would have a material adverse effect on
Borrower's financial condition or its ability to conduct its business
in the manner now conducted.
(b) Subsidiaries. Schedule 2.1(b) hereto is a complete list of
each corporation, partnership, joint venture or other business
organization (the "Subsidiary" or, with respect to all such
organizations, the "Subsidiaries") in which Borrower or any Subsidiary
owns, directly or indirectly, any capital stock or other equity
interest, or with respect to which Borrower or any Subsidiary, alone
or in combination with others, is in a control position, which list
shows the jurisdiction of incorporation or other organization and the
percentage of stock or other equity interest of each Subsidiary owned
by Borrower. Each Subsidiary which is a corporation is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to transact
business as a foreign corporation and is in good standing in the
jurisdictions listed in Schedule 2.1(b), which are the only
jurisdictions where the properties owned or leased or the business
transacted by it makes such licensing or qualification to do business
as a foreign corporation necessary, and no other jurisdiction has
demanded, requested or otherwise
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indicated that (or inquired whether) it is required so to qualify.
Each Subsidiary which is not a corporation is duly organized and
validly existing under the laws of the jurisdiction of its
organization. The outstanding capital stock of each Subsidiary which
is a corporation is validly issued, fully paid and nonassessable.
Borrower and the Subsidiaries have good and valid title to the equity
interests in the Subsidiaries shown as owned by each of them on
Schedule 2.1(b), free and clear of all liens, claims, charges,
restrictions, security interests, equities, proxies, pledges or
encumbrances of any kind. Except where otherwise indicated herein or
unless the context otherwise requires, any reference to Borrower
herein shall include Borrower and all of its Subsidiaries.
(c) Authorization. Borrower has full legal right, power and
authority to conduct its business and affairs. Borrower has full legal
right, power and authority to enter into and perform its obligations
under the Loan Documents, without the consent or approval of any other
person, firm, governmental agency or other legal entity. The execution
and delivery of this Agreement, the borrowing hereunder, the execution
and delivery of each Loan Document to which Borrower is a party, and
the performance by Borrower of its obligations thereunder are within
the corporate powers of Borrower and have been duly authorized by all
necessary corporate action properly taken, have received all necessary
governmental approvals, if any were required, and do not and will not
contravene or conflict with any provision of law, any applicable
judgment, ordinance, regulation or order of any court or governmental
agency, the charter or bylaws of Borrower, or any agreement binding
upon Borrower or its properties. The officer(s) executing this
Agreement, the Note and all of the other Loan Documents to which
Borrower is a party are duly authorized to act on behalf of Borrower.
(d) Validity and Binding Effect. This Agreement and the other
Loan Documents are the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms,
subject to limitations imposed by bankruptcy, insolvency, moratorium
or other similar laws affecting the rights of creditors generally or
the application of general equitable principles.
(e) Capitalization. Schedule 2.1(e) hereto accurately
reflects, as of the date hereof, (i) the authorized capital stock of
Borrower by class, (ii) the number of shares outstanding in each
class, and (iii) the number of shares presently reserved for issuance
pursuant to warrants and convertible securities (the appropriate
number of reserved shares may increase from time to time pursuant to
the provisions of such warrants and securities). The Stock Purchase
Warrant of this date issued by Borrower to Lender is referred to as
the "Warrant." As of the date hereof, Borrower shall not have
outstanding any stock or securities convertible or exchangeable for
any shares of its Common Stock or containing any profit participation
features, nor shall it have outstanding any rights or options to
subscribe for or to purchase its Common Stock or any stock
appreciation rights or phantom stock plans, except as set forth on
Schedule 2.1(e) and for the Warrant. Schedule 2.1(e) accurately sets
forth the following with respect to all outstanding options
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and rights to acquire the Borrower's Common Stock from Borrower: (i)
the total number of shares issuable upon exercise of all outstanding
options, (ii) the range of exercise prices for all such outstanding
options, (iii) the number of shares issuable, the exercise price and
the expiration date for each such outstanding option and (iv) with
respect to all outstanding options, warrants and rights to acquire
Borrower's capital stock other than the Warrant, the holder, the
number of shares covered, the exercise price and the expiration date.
As of the date hereof, Borrower shall not be subject to any obligation
(contingent or otherwise) to repurchase, redeem, retire or otherwise
acquire any shares of its capital stock or any warrants, options or
other rights to acquire its capital stock, except as set forth in the
Warrant or on Schedule 2.1(e). As of the date hereof, all of the
outstanding shares of Borrower's capital stock shall be validly
issued, fully paid and nonassessable. Except as set forth on Schedule
2.1(e), there are no statutory or contractual preemptive rights,
rights of first refusal, anti-dilution rights or any similar rights,
held by stockholders or option holders of Borrower, with respect to
the issuance of the Warrant or the issuance of the Common Stock upon
exercise of the Warrant. All such rights granted in the documents
listed on Schedule 2.1(e) have been effectively waived with regard to
the issuance of the Warrant, the exercise of the Warrant and the
issuance of the Common Stock upon exercise of the Warrant. Borrower
has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital
stock, and the offer, sale and issuance of the Warrant hereunder do
not require registration under the Securities Act or any applicable
state securities laws. To the best of Borrower's knowledge, there are
no agreements among Borrower's stockholders with respect to any other
aspect of Borrower's affairs, except as set forth on Schedule 2.1(e).
(f) Trademarks, Patents, Etc. Schedule 2.1(f) is an accurate
and complete list of all patents, trademarks, tradenames, trademark
registrations, service names, service marks, copyrights, licenses,
formulas and applications therefor owned by Borrower or used or
required by Borrower in the operation of it's business, title to each
of which is, except for liens in favor of Lender and as set forth in
Schedule 2.1(f) hereto, held by Borrower free and clear of all adverse
claims, liens, security agreements, restrictions or other
encumbrances. There is no infringement action, lawsuit, claim or
complaint which asserts that Borrower's operations violate or infringe
the rights or the trade names, trademarks, trademark registration,
service name, service xxxx or copyright of others with respect to any
apparatus or method of Borrower or any adversely held trademark, trade
name, trademark registration, service name, service xxxx or copyright,
and Borrower is not in any way making use of any confidential
information or trade secrets of any person except with the consent of
such person.
