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EXHIBIT 10.24
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LOAN AND SECURITY AGREEMENT
AMONG
XXXXXXX CENTRAL HOLDINGS, INC.,
EACH OF THOSE SUBSIDIARIES OF
XXXXXXX CENTRAL HOLDINGS, INC. IDENTIFIED
AS "SUBSIDIARY GUARANTORS" ON THE SIGNATURE PAGES HERETO
AND
WACHOVIA BANK, NATIONAL ASSOCIATION
CLOSING DATE: MAY 11, 1998
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TABLE OF CONTENTS
1. DEFINITIONS, TERMS AND REFERENCES...............................................................1
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1.1. CERTAIN DEFINITIONS...........................................................1
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1.2. USE OF DEFINED TERMS.........................................................11
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1.3. ACCOUNTING TERMS. ..........................................................11
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1.4. UCC TERMS....................................................................11
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2. THE FINANCING..................................................................................11
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2.1. EXTENSIONS OF CREDIT.........................................................11
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2.2. INTEREST AND OTHER CHARGES...................................................12
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2.3. GENERAL PROVISIONS AS TO PAYMENTS............................................16
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2.4. GUARANTY.....................................................................17
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3. SECURITY INTEREST..............................................................................20
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4. REPRESENTATIONS, WARRANTIES AND COVENANTS APPLICABLE TO COLLATERAL.............................20
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4.1. GOOD TITLE...................................................................20
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4.2. RIGHT TO XXXXX XXXX..........................................................20
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4.3. SALE OR OTHER DISPOSITION OF COLLATERAL......................................20
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4.4. INSURANCE....................................................................20
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4.5. LOCATION OF COLLATERAL.......................................................21
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5. GENERAL REPRESENTATIONS AND WARRANTIES.........................................................21
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5.1. EXISTENCE AND QUALIFICATION..................................................21
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5.2. AUTHORITY; AND VALIDITY AND BINDING EFFECT...................................21
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5.3. INCUMBENCY AND AUTHORITY OF SIGNING OFFICERS.................................21
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5.4. NO MATERIAL LITIGATION.......................................................21
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5.5. TAXES........................................................................22
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5.6. CAPITAL......................................................................22
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5.7. ORGANIZATION.................................................................22
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5.8. INSOLVENCY...................................................................22
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5.9. TITLE........................................................................22
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5.10. MARGIN STOCK.................................................................22
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5.11. NO VIOLATIONS................................................................22
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5.12. FINANCIAL STATEMENTS.........................................................23
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5.13. POLLUTION AND ENVIRONMENTAL CONTROL..........................................23
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5.14. POSSESSION OF PERMITS........................................................23
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5.15. SUBSIDIARIES.................................................................23
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5.16. FEDERAL TAXPAYER IDENTIFICATION NUMBER.......................................23
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5.17. EMPLOYEE BENEFIT PLANS.......................................................24
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6. AFFIRMATIVE COVENANTS..........................................................................24
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6.1. RECORDS RESPECTING COLLATERAL................................................24
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6.2. FURTHER ASSURANCES...........................................................24
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6.3. RIGHT TO INSPECT AND CONDUCT AUDITS..........................................24
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6.4. PERIODIC FINANCIAL STATEMENTS................................................24
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6.5. ANNUAL FINANCIAL STATEMENTS..................................................25
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6.6. COMPLIANCE CERTIFICATE.......................................................25
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6.7. PROJECTIONS..................................................................25
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6.8. PAYMENT OF TAXES.............................................................25
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6.9. MAINTENANCE OF INSURANCE.....................................................25
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6.10. MAINTENANCE OF PROPERTY......................................................26
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6.11. CHANGE OF PRINCIPAL PLACE OF BUSINESS, ETC...................................26
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6.12. WAIVERS......................................................................26
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6.13. PRESERVATION OF EXISTENCE....................................................26
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6.14. COMPLIANCE WITH LAWS.........................................................26
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6.15. .............................................................................26
CERTAIN REQUIRED NOTICES................................................................................26
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6.16. YEAR 2000 COMPATIBILITY......................................................26
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6.17. SEC REPORTS..................................................................27
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7. NEGATIVE COVENANTS.............................................................................27
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7.1. ENCUMBRANCES.................................................................27
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7.2. DEBT.........................................................................27
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7.3. CONTINGENT LIABILITIES.......................................................27
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7.4. DIVIDENDS....................................................................28
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STOCK REDEMPTIONS.......................................................................................28
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7.6. INVESTMENTS..................................................................28
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7.7. MERGERS......................................................................28
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7.8. BUSINESS LOCATIONS...........................................................28
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7.9. AFFILIATE TRANSACTIONS.......................................................28
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7.10. FISCAL YEAR..................................................................28
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7.11. DISPOSITION OF ASSETS........................................................28
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7.12. FEDERAL TAXPAYER IDENTIFICATION NUMBER.......................................29
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7.13. EMPLOYEE BENEFIT PLANS.......................................................29
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7.14. SUBSIDIARIES.................................................................29
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8. FINANCIAL COVENANTS............................................................................29
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8.1. NET WORTH....................................................................29
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8.2. LEVERAGE RATIO...............................................................29
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8.3. LIQUIDITY....................................................................29
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9. EVENTS OF DEFAULT..............................................................................29
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9.1. OBLIGATIONS..................................................................29
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9.2. MISREPRESENTATIONS...........................................................29
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9.3. CERTAIN COVENANTS............................................................30
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9.4. OTHER COVENANTS..............................................................30
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9.5. OTHER DEBTS..................................................................30
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9.6. VOLUNTARY BANKRUPTCY.........................................................30
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9.7. INVOLUNTARY BANKRUPTCY.......................................................30
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9.8. DAMAGE, LOSS, THEFT OR DESTRUCTION OF COLLATERAL.............................31
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9.9. JUDGMENTS....................................................................31
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9.11. CHANGE OF CONTROL, ETC.......................................................31
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10. REMEDIES.......................................................................................31
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10.1. ACCELERATION OF THE OBLIGATIONS..............................................31
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10.2. DEFAULT......................................................................32
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10.3. REMEDIES OF A SECURED PARTY..................................................32
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10.4. REPOSSESSION OF THE COLLATERAL...............................................32
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10.5. DIRECT NOTIFICATION..........................................................32
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10.6. SET OFF......................................................................33
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10.7. OTHER REMEDIES...............................................................33
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11. MISCELLANEOUS..................................................................................33
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11.1. WAIVER.......................................................................33
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11.2. GOVERNING LAW................................................................33
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11.3. SURVIVAL.....................................................................33
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11.4. ASSIGNMENTS..................................................................33
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11.5. COUNTERPARTS.................................................................34
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11.6. REIMBURSEMENT................................................................34
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11.7. SUCCESSORS AND ASSIGNS.......................................................34
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11.8. SEVERABILITY.................................................................34
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11.9. NOTICES......................................................................34
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11.10. ENTIRE AGREEMENT: AMENDMENTS.................................................35
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11.11. TIME OF ESSENCE..............................................................35
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11.12. INTERPRETATION...............................................................35
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11.13. LENDER NOT A JOINT VENTURER..................................................35
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11.14. JURISDICTION.................................................................35
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11.15. ACCEPTANCE...................................................................35
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11.16. PAYMENT ON NON-BUSINESS DAYS.................................................36
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11.17. CURE OF DEFAULTS BY LENDER...................................................36
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11.18. RECITALS.....................................................................36
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11.19. ATTORNEY-IN-FACT.............................................................36
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11.20. SOLE BENEFIT.................................................................36
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11.21. INDEMNIFICATION..............................................................36
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11.22. JURY TRIAL WAIVER............................................................37
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11.23. TERMINOLOGY..................................................................37
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11.24. EXHIBITS.....................................................................37
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12. CONDITIONS PRECEDENT...........................................................................37
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12.1. SECRETARY'S CERTIFICATE......................................................38
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12.2. GOOD STANDING CERTIFICATES...................................................38
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12.3. LOAN DOCUMENTS...............................................................38
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12.4. INSURANCE....................................................................38
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12.5. FINANCING STATEMENTS.........................................................38
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12.6. OPINION OF COUNSEL...........................................................38
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12.7. LANDLORD AGREEMENTS..........................................................38
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12.8. NO DEFAULT...................................................................38
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12.9. NO MATERIAL ADVERSE CHANGE...................................................38
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12.10. SECURITIES PLEDGE AGREEMENT..................................................39
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12.11. OTHER........................................................................39
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LOAN AND SECURITY AGREEMENT
PREAMBLE. THIS AGREEMENT, made, entered into and effective as of May 11, 1998,
by and between XXXXXXX CENTRAL HOLDINGS, INC., a Delaware corporation
("Borrower"); each of those Subsidiaries of Borrower identified as "Subsidiary
Guarantors" on the signature pages to this Agreement (the "Subsidiary
Guarantors"); and WACHOVIA BANK, NATIONAL ASSOCIATION, a national bank
("Lender").
W I T N E S S E T H :
WHEREAS, Borrower has applied to Lender for certain financing, as more
particularly described hereinbelow, consisting, initially, of a $25,000,000
revolving line of credit; and
WHEREAS, the Subsidiary Guarantors will receive direct and material
economic benefit from the financing being extended to Borrower pursuant hereto
and have agreed to join with Borrower in the execution of this Agreement to
evidence their issuance of a secured Guaranty in favor of Lender in respect of
the Obligations, and for related purposes; and
WHEREAS, Lender is willing to extend such financing to Borrower in
accordance with the terms hereof upon the execution of this Agreement by
Borrower and the Subsidiary Guarantors (Borrower and all such Subsidiary
Guarantors herein sometimes called, collectively, the "Obligors" or,
individually, an "Obligor"), compliance by Obligors with all of the terms and
provisions of this Agreement and fulfillment of all conditions precedent to
Lender's obligations herein contained;
NOW, THEREFORE, to induce Lender to extend the financing provided for
herein, and for other good and valuable consideration, the sufficiency and
receipt of all of which are acknowledged by Obligors, Lender agrees with
Obligors as follows:
1. DEFINITIONS, TERMS AND REFERENCES.
1.1. CERTAIN DEFINITIONS. In addition to such other terms as
elsewhere defined herein, as used in this Agreement and in any Exhibit or
Schedule attached hereto, the following terms shall have the following meanings:
"Accounts Receivable Collateral" shall mean and include all accounts,
accounts receivable, contract rights, instruments, chattel paper and general
intangibles in the nature of payment obligations owing to each Obligor,
including, without limitation, all rights of each Obligor to payment for goods
sold or leased, or to be sold or to be leased, or for services rendered or to be
rendered, howsoever evidenced or incurred, together with all returned or
repossessed goods and all books, records, computer tapes, programs and ledger
books arising therefrom or relating thereto, all whether now owned or hereafter
acquired and howsoever arising.
"Account Debtor" shall mean any Person who is obligated on any of the
Accounts Receivable Collateral or otherwise is obligated as a purchaser or
lessee of any of the Inventory Collateral.
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"Advance" shall mean an advance of borrowed funds made by Lender to or
on behalf of Borrower pursuant to this Agreement.
"Affiliate" shall mean, with respect to any Person, any Person
Controlling, Controlled by or under common Control with such Person, and any
Subsidiary, shareholder, partner, member, director, manager or officer of such
Person.
"Agreement" shall mean this Loan and Security Agreement, as it may be
modified, amended or supplemented from time to time; together with any and all
Schedules or Exhibits attached hereto.
"Applicable Rate" shall mean the interest rate per annum payable on the
Advances, as is defined and more particularly described in Section 2.2.1.
"Balances Collateral" shall mean all property of each Obligor left
with Lender or in Lender's possession, custody or control now or hereafter, all
deposit accounts of each Obligor now or hereafter opened with Lender, all
certificates of deposit now or hereafter issued by Lender to each Obligor, and
all drafts, checks and other items deposited in or with Lender by each Obligor
for collection now or hereafter.
"Bankruptcy Code" shall mean Title 11 of the United States Code, as it
may be amended from time to time.
"Borrower" shall have the meaning given to such term in the preamble to
this Agreement.
"Borrower Information Schedule" shall mean an information schedule, to
be completed by Borrower in respect of each Obligor, in substantially the form
of Exhibit "A" attached hereto.
"Borrowings" shall mean Advances of borrowed funds made hereunder to or
on behalf of Borrower pursuant to this Agreement.
"Business Day" shall mean a day on which Lender is open for the conduct
of banking business at its principal office in Atlanta, Georgia; provided,
however, that, for purposes of determining the timing of requests for, and
establishing the Applicable Rate on, LIBOR Borrowings, "Business Day" shall
mean, additionally, any day on which dealings in United States Dollar deposits
are also being carried out by Lender in the London interbank eurodollar market.
"Cash Equivalents" shall mean (i) investments in direct obligations of
the United States of America, or any agency thereof or obligations guaranteed by
the United States of America, provided that such obligations mature within one
(1) year from the date of acquisition thereof; (ii) investments in time
deposits, demand deposits and certificates of deposit maturing within one (1)
year from the date of acquisition issued by a bank or trust company organized
under the laws of the United States or any state thereof having capital surplus
and undivided profits aggregating at least $500,000,000;
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and (iii) investments in commercial paper given the highest rating by a national
credit rating agency and maturing not more than two hundred seventy (270) days
from the date of creation thereof.
"Closing Date" shall mean the date set forth on the cover page as the
"Closing Date."
"Collateral" shall mean the property, or interests in property, of each
Obligor described as such in Article 3 plus any other property, or interests in
property, of each Obligor in which Lender has, or hereafter obtains or claims, a
Lien as security for the payment of the Obligations.
"Collateral Locations" shall mean the Executive Office and those
additional locations, if any, set forth and described on the Borrower
Information Schedule, as they may be modified from time to time pursuant to
Section 7.8.
"Columbia/HCA Guaranty" shall mean the guaranty, dated on or about
October 31, 1996, given by Xxxxxxx Central, Inc. to Columbia/HCA and/or certain
of its Affiliates in respect of certain indemnity obligations of the former
stockholders of CHHC, formerly an Affiliate of Borrower.
"Compliance Certificate" shall mean a certificate to be signed by a
duly authorized officer of Borrower pursuant to Section 6.6, in substantially
the form of Exhibit "B" attached hereto (unless otherwise required or approved
by Lender).
"Commitment" shall mean the maximum amount which is available for
borrowing under the Line of Credit (considered without regard to the Margin)
which, as of the Closing Date, is Twenty-Five Million Dollars ($25,000,000).
"Consolidated Subsidiaries" shall mean those Subsidiaries of Borrower
(if any) existing from time to time which, for purposes of GAAP, are required to
be consolidated for financial reporting purposes.
"Control," "Controlled" or "Controlling" shall mean, with respect to
any Person, the power to direct the management and policies of such Person,
directly, indirectly, whether through the ownership of voting securities or
otherwise; provided, however, that, in any event, any Person which owns directly
or indirectly twenty percent (20%) or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation shall be deemed to "Control" such corporation for purposes of this
Agreement.
"Debt" means all liabilities, obligations and indebtedness of a Person,
of any kind or nature, whether now or hereafter owing, arising, due or payable,
howsoever evidenced, created, incurred, acquired or owing, and whether primary,
secondary, direct, contingent, fixed or otherwise, including, without in any way
limiting the generality of the foregoing: (i) the Obligations; (ii) Purchase
Money Debt; (iii) all obligations, liabilities and indebtedness secured by any
Lien on a Person's Property, even though such Person shall not have assumed or
become liable for the payment thereof; (iv) all obligations or liabilities
created or arising under any capital lease, synthetic lease, conditional sale
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or other title retention agreement; (v) all accrued pension fund and other
employee benefit plan obligations and liabilities; (vi) all Guaranteed
Obligations; (vii) any liabilities under, or associated with, interest rate
protection agreements and derivative products; and (viii) any net deferred tax
liabilities.
"Default Condition" shall mean the occurrence of any event which, after
satisfaction of any requirement for the giving of notice or the lapse of time,
or both, would become an Event of Default.
"Default Rate" shall mean that interest rate per annum equal to two
percent (2%) per annum in excess of the otherwise Applicable Rate payable on any
Obligation.
"Dollars" or "$" shall mean United States Dollars.
"EBITDA" shall mean, for Borrower and its Consolidated Subsidiaries,
determined in accordance with GAAP, for the fiscal period in question, earnings
before interest expense, income tax expense, depreciation and amortization
expense, less dividends, less extraordinary gains, plus any non-recurring,
non-cash write-offs associated with Permitted Acquisitions.
"Employee Benefit Plan" shall mean any employee welfare benefit plan,
as that term is defined in Section 3(1) of ERISA, any employee pension benefit
plan, as that term is defined in Section 3(2) of ERISA, or any other plan which
is subject to the provisions of Title IV of ERISA which is for the benefit of
any employees of Borrower and any employees of any Subsidiary or any other
entity which is a member of a "controlled group" or under "common control" with
Borrower or any Subsidiary, as such quoted terms are defined in Section
4001(a)(14) of ERISA.
"Environmental Laws" shall mean all federal, state and local laws,
rules, regulations, ordinances, programs, permits, guidances, orders and consent
decrees relating to health, safety and environmental matters, whether now or
hereafter existing, including, but not limited to state and federal superlien
and environmental cleanup laws and U.S. Department of Transportation regulations
and any other state or local law or regulation relating to pollution,
reclamation, or protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, or hazardous or toxic materials or wastes into air, water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling or pollutants, contaminants
or hazardous or toxic materials or wastes.
"Equipment Collateral" shall mean all equipment and fixtures of each
Obligor, whether now owned or hereafter acquired, wherever located, including,
without limitation, all machinery, furniture, furnishings, leasehold
improvements, computer hardware, motor vehicles, forklifts, rolling stock, dies
and tools used or useful in each Obligor's business operations.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as may be amended from time to time.
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"Event of Default" shall mean any of the events or conditions described
in Article 13, provided that any requirement for the giving of notice or the
lapse of time, or both, has been satisfied.
"Executive Office" shall mean the address of each Obligor's chief
executive office and principal place of business, as designated on the Borrower
Information Schedule.
"Fiscal Year", in respect of a Person, shall mean the fiscal year of
such Person, as employed by such Person as of the Closing Date, and designated
as such on the Borrower Information Schedule, as to Borrower. The terms "Fiscal
Quarter" and "Fiscal Month" shall correspond accordingly thereto.
