EXHIBIT 4.49
PARTIAL LOAN LIABILITY RELEASE AGREEMENT
THIS PARTIAL LOAN LIABILITY RELEASE AGREEMENT (this "Agreement") is made as
of September 24, 2002, by and among the following parties:
1. SOUTHTRUST BANK ("Bank");
2. COLOR IMAGING, INC. ("Delaware Color"), a Delaware corporation;
3. LOGICAL IMAGING SOLUTIONS, INC. ("Logical"), a California corporation;
4. KINGS BROTHERS, LLC ("Kings Brothers"), a Georgia limited liability
company; and
5. XX. XXX-XXXX XXXX ("Xx. Xxxx).
RECITALS:
1. Obligations. Delaware Color and Logical (collectively, jointly and
severally, "Borrower"), are jointly and severally indebted to Bank under and in
regard to various loans and obligations (collectively, the "Obligations") the,
including but not limited to the following:
a. Revolving Loan in the maximum principal amount of Two Million Five
Hundred Thousand Dollars ($2,500,000) evidenced by and subject to Loan and
Security Agreement (as amended, the "Revolving Loan Agreement") dated as of
May 5, 2000, between Georgia Color and Bank, as amended and affected by
Amendment of Loan Documents dated as of August 30, 2000, Second Amendment
of Loan Documents dated as of November 30, 2000, Third Amendment of Loan
Documents made as of July 5, 2001, to be effective for all purposes as of
June 30, 0000, Xxxxxx Xxxxxxxxx of Loan Documents dated as of November 1,
2001, Fifth Amendment of Loan Documents made as of December 31, 2001, Sixth
Amendment of Loan Documents made as of February 2002, and Seventh Amendment
of Loan Documents made as of July 5, 2002;
b. Term Loan (as amended, the "Term Loan") in the original principal
amount of One Million Seven Hundred Fifty-Two Thousand Dollars ($1,752,000)
evidenced by Installment Note (the "Term Note") dated as of June 24, 1999
from Georgia Color to Bank and Term Loan Agreement (the "Term Loan
Agreement") dated as of June 24, 1999 between Georgia Color and Bank, all
as amended by Term Loan Documents Modification Agreement dated as of August
30, 2000, among Bank, Delaware Color, Logical, Georgia Color and Alorex
Corp.;
c. Reimbursement Agreement dated as of June 1, 1999, among Georgia
Color, Kings Brothers and Bank, as amended by Amendment of Loan Documents
dated as of August 30, 2000, among Bank, Delaware Color, Logical, Georgia
Color and Alorex Corp.; and
d. Guaranty Agreement dated as of March 31, 1999 regarding the
obligations of Kings Brothers under a Term Loan in the original principal
amount of Three Million Seven Hundred Forty-Five Thousand Eight Hundred
Seventy-Two Dollars ($3,745,872), evidenced by (i) Term Loan Agreement
between Kings Brothers and Bank dated as of March 31, 1999, as amended by
First Amendment thereto dated as of June 24, 1999, and (ii) Term Note
between Kings Brothers and Bank dated as of March 31, 1999 in the original
principal amount of Four Million Seven Hundred Twenty Thousand Dollars
($4,720,000), as amended and restated by Amended and Restated Term Note
between Kings Brothers and Bank dated as of June 24, 1999, in the original
principal amount of Three Million Seven Hundred Forty-Five Thousand Eight
Hundred Seventy-Two Dollars ($3,745,872); and
e. Patent Security Agreement dated as of August 30, 2000, among Bank,
Delaware Color, Logical, Georgia Color and Alorex Corp..
2. Guarantors. Kings Brothers and Xx. Xxxx (collectively, "Guarantors")
have guaranteed to Bank full payment and performance by Borrower of all the
Obligations, and those guaranty obligations remain in full force and effect.
3. Transaction. Borrower and Guarantors have requested Bank to agree as
follows:
a. To consent to the exchange by Delaware Color of all of the
outstanding stock of its wholly-owned subsidiary, Logical, for 1,700,000
shares of common stock of Delaware Color held by Digital Color Print, Inc.
("DCP"), a Nevada corporation, and a warrant to purchase shares of the
common stock of Logical or DCP, as set forth in the Share Exchange
Agreement (the "Share Exchange Agreement") among Delaware Color, Logical,
DCP and the shareholders of DCP;
b. To release Logical from its obligations under the Obligations; and
c. To release Bank's liens on the assets of Logical.
Bank has agreed to such requests, subject to the execution and delivery of this
Agreement.
NOW THEREFORE, for and in consideration of ONE HUNDRED DOLLARS ($100) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, covenant
and agree as follows:
1. Recitals; Definitions. The foregoing recitals are true and correct and
are hereby incorporated herein by this reference. All capitalized terms utilized
herein, not defined herein but defined in the Loan Agreement shall have the
definitions ascribed thereto in the Loan Agreement.
2. Release of Liability. Effective upon consummation (the "Closing") of the
transactions set forth in the Share Exchange Agreement but not before or
otherwise, Bank releases Logical from all liabilities and obligations arising
under the Obligations after the Closing, expressly reserving, however, liability
under the express provisions of this Amendment. Notwithstanding the immediately
preceding sentence, (a) Logical shall remain liable for all liabilities and
obligations due and payable or to be performed prior to the Closing and (b) if
at any time all or any part of any payment applied by Bank to any of the
Obligations prior to Closing must be returned by Bank for any reason, whether
upon the claim of a preference, fraudulent transfer, prior lien or other claim
of a creditor, debtor in possession, trustee in bankruptcy or other
representative of creditors of Borrower, or otherwise, and whether by court
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order, administrative order or non-judicial settlement, the obligations of
Logical shall be reinstated and Logical shall be liable for the full amount
returned as if such amount had never been received by Bank. Further, if the
transaction described in the Share Exchange Agreement or any portion thereof is
hereafter rescinded or reversed under bankruptcy law, creditors' or debtors'
rights law or otherwise, whether as a preference, a fraudulent conveyance or
otherwise, Logical shall be deemed, for all purposes and without the execution
and delivery of any further documentation, to have re-assumed all of the
Obligations retroactive to the date of Closing.