(g) No Conflicts. Consummation of the transactions hereby
contemplated and the performance of the obligations of Borrower under
and by virtue of the Loan Documents will not result in any breach of,
or constitute a default under, any mortgage, security deed or
agreement, deed of trust, lease, bank loan or credit agreement,
corporate charter or bylaws, agreement or certificate of limited
partnership, partnership agreement,
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license, franchise or any other instrument or agreement to which
Borrower is a party or by which Borrower or its respective properties
may be bound or affected or to which Borrower has not obtained an
effective waiver.
(h) Litigation. There are no actions, suits or proceedings
pending, or, to the knowledge of Borrower threatened, against or
affecting Borrower or involving the validity or enforceability of any
of the Loan Documents at law or in equity, or before any governmental
or administrative agency; and to Borrower's knowledge, Borrower is not
in default with respect to any order, writ, injunction, decree or
demand of any court or any governmental authority.
(i) Financial Statements. The financial statements of Borrower
attached hereto as Schedule 2.1(i)(A), (i) with respect to NovaVision,
Inc. and its subsidiaries, are true and correct in all material
respects and fairly present the financial condition of Borrower as of
the date(s) thereof, and (ii) with respect to American Consolidated
Laboratories, Inc. and its subsidiaries, have been prepared on the
basis of generally accepted accounting principles, consistently
applied, and fairly present the financial condition of such entities
as of the date thereof. No material adverse change has occurred in the
financial condition of Borrower since the date(s) thereof, and no
additional borrowings have been made by Borrower since the date(s)
thereof other than as set forth on Schedule 2.1(i)(B).
(j) Other Agreements; No Defaults. Borrower is not a party to
any indenture, loan or credit agreement, lease or other agreement or
instrument, or subject to any charter or corporate restriction, that
could reasonably be expected to have a material adverse effect on the
business, properties, assets, operations or conditions, financial or
otherwise, of Borrower, or the ability of Borrower to carry out its
obligations under the Loan Documents to which it is a party. Except as
described in Schedule 2.1(j) attached hereto, Borrower is not in
default in any material respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any agreement or instrument material to its business to
which it is a party, including but not limited to this Agreement and
the other Loan Documents, and, to Borrower's knowledge, no other
default or event has occurred and is continuing that with notice or
the passage of time or both would constitute a default or event of
default under any of same.
(k) Compliance With Law. Borrower has obtained all necessary
licenses, permits and approvals and authorizations necessary or
required in order to conduct its business and affairs as heretofore
conducted and as hereafter intended to be conducted. To Borrower's
knowledge, Borrower is in compliance with all laws, regulations,
decrees and orders applicable to it (including but not limited to
laws, regulations, decrees and orders relating to environmental,
occupational and health standards and controls, antitrust,
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monopoly, restraint of trade or unfair competition), to the extent
that noncompliance, in the aggregate, cannot reasonably be expected to
have a material adverse effect on its respective business, operations,
property or financial condition and will not materially adversely
affect Borrower's ability to perform its obligations under the Loan
Documents.
(l) Debt. Schedule 2.1(l) is a complete and correct list of
all credit agreements, indentures, purchase agreements, promissory
notes and other evidences of indebtedness, guaranties, capital leases
and other instruments, agreements and arrangements presently in effect
providing for or relating to extensions of credit (including
agreements and arrangements for the issuance of letters of credit or
for acceptance financing) in respect of which the Borrower or any of
the properties thereof is in any manner directly or contingently
obligated for a principal amount in excess of $25,000; and the maximum
principal or face amounts of the credit in question that are
outstanding and that can be outstanding are correctly stated, and all
liens of any nature given or agreed to be given as security therefor
are correctly described or indicated in such Schedule.
(m) Taxes. Except as set forth in Schedule 5.1(m) attached
hereto, Borrower has filed or caused to be filed all tax returns that
to its knowledge are required to be filed (except for returns that
have been appropriately extended), and has paid, or will pay when due,
all taxes shown to be due and payable on said returns and all other
taxes, impositions, assessments, fees or other charges imposed on them
by any governmental authority, agency or instrumentality, prior to any
delinquency with respect thereto (other than taxes, impositions,
assessments, fees and charges currently being contested in good faith
by appropriate proceedings, for which appropriate amounts have been
reserved). No tax liens have been filed against Borrower or any of the
property thereof.
(n) Small Business Concern. Borrower, together with its
"affiliates" (as that term is defined in Title 13, Code of Federal
Regulations, ss. 121.103), is a "small business concern" within the
meaning of the Small Business Investment Act of 1958, as amended, and
the regulations promulgated thereunder. The information set forth in
the Small Business Administration Forms 480, 652 and Parts A and B of
Form 1031 regarding Borrower upon delivery, pursuant to Section 4.1
hereof, will be accurate and complete. Borrower does not presently
engage in, and it will not hereafter engage in, any activities, and
Borrower will not use directly or indirectly, the proceeds from the
Loan, for any purpose for which a Small Business Investment Company is
prohibited from providing funds by the Small Business Investment Act
and the regulations thereunder, including Title 13, Code of Federal
Regulations ss.107.720.
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(o) Certain Transactions. Except as set forth on Schedule
2.1(o) hereto, Borrower is not indebted, directly or indirectly, to
any of its shareholders, officers or directors or to their respective
spouses or children, in any amount whatsoever; none of said
shareholders, officers or directors or any members of their immediate
families, are indebted to Borrower or have any direct or indirect
ownership interest in any firm or corporation with which Borrower has
a business relationship, or any firm or corporation which competes
with Borrower, except that shareholders, officers and/or directors of
Borrower may own no more than 4.9% of outstanding stock of publicly
traded companies which may compete with Borrower. No shareholder,
officer or director or any member of their immediate families, is,
directly or indirectly, interested in any material contract with
Borrower. Borrower is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
(p) Statements Not False or Misleading. No representation or
warranty given as of the date hereof by Borrower contained in this
Agreement or any schedule attached hereto or any statement in any
document, certificate or other instrument furnished by Borrower to
Lender pursuant hereto, taken as a whole and evaluated in the context
presented, contains any untrue statement of a material fact, or omits
to state any material fact which is necessary in order to make the
statements contained therein not misleading in light of the
circumstances under which such information was presented.