"Funded Debt" shall mean, for Borrower and its Consolidated
Subsidiaries, as of the end of any fiscal period in question, all Debt which is
interest bearing (including, for this purpose, any Debt, with an implicit
interest component, such as capital leases and Purchase Money Debt, in which
interest is expressed as part of a "time price differential"), whether
short-term or long-term (excluding, for this purpose, Debt under the
Columbia/HCA Guaranty unless and until a payment becomes due and owing
thereunder, and, then, the Debt to be included shall be limited to the payment
amount then due).
"GAAP" shall mean generally accepted accounting principles consistently
applied for the fiscal period(s) in question.
"Guaranteed Obligations" shall mean, with respect to any Person, all
obligations of such Person which in any manner directly or indirectly guarantee
or assure, or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligation of any other Person or to assure or
in effect assure the holder of any such obligations against loss in respect
thereof.
"Guarantor" shall mean, individually and collectively, any and all
accommodation makers, endorsers, guarantors or sureties from whom Lender may
require, either on or after the Closing Date, the endorsement of any Note or the
execution of any contract of guaranty or suretyship guaranteeing payment of any
of the Obligations. Initially, the Subsidiary Guarantors shall be the only
Guarantors.
"Guaranty" shall mean any agreement or other writing executed by a
Guarantor guaranteeing payment of any of the Obligations, in form and substance
satisfactory to Lender.
"Intangibles Collateral" shall mean all general intangibles of each
Obligor, whether now existing or hereafter acquired or arising, including,
without limitation, all intellectual property, copyrights, royalties, tax
refunds, rights to tax refunds, trademarks, trade names, service marks, patent
and proprietary rights, blueprints, drawings, designs, trade secrets, plans,
diagrams, schematics and assembly and display materials relating thereto, all
customer lists, all books and
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records, all computer software and programs, and all rights of each Obligor as
purchaser, lessee, licensee or indemnitee under any contract.
"Interest Period" shall mean, in respect of LIBOR Borrowings, a period
commencing on the date of such borrowing and ending on the numerically
corresponding date in the first (1st), second (2nd), third (3rd), or sixth (6th)
month thereafter, as Borrower may elect in the applicable notice of such
borrowing to be given pursuant to Section 2.2.1; provided, however, that any
Interest Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day, and any Interest Period which begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
"Interest Rate Determination Date" shall mean, in respect of LIBOR
Borrowings, three (3) Business Days prior to the first day of each Interest
Period.
"Inventory Collateral" shall mean all inventory of each Obligor,
whether now owned or hereafter acquired, wherever located, including, without
limitation, all goods of each Obligor held for sale or lease or furnished or to
be furnished under contracts of service, all goods held for display or
demonstration, goods on lease or consignment, spare parts, repair parts,
returned and repossessed goods, all raw materials, work-in-process, finished
goods, catalysts and supplies used or consumed in each Obligor's business,
together with all documents, documents of title, dock warrants, dock receipts,
warehouse receipts, bills of lading or orders for the delivery of all, or any
portion, of the foregoing.
"Landlord's Agreement" shall mean an agreement from the landlord of any
Collateral Location pursuant to which such landlord has waived, released or
subordinated in favor of Lender any rights it has in respect of the Collateral,
to be substantially in the form of Exhibit "C" attached hereto (unless otherwise
required or approved by Lender).
"Lender" shall have the meaning given to such term in the preamble to
this Agreement.
"Letter of Credit" shall have the meaning given to such term in Section
2.1.2.
"Letter of Credit Obligations" shall mean all Obligations of Borrower
arising in respect of Letters of Credit, including, without limitation, (i) all
contingent liabilities arising in respect of Letters of Credit issued, but not
drawn upon, and (ii) all reimbursement liabilities arising in respect of
drawings made under Letters of Credit.
"Leverage Ratio" shall mean the ratio which: (i) Funded Debt, bears to
(ii) EBITDA, as of the end of each Fiscal Quarter, measured on a rolling four
(4) Fiscal Quarters' basis.
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"LIBOR Borrowings" shall mean those Borrowings which Borrower elects,
pursuant to Section 2.2.1, to bear interest at a rate per annum determined by
reference to the LIBOR Rate plus any applicable margin described therein.
"LIBOR Rate" shall mean, with respect to any Interest Period, an
interest rate per annum computed by dividing: (x) the rate per annum determined
by Lender from time to time on the basis of the offered rate for deposits in
dollars in the London interbank borrowing market of amounts equal to or
comparable to the amount of a requested borrowing under the Line of Credit to
which such Interest Period relates offered for a term comparable to such
Interest Period, which rate appears on the display designated as page "3750" of
the Telerate Service (or such other page as may replace page "3750" of that
service or such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for U.S. dollar deposits) as of 11:00 a.m., London time, on the Interest
Rate Determination Date pertaining to such Interest Period (which rate shall be
rounded upward, if necessary, to the next higher 1/10,000 of 1%); provided,
however, that if more than one such offered rate appears on such service on such
date, the offered rate shall be deemed to be the arithmetic average (rounded
upward, if necessary, to the next higher of 1/100 of 1%) of such offered rates;
by (y) the number 1 minus any then applicable percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of Governors
of the Federal Reserve System (or its successor) for determining the maximum
reserve requirement for a member of the Federal Reserve System in respect of
"Eurocurrency liabilities" (or any other category of liabilities which includes
deposits by reference to which the interest rate on such borrowings is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of Lender to United States
residents). The LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the percentage described in the foregoing clause
(y).
"Lien" shall mean any deed to secure debt, deed of trust, mortgage or
similar instrument, and any lien, security interest, preferential arrangement
which has the practical effect of constituting a security interest, security
title, pledge, charge, encumbrance or servitude of any kind, whether by
consensual agreement or by operation of statute or other law, and whether
voluntary or involuntary, including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof.
"Line of Credit" shall refer to the line of credit in the maximum
principal amount of Twenty-Five Million Dollars ($25,000,000) opened by Lender
in favor of Borrower pursuant to the provisions of Section 2.1.
"Loan Documents" shall mean this Agreement, the Notes, any financing
statements covering portions of the Collateral, and any and all other documents,
instruments, certificates and agreements executed and/or delivered by any
Obligor in connection herewith, or any one, more, or all of the foregoing, as
the context shall require.
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"Margin" shall mean, initially, the sum of Twenty-Two Million Six
Hundred Thirty-Six Thousand Dollars ($22,636,000), as adjusted by Lender from
and after the Closing Date, based on Borrower's consolidated financial
statements delivered pursuant to Section 6.4 for each Fiscal Quarter and Section
6.5 for each Fiscal Year, commencing with the Fiscal Quarter ended June 30,
1998, to an amount equal to the product of: (i) EBITDA, determined on a rolling
four (4) Fiscal Quarters' basis as of the end of such Fiscal Quarter, multiplied
by (ii) four (4). Each such adjustment shall become effective as of the first
day of the calendar month succeeding the date on which Lender receives
Borrower's quarterly financial statements pursuant to Section 6.4, except that
any such adjustment based on Borrower's financial statements for the fourth
(4th) Fiscal Quarter of each Fiscal Year shall itself be subject to further
adjustment based on Borrower's annual financial statements for the same said
period delivered pursuant to Section 6.5, effective as of the first day of the
calendar month succeeding their delivery to Lender.
"Margin Requirement" shall have the meaning ascribed to such term in
Section 2.1.1.
"Master Note" shall mean the master promissory note, dated of even date
herewith, as amended or supplemented from time to time, in a principal amount
equal to the maximum amount of the Line of Credit, evidencing Advances to be
obtained by Borrower under the Line of Credit, together with any renewals or
extensions thereof in whole or in part. The Master Note shall be substantially
in the form of Exhibit "C".
"Material Adverse Change" shall mean with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business or properties of Borrower and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the
Lender under any of the Loan Documents (or any documents, instruments or
agreements executed and/or delivered by any Person other than an Obligor in
conjunction with the Loan Documents), or the ability of any Obligor to perform
its obligations under any of the Loan Documents, or (c) the legality, validity
or enforceability of any of the Loan Documents (or any documents, instruments or
agreements executed and/or delivered by any Person other than an Obligor in
conjunction with the Loan Documents).
"Net Worth" shall mean, for Borrower and its Consolidated Subsidiaries,
determined in accordance with GAAP, as of the end of any fiscal period in
question, total shareholders' equity.
"Note" shall mean any instrument at any time evidencing all or any
portion of any Obligations.
"Obligations" shall mean any and all Debts of each Obligor to Lender,
including without limiting the generality of the foregoing, any Debt of any
Obligor to Lender under any loan made to Borrower by Lender prior to the date
hereof and any and all extensions or renewals thereof in whole
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or in part; any Debt of Borrower to Lender arising hereunder or as a result
hereof, whether evidenced by any Note, or constituting Advances, Letter of
Credit Obligations or otherwise, and any and all extensions or renewals thereof
in whole or in part; all Debts of each Subsidiary Guarantor under its Guaranty
issued pursuant to Section 2.4; any Debt of any Obligor to Lender under any
later or future advances or loans made by Lender to such Obligor, and any and
all extensions or renewals thereof in whole or in part; and any and all future
or additional Debts of each Obligor to Lender whatsoever and in any event,
whether existing as of the date hereof or hereafter arising, whether arising
under a loan, lease, credit card arrangement, line of credit, letter of credit
or other type of financing, and whether direct, indirect, absolute or
contingent, as maker, endorser, guarantor, surety or otherwise, and whether
evidenced by, arising out of, or relating to, a promissory note, xxxx of
exchange, check, draft, bond, letter of credit, guaranty agreement, bankers'
acceptance, foreign exchange contract, interest rate protection agreement,
commitment fee, service charge or otherwise.
"Permitted Acquisition" shall mean the acquisition by Borrower or any
Consolidated Subsidiary of Borrower of all or substantially all of the equity
interests of any Person or all or substantially all of the operating assets of
any Person, or assets which constitute all or substantially all of the assets of
a division or a separate or separable line of business of any Person, provided
that: (i) Borrower or such Subsidiary is the acquiring entity; (ii) the
acquisition is not a "hostile" acquisition; (iii) the Person, operating assets
or line of business acquired is in a substantially similar or related line of
business as Borrower or such Subsidiary; (iv) no Event of Default or Default
Condition shall exist at the time of such acquisition, and (v) contemporaneously
with the closing of such acquisition Lender shall have received (A) such
documents and instruments as may be necessary to grant or confirm to the Lender
a Lien on or security interest in the operating assets or line of business so
acquired and (B) if the Person is acquired by, and not merged into, Borrower or
such Subsidiary, the inclusion of such Person as a Subsidiary Guarantor pursuant
to Section 7.14 hereof.
"Permitted Encumbrances" shall mean: (i) Liens for taxes not yet due
and payable or being actively contested as permitted by this Agreement, but only
if such Liens do not adversely affect Lender's rights or the priority of
Lender's security interest in the Collateral; (ii) carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business, payment for which is not yet due or which are being
actively contested in good faith and by appropriate, lawful proceedings, but
only if such liens are and remain junior to liens granted in favor of Lender;
(iii) pledges or deposits in connection with worker's compensation, unemployment
insurance and other social security legislation; (iv) deposits to secure the
performance of utilities, leases, statutory obligations and surety and appeal
bonds and other obligations of a like nature arising by statute or under
customary terms regarding depository relationships on deposits held by financial
institutions with whom the Obligor in question has a banker-customer
relationship; (vi) typical restrictions imposed by licenses and leases of
software (including location and transfer restrictions); (vii) Liens in favor of
Lender; (viii) rights of setoff arising under the Columbia/HCA Guaranty in
respect of Debts owing by Xxxxxxx Central, Inc.; (ix) any "springing" Lien
hereafter arising under, or in respect of, the Columbia/HCA Guaranty upon any
payment coming due thereunder, provided that such Lien is released not later
than thirty (30) days
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after its having arisen; and (x) Liens granted by any Obligor to vendors or
financiers of capital assets to secure the payment of Purchase Money Debt so
long as (A) such Debt is permitted to be incurred hereunder, (B) such Liens
extend only to the specific assets so purchased, secure only such deferred
payment obligation and related interest, fees and charges and no other Debt, and
(C) such Liens are promptly released upon the payment in full of such Debt.
"Person" shall mean any individual, partnership, corporation, limited
liability company, joint venture, joint stock company, trust, governmental unit
or other entity.
"Prime Borrowings" shall mean those Borrowings which Borrower elects,
pursuant to Section 2.2.1, to bear interest at a rate per annum determined by
reference to the Prime Rate.
"Prime Rate" refers to that interest rate so denominated and set by
Lender from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Lender. Lender extends
credit at interest rates equal to, above and below the Prime Rate.
"Purchase Money Debt" shall mean Debt incurred by Borrower or any
Subsidiary in connection with the acquisition of capital assets for the cost
thereof (including any for the deferred payment of any purchase price),
including pursuant to any capital lease.
"Subordinated Debt" shall mean any unsecured Debt for borrowed funds or
for the deferred payment of any purchase price of Borrower or any Subsidiary to
any Person which, by written agreement in form and substance satisfactory to
Lender, has been subordinated in right of payment and claim, to the rights and
claims of Lender in respect of the Obligations, on terms and conditions
acceptable to and approved by Lender.
"Subsidiary" shall mean any corporation, partnership, business
association or other entity (including any Subsidiary of any of the foregoing)
of which Borrower owns, directly or indirectly, through one or more
Subsidiaries, more than fifty percent (50%) of the capital stock or other equity
interest having ordinary power for the election of directors or others
performing similar functions.
"Subsidiary Guarantors" shall mean (i) each of those Subsidiaries of
Borrower identified as "Subsidiary Guarantors" on the signature pages to this
Agreement; and (ii) all Subsidiaries added as "Subsidiary Guarantors" hereafter
pursuant to the operation and effect of Section 7.14.
"Telephone Instruction Letter" shall mean a letter from Borrower to
Lender, dated the Closing Date, in substantially the form of Exhibit "I"
attached hereto.
"Termination Date" shall mean the earliest to occur of the following
dates: (i) that date on which, pursuant to Section 14, Lender terminates the
Line of Credit (or the Line of Credit is deemed automatically terminated)
subsequent to the occurrence of an Event of Default; (ii) that date which is
three (3) years after the Closing Date; (iii) such later date as to which Lender
may agree in writing from time to time hereafter; or (iv) any earlier date on
which Borrower elects, by giving at least ten
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(10) days advance written notice to Lender to such effect, to terminate its
Borrowings under the Line of Credit and pay, in full, all Obligations.
"UCC" shall mean the Uniform Commercial Code- Secured Transactions of
Georgia (OCGA Art. 11-9), as in effect on the Closing Date.
1.2. USE OF DEFINED TERMS. All terms defined in this Agreement and the
Exhibits shall have the same defined meanings when used in any other Loan
Documents, unless the context shall require otherwise.
1.3. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall have the meanings generally attributed to such terms under GAAP.
1.4. UCC TERMS. The terms "accounts", "chattel paper", "instruments",
"general intangibles", "inventory," "equipment" and "fixtures", as and when used
in the Loan Documents, shall have the same meanings given to such terms under
the UCC.
2. THE FINANCING.
2.1. EXTENSIONS OF CREDIT.
2.1.1. LINE OF CREDIT. On the Closing Date, subject to
fulfillment of all conditions precedent set forth in Section 16, Lender agrees
to open the Line of Credit in favor of Borrower so that, during the period from
the Closing Date to, but not including, the Termination Date, so long as there
is not in existence any Default Condition or Event of Default and the requested
Borrowing, if made, will not cause a Default Condition or Event of Default to
exist, Borrower may borrow and repay and reborrow Advances in up to a maximum
aggregate principal amount outstanding at any one time equal to the amount of
the Line of Credit; subject, however, to the requirement that at no time shall
the aggregate principal amount of (i) outstanding Advances under the Line of
Credit, plus (ii) the aggregate amount of all Letter of Credit Obligations,
exceed the lesser of: (A) the Commitment or (B) the Margin (such requirement
being referred to herein as the "Margin Requirement"); and subject, further, to
the requirement that if, at any time hereafter, the Margin Requirement is not
satisfied, Borrower will immediately repay the then principal balance of the
Master Note by that amount necessary to satisfy the Margin Requirement. All
proceeds so obtained under the Line of Credit may be used by Borrower for
working capital in such manner as Borrower may elect in the ordinary course of
its and its Subsidiaries' business operations, to finance Permitted Acquisitions
and for other, general corporate purposes not in conflict with the terms of this
Agreement. The Debts arising from Advances made to or on behalf of Borrower
under the Line of Credit shall be evidenced by the Master Note, which shall be
executed by Borrower and delivered to Lender on the Closing Date. The
outstanding principal amount of the Master Note may fluctuate from time to time,
but shall be due and payable in full on the Termination Date, and shall bear
interest from the date of each disbursement of principal until paid in full at
the Applicable Rate, payable in the manner described in Section 2.2.1. Subject
to any contrary provisions of Section 2.2.1
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in respect of LIBOR Borrowings, Borrower shall have the option to request
Advances under the Line of Credit by telephone or in a writing delivered to
Lender not later than 11:00 a.m. (Atlanta, Georgia time) on the date of the
requested Advance; provided, however, that any telephone requests shall be made
in accordance with the Telephone Instructions Letter and, unless otherwise
approved by Lender, confirmed in writing not later than the Business Day
following the disbursement of the requested Advance.
2.1.2. LETTERS OF CREDIT. In addition to the foregoing, so
long as the Line of Credit remains open, Borrower shall have the further right
to apply for and obtain, and Lender agrees to issue, commercial or standby
letters of credit ("Letters of Credit") for the account of Borrower or any
Subsidiary for use by Borrower or such Subsidiary in the ordinary course of its
business operations pursuant to a separate application and agreement (one per
each Letter of Credit) to be executed at time of issuance between Lender and
Borrower, which shall set forth, among other things, the purpose, beneficiary,
the expiry date and credit limit, together with the fees and charges imposed by
Lender for the issuance and administration thereof. All outstanding Letter of
Credit Obligations shall be reserved by Lender against borrowing availability
under the Line of Credit and be included as outstanding Debt for purposes of
determining the Margin Requirement. Lender shall have the continuing right to
charge as Advances any outstanding Letter of Credit Obligations, and any fees
and charges associated therewith, which have become due and payable. Lender
shall have the further right from time to time to impose sublimits on the
aggregate amounts of Letters of Credit and Letter of Credit Obligations which at
any one time may be outstanding.
2.2. INTEREST AND OTHER CHARGES.
2.2.1. INTEREST AT APPLICABLE RATE. Lender and Borrower
agree that the interest rate payable on the Borrowings (herein called the
"Applicable Rate") shall be determined as follows:
(a) LINE OF CREDIT. Outstanding Advances under the Line of
Credit shall bear interest at either (i) the Prime Rate, in the case of Advances
constituting Prime Borrowings, or (ii) subject to the conditions and limitations
set forth in subsection (c) below, the LIBOR Rate plus one and one-half of one
percent (1 2%) per annum, in the case of Advances constituting LIBOR Borrowings,
subject, however, to subsequent adjustment as provided in subsection (b) below.
(b) SUBSEQUENT ADJUSTMENTS. The Applicable Rate described in
subsection (a)(ii) above for LIBOR Rate Borrowings shall be subject to
subsequent adjustment, up or down, based on Borrower's financial performance,
determined by reference to the Leverage Ratio, measured quarterly; that is, if
the Leverage Ratio, measured as of the end of each Fiscal Quarter of Borrower,
commencing with the Fiscal Quarter ending closest to, but occurring after, the
Closing Date, is as described below, the Applicable Rate for LIBOR Rate
Borrowings shall be the interest rate appearing opposite said Leverage Ratio:
Leverage Ratio Applicable Rate
-------------- ---------------
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< 4.00:1, > 3.00:1 LIBOR Rate + 3.00%
-
< 3.00:1, > 2.50:1 LIBOR Rate + 2.50%
-
< 2.50:1, > 2.00:1 LIBOR Rate + 2.00%
-
< 2.00:1 LIBOR Rate + 1.50%
-
Lender shall determine whether any adjustment to the Applicable Rate is to be
made quarterly, based on Borrower's financial statements as of and for each
Fiscal Quarter end delivered to Lender pursuant to Section 6.4, provided,
however, that if such financial statements are not timely delivered to Lender,
then an adjustment to the Applicable Rate shall be made based on an assumed
delivery of said financial statements reflecting a Leverage Ratio of 4.00:1;
and, provided, further, that no downward adjustment shall be made if an Event of
Default or Default Condition then exists. Each such adjustment to the Applicable
Rate shall become effective as of the first day of the calendar month following
the date on which such financial statements are delivered (or deemed delivered)
to Lender, and shall remain effective unless and until any subsequent adjustment
becomes effective in accordance with the terms of this subsection (b). Each such
adjustment shall apply only to LIBOR Borrowings made (including conversions and
continuations) within such period (but not to any then existing). In the event
that the annual audit report of Borrower for any Fiscal Year shall require
restatement of financial statements of Borrower and such restatement shall
affect the Leverage Ratio and would have required a different Applicable Rate to
be in effect for prior periods, then Lender at its option, may require Borrower
to make additional payments of interest or rebate interest for such prior
periods.
(c) SPECIAL CONDITIONS AND LIMITATIONS ON LIBOR BORROWINGS.
All Borrowings obtained on the Closing Date and for a period of three (3)
Business Days thereafter shall be Prime Borrowings. Thereafter, Borrower shall
have the continuing right, provided that no Event Default or Default Condition
exists, to obtain LIBOR Borrowings or to convert Prime Borrowings to LIBOR
Borrowings; subject, however, to the following conditions and limitations: (i)
Borrower must request a LIBOR Borrowing, specifying the amount thereof and the
applicable Interest Period, at least three (3) Business Days in advance of the
intended Borrowing date; (ii) no more than four (4) LIBOR Borrowings under the
Line of Credit may be obtained at any time; (iii) LIBOR Borrowings must be in
minimum amounts of One Million Dollars ($1,000,000), or integral multiples of
Two Hundred Fifty Thousand Dollars ($250,000) in excess thereof; (iv) the
Interest Period for LIBOR Borrowings in respect of the Line of Credit shall not
exceed the Termination Date; (v) if on or prior to the first day of any Interest
Period, Lender determines that deposits in United States Dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period or that the LIBOR Rate will not adequately and fairly reflect
the cost to Lender of funding any relevant borrowings for such Interest Period,
then, Lender shall forthwith give notice thereof to Borrower, whereupon, until
Lender notifies Borrower that the circumstances giving rise to such suspension
no longer exist, the obligation of Lender to make LIBOR Borrowings available to
Borrower shall be suspended; (vi) if at any time, a change of law, or compliance
by Lender with any request or directive (whether or not having the force of law)
of any governmental authority shall make it unlawful or impracticable for Lender
to make available, maintain or fund any LIBOR Borrowings, Lender shall forthwith
give notice to such effect to Borrower, whereupon, until Lender
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notifies Borrower that the circumstances giving rise to such suspension no
longer exist, the obligation of Lender to make such borrowings available to
Borrower shall be suspended and if Lender shall determine that it may not
lawfully continue to maintain and fund any then outstanding borrowings to
maturity and shall so specify in such notice, each Borrowing so affected shall
be converted into a Prime Borrowing, effective immediately; (vii) unless
Borrower has timely given Lender a notice of LIBOR Borrowing required
hereinabove, a LIBOR Borrowing shall automatically convert to a Prime Borrowing
at the expiration of the Interest Period corresponding thereto; and (viii) upon
the request of Lender, delivered to Borrower, Borrower shall pay to Lender such
amount or amounts as shall be determined by Lender in connection with the
relevant Interest Period as a result of: (A) any payment or prepayment of any
LIBOR Borrowing by Borrower being made on a date other than the last day of an
Interest Period for such borrowing, whether as a result of permitted voluntary
prepayment, involuntary acceleration or otherwise; or (B) any failure by the
Borrower to undertake any such LIBOR Borrowing on the date for which notice of
such borrowing is specified by Borrower. In the case of clause (viii) above,
such amount shall include an amount determined by Lender, in its good faith
discretion, to be equal to the excess, if any, of the amount of interest which
would have accrued on the amount so paid or prepaid or not prepaid or borrowed
for the period from the date of such payment, prepayment or failure to prepay or
borrow to the last day of the then current Interest Period for such borrowing
(or, in the case of a failure to prepay or borrow, the Interest Period for such
borrowing which would have commenced on the date of such failure to prepay or
borrow) at the applicable rate of interest for such borrowing provided for
herein (determined without regard to the Applicable Margin) over the amount of
interest (as determined by Lender in the exercise of its good faith discretion)
Lender would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
(d) PAYMENT OF INTEREST. Accrued interest on any Prime
Borrowings at the Applicable Rate shall be due and payable monthly in arrears,
on the first day of each calendar month, for the preceding calendar month (or
portion thereof), commencing on the first day of the first calendar month
following the Closing Date, and at maturity. Accrued interest on any LIBOR
Borrowings shall be due and payable at the Applicable Rate on the same dates as
are prescribed for the payment of accrued interest on Prime Borrowings and,
additionally, at the expiration of each Interest Period corresponding to such
Borrowings, and at maturity.
(e) CALCULATION OF INTEREST AND FEES. Interest on Borrowings
at the Applicable Rate (and any fees described in Section 2.2.2 computed on a
per annum basis) shall be calculated on the basis of a 360-day year and actual
days elapsed. The Applicable Rate on Prime Borrowings shall change with each
change in the Prime Rate, effective as of the opening of business on the
Business Day of such change.
(f) CHARGING OF INTEREST AND FEES. Accrued and unpaid
interest on any Borrowings (and any outstanding fees described in Section 2.2.2)
may, if not paid when due and payable, be paid, at Lender's option (without any
obligation to do so), either (i) by Lender's charging the Line of Credit for an
Advance in the amount thereof; or (ii) by Lender's debiting any deposit
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account constituting Balances Collateral for the amount thereof; but,
notwithstanding the foregoing, Borrower shall be and remain responsible for the
payment of such sums.
(g) RATE ON OTHER OBLIGATIONS. To the extent that, at any
time, there are other Obligations besides Advances which are outstanding and
unpaid, such Obligations shall, unless and except to the extent that this
Agreement, any Note or any other Loan Document evidencing such Obligations
provides otherwise, bear interest at the same rate per annum as is then and
thereafter payable on Prime Borrowings under the Line of Credit.
2.2.2. FEES. In addition to the payment of interest at the
Applicable Rate, Borrower shall also be obligated to pay Lender the following
fees and charges:
(a) LOAN ORIGINATION FEE. On the Closing Date, a fully
earned, non-refundable loan origination fee of Sixty-Two Thousand Five Hundred
Dollars ($62,500).
(b) NON-USAGE FEE. Quarterly, on the first day of each
calendar quarter, commencing on the first of such dates following the Closing
Date, Borrower shall pay to Lender a fee equal to (x) one-fifth of one percent
(.20%) per annum, times (y) the difference between (A) the lesser of (i) the
Commitment, and (ii) the Margin, determined on a daily average basis for the
immediately preceding calendar quarter (or portion thereof, as the case may be),
and (B) the sum, without duplication, of the following, determined on a daily
average basis for the immediately preceding calendar quarter (or portion
thereof, as the case may be): (i) all Advances under the Line of Credit plus
(ii) all outstanding Letter of Credit Obligations.
(c) AUDIT FEES. For Collateral audits performed by Lender
pursuant to Section 10.3, Lender's standard audit fee for each audit performed
by Lender (or its designee), which, as of the Closing Date, equals Two Thousand
Five Hundred Dollars ($2,500) plus expenses; provided, however, that Borrower
shall not have to pay for more than four (4) such audits in any one Fiscal Year
so long as no Event of Default exists.
2.2.3. CAPITAL ADEQUACY. If, after the Closing Date, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the administration thereof, or compliance by Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency does or shall have the
effect of reducing the rate or return on Lender's capital as a consequence of
its obligations hereunder to a level below that which Lender could have achieved
but for such adoption, change or compliance (taking into consideration Lender's
policies with respect to capital adequacy) by an amount deemed by Lender to be
material, then from time to time within ten (10) days after submission by lender
to Borrower of a written request therefor, together with a certificate (which
shall be conclusive absent manifest error), setting forth the calculations
evidencing such requested additional amount and the law or regulation with
respect thereto and certifying that such request is generally consistent with
Lender's treatment of
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other similar customers having similar provisions in their agreements with
Lender, and that such request is being made on the basis of a reasonable
allocation of the additional amount or amounts as will compensate Lender for
such reduction. Notwithstanding the foregoing, Borrower shall only be obligated
to compensate Lender for any amount under this subsection arising or occurring
during (i) in the case of each such request for compensation, any time or period
commencing not more than sixty (60) days prior to the date on which Lender
submits such request and (ii) any other time or period during which, because of
the unannounced retroactive application of such law, regulation, interpretation,
request or directive, Lender could not have known that the resulting reduction
in return might arise. Lender will notify Borrower that it is entitled to
compensation pursuant to this subsection as promptly as practicable after it
determines to request such compensation; provided, however, that the failure to
provide such notice shall not restrict the ability of Lender to be reimbursed
under this Section except as provided in clause (i) above.
2.2.4. USURY SAVINGS PROVISIONS. Lender and Borrower hereby
further agree that the only charge imposed by Lender upon Borrower for the use
of money in connection herewith is and shall be interest at the Applicable Rate,
and that all other charges imposed by Lender upon Borrower in connection
herewith, are and shall be deemed to be charges made to compensate Lender for
underwriting and administrative services and costs, and other services and costs
performed and incurred, and to be performed and incurred, by Lender in
connection with making credit available to Borrower hereunder, and shall under
no circumstances be deemed to be charges for the use of money. In no contingency
or event whatsoever shall the aggregate of all amounts deemed interest hereunder
or under the Notes and charged or collected pursuant to the terms of this
Agreement or pursuant to the Notes exceed the highest rate permissible under any
law which a court of competent jurisdiction shall, in a final determination,
deem applicable hereto. In the event that such a court determines that Lender
has charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by applicable law and Lender shall promptly refund to Borrower
any interest received by Lender in excess of the maximum lawful rate or, if so
requested by Borrower, shall apply such excess to the principal balance of the
Obligations. It is the intent hereof that Borrower not pay or contract to pay,
and that Lender not receive or contract to receive, directly or indirectly in
any manner whatsoever, interest in excess of that which may be paid by Borrower
under applicable law.
2.3. GENERAL PROVISIONS AS TO PAYMENTS.
2.3.1. METHOD OF PAYMENT. All payments of interest, fees and
principal pursuant to this Agreement must be received by Lender no later than
2:00 p.m. (Atlanta, Georgia time) on the date when due, in federal or other
funds immediately available to Lender in Atlanta, Georgia.
2.3.2. APPLICATION OF PAYMENT. Except as otherwise expressly
set forth herein, all payments received by Lender hereunder shall be applied, in
accordance with the then current billing statement applicable to the Borrowing,
first to accrued interest, then to fees, then to principal due and then to late
charges. Any remaining funds shall be applied to the further reduction
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of principal. In the event more than one Borrowing shall be outstanding
hereunder, and no designation is made by Borrower, Lender, in its discretion,
may determine to which Borrowing(s) each payment shall be applied.
Notwithstanding the foregoing, upon the occurrence of a Default Condition or
Event of Default, payments shall be applied to the Obligations in such order as
Lender, in its sole discretion, may elect.
2.4. GUARANTY. Each Subsidiary Guarantor, for value received,
hereby agrees with Lender as follows:
2.4.1. Each Subsidiary Guarantor hereby unconditionally
guarantees to Lender, irrespective of the validity and enforceability of this
Agreement, the Notes, or the other Loan Documents or the Obligations hereunder
of Borrower the value or sufficiency of any Collateral or any other circumstance
that might otherwise affect the liability of a Subsidiary Guarantor, that all
Obligations shall be promptly paid in full when due, whether at stated maturity,
by acceleration or otherwise, in accordance with the terms hereof and of the
other Loan Documents. Failing payment by Borrower when due of any amount so
guaranteed for whatever reason, such Subsidiary Guarantor will be obligated to
pay the same immediately.
2.4.2. Each Subsidiary Guarantor hereby waives presentment,
protest, demand of payment, notice of dishonor and all other notices and demands
whatsoever. Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and Lender, on the other hand, (i) the
maturity of the Obligations guaranteed hereby may be accelerated as provided
herein for the purposes of this Guaranty, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such Obligations as provided herein, such Obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
purposes of this Guaranty. The obligations of each Subsidiary Guarantor under
this Section shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of Borrower or any other Subsidiary Guarantor
is rescinded or must otherwise be restored by any holder of any of the
Obligations guaranteed hereunder, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Subsidiary Guarantor agrees
that it will indemnify Lenders on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by Lenders in connection with such rescission or restoration.
2.4.3. The guaranty of each Subsidiary Guarantor set forth
herein shall remain in full force and effect until all Obligations are
indefeasibly paid in full and this Agreement has been terminated in writing. No
payment or payments made by Borrower or any other Person or received or
collected by an Lender from Borrower or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Subsidiary
Guarantor pursuant to this Section, which liability shall, notwithstanding any
such payment or payments, other than payments made by Borrower in
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respect of the Obligations, remain for the Obligations until all Obligations are
paid in full. Anything herein, or in any other Loan Document, to the contrary
notwithstanding, the maximum liability of each Subsidiary Guarantor under this
Section shall in no event exceed the amount which can be guaranteed by such
Subsidiary Guarantor under applicable federal or state laws relating to the
insolvency of debtors.
2.4.4. Without in any manner limiting the generality of the
foregoing, each Subsidiary Guarantor agrees that Lender may, in accordance with
the terms of this Agreement, from time to time, consent to any action or
non-action of Borrower or any other Subsidiary Guarantor which, in the absence
of such consent, violates or may violate this Agreement, with or without
consideration, on such terms and conditions as may be acceptable to Lender,
without in any manner affecting or impairing the liability of any Subsidiary
Guarantor hereunder. Each Subsidiary Guarantor waives any defense arising by
reason of any inability to pay or any defense based on bankruptcy or insolvency
or other similar limitations on creditors' remedies. Each Subsidiary Guarantor
authorizes Lender, without notice or demand and without affecting such
Subsidiary Guarantor's liability hereunder or under any of the other Loan
Documents, from time to time to: (i) accelerate (or, in accordance with the
terms of this Agreement, renew, extend, or otherwise change the time or place
for payment of, or otherwise change the terms of) the Notes or the Obligations
or any part thereof including, without limitation, increase or decrease of the
rate of interest thereon; (ii) take and hold security, and exchange, enforce,
waive and release any collateral or security or any part thereof or any such
other security or surrender, modify, impair, change, alter, renew, continue,
compromise or release in whole or in part of any such security, or fail to
perfect its interest in any such security or to establish its priority with
respect thereof; (iii) apply such security and direct the order or manner or
sale thereof as Lender in its sole discretion may determine; (iv) release or
substitute Borrower or any other Subsidiary Guarantor, in whole or in part or
any of the endorsers or guarantors of the Obligations or any part thereof; (v)
settle or compromise any or all of the Obligations with Borrower or any other
Subsidiary Guarantor or any endorser or guarantor of the Obligations; and (vi)
subordinate any or all of the Obligations to any other obligations of or claim
against Borrower or any other Subsidiary Guarantor, whether owing to or existing
in favor of Lender or any other party.
2.4.5. Lender may, at its election, exercise any right or
remedy that it may have against Borrower or any Subsidiary Guarantor or any
security now or hereafter held by or for the benefit of Lender, including,
without limitation, the right to foreclose upon any such security by judicial or
nonjudicial sale, without affecting or impairing in any way the liability of
Borrower or any Subsidiary Guarantor, except to the extent the Obligations may
thereby be paid. Each Subsidiary Guarantor waives any defense arising out of the
absence, impairment or loss of any right of reimbursement or other right or
remedy against Borrower or any other Subsidiary Guarantor or any such security,
whether resulting from the election by any Lender to exercise any right or
remedy they may have against Borrower or any other Subsidiary Guarantor, any
defect in, failure of, or loss or absence of priority with respect to the
interest of any Lender in such security, or otherwise. In the event that any
foreclosure sale is deemed to be not commercially reasonable, each Subsidiary
Guarantor waives any right that it may have to have any portion of the
Obligations discharged except
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to the extent of the amount actually bid and received by Lender at any such
sale. Lender shall not be required to institute or prosecute proceedings to
recover any deficiency as a condition of payment hereunder or enforcement
hereof.