(q) Margin Regulations. Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock. No proceeds received pursuant to this Agreement will be
used to purchase or carry any equity security of a class which is
registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended.
(r) Significant Contracts. Schedule 2.1(r) is a complete and
correct list of all contracts, agreements and other documents pursuant
to which Borrower receives revenues in excess of $25,000 per fiscal
year. Each such contract, agreement and other document is in full
force and effect as of the date hereof and Borrower knows of no reason
why such contracts, agreements and other documents would not remain in
full force and effect pursuant to the terms thereof.
(s) Environment. Borrower has duly complied with, and its
business, operations, assets, equipment, property, leaseholds or other
facilities are in compliance in all material respects with, the
provisions of all applicable federal, state and local environmental,
health, and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder. Borrower has been issued and will
maintain all required federal, state and local permits, licenses,
certificates and approvals relating to (1) air emissions; (2)
discharges to surface water or groundwater; (3) noise emissions; (4)
solid or liquid waste disposal; (5) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or wastes
(which shall include any and all such materials listed in
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any federal, state or local law, code or ordinance and all rules and
regulations promulgated thereunder as hazardous or potentially
hazardous); or (6) other environmental, health or safety matters.
Borrower has not received notice of, does not know of, and does not
have reason to believe that facts exists which would reasonably be
expected to constitute, any material violations of any federal, state
or local environmental, health or safety laws, codes or ordinances,
and any rules or regulations promulgated thereunder with respect to
its businesses, operations, assets, equipment, property, leaseholds,
or other facilities. Except in accordance with a valid governmental
permit, license, certificate or approval, there has been no emission,
spill, release or discharge into or upon (1) the air; (2) soils, or
any improvements located thereon; (3) surface water or groundwater; or
(4) the sewer, septic system or waste treatment, storage or disposal
system servicing the premises, of any toxic or hazardous substances or
wastes at or from the premises; and accordingly the premises of
Borrower are free of any material amount of such toxic or hazardous
substances or wastes. There has been no complaint, order, directive,
claim, citation or notice by any governmental authority or any person
or entity with respect to (1) air emissions; (2) spills, releases or
discharges to soils or improvements located thereon, surface water,
groundwater or the sewer, septic system or waste treatment, storage or
disposal systems servicing the premises; (3) noise emissions; (4)
solid or liquid waste disposal; (5) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or waste;
or (6) other environmental, health or safety matters affecting
Borrower or its business, operations, assets, equipment, property,
leaseholds or other facilities in any material respect. The
representations in the preceding two sentences are made to the best of
Borrower's knowledge, information and belief, with no special
diligence in preparation for the execution of this Agreement;
provided, however, should any of such representations prove false in
any material respect as to impose a material liability upon Borrower,
the representation shall be deemed breached for the purpose of
establishing a default under this Agreement. Borrower does not have
any indebtedness, obligation or liability (absolute or contingent,
matured or not matured), with respect to the storage, treatment,
cleanup or disposal of any solid wastes, hazardous wastes or other
toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current
regulation, law or statute regarding such storage, treatment, cleanup
or disposal).
(t) Fees/Commissions. Except as described in Section 2.1(t)
attached hereto, Borrower has not agreed to pay any finder's fee,
commission, origination fee or other fee or charge to any person or
entity with respect to the Loan and investment transactions
contemplated hereunder.
(u) ERISA. Borrower is in compliance in all material respect
with all applicable provisions of ERISA as defined in Section 3.11
hereof). Neither a reportable event nor a prohibited transaction (as
defined in ERISA) has occurred and is continuing with respect to any
Plan (as defined in Section 3.11 hereof); no notice of intent to
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terminate a Plan has been filed nor has any Plan been terminated; no
circumstances exist which constitute grounds entitling the Pension
Benefit Guaranty Corporation (together with any entity succeeding to
or all of its functions, the "PBGC") to institute proceedings to
terminate, or appoint a trustee to administer, a Plan, nor has the
PBGC instituted any such proceedings; neither Borrower nor any
commonly controlled entity (as defined in ERISA) has completely or
partially withdrawn from a multiemployer plan(as defined in ERISA);
Borrower and each commonly controlled entity has met its minimum
funding requirements under ERISA with respect to all of its Plans and
the present fair market value of all Plan property exceeds the present
value of all vested benefits under each Plan, as determined on the
most recent valuation date of the Plan and in accordance with the
provisions of ERISA and the regulations thereunder for calculating the
potential liability of Borrower or any commonly controlled entity to
the PBGC or the Plan under Title IV or ERISA; and neither Borrower nor
any commonly controlled entity has incurred any liability to the PBGC
under ERISA.
(v) Title to Properties. Borrower has good, indefeasible and
insurable title to, or valid leasehold interests in, all its real
properties and good title to its other assets, free and clear of all
liens other than Permitted Liens (as defined in Section 3.15 hereof).
(w) Limited Offering of Note and Warrant. Neither Borrower nor
anyone acting on its behalf has taken, or will take, any action which
would subject the issuance or sale of the Note and Warrant to Section
5 of the Securities Act of 1933, as amended, or the registration or
qualification provisions of the blue sky laws of any state.
(x) Registration Rights. Except as described in the Warrant,
Borrower is not under any obligation to register under the Securities
Act of 1933, as amended, or the Trust Indenture Act of 1939, as
amended, any of its presently outstanding securities or any of its
securities that may subsequently be issued.
(y) Employees. Borrower has no current labor problems or
disputes which Borrower reasonably believes could be expected to have
a material adverse effect.
(z) Issuance Taxes. All taxes imposed on Borrower in
connection with the issuance, sale and delivery of the Note, the
Warrant and the capital stock issuable upon exercise of the Warrant
have been or will be fully paid, and all laws imposing such taxes have
been or will be fully satisfied by Borrower.
(aa) Status of Certain Subsidiaries and Division. Borrower
warrants and agrees that Wolcon Labs, Inc., a Michigan corporation,
and S-O Nebraska, Inc., a Florida corporation, which are wholly-owned
subsidiaries of American Consolidated Laboratories, Inc., are both in
the process of being dissolved and neither of them has or shall have
an office or any assets. The dissolution of these entities shall not
be an Event of Default under this Agreement.