2.4.6. Each Subsidiary Guarantor waives the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof, to the extent permitted by law. Any part performance of the Obligations
by Borrower, or any other event or circumstances, which operate to toll any
statute of limitations as to Borrower, shall not operate to toll the statute of
limitations as to Borrower or any other Subsidiary Guarantor. Each Subsidiary
Guarantor waives any defense arising by reason of any disability or other
defense of Borrower or any other Subsidiary Guarantor or by reason of the
cessation from any cause whatsoever of the liability of Borrower or any other
Subsidiary Guarantor. Each Subsidiary Guarantor waives any setoff, defense or
counterclaim which Borrower may have or claim to have against Lender.
2.4.7. Each Subsidiary Guarantor expressly represents and
acknowledges that any financial accommodations by Lender to Borrower hereunder
and under the other Loan Documents are and will be of direct interest, benefit
and advantage to such Subsidiary Guarantor. Each Subsidiary Guarantor
acknowledges that any notice given by Lender to Borrower shall be effective with
respect to such Subsidiary Guarantor as well. Each Subsidiary Guarantor shall be
entitled to subrogation and contribution rights from and against any other
Subsidiary Guarantor to the extent such Subsidiary Guarantor is required to pay
to Lender any amount in excess of the Advances made directly to Borrower or as
otherwise available under applicable law, subject, however, to Section 2.4.8.
The provisions of this subsection shall in no way limit the obligations and
liabilities of any Subsidiary Guarantor to the Lender and each Subsidiary
Guarantor shall remain liable to the Lender for the full amount of the
Obligations.
2.4.8. No Subsidiary Guarantor will exercise any rights
which it may acquire by way of subrogation hereunder or under any other Loan
Document or at law by any payment made hereunder or otherwise, nor shall any
Subsidiary Guarantor seek or be entitled to seek any contribution or
reimbursement from any other Subsidiary Guarantor in respect of payments made by
such Subsidiary Guarantor hereunder or under any other Loan Document, until all
Obligations are paid in full and the Commitment is terminated. If any amounts
shall be paid to any Subsidiary Guarantor on account of such subrogation or
contribution rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Subsidiary Guarantor in trust
for Lender, segregated from other funds of such Subsidiary Guarantor, and shall,
forthwith upon receipt by such Subsidiary Guarantor, be turned over to Lender in
the exact form received by such Subsidiary Guarantor (duly endorsed by such
Subsidiary Guarantor to Lender, if required), to be applied against the
Obligations, whether mature or unmatured, as provided for herein.
2.4.9. Notwithstanding any provision to the contrary
contained hereinabove, to the extent the obligations of any Subsidiary Guarantor
hereunder shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Subsidiary
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Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
3. SECURITY INTEREST. As security for the payment of all
Obligations, each Obligor hereby grants to Lender a continuing, general Lien
upon and security interest and security title in and to the following described
property, or interests in property, of each Obligor, wherever located, whether
now existing or hereafter acquired or arising (herein collectively called the
"Collateral"), namely: (a) the Accounts Receivable Collateral; (b) the Inventory
Collateral; (c) the Equipment Collateral; (d) the Intangibles Collateral; (e)
the Balances Collateral; and (f) all products and/or proceeds of any and all of
the foregoing, including, without limitation, insurance proceeds.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS APPLICABLE TO
COLLATERAL. With respect to the Collateral owned by it at any time, each
Obligor, hereby represents, warrants and covenants to Lender as set forth below.
4.1. GOOD TITLE. Such Obligor has good title to such Collateral
free and clear of all Liens other than any Permitted Encumbrances, and no
financing statement covering such Collateral is on file in any public office
other than any evidencing Permitted Encumbrances.
4.2. RIGHT TO XXXXX XXXX. Such Obligor has full right, power and
authority to xxxxx x Xxxx on the Collateral owned by it in favor of Lender as
security for payment of the Obligations pursuant hereto.
4.3. SALE OR OTHER DISPOSITION OF COLLATERAL. Such Obligor will
not sell, lease, exchange, or otherwise dispose of any of its Inventory
Collateral without the prior written consent of Lender, except (i) for sales of
its Inventory Collateral in the ordinary course of business for cash or on open
account or on terms of payment ordinarily extended to its customers; (ii) sales
of its Equipment Collateral which is obsolete, worn-out or unsuitable for
continued use if such Equipment Collateral is replaced promptly upon its
disposition with equipment constituting Equipment Collateral having a market
value equal to or greater than the Equipment Collateral sold and in which Lender
shall obtain and have a first priority security interest pursuant hereto; and
(iii) to the extent otherwise expressly permitted pursuant to Section 7.11. Upon
the sale, exchange or other disposition of any Collateral authorized hereunder,
the security interest and Lien created and provided for herein, without break in
continuity and without further formality or act, shall continue in and attach to
any proceeds thereof, including, without limitation, accounts, contract rights,
shipping documents, documents of title, bills of lading, warehouse receipts,
dock warrants, dock receipts and cash or noncash proceeds, and in the event of
any unauthorized sale, exchange or other disposition, shall continue in the
Collateral itself.
4.4. INSURANCE. Such Obligor will obtain and maintain insurance
on its Collateral with such companies, in such amounts and against such risks as
Lender may request, with loss payable to Lender as its interests may appear.
Such insurance shall not be cancellable by such Obligor, unless with the prior
written consent of Lender, or by its insurer, unless with at least thirty
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(30) days (or any lesser number of days otherwise approved by Lender) advance
written notice to Lender. In addition, such Obligor shall cause insurer to
provide Lender with at least thirty (30) days advance written notice prior to
insurer's nonrenewal of such insurance; and such Obligor shall provide to Lender
a copy of each such policy.
4.5. LOCATION OF COLLATERAL. Such Obligor will keep and maintain
its Collateral only at one or more of the Collateral Locations.
5. GENERAL REPRESENTATIONS AND WARRANTIES. In order to induce
Lender to enter into this Agreement, Borrower hereby represents and warrants to
Lender (which representations and warranties, together with any other
representations and warranties of Borrower contained elsewhere in this
Agreement, shall be deemed to be renewed as of the date of each Advance and the
issuance of each Letter of Credit (to the extent not applicable to a specific
date or point in time) on behalf of itself and each Subsidiary Guarantor as
follows:
5.1. EXISTENCE AND QUALIFICATION. Each Obligor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of its incorporation, as designated on the Borrower Information Schedule,
with its principal place of business, chief executive office and office where it
keeps all, or substantially all, of its books and records being located at the
Executive Office and is duly qualified as a foreign corporation in good standing
in each other state in which a Collateral Location is situated or wherein the
conduct of its business or the ownership of its property requires such
qualification (except where the failure to be or remain so qualified would not
result in a Material Adverse Change). Each Obligor has as its corporate name, as
registered with the secretary of state of the state of its incorporation, the
words first inscribed hereinabove as its name, and, except as may be described
on the Borrower Information Schedule, has not done business under any other
name.
5.2. AUTHORITY; AND VALIDITY AND BINDING EFFECT. Each Obligor has
the corporate power to make, deliver and perform under the Loan Documents, and
has taken all necessary and appropriate corporate action to authorize the
execution, delivery and performance of the Loan Documents. This Agreement
constitutes, and the remainder of the Loan Documents, as and when executed and
delivered for value received, will constitute, the valid obligations of each
Obligor, legally binding upon it and enforceable against it in accordance with
their respective terms.
5.3. INCUMBENCY AND AUTHORITY OF SIGNING OFFICERS. The
undersigned officers of each Obligor hold the offices set forth on the signature
page(s) hereof and, in such capacities, are duly authorized and empowered to
execute, attest and deliver this Agreement and the remainder of the Loan
Documents for and on behalf of such Obligor, and to bind such Obligor
accordingly thereby.
5.4. NO MATERIAL LITIGATION. Except as may be set forth on the
Borrower Information Schedule, there are no legal proceedings pending, before
any court or administrative
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agency which, if adversely determined, could reasonably be expected to result in
a Material Adverse Change.
5.5. TAXES. Each Obligor has filed or caused to be filed all
material tax returns required to be filed by it and has paid all taxes shown to
be due and payable by it on said returns or on any assessments made against it.
5.6. CAPITAL. All capital stock, debentures, bonds, notes and all
other securities of each Obligor presently issued and outstanding are validly
and properly issued in accordance with all applicable laws, including, but not
limited to, the "blue sky" laws of all applicable states and the federal
securities laws.
5.7. ORGANIZATION. The articles of incorporation of and bylaws of
each Obligor are in full force and effect under the law of the state of its
incorporation and all material amendments to said articles of incorporation and
bylaws have been duly and properly made under and in accordance with all
applicable laws.
5.8. INSOLVENCY. After giving effect to the execution and
delivery of the Loan Documents and the extension of any credit or other
financial accommodations hereunder, no Obligor will not be "insolvent", within
the meaning of such term as used in O.C.G.A. Sec. 18-2-22 or as defined in Sec.
101(32) of the Bankruptcy Code; or be unable to pay its debts generally as such
debts become due; or have an unreasonably small capital.
5.9. TITLE. Each Obligor has good and marketable title to all of
its properties subject to no Lien of any kind except for Permitted Encumbrances.
5.10. MARGIN STOCK. No Obligor is engaged principally, or as one
of its important activities, in the business of purchasing or carrying any
"margin stock", as that term is defined in Section 221.2(h) of Regulation U of
the Board of Governors of the Federal Reserve System, and no part of the
proceeds of any borrowing made pursuant hereto will be used to purchase or carry
any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation X of said
Board of Governors. In connection herewith, if requested by Lender, Borrower
will furnish to Lender a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in said Regulation U to the foregoing
effect.
5.11. NO VIOLATIONS. The execution, delivery and performance by
each Obligor of this Agreement and any other Loan Documents to which it is party
have been duly authorized by all necessary corporate action and do not and will
not require any consent or approval of the shareholders of such Obligor, violate
any provision of any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to such Obligor or of the articles of incorporation or
bylaws of such Obligor, or result in a breach of or
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constitute a default under any material indenture or loan or credit agreement or
any other material agreement, lease or instrument to which such Obligor is a
party or by which it or its properties may be bound or affected; and no Obligor
is in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture, agreement,
lease or instrument.
5.12. FINANCIAL STATEMENTS. The financial statements of Borrower and
its Consolidated Subsidiaries for its most recently completed Fiscal Year and
for that portion of its current Fiscal Year ended with that Fiscal Quarter ended
closest to the Closing Date for which financial statements have been prepared,
including balance sheet, income statement and, if available, statement of
changes in cash flow, copies of which heretofore have been furnished to Lender,
are complete and accurately and fairly represent the financial condition of
Borrower and its Consolidated Subsidiaries (if any), the results of its
operations and the transactions in its equity accounts as of the dates and for
the periods referred to therein, and have been prepared in accordance with GAAP.
There are no material liabilities, direct or indirect, fixed or contingent, of
Borrower or any such Consolidated Subsidiaries as of the date of such financial
statements which are not reflected therein or in the notes thereto. No Material
Adverse Change has occurred since the date of the balance sheet contained in the
annual financial statement described hereinabove.
5.13. POLLUTION AND ENVIRONMENTAL CONTROL. Borrower and each
Subsidiary have obtained all permits, licenses and other authorizations which
are required under, and is in material compliance with, all Environmental Laws.
5.14. POSSESSION OF PERMITS. Borrower and each Subsidiary possess all
franchises, certificates, licenses, permits and other authorizations from
governmental political subdivisions or regulatory authorities, and all material
patents, trademarks, service marks, trade names, copyrights, licenses and other,
similar rights, free from burdensome restrictions, that are necessary for the
ownership, maintenance and operation of any of its properties and assets, and
neither Borrower nor any Subsidiary is in violation of any thereof. A complete
and accurate list of all such patents, trademarks, service marks, trade names,
copyrights, licenses and other, similar rights owned by Borrower in existence on
the Closing Date is set forth on the Borrower Information Schedule attached
hereto.
5.15. SUBSIDIARIES. As of the Closing Date, (i) Borrower has no
Subsidiaries except as may be described on the Borrower Information Schedule;
(ii) all Subsidiaries of Borrower are Consolidated Subsidiaries; and (iii) all
Subsidiaries are listed as Subsidiary Guarantors on the signature pages to this
Agreement, except for Script Systems, Inc. (which has ceased to be actively
involved in any day-to-day operations or business).
5.16. FEDERAL TAXPAYER IDENTIFICATION NUMBER. Each Obligor's federal
taxpayer identification number is as indicated on the Borrower Information
Schedule.
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5.17. EMPLOYEE BENEFIT PLANS. As of the Closing Date, no Obligor has
any Employee Benefit Plans, except as may be described on the Borrower
Information Schedule.
6. AFFIRMATIVE COVENANTS. Borrower covenants to Lender that from and
after the date hereof, and so long as any amounts remain unpaid on account of
any of the Obligations or this Agreement remains effective (whichever is the
last to occur), Borrower will comply (and cause each Subsidiary, including each
Subsidiary Guarantor, to comply) with the affirmative covenants set forth below:
6.1. RECORDS RESPECTING COLLATERAL. All records of each Obligor with
respect to the Collateral will be kept at its Executive Office and will not be
removed from such address without the prior written consent of Lender.
6.2. FURTHER ASSURANCES. Each Obligor shall duly execute and/or
deliver (or cause to be duly executed and/or delivered) to Lender any
instrument, invoice, document, document of title, dock warrant, dock receipt,
warehouse receipt, xxxx of lading, order, financing statement, assignment,
waiver, consent or other writing which may be reasonably necessary to Lender to
carry out the terms of this Agreement and any of the other Loan Documents and to
perfect its security interest in and facilitate the collection of the
Collateral, the proceeds thereof, and any other property at any time
constituting security to Lender. Each Obligor shall perform or cause to be
performed such acts as Lender may request to establish and maintain for Lender a
valid and perfected security interest in and security title to the Collateral,
free and clear of any liens, encumbrances or security interests other than
Permitted Encumbrances.
6.3. RIGHT TO INSPECT AND CONDUCT AUDITS. Lender (or any Person or
Persons designated by it) shall have the continuing right to call at the
Executive Office or any Collateral Location at any reasonable time, upon
reasonable advance notice, and without hindrance or delay, inspect, audit, check
and make extracts from each Obligor's books, records, journals, orders, receipts
and any correspondence and other data relating to the Collateral, to each
Obligor's business or to any other transactions between the parties hereto.
6.4. PERIODIC FINANCIAL STATEMENTS. Borrower shall, as soon as
practicable, and in any event within fifty (50) days after the end of each
Fiscal Quarter, furnish to Lender unaudited financial statements of Borrower and
each Consolidated Subsidiary, including balance sheets, income statements and
statements of cash flow, for the Fiscal Quarter ended, and for the Fiscal Year
to date, on a consolidated and, if requested by Lender, consolidating basis.
Such financial statements shall also be prepared on an unaudited consolidating
basis for such Subsidiaries of Borrower which accounted for more than ten
percent (10%) of the gross revenues of Borrower for that year. All such
financial statements shall be certified by a duly authorized officer of Borrower
to present fairly the financial position and results of operations of Borrower
and its Consolidated Subsidiaries for the period involved in accordance with
GAAP (but for the omission of footnotes and subject to year-end audit
adjustments).
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6.5. ANNUAL FINANCIAL STATEMENTS. Borrower shall, as soon as
practicable, and in any event within ninety-five (95) days after the end of each
Fiscal Year, furnish to Lender the annual audit report of Borrower and its
Consolidated Subsidiaries, certified without material qualification by
independent certified public accountants selected by Borrower and acceptable to
Lender, and prepared in accordance with GAAP, together with relevant financial
statements of Borrower and such Subsidiaries for the Fiscal Year then ended, on
a consolidating and a consolidated basis, if applicable. Borrower shall cause
said accountants to furnish Lender with a statement that in making their
examination of such financial statements, they obtained no knowledge of any
Event of Default or Default Condition which pertains to accounting matters
relating to this Agreement or the Notes, or, in lieu thereof, a statement
specifying the nature and period of existence of any such Event of Default or
Default Condition disclosed by their examination.
6.6. COMPLIANCE CERTIFICATE. Borrower shall, on a quarterly basis not
later than fifty (50) days after the close of each of its first three (3) Fiscal
Quarters and not later than ninety-five (95) days after the close of its Fiscal
Year, cause to be issued to Lender a Compliance Certificate.
6.7. PROJECTIONS. Borrower shall, on a quarterly basis not later than
fifty (50) days after the close of each of its Fiscal Quarters, cause to be
issued to Lender proforma projections of its financial statements for the
immediately succeeding four (4) Fiscal Quarters, on a rolling basis, to include
balance sheets and income statements.
6.8. PAYMENT OF TAXES. Borrower shall (and shall cause each Subsidiary
to) pay and discharge all material taxes, assessments and governmental charges
upon it, its income and its properties prior to the date on which penalties
attach thereto, unless and to the extent only that (x) such taxes, assessments
and governmental charges are being contested in good faith and by appropriate
proceedings by Borrower or such Subsidiary, (y) Borrower or such Subsidiary
maintains reasonable reserves on its books therefor and (z) the payment of such
taxes does not result in a Lien upon any of the Collateral other than a
Permitted Encumbrance.
6.9. MAINTENANCE OF INSURANCE. In addition to and cumulative with any
other requirements herein imposed on any Obligor with respect to insurance,
Borrower shall (and shall cause each Subsidiary to) maintain insurance with
responsible insurance companies on such of its properties, in such amounts and
against such risks as is customarily maintained by similar businesses operating
in the same vicinity, but in any event to include loss, damage, flood,
windstorm, fire, theft, extended coverage, business interruption, freight
insurance and product liability insurance in amounts satisfactory to Lender,
which insurance shall not be cancellable by Borrower or such Subsidiary, unless
with the prior written consent of Lender, or by Borrower's or such Subsidiary's
insurer, unless with at least ten (10) days advance written notice to Lender
thereof (or such lesser or greater time period as shall be accepted or
reasonably required by Lender from time to time). Borrower shall file with
Lender upon its request a detailed list of such insurance then in effect stating
the names of the insurance companies, the amounts and rates of insurance, the
date of expiration thereof, the properties and risks covered thereby and the
insured with respect thereto, together with
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a copy of each such policy and, within thirty (30) days after notice in writing
from Lender, obtain such additional insurance as Lender may reasonably request.
6.10. MAINTENANCE OF PROPERTY. Borrower shall (and shall cause each
Subsidiary to) maintain its property in good working condition.
6.11. CHANGE OF PRINCIPAL PLACE OF BUSINESS, ETC. If, at time
hereafter, any Obligor elects to move its Executive Office, or elects to change
its name, identity or its organization structure to other than a corporate
structure, Borrower will notify Lender in writing at least thirty (30) days
prior thereto.