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ARTICLE 3
COVENANTS AND AGREEMENTS
Borrower covenants and agrees that during the term of this Agreement:
3.1 Payment of Obligations. Borrower shall pay the indebtedness
evidenced by the Note according to the terms thereof, and shall timely pay or
perform, as the case may be, all of the other obligations of Borrower to Lender,
direct or contingent, however evidenced or denominated, and however and whenever
incurred, including but not limited to indebtedness incurred pursuant to any
present or future commitment of Lender to Borrower, together with interest
thereon, and any extensions, modifications, consolidations and/or renewals
thereof and any notes given in payment thereof.
3.2 Financial Statements and Reports. Borrower shall furnish to Lender
(i) as soon as practicable and in any event within ninety (90) days after the
end of each fiscal year of Borrower, an audited balance sheet of Borrower as of
the close of such fiscal year, an audited statement of earnings and retained
earnings of Borrower as of the close of such fiscal year and an audited
statement of cash flows for Borrower for such fiscal year, prepared in
accordance with generally accepted accounting principles consistently applied
and accompanied by an unqualified audit report prepared by an independent
certified public accountant acceptable to Lender showing the financial condition
of Borrower at the close of such year and the results of its operations during
such year and accompanied by a certificate of the President of Borrower, stating
that to the best of the knowledge of such officer, Borrower has kept, observed,
performed and fulfilled each covenant, term and condition of this Agreement and
the other Loan Documents during the preceding fiscal year and that no Event of
Default has occurred and is continuing (or if an Event of Default has occurred
and is continuing, specifying the nature of same, the period of existence of
same and the action Borrower proposes to take in connection therewith), (ii)
within fifteen (15) days of the end of each calendar month, a status report
indicating the financial performance of Borrower during such month and the
financial position of Borrower as of the end of such month, (iii) within thirty
(30) days of the end of each quarter, a balance sheet of Borrower as of the
close of such quarter and a statement of earnings and retained earnings of
Borrower as of the close of such quarter, all in reasonable detail, and prepared
substantially in accordance with generally accepted accounting principles
consistently applied (except for the absence of footnotes and subject to
year-end adjustments), and (iv) with reasonable promptness, such other financial
data as Lender may reasonably request. Without Lender's prior written consent,
Borrower shall not modify or change any accounting policies or procedures in
effect on the date hereof in any material respect.
3.3 Maintenance of Books and Records; Inspection. Borrower shall
maintain its books, accounts and records in accordance with generally accepted
accounting principles consistently applied, and after reasonable notice from
Lender, permit Lender, its officers and employees and any professionals
designated by Lender in writing, at Borrower's expense, to visit
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and inspect any of its properties, corporate books and financial records, and to
discuss its accounts, affairs and finances with Borrower or the principal
officers of Borrower during reasonable business hours, all at such times as
Lender may reasonably request; provided that no such inspection shall materially
interfere with the conduct of Borrower's business.
3.4 Insurance. Without limiting any of the requirements of any of the
other Loan Documents, Borrower shall maintain, in amounts customary for entities
engaged in comparable business activities, (i) to the extent required by
applicable law, worker's compensation insurance (or maintain a legally
sufficient amount of self insurance against worker's compensation liabilities,
with adequate reserves, under a plan approved by Lender, such approval not to be
unreasonably withheld or delayed), and (ii) fire and "all risk" casualty
insurance on its properties against such hazards and in at least such amounts as
are customary in Borrower's business. Borrower will make reasonable efforts to
obtain and maintain public liability insurance in an amount, and at a cost,
deemed reasonable to the Borrower's Board of Directors. At the request of
Lender, Borrower will deliver forthwith a certificate specifying the details of
such insurance in effect.
3.5 Taxes and Assessments. Borrower shall (i) file all tax returns and
appropriate schedules thereto that are required to be filed under applicable
law, prior to the date of delinquency, (ii) pay and discharge all taxes,
assessments and governmental charges or levies imposed upon Borrower upon its
income and profits or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and (iii) pay all taxes, assessments and
governmental charges or levies that, if unpaid, might become a lien or charge
upon any of its properties; provided, however, that Borrower in good faith may
contest any such tax, assessment, governmental charge or levy described in the
foregoing clauses (ii) and (iii) so long as appropriate reserves are maintained
with respect thereto.
3.6 Corporate Existence. Borrower shall maintain its corporate
existence and good standing in the state of its incorporation, and its
qualification and good standing as a foreign corporation in each jurisdiction in
which such qualification is necessary pursuant to applicable law.
3.7 Compliance with Law and Other Agreements. Except where the failure
to do so would not materially adversely affect Borrower's operations or its
ability to fulfill its obligations under the Loan Documents, Borrower shall
maintain its business operations and property owned or used in connection
therewith in compliance with (i) all applicable federal, state and local laws,
regulations and ordinances governing such business operations and the use and
ownership of such property, and (ii) all agreements, licenses, franchises,
indentures and mortgages to which Borrower is a party or by which Borrower or
any of its properties is bound. Without limiting the foregoing, Borrower shall
pay all of its indebtedness promptly in accordance with the terms thereof,
except for indebtedness with respect to which a good faith dispute exists.
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3.8 Notice of Default. Borrower shall give written notice to Lender of
the occurrence of any default, event of default or Event of Default under this
Agreement or any other Loan Document promptly upon the occurrence thereof.
3.9 Notice of Litigation. Borrower shall give notice, in writing, to
Lender of (i) any actions, suits or proceedings, instituted by any persons
whomsoever against Borrower or affecting any of the assets of Borrower wherein
the amount at issue is in excess of Twenty-Five Thousand and No/100ths Dollars
($25,000.00), and (ii) any dispute, not resolved within sixty (60) days of the
commencement thereof, between Borrower on the one hand and any governmental
regulatory body on the other hand, which dispute might materially interfere with
the normal operations of Borrower.
3.10 Conduct of Business. Borrower will continue to engage in a
business of the same general type and manner as conducted by it on the date of
this Agreement.