6.12. WAIVERS. With respect to each of the Collateral Locations at
which, at any time, One Hundred Thousand Dollars ($100,000) or more, in
Collateral is situated, Borrower will obtain (or cause a Subsidiary Guarantor,
as appropriate to obtain) such Landlord Agreements as Lender may reasonably
require to insure the priority of its security interest in that portion of the
Collateral situated at such locations.
6.13. PRESERVATION OF EXISTENCE. Borrower shall (and shall cause each
Subsidiary to) preserve and maintain its corporate existence, rights, franchises
and privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which such
qualification is necessary or desirable in view of its business and operations
or the ownership of its properties (except where failure so to qualify or remain
qualified would not result in a Material Adverse Change).
6.14. COMPLIANCE WITH LAWS. Borrower shall (and shall cause each
Subsidiary to) comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority, noncompliance with which
would or could materially adversely affect their respective financial condition
or the ownership, maintenance or operation of any material portion of any of
their respective properties. Without limiting the foregoing, each of Borrower
and its Subsidiaries shall obtain and maintain all permits, licenses and other
authorizations which are required under, and otherwise comply with, all federal,
state, and local laws and regulations (except where failure to do so would not
result in a Material Adverse Change).
6.15. CERTAIN REQUIRED NOTICES. Promptly, but not later than ten (10)
days after, its receipt of notice or knowledge thereof, Borrower will report to
Lender: (i) any lawsuit or administrative proceeding in which Borrower or any
Subsidiary is a defendant which, if decided adversely to Borrower or such
Subsidiary, could reasonably be expected to result in a Material Adverse Change;
or (ii) the existence and nature of any Default Condition or Event of Default.
6.16. YEAR 2000 COMPATIBILITY. Promptly, but in no event later than
December 31, 1998: (a) Borrower shall take (and shall cause its Subsidiaries to
take) all action necessary to ensure that all computer based systems of the
Borrower and its Subsidiaries are capable of the following: (i) handling date
information involving all and any dates before, during and/or after January 1,
2000,
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including accepting input, providing output and performing date calculations in
whole or in part; (ii) operating, accurately without interruption on and in
respect of any and all dates before, during and/or after January 1, 2000 and
without any change in performance; (iii) responding to and processing two digit
year input without creating any ambiguity as to the century; and (iv) storing
and providing date input information without creating any ambiguity as to the
century; and (b) Borrower and its Subsidiaries shall take all action necessary
to ensure that all computer based systems of their vendors, suppliers and
customers are capable of all of the foregoing, where noncompliance could
reasonably be expected to result in a Material Adverse Change. In addition, at
the request of Lender, Borrower shall provide Lender assurances in form and
substance satisfactory to Lender of Borrower's and its Subsidiaries' ongoing
compliance with the foregoing requirements.
6.17. SEC REPORTS. Promptly, but not later than ten (10) days after,
its delivery thereof to the U.S. Securities Exchange Commission (the "SEC"),
Borrower will provide Lender with copies of its 10-Q, 10-K and any other,
similar reports delivered to the SEC or its shareholders generally.
7. NEGATIVE COVENANTS. Borrower covenants to Lender that from and
after the date hereof and so long as any amount remains unpaid on account of any
of the Obligations or this Agreement remains effective (whichever is the last to
occur), Borrower will not do (and will not permit any Subsidiary to do), without
the prior written consent of Lender, any of the things or acts set forth below:
7.1. ENCUMBRANCES. Create, assume, or suffer to exist any Lien, except
for Permitted Encumbrances.
7.2. DEBT. Incur, assume, or suffer to exist any Debt, except for: (i)
Debt to Lender or any Affiliate of Lender; (ii) Debt to Persons other than
Lender existing on the date of this Agreement; (iii) Subordinated Debt; (iv)
trade payables and contractual obligations to suppliers and customers incurred
in the ordinary course of business; (v) accrued pension fund and other employee
benefit plan obligations and liabilities (provided, however, that such Debt does
not result in the existence of any Event of Default or Default Condition under
any other provision of this Agreement); (vi) net deferred tax liabilities; (vii)
Debt resulting from endorsements of negotiable instruments received in the
ordinary course of its business; and (viii) Purchase Money Debt and Capital
Leases, not to exceed One Million Dollars ($1,000,000), in the aggregate, at any
one time outstanding.
7.3. CONTINGENT LIABILITIES. Guarantee, endorse, become surety with
respect to or otherwise become directly or contingently liable for or in
connection with the obligations of any other person, firm, or corporation,
except for (i) endorsements of negotiable instruments for collection in the
ordinary course of business, (ii) guaranties by Borrower or any Subsidiary of
any Debt permitted in Section 7.2, and (iii) the Columbia/HCA Guaranty.
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7.4. DIVIDENDS. Declare or pay any dividends on, or make any
distribution with respect to, its shares of any class of capital stock.
7.5. STOCK REDEMPTIONS. Purchase, redeem, or otherwise acquire for
value any shares of any class of its capital stock.
7.6. INVESTMENTS. Make any investment in cash or by delivery of
property to any Person, whether by acquisition of stock, indebtedness or other
obligation or security, or by loan, advance or capital contribution, or
otherwise, in any Person or property of a Person, except for: (i) fixed assets
acquired from time to time in the ordinary course of its business; (ii) current
assets arising from the sale of goods or the provision of services in the
ordinary course of business; (iii) loans or advances to employees for salary,
commissions, travel or the like, made in the ordinary course of business; (iv)
Cash Equivalents; and (v) Permitted Acquisitions.
7.7. MERGERS. Dissolve or otherwise terminate its corporate status or
enter into any merger, reorganization or consolidation or make any substantial
change in the basic type of business conducted by Borrower and its Subsidiaries,
as of the Closing Date.
7.8. BUSINESS LOCATIONS. In the case of each Obligor, transfer its
principal place of business or Executive Office, or open new store locations or
warehouses, or transfer existing store locations or warehouses or maintain
records with respect to Collateral, to or at any locations other than those at
which the same are presently kept or maintained as set forth on the Borrower
Information Schedule, except upon at least twenty-one (21) days prior written
notice to Lender and after the delivery to Lender of financing statements, if
required by Lender, in form satisfactory to Lender, to perfect or continue the
perfection of Lender's Lien.
7.9. AFFILIATE TRANSACTIONS. Enter into, or be a party to, or permit
any Subsidiary to enter into or be a party to, any transaction with any
Affiliate, except: (i) in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon fair and
reasonable terms which are fully disclosed to Lender and are no less favorable
to Borrower than would be obtained in a comparable arm's length transaction with
a Person not an Affiliate or (ii) as disclosed in Borrower's Form 10-K filed
with the SEC for the fiscal period ended December 31, 1997.
7.10. FISCAL YEAR. Change its Fiscal Year, or permit any Subsidiary to
have a fiscal year different from the Fiscal Year of Borrower.
7.11. DISPOSITION OF ASSETS. Sell, lease or otherwise dispose of any
of its properties, including any disposition of property as part of a sale and
leaseback transaction, to or in favor of any person, except sales or other
dispositions of assets, in addition to those set forth in Section 4.3, not to
exceed, in aggregate fair market sale (based on net sales price received), the
sum of Two Hundred Fifty Thousand Dollars ($250,000), as to Borrower and its
Subsidiaries, collectively.
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7.12. FEDERAL TAXPAYER IDENTIFICATION NUMBER. Change or permit any
Subsidiary to change its federal taxpayer identification number without prior
written notice to Lender.
7.13. EMPLOYEE BENEFIT PLANS. Permit an Employee Benefit Plan to
become materially underfunded or create any Employee Benefit Plan without prior
written notice to Lender and upon such notification this Agreement shall be
amended as determined necessary by Lender in its discretion as a result of the
creation of such Plan.
7.14. SUBSIDIARIES. Create or acquire any Subsidiary subsequent to the
Closing Date unless such Subsidiary is made party to this Agreement pursuant to
an Agreement of Joinder, in substantially the form of Exhibit "H" attached
hereto, and such Subsidiary executes and delivers such other documents as Lender
may require pursuant thereto.
8. FINANCIAL COVENANTS. Borrower covenants to Lender that, from and
after the date hereof and so long as any amount remains on account of any of the
Obligations or this Agreement remains effective (whichever is the last to
occur), it will comply with the financial covenants set forth below:
8.1. NET WORTH. Borrower shall maintain a minimum Net Worth at all
times of at least Seven Million Five Hundred Thousand Dollars ($7,500,000),
measured quarterly at the end of each Fiscal Quarter.
8.2. LEVERAGE RATIO. Borrower shall not permit the Leverage Ratio to
exceed 4.0:1 at any time, measured quarterly at the end of each Fiscal Quarter
on a rolling four (4) Fiscal Quarters' basis.
8.3. LIQUIDITY. Borrower shall maintain cash and Cash Equivalents at
all times of an amount of at least Two Million Dollars ($2,000,000), measured
quarterly at the end of each Fiscal Quarter.
9. EVENTS OF DEFAULT. The occurrence of any events or conditions set
forth below shall constitute an Event of Default hereunder, provided that any
requirement for the giving of notice or the lapse of time, or both, has been
satisfied:
9.1. OBLIGATIONS. Borrower shall fail to make (i) any payment of
principal on any of its Obligations, when due; or (ii) any payment of accrued
interest, fees or charges constituting any of its Obligations, within five (5)
days after the date when due.
9.2. MISREPRESENTATIONS. Any Obligor shall make any representations or
warranties in any of the Loan Documents or in any Guaranty or in any certificate
or statement
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furnished at any time hereunder or in connection with any of the Loan Documents
which proves to have been untrue or misleading in any material respect when made
or furnished.
9.3. CERTAIN COVENANTS. Any Obligor shall default in the observance or
performance of any covenant or agreement contained in Sections 6.3 through 6.8,
6.10 and 6.14 through 6.16 of Article 6, in any Section of Article 7 or in any
Section of Article 8.
9.4. OTHER COVENANTS. Any Obligor shall default in the observance or
performance of any covenant or agreement contained herein, in any of the other
Loan Documents (other than a default the performance or observance of which is
dealt with specifically elsewhere in this Section) unless (i) with respect to
this Agreement, such default is cured to Lender's satisfaction within ten (10)
days after the sooner to occur of receipt of notice of such default from Lender
or the date on which such default first becomes known to such Obligor and (ii)
with respect to any other Loan Document, such default is cured within any
applicable grace, cure or notice and cure period contained therein.
9.5. OTHER DEBTS. Borrower, any Subsidiary or any Guarantor shall
default in connection with any agreement for Debt with any creditor, exceeding
Two Hundred Fifty Thousand Dollars ($250,000), including Lender, which entitles
said creditor to accelerate the maturity thereof, including, without limitation,
any such Debt owing at any time under the Columbia/HCA Guaranty.
9.6. VOLUNTARY BANKRUPTCY. Borrower, any Subsidiary or any Guarantor
shall file a voluntary petition in bankruptcy or a voluntary petition or answer
seeking liquidation, reorganization, arrangement, readjustment of its debts, or
for any other relief under the Bankruptcy Code, or under any other act or law
pertaining to insolvency or debtor relief, whether state, Federal, or foreign,
now or hereafter existing; Borrower, any Subsidiary or any Guarantor shall enter
into any agreement indicating its consent to, approval of, or acquiescence in,
any such petition or proceeding; Borrower, any Subsidiary or any Guarantor shall
apply for or permit the appointment by consent or acquiescence of a receiver,
custodian or trustee of Borrower, any Subsidiary or any Guarantor for all or a
substantial part of its property; Borrower, any Subsidiary or any Guarantor
shall make an assignment for the benefit of creditors; or Borrower, any
Subsidiary or any Guarantor shall be unable or shall fail to pay its debts
generally as such debts become due, or Borrower, any Subsidiary or any Guarantor
shall admit, in writing, its inability or failure to pay its debts generally as
such debts become due.
9.7. INVOLUNTARY BANKRUPTCY. There shall have been filed against
Borrower, any Subsidiary or any Guarantor an involuntary petition in bankruptcy
or seeking liquidation, reorganization, arrangement, readjustment of its debts
or for any other relief under the Bankruptcy Code, or under any other act or law
pertaining to insolvency or debtor relief, whether state, federal or foreign,
now or hereafter existing; Borrower, any Subsidiary or any Guarantor shall
suffer or permit the involuntary appointment of a receiver, custodian or trustee
of Borrower, any Subsidiary or any Guarantor or for all or a substantial part of
its property; or Borrower, any Subsidiary or any Guarantor shall suffer or
permit the issuance of a warrant of attachment, execution or similar process
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against all or any substantial part of the property of Borrower, any Subsidiary
or any Guarantor; or any motion, complaint or other pleading is filed in any
bankruptcy case of any person or entity other than Borrower and such motion,
complaint or pleading seeks the consolidation of Borrower's assets and
liabilities with the assets and liabilities of such person or entity; and in
each such instance, such proceeding shall contain undismissed for a period of
sixty (60) consecutive days.
9.8. DAMAGE, LOSS, THEFT OR DESTRUCTION OF COLLATERAL. There shall
have occurred material uninsured damage to, or loss, theft or destruction of,
any Collateral having a value, based on the lower of its depreciated cost or
market value, exceeding Two Hundred Fifty Thousand Dollars ($250,000).
9.9. JUDGMENTS. A final judgment or order for the payment of money is
rendered against Borrower, any Subsidiary or any Guarantor in the amount of Two
Hundred Fifty Thousand Dollars ($250,000) or more (exclusive of amounts covered
by insurance) and either (x) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order, or (y) a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect for any period of thirty (30) consecutive days.
9.10. DISAVOWAL OF CERTAIN OBLIGATIONS. Any Person (other than Lender)
party to a Guaranty or Subordination Agreement shall disavow its obligations
thereunder; or any such Guaranty is alleged to be, or determined by any
governmental authority to be, invalid, unenforceable or otherwise not binding on
any Person party thereto (other than Lender), in whole or in part.
9.11. CHANGE OF CONTROL, ETC. A change in Control shall occur in
respect of Borrower subsequent to the Closing Date.
10. REMEDIES. Upon the occurrence or existence of any Event of
Default, or at any time thereafter, without prejudice to the rights of Lender to
enforce its claims against Borrower for damages for failure by Borrower to
fulfill any of its obligations hereunder, subject only to prior receipt by
Lender of payment in full of all Obligations then outstanding in a form
acceptable to Lender, Lender shall have all of the rights and remedies set forth
below, and it may exercise any one, more, or all of such remedies, in its sole
discretion, without thereby waiving any of the others; provided, however, that,
in addition to the foregoing, if the Event of Default is in respect of Section
9.6 or 9.7, then, automatically, immediately upon such Event of Default
occurring, without necessity of any further action on Lender's part, all
commitments of Lender hereunder and under all other Loan Documents shall
terminate, and all Obligations shall be immediately due and payable.
10.1. ACCELERATION OF THE OBLIGATIONS. Lender, at its option, may
terminate all commitments of Lender hereunder and under all other Loan
Documents, and declare all of the Obligations to be immediately due and payable,
whereupon the same shall become immediately due and payable without presentment,
demand, protest, notice of nonpayment or any other notice required by law
relative thereto, all of which are hereby expressly waived by Borrower, anything
contained herein to the contrary notwithstanding. If any note of Borrower to
Lender constituting
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Obligations, including, without limitation, any of the Notes, shall be a demand
instrument, however, the recitation of the right of Lender to declare any and
all Obligations to be immediately due and payable, whether such recitation is
contained in such note or in this Agreement, as well as the recitation of the
above events permitting Lender to declare all Obligations due and payable, shall
not constitute an election by Lender to waive its right to demand payment under
a demand at any time and in any event, as Lender in its discretion may deem
appropriate. Thereafter, Lender, at its option, may, but shall not be obligated
to, accept less than the entire amount of Obligations due, if tendered,
provided, however, that unless then agreed to in writing by Lender, no such
acceptance shall or shall be deemed to constitute a waiver of any Event of
Default or a reinstatement of any commitments of Lender hereunder or under all
other Loan Documents.
10.2. DEFAULT. If Lender so elects, by further written notice to
Borrower, Lender may increase the rate of interest charged on the Notes then
outstanding for so long thereafter as Lender further shall elect by an amount
not to exceed the Default Rate.
10.3. REMEDIES OF A SECURED PARTY. Lender shall thereupon have the
rights and remedies of a secured party under the UCC in effect on the date
thereof (regardless whether the same has been enacted in the jurisdiction where
the rights or remedies are asserted), including, without limitation, the right
to take possession of any of the Collateral or the proceeds thereof, to sell or
otherwise dispose of the same, to apply the proceeds therefrom to any of the
Obligations in such order as Lender, in its sole discretion, may elect. Lender
shall give Obligors c/o Borrower written notice of the time and place of any
public sale of the Collateral or the time after which any other intended
disposition thereof is to be made. The requirement of sending reasonable notice
shall be met if such notice is given to Borrower at least ten (10) days before
such disposition. Expenses of retaking, holding, insuring, preserving,
protecting, preparing for sale or selling or the like with respect to the
Collateral shall include, in any event, reasonable attorneys' fees and other
legally recoverable collection expenses, all of which shall constitute
Obligations.
10.4. REPOSSESSION OF THE COLLATERAL. Lender may take the Collateral
or any portion thereof into its possession, by such means (without breach of the
peace) and through agents or otherwise as it may elect (and, in connection
therewith, demand that Obligors assemble the Collateral at a place or places and
in such manner as Lender shall prescribe), and sell, lease or otherwise dispose
of the Collateral or any portion thereof in its then condition or following any
commercially reasonable preparation or processing, which disposition may be by
public or private proceedings, by one or more contracts, as a unit or in
parcels, at any time and place and on any terms, so long as the same are
commercially reasonable and Borrower hereby waives all rights which any Obligor
has or may have under and by virtue of OCGA Ch. 44-14, including, without
limitation, the right of any Obligor to notice and to a judicial hearing prior
to seizure of any Collateral by Lender.
10.5. DIRECT NOTIFICATION. Lender may, additionally, in its sole
discretion, at any time that an Event of Default exists, direct Account Debtors
to make payments on the Accounts Receivable Collateral, or portions thereof,
directly to Lender, and the Account Debtors are hereby
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authorized and directed to do so by Borrower upon Lender's direction, and the
funds so received shall be also deposited in the Collateral Reserve Account, or,
at the election of Lender, upon its receipt thereof, be applied directly to
repayment of the Obligations in such order as Lender, in its sole discretion,
shall determine.
10.6. SET OFF. Lender may set off any or all of the Balances
Collateral against the Obligations.
10.7. OTHER REMEDIES. Unless and except to the extent expressly
provided for to the contrary herein, the rights of Lender specified herein shall
be in addition to, and not in limitation of, Lender's rights under the UCC, as
amended from time to time, or any other statute or rule of law or equity, or
under any other provision of any of the Loan Documents, or under the provisions
of any other document, instrument or other writing executed by any Obligor or
any third party in favor of Lender, all of which may be exercised successively
or concurrently.
11. MISCELLANEOUS.
11.1. WAIVER. Each and every right granted to Lender under this
Agreement, or any of the other Loan Documents, or any other document delivered
hereunder or in connection herewith or allowed it by law or in equity, shall be
cumulative and may be exercised from time to time. No failure on the part of
Lender to exercise, and no delay in exercising, any right shall operate as a
waiver thereof, nor shall any single or partial exercise by Lender of any right
preclude any other or future exercise thereof or the exercise of any other
right. No waiver by Lender of any Default Condition or Event of Default shall
constitute a waiver of any subsequent Default Condition or Event of Default.
11.2. GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER, SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF GEORGIA.
11.3. SURVIVAL. All representations, warranties and covenants made
herein and in the Loan Documents shall survive the execution and delivery hereof
and thereof. The terms and provisions of this Agreement shall continue in full
force and effect, notwithstanding the payment of one or more of the Notes or the
termination of the Line of Credit, until all of the Obligations have been paid
in full and Lender has terminated this Agreement in writing.
11.4. ASSIGNMENTS. No assignment hereof or of any Loan Document shall
be made by any Obligor without the prior written consent of Lender. Lender may
assign, or sell participations in, its right, title and interest herein and in
the Loan Documents at any time hereafter without notice to or consent of any
Obligor.
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11.5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when fully executed shall be an original, and all of
said counterparts taken together shall be deemed to constitute one and the same
agreement.
11.6. REIMBURSEMENT. Borrower shall pay to Lender on demand all
out-of-pocket costs and expenses that Lender pays or actually incurs in
connection with the negotiation, preparation, consummation, enforcement and
termination of this Agreement and the other Loan Documents, including, without
limitation: (a) attorneys' fees and paralegals' fees and disbursements of
outside counsel; (b) costs and expenses (including outside attorneys' and
paralegals' fees and disbursements) for any amendment, supplement, waiver,
consent or subsequent closing in connection with the Loan Documents and the
transactions contemplated thereby; (c) costs and expenses of lien and title
searches and title insurance; (d) actual taxes, fees and other charges for
recording any deeds to secure debt, deeds of trust, mortgages, filing financing
statements and continuations, and other actions to perfect, protect and continue
the Lien of Lender in the Collateral; (e) sums paid or incurred to pay for any
amount or to take any action required of Borrower under the Loan Documents that
Borrower fails to pay or take; (f) costs of appraisals, inspections, field
audits and verifications of the Collateral, including, without limitation, costs
of travel, for inspections of the Collateral and Borrower's operations by
Lender; (g) costs and expenses of preserving and protecting the Collateral; and
(h) after an Event of Default, costs and expenses (including attorneys' and
paralegals' fees and disbursements) paid or incurred to obtain payment of the
Obligations, enforce the Lien in the Collateral, sell or otherwise realize upon
the Collateral, and otherwise enforce the provisions of the Loan Documents or to
defend any claim made or threatened against Lender arising out of the
transactions contemplated hereby (including, without limitation, preparations
for and consultations concerning any such matters). The foregoing shall not be
construed to limit any other provisions of the Loan Documents regarding costs
and expenses to be paid to Borrower. All of the foregoing costs and expenses
may, in the discretion of Lender, be charged to the Master Note. Borrower will
pay all expenses incurred by it in the transaction. In the event that any
Obligor becomes a debtor under the Bankruptcy Code, Lender's secured claim in
such case shall include interest on the Obligations and all fees, costs and
charges provided for herein (including, without limitation, reasonable
attorneys' fees actually incurred) all for the extent allowed by the Bankruptcy
Code.
11.7. SUCCESSORS AND ASSIGNS. This Agreement and Loan Documents shall
be binding upon and inure to the benefit of the successors and permitted assigns
of the parties hereto and thereto.
11.8. SEVERABILITY. If any provision this Agreement or of any of the
Loan Documents or the application thereof to any party thereto or circumstances
shall be invalid or unenforceable to any extent, the remainder of such Loan
Documents and the application of such provisions to any other party thereto or
circumstance shall not be affected thereby and shall be enforced to the greatest
extent permitted by law.
11.9. NOTICES. All notices, requests and demands to or upon the respective
parties hereto shall be deemed to have been given or made when personally
delivered or deposited in the
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mail, registered or certified mail, postage prepaid, addressed as follows: (i)
for Lender, care of the address of Lender inscribed beneath its signature
hereinbelow and (ii) for any Obligor, care of the address set forth as its
Executive Office on the Borrower Information Schedule (or to such other address
as may be designated hereafter in writing by the respective parties hereto)
except in cases where it is expressly provided herein or by applicable law that
such notice, demand or request is not effective until received by the party to
whom it is addressed.
11.10. ENTIRE AGREEMENT: AMENDMENTS. This Agreement, together with the
remaining Loan Documents, constitute the entire agreement between the parties
hereto with respect to the subject matter hereof. Neither this Agreement nor any
Loan Document may be changed, waived, discharged, modified or terminated orally,
but only by an instrument in writing signed by the party against whom
enforcement is sought.
11.11. TIME OF ESSENCE. Time is of the essence in this Agreement and
the other Loan Documents.
11.12. INTERPRETATION. No provision of this Agreement or any Loan
Document shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or dictated such
provision.
11.13. LENDER NOT A JOINT VENTURER. Neither this Agreement nor any
Loan Document shall in any respect be interpreted, deemed or construed as making
Lender a partner or joint venturer with Borrower or as creating any similar
relationship or entity, and Borrower agrees that it will not make any contrary
assertion, contention, claim or counterclaim in any action, suit or other legal
proceeding involving Lender and Borrower.
11.14. JURISDICTION. EACH OBLIGOR AGREES THAT ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY LOAN DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF GEORGIA OR THE UNITED STATES OF AMERICA FOR THE
NORTHERN DISTRICT OF GEORGIA, ATLANTA DIVISION, ALL AS LENDER MAY ELECT. BY
EXECUTION OF THIS AGREEMENT, EACH OBLIGOR HEREBY SUBMITS TO EACH SUCH
JURISDICTION, HEREBY EXPRESSLY WAIVING WHATEVER RIGHTS MAY CORRESPOND TO IT BY
REASON OF ITS PRESENT OR FUTURE DOMICILE. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF LENDER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN
ANY OTHER JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED OR REQUIRED
BY LAW.
11.15. ACCEPTANCE. This Agreement, together with the other Loan
Documents, shall not become effective unless and until delivered to Lender at
its principal office in Atlanta, Xxxxxx County, Georgia and accepted in writing
by Lender at such office as evidenced by its execution hereof (notice of which
delivery and acceptance are hereby waived by each Obligor).
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11.16. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a Saturday, Sunday or
any other day in which national banks within the State of Georgia are legally
authorized to close, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of interest hereunder or under the Notes.
11.17. CURE OF DEFAULTS BY LENDER. If, hereafter, any Obligor defaults
in the performance of any duty or obligation to Lender hereunder or under any
Loan Document, Lender may, at its option, but without obligation, cure such
default and any costs, fees and expenses incurred by Lender in connection
therewith including, without limitation, for the purchase of insurance, the
payment of taxes and the removal or settlement of liens and claims, shall be
deemed to be advances against the Master Note, whether or not this creates an
overadvance thereunder, and shall be payable in accordance with its terms.
11.18. RECITALS. All recitals contained herein are hereby incorporated
by reference into this Agreement and made part thereof.
11.19. ATTORNEY-IN-FACT. Each Obligor hereby designates, appoints and
empowers Lender irrevocably as its attorney-in-fact, effective during any time
that an Event of Default exists, either in the name of such Obligor or the name
of Lender, at such Obligor's cost and expense, (i) to do any and all actions
which Lender may deem necessary or advisable to carry out the terms of this
Agreement or any other Loan Document upon the failure, refusal or inability of
such Obligor to do so and (ii) to ask for, demand, xxx for, collect, compromise,
compound, receive, receipt for and give acquittances for any and all sums owing
or which may become due upon any of the Collateral and, in connection therewith,
to take any and all actions as Lender may deem necessary or desirable to realize
upon any Collateral; and such Obligor hereby agrees to indemnify and hold Lender
harmless from any costs, damages, expenses or liabilities arising against or
incurred by Lender in connection therewith.
11.20. SOLE BENEFIT. The rights and benefits set forth in this
Agreement and the other Loan Documents are for the sole and exclusive benefit of
the parties hereto and thereto and may be relied upon only by them.
11.21. INDEMNIFICATION. Each Obligor will hold Lender, its respective
directors, officers, employees, agents, Affiliates, successors and assigns
harmless from and indemnify Lender, its respective directors, officers,
employees, agents, Affiliates, successors and assigns against, all loss,
damages, costs and expenses (including, without limitation, reasonable
attorney's fees, costs and expenses) actually incurred by any of the foregoing,
whether direct, indirect or consequential, as a result of or arising from or
relating to any "Proceedings" (as defined below) by any Person, whether
threatened or initiated, asserting a claim for any legal or equitable remedy
against any Person under any statute, case or regulation, including, without
limitation, any federal or state securities laws or under any common law or
equitable case or otherwise, arising from or in
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connection with this Agreement, and any other of the transactions contemplated
by this Agreement, except to the extent such losses, damages, costs or expenses
are due to the wilful misconduct or gross negligence of Lender. As used herein,
"Proceedings" shall mean actions, suits or proceedings before any court,
governmental or regulatory authority and shall include, particularly, but
without limitation, any actions concerning Environmental Laws. At the request of
Lender, each Obligor will indemnify any Person to whom Lender transfers or sells
all or any portion of its interest in the Obligations or participations therein
on terms substantially similar to the terms set forth above. Lender shall not be
responsible or liable to any Person for consequential damages which may be
alleged as a result of this Agreement or any of the transactions contemplated
hereby. The obligations of Borrower under this Section shall survive the
termination of this Agreement and payment of the Obligations.
11.22. JURY TRIAL WAIVER. EACH OBLIGOR AND LENDER HEREBY WAIVE , TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
TO ANY OF THE LOAN DOCUMENTS, ANY OBLIGATIONS OR ANY COLLATERAL.
11.23. TERMINOLOGY. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural, and the plural shall
include the singular. Titles of Articles and Sections in this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement, and all references in this Agreement to Articles, Sections,
Subsections, paragraphs, clauses, subclauses or Exhibits shall refer to the
corresponding Article, Section, Subsection, paragraph, clause, subclause of, or
Exhibit attached to, this Agreement, unless specific reference is made to the
articles, sections or other subdivisions divisions of or Exhibit to, another
document or instrument. Wherever in this Agreement reference is made to any
instrument, agreement or other document, including, without limitation, any of
the Loan Documents, such reference shall be understood to mean and include any
and all amendments thereto or modifications, restatements, renewals or
extensions thereof. Wherever in this Agreement reference is made to any statute,
such reference shall be understood to mean and include any and all amendments
thereof and all regulations promulgated pursuant thereto. Whenever any matter
set forth herein or in any Loan Document is to be consented to or be
satisfactory to Lender, or is to be determined, calculated or approved by
Lender, then, unless otherwise expressly set forth herein or in any such Loan
Document, such consent, satisfaction, determination, calculation or approval
shall be in Lender's sole discretion, exercised in good faith and, where
required by law, in a commercially reasonable manner, and shall be conclusive
absent manifest error.
11.24. EXHIBITS. All Exhibits attached hereto are by reference made a
part hereof.
12. CONDITIONS PRECEDENT. Unless waived in writing by Lender at or prior
to the execution and delivery of this Agreement, the conditions set forth below
shall constitute express conditions precedent to any obligation of Lender
hereunder.
-37-
43
12.1. SECRETARY'S CERTIFICATE. Receipt by Lender of a certificate from
the Secretary (or Assistant Secretary) of each Obligor, to be in form and
substance substantially similar to the secretary's certificate set forth on
Exhibit "E", certifying to Lender (i) that appropriate resolutions have been
entered into by the Board of Directors of such Obligor incident hereto and that
the officers of such Obligor whose signatures appear hereinbelow, on the other
Loan Documents, and on any and all other documents, instruments and agreements
executed in connection herewith, are duly authorized by the Board of Directors
of such Obligor for and on behalf of such Obligor to execute and deliver this
Agreement, the other Loan Documents and such other documents, instruments and
agreements, and to bind such Obligor accordingly thereby, and (ii) as to the
existence and status of such Obligor's articles of incorporation and by-laws.
12.2. GOOD STANDING CERTIFICATES. Receipt by Lender of a certificate
of good standing with respect to such Obligor from the secretaries of state of
the state of incorporation of such Obligor and of any state in which a
Collateral Location is situated, dated within thirty (30) days of the Closing
Date.
12.3. LOAN DOCUMENTS. Receipt by Lender of all the other Loan
Documents, each duly executed in form and substance acceptable to Lender.
12.4. INSURANCE. Receipt by Lender of a certificate respecting all
insurance required to be maintained hereunder, together with appropriate loss
payee and additional insured endorsements thereto, favoring Lender, all in form
acceptable to Lender.
12.5. FINANCING STATEMENTS. Receipt by Lender of Uniform Commercial
Code financing statements respecting the Collateral, duly executed by each
Obligor in form and substance acceptable to Lender.
12.6. OPINION OF COUNSEL. Receipt by Lender of an opinion of counsel
from independent legal counsel to the Obligors in substantially the form of
Exhibit "F".
12.7. LANDLORD AGREEMENTS. Receipt by Lender of Landlord Agreements
with respect to each Collateral Location leased by an Obligor as of the Closing
Date.
12.8. NO DEFAULT. No Default Condition or Event of Default shall exist
and Borrower shall in all respects be in compliance with all of the terms of the
Loan Documents, as evidenced by its delivery of a Compliance Certificate to such
effect.
12.9. NO MATERIAL ADVERSE CHANGE. Lender shall have determined that no
Material Adverse Change shall have occurred.
-38-
44
12.10. SECURITIES PLEDGE AGREEMENT. Receipt by Lender of a Stock
Pledge Agreement from Borrower in respect of the capital stock of each
Subsidiary Guarantor, to be substantially in the form of Exhibit "G" attached
hereto.
12.11. OTHER. Receipt by Lender of such other documents, certificates,
instruments and agreements as shall be required hereunder or provided for herein
or as Lender or Lender's counsel may require in connection herewith.
[REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and Borrower has caused its seal to be affixed hereto, as of the day
and year first above written.
"LENDER"
WACHOVIA BANK, NATIONAL
ASSOCIATION
By: /S/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
Address for Notices:
Wachovia Bank, N.A.
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: Central Region Corporate
-39-
45
"BORROWER"
XXXXXXX CENTRAL HOLDINGS, INC. (SEAL)
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
"SUBSIDIARY GUARANTORS"
SC HOLDING, INC. (SEAL)
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
XXXXXXX CENTRAL, INC. (SEAL)
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
-40-
46
XXXXXXX CENTRAL NATIONAL, L.L.C.. (SEAL)
By: SC HOLDING, INC., as its sole Member
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
XXXXXXX CENTRAL CONSULTING, INC. (SEAL)
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
BENCHMARK HEALTHCARE CONSULTING, INC. (SEAL)
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
-41-
47
DEZINE HEALTHCARE SOLUTIONS, L.L.C. (SEAL)
By: SC HOLDING, INC., as its sole Member
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
KSI ACQUISITION, L.L.C. (SEAL)
By: SC HOLDING, INC., as its sole Member
By: /S/ Xxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
Attrest: /S/ X. Xxxxx Day, Jr.
------------------------------------------
Name: X. Xxxxx Day, Jr.
-------------------------------------
Title: Secretary
------------------------------------
-42-
48
EXHIBITS
Exhibit A Borrower Information Schedule
Exhibit B Compliance Certificate
Exhibit C Landlord's Agreement
Exhibit D Master Note
Exhibit E Secretary's Certificate
Exhibit F Opinion of Counsel
Exhibit G Securities Pledge Agreement
Exhibit H Joinder Agreement
49
EXHIBIT "A"
BORROWER INFORMATION SCHEDULE
CORPORATE NAME: XXXXXXX CENTRAL HOLDINGS, INC.
STATE OF INCORPORATION: Delaware
TAXPAYER ID (FEIN) NO.: 00-0000000
FISCAL YEAR ENDS: December 31
"DOING BUSINESS" OR TRADE NAME(S): N/A
TRADE STYLE(S) FOR INVOICING: N/A
EXECUTIVE OFFICE: 0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
EXECUTIVE OFFICERS: Xxxxx X. Xxxxxxxxx President/CEO
Xxxx X. Xxxxxx Treasurer
X. Xxxxx Day, Jr. Secretary
Others:
Xxxx X. Xxxxxxxxx Chief Operating Officer
Xxxxxxx X. Xxxxxxx, Xx. Executive Vice President
LOCATION(S) OF Owned Leased
COLLATERAL (OUTSIDE
EXECUTIVE OFFICE):
See Attachment A
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
(or attach schedule)
1
50
EXISTING LITIGATION: As of 4/15/98 - none except for what's disclosed in the
---------------------------------------------------------
Company's SEC filings.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(or attach schedule)
SUBSIDIARIES: See attachment C
------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(or attach schedule)
EMPLOYEE BENEFIT
PLAN(S: See attachment D
-----------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(or attach schedule)
PATENTS, TRADEMARKS, SERVICE MARKS OWNED BY BORROWER: See attachment E
-------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(or attach schedule)
2
51
Attachment A
XXXXXXX CENTRAL HOLDINGS, INC.
Office Summary
COMPANY OFFICE LOCATION LANDLORD
------- ------ -------- --------
Xxxxxxx Central Holdings, Inc. Corporate Office
0000 Xxxxxx Xxxxx Xxxx Powers Ferry Landing Xxxx
Xxxxxxx, XX 00000 0000 Xxxxxx Xxxxx Xxxx
Realty Holding Company
Insignia Commerce Group, Inc.