3.11 ERISA Plan. If Borrower has in effect, or hereafter institutes, a
pension plan that is subject to the requirements of Title IV of the Employee
Retirement Income Security Act of 1974, Pub. L. No. 93-406, September 2, 1974,
00 Xxxx. 000, 00 X.X.X.X. ss. 1001 et seq. (1975), as amended from time to time
("ERISA"), then the following warranty and covenants shall be applicable during
such period as any such plan (the "Plan") shall be in effect: (i) Borrower
hereby warrants that no fact that might constitute grounds for the involuntary
termination of the Plan, or for the appointment by the appropriate United States
District Court of a trustee to administer the Plan, exists at the time of
execution of this Agreement, (ii) Borrower hereby covenants that throughout the
existence of the Plan, Borrower's contributions under the Plan will meet the
minimum funding standards required by ERISA and Borrower will not institute a
distress termination of the Plan, and (iii) Borrower covenants that it will send
to Lender a copy of any notice of a reportable event (as defined in ERISA)
required by ERISA to be filed with the Labor Department or the Pension Benefit
Guaranty Corporation, at the time that such notice is so filed.
3.12 Dividends, Distributions, Stock Rights, etc. Except as described
in Schedule 3.12 attached hereto, Borrower shall not declare or pay any dividend
of any kind (other than stock dividends payable to all holders of any class of
capital stock), in cash or in property, on any class of the capital stock of
Borrower, or purchase, redeem, retire or otherwise acquire for value any shares
of such stock, nor make any distribution of any kind in cash or property in
respect thereof, nor make any return of capital of shareholders, nor make any
payments in cash or property in respect of any stock options, stock bonus or
similar plan (except as required or permitted hereunder), nor grant any
preemptive rights with respect to the capital stock of Borrower, without the
prior written consent of Lender.
3.13 Guaranties; Loans; Payment of Debt. Without Lender's prior express
written consent, Borrower shall not guarantee nor be liable in any manner,
whether directly or indirectly, or become contingently liable after the date of
this Agreement in connection with the obligations
12
or indebtedness of any person or entity whatsoever, except for the endorsement
of negotiable instruments payable to Borrower for deposit or collection in the
ordinary course of business. Without Lender's prior express written consent,
which shall not be unreasonably withheld, Borrower shall not (i) make any loan,
advance or extension of credit to any person other than in the normal course of
its business, or (ii) make any payment on any subordinated debt.
3.14 Debt. Without the express prior written consent of Lender,
Borrower shall not create, incur, assume or suffer to exist indebtedness of any
description whatsoever, excluding:
(a) the indebtedness evidenced by the Note;
(b) the endorsement of negotiable instruments payable to Borrower
for deposit or collection in the ordinary course of business;
(c) debts incurred in the ordinary course of business (each of
which, individually, does not exceed $25,000);
(d) the indebtedness listed on Schedule 2.1(l) hereto and as
described in Schedule 2.1(c) hereto; and
(e) debt for the cost of acquisition of equipment in an amount not
exceeding $50,000 or the value of the property acquired,
whichever is less, in the aggregate.
3.15 No Liens. Borrower shall not create, incur, assume or suffer to
exist any lien, security interest, security title, mortgage, deed of trust or
other encumbrance upon or with respect to any of its properties, now owned or
hereafter acquired, except the following permitted liens (the "Permitted
Liens"):
(a) liens in favor of Lender;
(b) liens for taxes or assessments or other governmental charges
or levies if not yet due and payable;
(c) liens in connection with the leasing of equipment in favor of
the Lessor of such equipment;
(d) liens described on Schedule 3.15 hereto; and
(e) liens securing obligations permitted under Section 3.14(e)
hereto.
3.16 Mergers, Consolidations, Acquisitions and Sales. Without the prior
written consent of Lender, Borrower shall not (a) be a party to any merger,
consolidation or corporate reorganization, nor (b) purchase or otherwise acquire
all or substantially all of the assets or stock of, or any partnership or joint
venture interest in, any other person, firm or entity, nor (c) sell, transfer,
convey, grant a security interest in or lease all or any substantial part of its
assets, nor (d) create any Subsidiaries nor convey any of its assets to any
Subsidiary.
3.17 Transactions With Affiliates. Borrower shall not enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any affiliate, except in the
ordinary course of and pursuant to the reasonable
13
requirements of Borrower's business and upon fair and reasonable terms no less
favorable to Borrower than Borrower would obtain in a comparable arm's length
transaction with a person not an affiliate. For the purposes of this Section
3.17, "affiliate" shall mean a person, corporation, partnership or other entity
controlling, controlled by or under common control with Borrower.
3.18 Environment. Borrower shall be and remain in compliance with the
provisions of all federal, state and local environmental, health, and safety
laws, codes and ordinances, and all rules and regulations issued thereunder;
notify Lender immediately of any notice of a hazardous discharge or
environmental complaint received from any governmental agency or any other
party; notify Lender immediately of any hazardous discharge from or affecting
its premises; immediately contain and remove the same, in compliance with all
applicable laws; promptly pay any fine or penalty assessed in connection
therewith; permit Lender to inspect the premises, to conduct tests thereon, and
to inspect all books, correspondence, and records pertaining thereto; and at
Lender's request, and at Borrower's expense, provide a report of a qualified
environmental engineer, satisfactory in scope, form, and content to Lender, and
such other and further assurances reasonably satisfactory to Lender that the
condition has been corrected.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 Closing of the Loan. The obligation of Lender to fund the Loan on
the date hereof (the "Closing Date") is subject to the fulfillment, on or prior
to the Closing Date, of each of the following conditions:
(a) Borrower shall have performed and complied in all material
respects with all of the covenants, agreements, obligations and
conditions required by this Agreement.
(b) Lender shall have received an opinion of the Borrower's
counsel, Xxxxxx Xxxx Xxxxxx Xxxx & Xxxxxxxxxx P.L.L.C., dated the
Closing Date, in form and substance satisfactory to Lender's counsel,
Boult, Cummings, Xxxxxxx & Xxxxx, PLC;
(c) Borrower shall have delivered to Lender a Note executed by
Borrower, substantially in the form of Exhibit A attached hereto and
incorporated herein by this reference.
(d) Borrower shall have delivered to Lender a Stock Purchase
Warrant executed by Borrower, substantially in the form of Exhibit B
attached hereto and incorporated herein by this reference.
14
(e) Borrower shall have delivered to Lender a Security
Agreement executed by each Borrower and related UCC-1 Financing
Statement(s) executed by each Borrower, each of which is substantially
in the form of Exhibit C attached hereto and incorporated herein by
this reference.