Xxxxxxx, XX 00000
Xxxxxxx Central National, L.L.C.
Atlanta Office Same as Xxxxxxx Central Holding, Inc. Same as Xxxxxxx Central Holding, Inc.
Florida Office 0000 XX 00xx Xxxxxx O'Xxxxxxx Xxxxx, Inc.
Xxxxxxx Xxxxx, XX 00000 attn: Xxxxx Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxxx Central Consulting, Inc.
Connecticut Xxxxxx 0000 Xxxxxxx Xxxxxx X&X Xxxxxx
Xxxxxx, XX 00000 000 Xxxx Xxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxx, XX 00000
Massachusetts 0000 Xxxx Xxxx Xx. X0/XXX Xxxx Xxxxxx Ltd. Partnership
Suite 300 C/O Xxxxxxxx Xxxx Company, Inc.
Xxxxxxxxxxx, XX 00000 0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Atlanta Office Same as Xxxxxxx Central Holding, Inc. Same as Xxxxxxx Central Holding, Inc.
52
XXXXXXX CENTRAL HOLDINGS, INC.
Office Summary
COMPANY OFFICE LOCATION LANDLORD
------- ------ -------- --------
Benchmark Healthcare Consulting, Inc.
Dallas Office 102 Xxxxxx Drive, Suite 240 Big Golf L.P.
Xxxxxx, XX 00000 000 Xxxx Xxxxx Xxx.
Xxxxx 000
Xxxxxx, XX 00000
Florida Office 0000 Xxxxxxxx Xx. Xxxxx Equity Inc
Suite 249 P.O. Box D860498
Xxxxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000-0000
Xxxxxx & Associates
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000-0000
Dezine Healthcare Solutions, L.L.C. New Jersey Xxxxxx 000 Xxxxx Xxx. 00 XXX/X Xxxxxxxxx Xxxx Associates
Suite 110 First NJ Real Property Mgmt
Xxxx Xxxxxxxxx, XX 00000 00 Xxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Houston Xxxxxx 0 Xxxxx Xxxxx Xxxxxx Xxxx Xxxxxxx Xxxxxxxxx X LLC
Xxxxx 000 X/X Xxxxxxxx Xxxx Xxxxxxxx
Xxxxxxxxx, XX 00000 X.X. Xxx 00000
Xxxxxxx, XX 00000
California Office 0000 0xx Xxxxxx 0000 Xxxxxx Xxx. A Partnership
Suite 201 0000 Xxxxx Xxx. 0xx Xxxxx
Xxx Xxxxx, XX 00000 Xxx Xxxxx, XX 00000
California Office 000 Xxxxx Xx. XXX Associates
KSI Acquisition, L.L.C. Xxxxx 000
Xxxxx Xxxx, XX 00000
53
Attachment C
Xxxxxxx Central Holdings, Inc.
Subsidiaries
SC Holding, Inc.
Xxxxxxx Central, Inc.
Xxxxxxx Central National, L.L.C.
Xxxxxxx Central Consulting, Inc.
Benchmark Healthcare Consulting, Inc.
Dezine Healthcare Solutions, L.L.C.
KSI Acquisition, L.L.C.
Script Systems, Inc.
54
Attachment X
Xxxxxxx Central Benefit Plans
Prudential health insurance
Prudential dental insurance
Prudential life insurance
Vision Service Plan
401K plan
Long & short term disability
Guardian life insurance (optional)
55
Attachment E
XXXXXXX CENTRAL PROJECTS
PROJECT ACTION TO DO INFORMATION COST X. XXXXXX
NEEDED ESTIMATE PRIORITY
----------------------------------------------------------------------------------------------------------------------------
1. TRADEMARKS Existing & Applied For
-----------------------------------------------------------------------------------------------------------------------------
2. XXXXXXX Register $ 550 H
CENTRAL
3. SC LOGO Register 550 H
4. SYNERGY TM search and, if clear, register description of 400 search H
goods/services 550 appln.
245 filing fee
5. SYNERGY + LOGO Register (if SYNERGY search is 400 search H
clear) 550 appln.
245 filing fee
6. INFOMED B&A docket renewal date Need copy of 100
registration certificate
JB will get if CB does
not have copy
7. INFOMED Review POGO TM search, do web 300
search and advise re: potential
infringers currently existing (appears
to be several)
8. INFOMED'S Get POGO TM search CB to provide search 400 search
TELTIME report 550 appln.
245 filing fee
9. STAT2 Register (search done for 400 search
STATSCAN, but does not appear to 550 appln.
have been registered) 245 filing fee
10. STATSCAN Register 550 appln.
245 filing fee
11. MAPPSCAN Review POGO search and register 400 search
550 appln.
245 filing fee
12. MAPPLUS Do TM search, register, if clear 400 search
550 appln.
245 filing fee
13. MAPPLINK Do TM search, register, if clear 400 search
550 appln.
245 filing fee
14. XXXX Refile application to register 550 appln.
245 filing fee
15. MANAGED Refile application to register 550 appln.
AVENUES OF 245 filing fee
PATIENT
PROGRESS
56
EXHIBIT B
COMPLIANCE CERTIFICATE
The undersigned, being an authorized officer having the title
inscribed below of XXXXXXX CENTRAL HOLDINGS, INC. ("Borrower"), and, in such
capacity, being familiar with the matters set forth herein and duly authorized
and empowered to issue this Certificate for and on behalf of Borrower, does
hereby certify to WACHOVIA BANK, NATIONAL ASSOCIATION ("Lender"), in connection
with and pursuant to that certain Loan and Security Agreement, dated as of May
11, 1998, among Borrower, Lender and the "Subsidiary Guarantors" named therein
(herein, as it may be amended to date, called the "Loan Agreement"; capitalized
terms used herein, without definition, having the meanings given to such terms
in the Loan Agreement) that, as of the date of this Certificate, there exists no
Event of Default or Default Condition.
Without limiting the generality of the foregoing, Borrower is in
compliance with all financial covenants specified in Section 8 to the Loan
Agreement, as demonstrated by the computations set forth on Exhibit "A" attached
hereto.
WITNESS my hand as of May 11, 1998.
---------------------------------
Name:
----------------------------
Title:
---------------------------
1
57
EXHIBIT C
LANDLORD'S AGREEMENT
Tenant:
----------------------
THIS LANDLORD'S AGREEMENT ("Agreement"), made and entered into by the
undersigned landlord (the "Landlord") in favor of WACHOVIA BANK, NATIONAL
ASSOCIATION ("Lender") in respect of the subject Tenant.
WITNESSETH:
RECITALS:
1.1 Landlord is the landlord under the Lease described on Exhibit
"A" attached hereto (the "Lease"), covering the business premises likewise
described on said Exhibit "A" (the "Premises").
1.2 Tenant is the tenant of Landlord under the Lease and, in such
capacity, is operating its business on, or keeps property on, the Premises.
1.3 Tenant has notified Landlord that it has entered, or intends to
enter, into a certain financing arrangement (the "Financing, Arrangement") with
Lender, pursuant to which Lender will make certain loans, advances and other
financial accommodations to or for the benefit of Tenant.
1.4 Tenant intends to secure the payment and performance of its
obligations to Lender under the Financing Arrangement by granting to Lender a
security interest in, among other property of Tenant, all of its inventory,
books and records, equipment and trade fixtures, whether now owned or hereafter
acquired or existing (the "Collateral"), portions of which are or hereafter may
be located on the Premises.
1.5 In connection therewith, pursuant to Lender's request, Tenant has
requested that Landlord execute this Agreement in favor of Lender.
1.6 Landlord has agreed, at Tenant's request and as an accommodation
to it, to execute this Agreement.
IN CONSIDERATION of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by
Landlord, Landlord acknowledges and agrees as follows in favor of Lender:
1.1 Lien Subordination. Landlord acknowledges and agrees that: (a) the
security interest of Lender in the Collateral shall be superior to any lien,
right, title, claim or interest which Landlord may now or hereafter have
therein; (b) Landlord shall not assert as against Lender's security interest
1
58
therein any statutory, contractual or possessory lien, right, title, claim or
interest in the Collateral, including without limitation, rights of levy or
distraint for rent, all of which Landlord hereby subordinates to Lender for the
term of this Agreement; (c) Lender shall have access to the Collateral and the
Premises at all times hereafter during regular business hours to remove the
Collateral therefrom should Lender elect to enforce the security interest
granted in their favor in the Collateral, without hindrance or delay by
Landlord; and (d) all Collateral which is now located or hereafter may be
located oil the Premises shall remain the property of Tenant.
1.2 Termination of the Lease or Sublease. If, after the date hereof,
Landlord intends to terminate the Lease or otherwise exercise any right it may
have to require Tenant to surrender the Premises or to remove any property of
Tenant (including the Collateral) from the Premises, Landlord use its best
efforts to notify, Lender in writing at Wachovia Bank, National Association, 000
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attn: Central Region Corporate, of its
intent to take such action and to permit Lender to enter onto the Premises
within such thirty (30) day period in order to remove the Collateral therefrom,
without charge, that Lender shall promptly repair any damage to the Premises
caused by such removal; and in either such event, Landlord agrees to cooperate
with Lender and not to lender its actions in protecting or realizing upon the
Collateral.
1.3 Term. This Agreement shall remain in full force and effect until
the Financing Arrangement has been terminated, and all obligations and
liabilities of Tenant to Lender arising therefrom have been paid and satisfied
in full.
1.4 No Oral Modification; Successors and Assigns. The provisions of
this Agreement may not be modified or terminated orally, and shall be binding
upon the successors, assigns and personal representatives of Landlord, and upon
any successor owner or transferee of the Premises, and shall inure to the
benefit of the successors and assigns of Lender.
2
59
IN WITNESS WHEREOF, Landlord has caused this Agreement to be executed,
by its duly authorized officer, agent or other representative is of the date
first above written.
Signed and delivered LANDLORD:
in the presence of:
---------------------------------
---------------------------------
Witness
By:
------------------------------
Name:
--------------------------------- --------------------------
Notary Public Title:
------------------------
My Commission Expires:
--------------------------------
(NOTARY SEAL)
EXHIBIT "A"
Description of Lease:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Description of Premises:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(or add Exhibit)
3
60
EXHIBIT D
MASTER NOTE
1. FOR VALUE RECEIVED, the undersigned (Borrower"), promises to pay to
the order of WACHOVIA BANK, NATIONAL ASSOCIATION ("Lender"), at the principal
office of Lender in Atlanta, Georgia, or at such other place as Lender
hereafter may direct in writing, in legal tender of the United States of
America, the principal sum of Twenty-Five Million Dollars ($25,000,000), or so
much thereof as may be disbursed and remain outstanding from time to time
hereafter under that certain "Line of Credit" opened by Lender in favor of
Borrower pursuant to the terms of that certain Loan and Security Agreement,
dated as of May 11, 1998, among Lender, Borrower and the "Subsidiary Guarantors"
named therein (hereinafter, as it may be amended or supplemented from time to
time, called the "Loan Agreement"; all capitalized terms used herein, but not
expressly defined herein, shall have the meanings given to such terms in the
Loan Agreement), the terms and provisions of which are hereby incorporated
herein by reference and made a part hereof, on the Termination Date, with
interest thereon (computed on the daily outstanding principal balance, for the
actual number of days outstanding, on the basis of a 360 day year) on each
advance made hereunder from date of advance until paid in full at a rate per
annum equal to the Applicable Rate. Unless and except to the extent otherwise
expressly provided in the Loan Agreement, accrued interest on the unpaid
principal balance hereof from time to time outstanding shall be due and payable
monthly, commencing on the first day of the calendar month succeeding the date
hereof and continuing on the same day of each succeeding calendar month
thereafter and on demand for payment in full of the principal balance hereof.
2. Borrower agrees, in the event that this Master Note or any portion
hereof is collected by law or through an attorney at law, to pay all costs of
collection, including, without limitation, reasonable attorneys' fees.
3. This Note evidences borrowing under, is subject to and secured by,
and shall be paid and enforced in accordance with, the terms of the Loan
Agreement, and is the "Master Note" defined in Section 1.1 thereof.
4. Nothing herein shall limit any night granted to Lender by any other
instrument or by law or equity.
5. Borrower hereby waives presentment, demand, protest, notice of
presentment, demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be provided for in the
Loan Agreement.
1
61
IN WITNESS WHEREOF, Borrower has caused this Note to be signed and
sealed as of May 11, 1998.
"BORROWER"
XXXXXXX CENTRAL HOLDINGS, INC.
(SEAL)
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
Attest:
---------------------------
Name:
--------------------------
Title:
-------------------------
2
62
EXHIBIT "E"
SECRETARY'S CERTIFICATE
I hereby certify that I am the duly elected, qualified and serving
Secretary of_______________("Obligor"); that Obligor is a corporation organized
and existing under the laws of the State of its incorporation, having its
registered office and registered agent in such state; that attached hereto as
Exhibits "A" and "B", respectively, are true, correct and complete copies of the
Board of Directors of Borrower as in effect on the date of this Certificate;
that the following copy is a true and correct copy of resolutions duly adopted
at a meeting of the Board of Directors of Obligor, held on or prior to the date
of this Certificate, at which a quorum was present and acting throughout; that
said meeting was duly authorized by the By-Laws of Borrower; that the actions
taken at such meeting and reflected in said resolutions are authorized by the
By-Laws of Obligor; that said resolutions are now in full force and effect and
have not been modified or amended; that on the date hereof the office of
[President] of Obligor is held by the PERSON NAMED as such below and the office
of Secretary of Obligor is held by the Person named as such below; and that the
following are the genuine signatures of said officers:
[President]
-------------------
Secretary
-------------------
"RESOLVED that this corporation enter into a certain loan and security
agreement with Wachovia Bank, National Association ("Lender"), providing
generally for the extension of a line of credit in favor of [this corporation]
[the parent company of this corporation] in the principal amount of Twenty-Five
Million Dollars ($25,000,000), [guaranteed by this corporation], secured by the
grant of a security interest in all, or substantially all assets of this
corporation;
"RESOLVED FURTHER, that the [President] or any other officer of this
corporation be and he is hereby authorized to execute and deliver said agreement
and any notes, guaranties and other certificates, instruments and agreements
which Lender may require, and to consent and agree to any and all terms to each
and every one thereof;
"RESOLVED, FURTHER, that the execution and delivery of any writings or
the taking of any other actions in connection with the foregoing by the
[President] or any other officer of this corporation be and the same is hereby
ratified as the act and deed of this corporation;
1
63
"RESOLVED, FURTHER, that the Secretary of this corporation be and he is
hereby authorized to affix the seat of said corporation to any writings executed
by the President or any other officer of this corporation in connection with
the foregoing, and to attest the same, but such attestation is not required to
evidence the same as the act and deed of this corporation."
So certified to as of May 11, 1998.
(CORPORATE SEAL)
---------------------------------
Name:
----------------------------
Title: Secretary
ACKNOWLEDGMENT
The undersigned, being the or any other officer having the
title inscribed below of , do certify that the person whose signature is
inscribed above is the duly elected and qualified Secretary of said corporation
as of the date hereof, and the keeper of the records and minutes of the meetings
of the Board of Directors of said corporation.
---------------------------------
Name:
----------------------------
Title:
---------------------------
2
64
EXHIBIT "F"
OPINION OF COUNSEL
(LAW FIRM STATIONERY)
May 11, 1998
Wachovia Bank, N.A.
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Central Region Corporate
Re: XXXXXXX CENTRAL HOLDINGS, INC. ("Borrower"); Loan and Security
Agreement, dated as of May 11, 1998 ("Agreement"), among Borrower, the
"Subsidiary Guarantors" named therein, and Wachovia Bank, N.A.
("Lender")
Ladies and Gentlemen:
Terms which are defined in the Agreement and which are used herein
shall have the same meanings herein as ascribed thereto in the Agreement.
We are legal counsel to each Obligor and, in such capacity, we have
reviewed the Agreement and the remaining Loan Documents as well as the Articles
of Incorporation, By-Laws and minute book of each Obligor and such other
documents, instruments, certificates and agreements as we have deemed necessary
or advisable to review in order to render the opinions set forth below.
Accordingly, it is our opinion that.
1. Each Obligor is a corporation duly organized, validly existing and
in good standing under the laws of the State of its incorporation.
2. Each Obligor has the requisite corporate power to make, deliver and
perform under the Loan Documents and has taken all necessary and appropriate
corporate action to authorize the execution, delivery and performance of the
Loan Documents.
1
65
3. The Loan Documents constitute the valid obligations of each Obligor,
legally binding upon it and enforceable against it in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditor's rights generally. The
enforceability of each Obligor's obligations under the Loan Document is subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4. No consent or approval of any other party, including, but not
limited to, any shareholders or directors of each Obligor, and no consent,
license, approval or authorization of any governmental authority, commission,
bureau or agency is required in connection with the execution, delivery,
performance, validity and enforceability of the Loan Documents which has not
been obtained by each Borrower on or prior to the date hereof.
5. The officers of each Borrower who executed, attested and delivered
the Loan Agreement and the other Loan Documents were authorized and empowered to
do so for and on behalf of such Obligor, and to bind such Obligor accordingly
thereby.
6. The execution, delivery of and performance by each Obligor under
the Loan Documents have been duly authorized by all necessary corporate action
and do not and will not violate the provisions of the Articles of Incorporation,
By-Laws, or of any shareholder agreement of such Obligor, or of any mortgage,
indenture, security agreement, contract, undertaking or other agreement to which
such Obligor is a party or which purports to be binding upon such Obligor or any
of its property or assets, or of any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award known to us, after
reasonable investigation, to be presently effective having applicability to
Borrower.
7. To our knowledge there are no proceedings pending or before any
court or administrative agency against any Obligor.
This opinion of counsel is rendered for your benefit only and may be
relied upon only by you.
Sincerely,
(Partner)
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EXHIBIT G
SECURITIES PLEDGE AGREEMENT
THIS SECURITIES PLEDGE AGREEMENT (this "Agreement"), made by XXXXXXX CENTRAL
HOLDINGS, INC. ("Borrower"), XXXXXXX CENTRAL CONSULTING, INC. ("Xxxxxxx
Consulting") and SC HOLDING, INC. ("Holding,") (Borrower, Xxxxxxx Consulting and
Holding individually and collectively, "Pledgor") to and in favor of WACHOVIA
BANK, N.A., a national bank ("Lender"), pursuant to that certain Loan and
Security Agreement, dated of even date herewith, among Borrower, as borrower,
Xxxxxxx Consulting and Holding, as "Subsidiary Guarantors", the other
"Subsidiary Guarantor" named therein, and Lender (hereinafter, together with any
amendments or supplements thereto, called the "Loan Agreement"; all capitalized
terms used herein, but not expressly defined herein, to have the meanings given
to such terms in the Loan Agreement) in order to provide for the pledge by
Pledgor of all capital stock or membership interests of each Subsidiary
Guarantor owned by Pledgor.
1. PLEDGE
For value received and in consideration of any extension of credit as
may from time to time be made by Lender to Borrower pursuant to the Loan
Agreement, Pledgor hereby assigns, pledges and conveys to Lender a continuing
general primary lien upon and security interest in and to the following
property: (i) all that capital stock of, or membership interest of Pledgor in,
each Subsidiary of Pledgor, as more particularly described on Exhibit "A"
attached hereto and by reference incorporated herein, together with all
replacements, substitutions, renewals or extensions thereof, and all cash,
additional securities, subscription rights, interest, dividends, options,
warrants, instruments or other property or rights at any time and from time to
time receivable or otherwise distributed in respect of or in exchange for any
or all of the foregoing (hereinafter collectively referred to as the "Pledged
Securities"), and (ii) all proceeds of the foregoing (hereinafter, the property
described in (i) and (ii) above, shall sometimes be collectively referred to as
the "Collateral").
2. OBLIGATIONS SECURED.
This Agreement is made to secure all Obligations of Pledgor to Lender
whatsoever, whether existing as of the date hereof or hereafter arising.
3. REPRESENTATIONS AND WARRANTIES OF PLEDGOR.
Pledgor represents and warrants to Lender (which representations and
warranties shall be deemed to be renewed as of the date of each renewal or
extension of credit in respect of any of the Obligations) that:
(a) Pledgor is the sole legal and equitable owner of the Collateral and
holds the same free and clear of all liens, charges, options, restrictions on
sale, transfer or disposition, encumbrances and security interests of every
kind and nature whatsoever (except those in favor of Lender).
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(b) Pledgor has full power and authority to make the collateral
assignment of the Collateral evidenced hereby and, when, executed this Agreement
will constitute the valid obligations of Pledgor, legally binding on Pledgor and
enforceable in accordance with the terms hereof. The undersigned is duly
authorized and empowered to execute this Agreement for and on behalf of
Pledgor.
(c) No consent or approval of any other person or entity (including,
without limitation, any shareholders or directors of Pledgor) and no consent,
license, approval or authorization of any governmental authority, bureau or
agency is required in connection with the execution, delivery, performance,
validity and enforceability of this Agreement.
4. COVENANTS WITH RESPECT TO COLLATERAL.
Pledgor agrees with Lender with respect to the Collateral as follows:
(a) Unless an Event of Default (as hereinafter defined) shall have
occurred, Pledgor shall be entitled to (i) vote any Pledged Securities and give
any consents, waivers and ratifications in respect thereof, provided no vote
shall be cast or consent, waiver or ratification given or action taken by
Pledgor which, in the sole judgment of Lender would impair the value or
marketability of the Pledged Securities and (ii) receive all interest and/or
cash dividends or distributions paid with respect to the Pledged Securities, if
and to the extent then permitted to be paid to Pledgor under the Loan Agreement
(or otherwise expressly approved in writing by Lender).
(b) Pledgor will cause any additional securities or property issued to
or received by Pledgor with respect to any of the Collateral, whether or not for
value paid by Pledgor, to be promptly deposited with and pledged to Lender
pursuant hereto. Upon delivery thereof, such additional securities or property
shall constitute Collateral hereunder.
(c) Pledgor agrees that all Collateral now or hereafter so deposited
and pledged or substituted by Pledgor will be accompanied by proper instruments
of assignment duly executed in blank by Pledgor, all as Lender may require.
(d) If an Event of Default has occurred, Pledgor shall cooperate with
and assist Lender in its efforts to dispose of all or any portion of the Pledged
Securities.
5. DEFAULT REMEDIES.
Upon the occurrence or existence of any Event of Default, or at any
time thereafter (such default not having been previously cured), Lender, at its
option, may declare all of the Obligations to be immediately due and payable,
whereupon the same shall become immediately due and payable without presentment,
demand, protest, notice of non-payment or any other notice required by law
relative thereto, all of which are hereby expressly waived by Pledgor, anything
contained herein to the contrary notwithstanding. If any note constituting
Obligations shall be a demand instrument,
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however, the recitation of the right of Lender to declare any and all
Obligations to be immediately due and payable, which is contained in this
Agreement, as well as the recitation of the above events permitting Lender to
declare all Obligations due and payable, shall not constitute an election by
Lender to waive its right to demand payment under a demand at anytime and in
any event, as Lender in its discretion may deem appropriate.
In addition, upon the occurrence of any of the above Events of Default
and at any time thereafter (such default not having previously been cured) or on
or after demand for payment of any of the Obligations, Lender, without notice or
demand, (i) shall be entitled to collect and receive all payments in respect of
the Collateral, (ii) may exercise all rights of Pledgor with respect thereto and
(iii) may sell the Collateral, or any part thereof, at public or private sale or
at any broker's board or on any securities exchange, for cash, upon credit or
for future delivery, all as Lender shall deem appropriate, in its sole
discretion. Upon consummation of any such sale Lender shall have the right to
assign, transfer and delivery to the purchase or purchasers thereof the
Collateral so sold. Each such purchaser at any sale shall hold the property
sold absolutely free from any claim or right on the part of Pledgor, and Pledgor
hereby waives (to the extent permitted by law) all rights of redemption, stay
and/or appraisal which Pledgor now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Any sale of
the Collateral, or a portion thereof, may be sold in one lot as an entirety or
in separate lots, as Lender may (in its sole and absolute discretion) determine.
Lender shall not be obligated to sell the Collateral if it shall determine not
to do so. In case sale of all or any part of the Collateral is made on credit or
for future delivery, the Collateral so sold may be retained by Lender until the
sale price is paid by the purchaser or purchasers thereof, but Lender shall not
incur any liability if any such purchaser or purchasers shall fail to take up
and pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again. As an alternative to exercising the power of the
sale herein conferred upon it, Lender may proceed by a suit or suits at law or
in equity to foreclose this agreement and to sell the Collateral, or any portion
thereof, pursuant to a judgment or decree of a court of courts of competent
jurisdiction. The rights of Lender specified herein shall be in addition to,
and not in limitation of, its rights under the Uniform Commercial Code of
Georgia, as amended from time to time (the "Code") (regardless of whether the
Code has been enacted in the jurisdiction where the rights or remedies are
asserted) or under any other statute or rule of law conferring rights similar to
those conferred by the Code, and under the provisions of any other instrument or
agreement executed by Pledgor in favor of Lender. Lender shall give Pledgor
written notice of the time and place of any public sale of the Collateral or
the time after which any other intended disposition thereof is to be made,
except when the Collateral is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market. The requirement
of sending reasonable notice shall be met if such notice is given to Pledgor at
the last address shown on Lender's records at least five (5) days before such
disposition.
The proceeds of the sale of the Collateral sold pursuant to this
section hereof shall be applied by Lender as follows: First, to the payment of
all costs and expenses incurred by Lender in connection with such sale,
including, but not limited to, all court costs and reasonable attorneys' fees
and to the payment of all costs and expenses paid or incurred by Lender in the
exercise of any right
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or remedy granted to Lender hereunder; Second, to the payment in full of the
Obligations, to the extent not previously paid; and Third, to Pledgor (or as
otherwise may be required by law), any remainder of such proceeds.
6. LENDER APPOINTED ATTORNEY-IN-FACT.
Pledgor hereby irrevocably appoints Lender as Pledgor's
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument which Lender may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, Lender shall have the right and power (i) to receive, endorse
and collect all checks and other orders for the payment of money made payable to
Pledgor representing any interest or dividend or other distribution payable in
respect of the Collateral or any part thereof and to give full discharge for the
same and (ii) to execute and delivery, either in Pledgor's or Lender's name,
stock powers, bond powers or other instruments of assignment necessary in the
premises.
7. MISCELLANEOUS.
(a) Entire Agreement; Amendment. This Agreement constitutes and
contains the entire understanding of the parties and supersedes and cancels any
pre-existing agreements or understandings between the parties relating to the
subject matter hereof. This Agreement may not be amended or modified, nor may
any Collateral be released, except by a writing signed by Lender.
(b) Waiver. Each and every right granted to Lender under this
Agreement, or any other document delivered hereunder or in connection herewith
or allowed by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of Lender to exercise, and no delay in
exercising, any right shall operate as a waiver thereof, nor shall any single or
partial exercise by Lender of any right preclude any other or future exercise
thereof or the exercise of any other right. No waiver by Lender of any default
hereunder shall constitute a waiver of any subsequent default.
(c) Governing Law. This Agreement and the rights and obligations of
the parties hereunder shall be governed by, construed and interpreted in
accordance with the laws of the State of Georgia.
(d) Further Assurances. Pledgor agrees to do such further acts and
things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments, as Lender may at any time request in connection with
the administration and enforcement of this Agreement or relative to the
Collateral or any part thereof or in order better to assure and confirm unto
Lender its rights and remedies hereunder.
(e) Timeliness of Performance. Time is of the essence in this
Agreement.
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(f) Survival. All representations, warranties, and covenants made
herein shall survive the execution and delivery of the Obligations and any other
agreement hereunder.
(g) Binding Effect. The terms of this Agreement shall be binding upon
and inure to the benefit of each party hereto and their respective heirs,
successors and assigns.
(h) Headings. Section headings used herein are for convenience only and
are not to affect the construction of or be taken into consideration in
interpreting this Agreement.
(i) Use of Terms. The terms used in this Agreement which are defined in
the Code shall have the meanings given such terms in the Code. Whenever used,
the singular shall be deemed to include the plural and the plural the singular.
As used herein the term "Pledgor" shall mean each of the undersigned jointly and
severally, if more than one.
(j) Termination. This Agreement shall be in full force and effect until
the Obligations have been indefeasibly paid in full and such payments are no
longer subject to rescission, recovery or repayment upon any bankruptcy,
insolvency, reorganization, moratorium, receivership or similar proceeding
affecting Borrower or Obligor, and Lender shall not be obligated to extend any
further Obligations and has terminated this Agreement in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed under seal as of the day and year first above written.
"PLEDGOR"
XXXXXXX CENTRAL HOLDINGS, INC. (SEAL)
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
Attest:
--------------------------------
Name:
------------------------------
Title:
------------------------------
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XXXXXXX CENTRAL CONSULTING, INC. (SEAL)
By:
------------------------------------
Name:
-------------------------------
Title:
-------------------------------
Attest:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
SC HOLDING, INC. (SEAL)
By:
------------------------------------
Name:
-------------------------------
Title:
-------------------------------
Attest:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
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Accepted:
"LENDER"
"WACHOVIA BANK, N.A.
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
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SECURITIES PLEDGE AGREEMENT
EXHIBIT A
Capital Stock or
Membership
Interests Certificate Nos.
Subsidiary Name Being Pledged (if applicable) Owner
--------------- ------------- --------------- -----
SC Holding, Inc. 100 38 Xxxxxxx Central
Holdings, Inc.
Xxxxxxx Central, Inc. 100 001 SC Holding, Inc.
Xxxxxxx Central National, L.L.C. 100 1 SC Holding, Inc.
Xxxxxxx Central Consulting, Inc. 100 1 SC Holding, Inc.
Benchmark Healthcare Consulting, Inc. -- -- Xxxxxxx Central
Consulting, Inc.
Dezine Healthcare Solutions, LLC -- -- SC Holding, Inc.
KSI Acquisitions, L.L.C. -- -- SC Holding, Inc.
InfoMed, Inc. -- -- SC Holding, Inc.
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EXHIBIT "H"
AGREEMENT OF JOINDER
THIS AGREEMENT OF JOINDER (this "Agreement") is made as of
_____________ 19_, by [NEW SUBSIDIARY GUARANTOR], a [State] corporation ("New
Subsidiary Guarantor"), to and in favor of Wachovia Bank, National Association
("Lender"), in connection with, and in furtherance of, the terms of that certain
Loan and Security Agreement, dated as of May 11, 1998, as may be modified or
amended to date, among the parties identified therein as the "Borrower," the
"Subsidiary Guarantors" identified as such therein, and Lender (the "Loan
Agreement"). Capitalized terms used in this Agreement, but not expressly defined
herein, shall have the meanings given to such terms in the Loan Agreement.
Preamble. New Subsidiary Guarantor is a direct or indirect Subsidiary of
Borrower. New Subsidiary Guarantor has received and reviewed copies, as signed,
of the Loan Agreement, and each other Loan Document, and has satisfied itself in
regard thereto. It is the desire and intent of New Subsidiary Guarantor that New
Subsidiary Guarantor be added as a Subsidiary Guarantor under the Loan
Agreement, thereafter to be bound thereby. Accordingly, for value received, the
receipt and sufficiency of which are hereby acknowledged, New Subsidiary
Guarantor covenants and agrees as follows:
1. Assumption. New Subsidiary Guarantor hereby accepts, assumes,
affirms and agrees to be bound by all the terms, covenants and conditions of the
Loan Agreement as a "Subsidiary Guarantor" thereunder as fully and completely as
if New Subsidiary Guarantor were an original party thereto. Subject to New
Subsidiary Guarantor's compliance with Section 2 below, Agent consents to and
approves the addition of New Subsidiary Guarantor as a New Subsidiary Guarantor.
2. Further Assurances. Concurrently herewith, New Guarantor shall cause
to be delivered to Lender such documents, instruments, certificates and
agreements as Lender may reasonably request to give effect hereto, including,
without limitation, those documents (or substantially the same variations
thereof) described in Section 6.2 of the Loan Agreement, as, and to the extent,
they relate to New Subsidiary Guarantor.
3. Miscellaneous. This Agreement shall itself constitute a Loan
Document and be governed accordingly as provided in the Loan Agreement.
4. Effectiveness. This Agreement shall become effective upon its
acceptance by the Agent, as prescribed herein below.
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WITNESS the hand and seal of New Subsidiary Guarantor, effective as of
the date first above written.
"NEW SUBSIDIARY GUARANTOR"
[NEW SUBSIDIARY GUARANTOR]
By
--------------------------------------
Title:
--------------------------------
Attest:
Title:
--------------------------------
Accepted:
WACHOVIA BANK, N.A.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
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EXHIBIT "I"
TELEPHONE INSTRUCTION LETTER
May 11, 1998
Wachovia Bank,
National Association
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Central Region Corporate
Ladies and Gentlemen:
Please refer to that certain Loan and Security Agreement, dated of even
date herewith, among you, us and the "Subsidiary Guarantors" identified as such
therein ("Loan Agreement").
From the proceeds of any Advances which you make to us under the Loan
Agreement, we hereby authorize and direct you to make disbursements from time to
time for our account to our bank account number ______________ maintained with
____________________ ____________ of _______________, _______________ upon
receipt of telephone instructions from any of the following persons or their
respective designees, which Persons shall also be authorized and empowered to
obtain Letters of Credit for our account from you:
Name Title
---- -----
---------------------------- -----------------------------
---------------------------- -----------------------------
---------------------------- -----------------------------
You shall have no liability to us whatsoever for acting upon any such
telephone instruction which you, in good faith, believe was given by any of the
above designated persons or their respective designees and you shall have no
duty to inquire as to the propriety of any disbursement.
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You shall have the right to accept the telephone instructions of any of
the above designated persons or their respective designees unless and until
actual receipt by you from us of written notice of termination of the authority
of any such designated persons. We may change persons designated to give you
telephone instructions only by delivering to you written notice of such change.
Unless and until you advise us to the contrary, each telephone
instruction from the above-named persons or their respective designees shall be
followed by a written confirmation of the request for disbursement in such form
as you make available from time to time to use for such purpose.
Very truly yours,
XXXXXXX CENTRAL HOLDINGS, INC.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
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MASTER NOTE
1. FOR VALUE RECEIVED, the undersigned ("Borrower"), promises to pay to
the order of WACHOVIA BANK, NATIONAL ASSOCIATION ("Lender"), at the principal
office of Lender in Atlanta, Georgia, or at such other place as Lender hereafter
may direct in writing, in legal tender of the United States of America, the
principal sum of Twenty-Five Million Dollars ($25,000,000), or so much thereof
as may be disbursed and remain outstanding from time to time hereafter under
that certain "Line of Credit" opened by Lender in favor of Borrower pursuant to
the terms of that certain Loan and Security Agreement, dated as of May 11, 1998,
among Lender, Borrower and the "Subsidiary Guarantors" named therein
(hereinafter, as it may be amended or supplemented from time to time, called the
"Loan Agreement"; all capitalized terms used herein, but not expressly defined
herein, shall have the meanings given to such terms in the Loan Agreement), the
terms and provisions of which are hereby incorporated herein by reference and
made a part hereof, on the Termination Date, with interest thereon (computed on
the daily outstanding principal balance, for the actual number of days
outstanding, on the basis of a 360 day year) on each advance made hereunder from
date of advance until paid in full at a rate per annum equal to the Applicable
Rate. Unless and except to the extent otherwise expressly provided in the Loan
Agreement, accrued interest on the unpaid principal balance hereof from time to
time outstanding shall be due and payable monthly, commencing on the first day
of the calendar month succeeding the date hereof and continuing on the same day
of each succeeding calendar month thereafter and on demand for payment in full
of the principal balance hereof.
2. Borrower agrees, in the event that this Master Note or any portion
hereof is collected by law or through an attorney at law, to pay all costs of
collection, including, without limitation, reasonable attorneys' fees.
3. This Note evidences borrowing under, is subject to and secured by,
and shall be paid and enforced in accordance with, the terms of the Loan
Agreement, and is the "Master Note" defined in Section 1.1 thereof.
4. Nothing herein shall limit any right granted to Lender by any
other instrument or by law or equity.
5. Borrower hereby waives presentment, demand, protest, notice of
presentment, demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be provided for in the
Loan Agreement.
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IN WITNESS WHEREOF, Borrower has caused this Note to be signed and
sealed as of May 11, 1998.
"BORROWER"
XXXXXXX CENTRAL HOLDINGS, INC.
(SEAL)
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
-----------------------------
Title: Chief Executive Officer
----------------------------
By: /s/ X. Xxxxx Day, Jr.
----------------------------------
Name: X. Xxxxx Day, Jr.
-----------------------------
Title: Secretary
----------------------------
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