(f) Borrower shall have delivered to Lender a Trademark and
Patent Security Agreement executed by each Borrower and related UCC-1
Financing Statement(s) executed by each Borrower, in the form of
Exhibit D attached hereto and incorporated herein by this reference.
(g) Borrower shall have delivered to Lender a Stock Pledge
Agreement and related stock certificates and stock powers with respect
to Borrower's interest in NovaVision, Inc., executed by Borrower,
substantially in the form of Exhibit E attached hereto and incorporated
herein by this reference.
(h) Lender shall have received such stock certificates,
certifications and other evidence as it may require confirming
Borrower's successful acquisition of NovaVision, Inc., pursuant to that
letter of intent dated February 10, 1997, as previously delivered to
Lender.
(i) Borrower shall have delivered to Lender a Joint and
Several Unconditional Continuing Guaranty whereby each Borrower
guarantees the obligations of each other Borrower to Lender, in the
form attached hereto as Exhibit F.
(j) Borrower shall have delivered to Lender an amendment to
the existing Trademark and Patent Security Agreement and Stock Pledge
Agreement executed by NovaVision, Inc. dated as of December 18, 1996,
to reflect that these documents also secure the guaranty of NovaVision,
Inc. for the obligations of Borrower to Lender.
(k) Borrower shall have delivered to Lender amendments to the
existing Trademark and Patent Security Agreement executed by Biopolymer
Corporation dated as of December 18, 1996, to reflect that this
document also secures the guaranty of Biopolymer Corporation for the
obligations of Borrower to Lender.
(l) Borrower shall have delivered to Lender the Small Business
Administration Forms 480, 652 and 1031 (Parts A and B) completed by
Borrower.
(m) Borrower shall have delivered to Lender the Small Business
Administration Economic Impact Assessment completed by Borrower, a form
of which is attached hereto as Exhibit G and incorporated herein by
this reference.
15
(n) Borrower shall have delivered a Landlord's Consent and
Subordination of Lien for each leased location, executed by Borrower's
Landlord, in substantially the form attached hereto as Exhibit H and
incorporated herein by this reference.
(o) Lender shall have received an executed Intercreditor
Agreement in form and substance acceptable to Lender establishing that
the Loan and Borrower's $550,000 debt to Xxxxxx-Xxxxxxxxx Capital
Focus, L.P. will share in a first priority perfected security interest
in Borrower's assets on a PARI PASSU basis.
(p) Lender shall have received copies of the corporate charter
and other publicly filed organizational documents of Borrower,
certified by the Secretary of State or other appropriate public
official in the jurisdiction in which Borrower is incorporated.
(q) Lender shall have received certified (as of the date of
this Agreement) copies of all corporate action taken by Borrower,
including resolutions of its Board of Directors, authorizing the
execution, delivery and performance of the Loan Documents.
(r) Lender shall have received a certificate as to the legal
existence and good standing of the Borrower, issued by the Secretary of
State or other appropriate public official in the jurisdiction in which
the Borrower is incorporated.
(s) Lender shall have received certificates of the Secretaries
of State or other appropriate public officials as to Borrower's
qualification to do business and good standing in each jurisdiction in
which a failure to be so qualified would have a material adverse effect
on its financial position or its ability to conduct its business in the
manner now conducted and as hereafter intended to be conducted.
(t) Lender shall have received an Authorization Agreement for
Pre-Authorized Payments (Debit) executed by Borrowers in substantially
the form of Exhibit I attached hereto and incorporated herein by this
reference.
(u) NovaVision, Inc. and Lender shall have executed an
amendment to the Secured Promissory Note dated December 18, 1996 in the
principal amount of $520,000 changing the interest rate thereunder to
the rate of 13.5%.
(v) Borrower shall have executed and delivered to Lender a
collateral first priority assignment of any key man life insurance
policies in effect as of the closing and shall further grant such an
assignment as to any future such life insurance policies.
16
ARTICLE 5
DEFAULT AND REMEDIES
5.1 Events of Default. The occurrence of any of the following shall
constitute an Event of Default hereunder:
(a) Default in the payment of the principal of or interest on
the indebtedness evidenced by the Note in accordance with the terms of
the Note, which default is not cured within fifteen (15) days;
(b) Any representation or warranty by Borrower or any
subsidiary or affiliate of Borrower as to any material matter hereunder
or under any of the other Loan Documents, or any schedule, statement,
resolution, report, certificate, notice or writing delivered to Lender
by such a party with respect to the Loan, be found to be untrue in any
material respect on the date as of which the facts set forth therein
are stated or certified;
(c) Failure of Borrower, any guarantor of the Loan or
shareholder, subsidiary or affiliate of Borrower to perform any of its
obligations, covenants or agreements under this Agreement, the Note or
any of the other Loan Documents;
(d) Borrower (i) shall generally not pay or shall be unable to
pay its debts as such debts become due; or (ii) shall make an
assignment for the benefit of creditors or petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it
or a substantial part of its assets; or (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (iv) shall have
had any such petition or application filed or any such proceeding
commenced against it in which an order for relief is entered or an
adjudication or appointment is made; or (v) shall indicate, by any act
or intentional and purposeful omission, its consent to, approval of or
acquiescence in any such petition, application, proceeding or order for
relief or the appointment of a custodian, receiver or trustee for it or
a substantial part of its assets; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for
a period of sixty (60) days or more;
(e) Borrower shall be liquidated, dissolved, partitioned or
terminated, or the charter thereof shall expire or be revoked;
(f) A default or event of default shall occur under any of the
other Loan Documents and, if subject to a cure right, such default or
event of default shall not be cured within the applicable cure period;
(g) Borrower shall default in the timely payment or
performance of any obligation now or hereafter owed to Lender in
connection with any other indebtedness of
17
Borrower now or hereafter owed to Lender within fifteen (15) days of
when such amount becomes due;
(h) Except as described in Schedule 5.1(h) attached hereto,
Borrower shall have defaulted and continue to be in default in the
timely payment or performance of any other indebtedness or obligation,
which in the aggregate exceeds Twenty-Five Thousand and No/100ths
Dollars ($25,000.00) or materially adversely affects Borrower's
financial condition; or
(i) A significant change in the executive staff or management
of Borrower shall occur.
With respect to any Event of Default described above that is capable of
being cured and that does not already provide its own cure procedure (a "Curable
Default"), the occurrence of such Curable Default shall not constitute an Event
of Default hereunder if such Curable Default is fully cured and/or corrected
within thirty (30) days (ten (10) days, if such Curable Default may be cured by
payment of a sum of money) of notice thereof to Borrower given in accordance
with the provisions hereof; provided, however, that this provision shall not
require notice to Borrower and an opportunity to cure any Curable Default of
which Borrower has had actual knowledge for the requisite number of days set
forth.
5.2 Acceleration of Maturity; Remedies. Upon the occurrence of any
Event of Default described in subsection 5.1(d), the indebtedness evidenced by
the Note as well as any and all other indebtedness of Borrower to Lender shall
be immediately due and payable in full; and upon the occurrence of any other
Event of Default described above, Lender at any time thereafter may at its
option accelerate the maturity of the indebtedness evidenced by the Note as well
as any and all other indebtedness of Borrower to Lender; all without notice of
any kind. Upon the occurrence of any such Event of Default and the acceleration
of the maturity of the indebtedness evidenced by the Note:
(a) Lender shall be immediately entitled to exercise any and
all rights and remedies possessed by Lender pursuant to the terms of
the Note and all of the other Loan Documents; and
(b) Lender shall have any and all other rights and remedies
that Lender may now or hereafter possess at law, in equity or by
statute.
5.3 Remedies Cumulative; No Waiver. No right, power or remedy conferred
upon or reserved to Lender by this Agreement or any of the other Loan Documents
is intended to be exclusive of any other right, power or remedy, but each and
every such right, power and remedy shall be cumulative and concurrent and shall
be in addition to any other right, power and remedy given hereunder, under any
of the other Loan Documents or now or hereafter existing at law, in equity or by
statute. No delay or omission by Lender to exercise any right, power or remedy
18
accruing upon the occurrence of any Event of Default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein, and every right, power and remedy
given by this Agreement and the other Loan Documents to Lender may be exercised
from time to time and as often as may be deemed expedient by Lender.
5.4 Proceeds of Remedies. Any or all proceeds resulting from the
exercise of any or all of the foregoing remedies shall be applied as set forth
in the Loan Document(s) providing the remedy or remedies exercised; if none is
specified, or if the remedy is provided by this Agreement, then as follows:
First, to the costs and expenses, including without limitation
reasonable attorney's fees, incurred by Lender in connection with the
exercise of its remedies;
Second, to the expenses of curing the default that has
occurred, in the event that Lender elects, in its sole discretion, to
cure the default that has occurred;
Third, to the payment of the obligations of Borrower under the
Loan Documents (the "Obligations"), including but not limited to the
payment of the principal of and interest on the indebtedness evidenced
by the Note, in such order of priority as Lender shall determine in its
sole discretion; and
Fourth, the remainder, if any, to Borrower or to any other
person lawfully thereunto entitled.
ARTICLE 6
TERMINATION
6.1 Termination of this Agreement. This Agreement shall remain in full
force and effect until the later of (i) the Maturity Date (as defined in the
Note), or (ii) the payment by Borrower of all amounts owed to Lender, at which
time Lender shall cancel the Note and deliver it to Borrower; provided, however,
that if at any time Borrower has satisfied all obligations to Lender, Borrower
may terminate this Agreement by providing written notice to Lender.
ARTICLE 7
MISCELLANEOUS
7.1 Performance By Lender. If Borrower shall default in the payment,
performance or observance of any covenant, term or condition of this Agreement,
which default is not cured within the applicable cure period, then Lender may,
at its option, pay, perform or observe the same, and all payments made or costs
or expenses incurred by Lender in connection therewith
19
(including but not limited to reasonable attorney's fees), with interest thereon
at the highest default rate provided in the Note (if none, then at the maximum
rate from time to time allowed by applicable law), shall be immediately repaid
to Lender by Borrower and shall constitute a part of the Obligations. Lender
shall be the sole judge of the necessity for any such actions and of the amounts
to be paid.
7.2 Successors and Assigns Included in Parties. Whenever in this
Agreement one of the parties hereto is named or referred to, the heirs, legal
representatives, successors, successors-in-title and assigns of such parties
shall be included, and all covenants and agreements contained in this Agreement
by or on behalf of Borrower or by or on behalf of Lender shall bind and inure to
the benefit of their respective heirs, legal representatives,
successors-in-title and assigns, whether so expressed or not.
7.3 Costs and Expenses. Borrower agrees to pay all reasonable costs and
expenses incurred by Lender in connection with the making of the Loan, including
but not limited to filing fees, recording taxes and reasonable attorneys' fees,
promptly upon demand of Lender. Borrower further agrees to pay all premiums for
insurance required to be maintained by Borrower pursuant to the terms of the
Loan Documents and all of the out-of-pocket costs and expenses incurred by
Lender in connection with the collection of the Loan, amendment to the Loan
Documents, or prepayment of the Loan, including but not limited to reasonable
attorneys' fees, promptly upon demand of Lender. Any references herein or in any
of the other Loan Documents to fees of attorneys shall means fees based upon
such attorneys' normal hourly rates and other usual charges.
7.4 Assignment. The Note, this Agreement and the other Loan Documents
may be endorsed, assigned and/or transferred in whole or in part by Lender, and
any such holder and/or assignee of the same shall succeed to and be possessed of
the rights and powers of Lender under all of the same to the extent transferred
and assigned. Lender may grant participations in all or any portion of its
interest in the indebtedness evidenced by the Note, and in such event Borrower
shall continue to make payments due under the Loan Documents to Lender and
Lender shall have the sole responsibility of allocating and forwarding such
payments in the appropriate manner and amounts. Borrower shall not assign any of
its rights nor delegate any of its duties hereunder or under any of the other
Loan Documents without the prior express written consent of Lender.
7.5 Time of the Essence. Time is of the essence with respect to each
and every covenant, agreement and obligation of Borrower hereunder and under all
of the other Loan Documents.
7.6 Severability. If any provision(s) of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
20
7.7 Interest and Loan Charges Not to Exceed Maximum Allowed by Law.
Anything in this Agreement, the Note or any of the other Loan Documents to the
contrary notwithstanding, in no event whatsoever, whether by reason of
advancement of proceeds of the Loan, acceleration of the maturity of the unpaid
balance of the Loan or otherwise, shall the interest and loan charges agreed to
be paid to Lender for the use of the money advanced or to be advanced hereunder
exceed the maximum amounts collectible under applicable laws in effect from time
to time. It is understood and agreed by the parties that, if for any reason
whatsoever the interest or loan charges paid or contracted to be paid by
Borrower in respect of the indebtedness evidenced by the Note shall exceed the
maximum amounts collectible under applicable laws in effect from time to time,
then ipso facto, the obligation to pay such interest and/or loan charges shall
be reduced to the maximum amounts collectible under applicable laws in effect
from time to time, and any amounts collected by Lender that exceed such maximum
amounts shall be applied to the reduction of the principal balance of the
indebtedness evidenced by the Note and/or refunded to Borrower so that at no
time shall the interest or loan charges paid or payable in respect of the
indebtedness evidenced by the Note exceed the maximum amounts permitted from
time to time by applicable law.
7.8 Article and Section Headings; Defined Terms. Numbered and titled
article and section headings and defined terms are for convenience only and
shall not be construed as amplifying or limiting any of the provisions of this
Agreement.
7.9 Notices. Any and all notices, elections or demands permitted or
required to be made under this Agreement shall be in writing, signed by the
party giving such notice, election or demand and shall be delivered personally,
telecopied, telexed, or sent by certified mail or overnight via nationally
recognized courier service (such as Federal Express), to the other party at the
address set forth below, or at such other address as may be supplied in writing
and of which receipt has been acknowledged in writing. The date of personal
delivery, telecopy or telex or two (2) business days after the date of mailing
(or the next business day after delivery to such courier service), as the case
may be, shall be the date of such notice, election or demand. For the purposes
of this Agreement:
The Address of Lender is: Sirrom Investments, Inc.
Xxxxx 000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopy No.: 615/726-1208
21
with a copy to: Boult, Cummings, Xxxxxxx & Xxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx III
Telecopy No.: 615/252-2359
The Address of Borrower is: American Consolidated Laboratories, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Arena
Telecopy No.:(000) 000-0000
with a copy to: Xxxxxx Xxxx Xxxxxx Xxxx & Xxxxxxxxxx P.L.L.C.
Suite 0000 Xxxxxxxxxxx Xxxxx
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy No.: (000) 000-0000
7.10 Entire Agreement. This Agreement and the other written agreements
between Borrower and Lender represent the entire agreement between the parties
concerning the subject matter hereof, and all oral discussions and prior
agreements are merged herein; provided, if there is a conflict between this
Agreement and any other document executed contemporaneously herewith with
respect to the Obligations, the provision of this Agreement shall control. The
execution and delivery of this Agreement and the other Loan Documents by the
Borrower were not based upon any fact or material provided by Lender, nor was
the Borrower induced or influenced to enter into this Agreement or the other
Loan Documents by any representation, statement, analysis or promise by Lender.
7.11 Governing Law and Amendments. This Agreement and all of the Loan
Documents shall be construed and enforced under the laws of the State of
Tennessee applicable to contracts to be wholly performed in such State. No
amendment or modification hereof shall be effective except in a writing executed
by each of the parties hereto.
7.12 Survival of Representations and Warranties. All representations
and warranties contained herein or in any of the Loan Documents or made by or
furnished on behalf of the Borrower in connection herewith or in any Loan
Documents shall survive the execution and delivery of this Agreement and all
other Loan Documents.
7.13 Jurisdiction and Venue. Borrower hereby consents to the
jurisdiction of the courts of the State of Tennessee and the United States
District Court for the Middle District of Tennessee, as well as to the
jurisdiction of all courts from which an appeal may be taken from such courts,
for the purpose of any suit, action or other proceeding arising out of any of
its
22
obligations arising under this Agreement or any other Loan Documents or with
respect to the transactions contemplated hereby, and expressly waives any and
all objections it may have as to venue in any of such courts.
7.14 Waiver of Trial by Jury. LENDER AND BORROWER HEREBY WAIVE TRIAL BY
JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER IN CONTRACT
OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT OR THE LOAN DOCUMENTS.
7.15 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.
7.16 Construction and Interpretation. Should any provision of this
Agreement require judicial interpretation, the parties hereto agree that the
court interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of the
rule of construction that a document is to be more strictly construed against
the party that itself or through its agent prepared the same, it being agreed
that the Borrower, Lender and their respective agents have participated in the
preparation hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be executed by their duly authorized officers, as
of the day and year first above written.
LENDER:
SIRROM INVESTMENTS, INC.,
a Tennessee corporation
By: /s/ Xxxxxx X. Xxxxxxxxxx
Title: Vice President
BORROWER:
AMERICAN CONSOLIDATED LABORATORIES,
INC.,
a Florida corporation
By: /s/ Xxxxxx X. Arena
Title: CEO
23
INDEX OF SCHEDULES AND ATTACHMENTS
Exhibit A - Form of Note
Exhibit B - Form of Stock Purchase Warrant
Exhibit C - Form of Security Agreement and UCC-1
Exhibit D - Form of Trademark and Patent Security Agreement
Exhibit E - Form of Pledge and Security Agreement (ACL)
Exhibit F - Form of Jont and Several Unconditional Continuing Guaranty
Exhibit G - Form of Economic Impact Assessment
Exhibit H - Form of Landlord's Consent and Subordination of Lien
Exhibit I - Form of Pre-Authorized Payments (Debit)
Schedule 2.1(b) - Subsidiaries
Schedule 2.1(e) - Capital Structure
Schedule 2.1(f) - Trademarks and Patents
Schedule 2.1(i)(A) and (B) - Financial Statements
Schedule 2.1(j) - Defaults under other Agreements
Schedule 2.1(l) - Debt and Liens
Schedule 2.1(m) - Taxes
Schedule 2.1(o) - Shareholder Loans and Insider Dealings
Schedule 2.1(r) - Material Contracts
Schedule 2.1(t) - Taxes
Schedule 3.12 - Permitted Dividends
Schedule 3.15 - Permitted Encumbrances
Schedule 5.1(h) - Certain Defaults