3. Release of Collateral. Upon effectiveness of the release of liability
pursuant to the foregoing Section 2, Bank shall release all liens, security
interests and encumbrances owned by Bank on any personal property of Logical.
Bank shall execute and deliver such instruments as are required to release all
such liens, security interests and encumbrances promptly upon Logical's
delivering to Bank the instruments required to evidence such releases.
Notwithstanding the immediately preceding sentence, if the transaction described
in the Share Exchange Agreement or any portion thereof is hereafter rescinded or
reversed under bankruptcy law, creditors' or debtors' rights law or otherwise,
whether as a preference, a fraudulent conveyance or otherwise, the liens,
security interest of encumbrances of Bank in the personal property of Logical
shall be deemed, for all purposes and without the execution and delivery of any
further documentation, to be reimposed on the assets of Logical. The immediately
preceding sentence shall be included in the release instruments executed by
Bank.
4. Delaware Color and Guarantors. Delaware Color and each of the Guarantors
consents to the execution of this Agreement, the release of Logical and the
release of the collateral described above and confirms that its obligations
under and in regard to the Obligations remain in full force and effect.
5. Conditions. Bank's agreements set forth herein are subject to and
conditioned upon satisfaction of the following conditions to Bank's
satisfaction:
a. Costs. Payment by Borrower of all Bank's costs and expenses in
regard to the investigation, review and approval of this transaction, the
preparation of this Agreement and all documents and agreements required
hereby and the administration thereof, including, without limitation, (i)
all legal fees, expenses and disbursements and other actual third-party
expense reimbursements incurred or sustained by Bank in connection with
this transaction, (ii) all recording and filing fees, intangibles taxes,
documentary and revenue stamps, other taxes or other expenses and charges
payable in connection with this Agreement or any agreements or instruments
executed in connection herewith and (iii) all costs, expenses (including
fees and expenses of outside consultants), related to the administration of
the transactions contemplated hereby.
b. Other Documents. The execution and delivery of such other documents
and agreements as Bank shall require to evidence and consummate the
transactions described herein.
6. General Provisions.
a. Legal Counsel. Borrower acknowledges and agrees that legal counsel
to Bank does not represent Borrower as Borrower's attorney, that Borrower
has retained (or has had an opportunity to retain) counsel of its own
choice and has not and will not rely upon any advice from Bank's counsel.
In no event shall Borrower's reimbursement of expenses pursuant to this
Agreement(even if effected by payment directly by Borrower to Bank's
counsel) be deemed to establish any attorney-client relationship between
Borrower and Bank's counsel.
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b. No Waiver. The execution and delivery of this Agreement does not
constitute, and shall not be construed as, a waiver by Bank of any default
or Event of Default under any document, agreement or instrument. No delay
or omission of Bank or any subsequent holder of the obligations of Borrower
to Bank to exercise any right, remedy, power or privilege after the
occurrence of such default or Event of Default shall be construed as a
waiver of any such default, or acquiescence therein.
c. Headings. The headings of the articles, sections, paragraphs and
subdivisions of this Agreement are for convenience of reference only, are
not to be considered a part hereof, and shall not limit or otherwise affect
any of the terms hereof.
d. Survival of Covenants. All covenants, agreements, representations
and warranties made herein and in certificates or reports delivered
pursuant hereto shall be deemed to have been material and relied on by
Bank, notwithstanding any investigation made by or on behalf of Bank, and
shall survive the execution and delivery to Bank of this Amendment. All the
terms and conditions of the instruments and agreements amended by this
Agreement are hereby ratified, affirmed and approved as herein amended.
e. Continuing Obligation; Benefits. This Amendment, and each and every
provision hereof, is a continuing obligation and shall (i) be binding upon
each of the parties hereto and their respective heirs, representatives,
successors and assigns, and (ii) inure to the benefit of and be enforceable
by the parties hereto and their respective heirs, representatives,
successors and assigns; provided, that none of Delaware Color or Guarantors
or any thereof may assign all or any part of this Agreement without the
prior written consent of Bank, which consent may be granted or withheld in
the sole discretion of Bank.
f. Controlling Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
g. Standard of Review. Any document, writing or instrument required or
permitted to be delivered to Bank under this Agreement shall be deemed
satisfactory only if approved by Bank in the exercise of its sole
discretion, and any act or approval permitted to be done by Bank under this
Agreement shall be in Bank's sole discretion.
h. Miscellaneous. This Agreement may not be varied, altered, or
amended except by a written instrument executed by an authorized officer of
the Bank. This Agreement may be executed in any number of counterparts,
each of which, when executed and delivered, shall be an original, but such
counterparts shall together constitute one and the same instrument. Any
provision in this Agreement which may be unenforceable or invalid under any
law shall be ineffective to the extent of such unenforceability or
invalidity without affecting the enforceability or validity of any other
provisions hereof.
i. General Waivers. To the fullest extent permitted by Applicable Law,
Delaware Color and Guarantors waive (i) presentment, demand and protest and
notice of presentment, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Bank on which Obligors may in any way be
liable; (ii) notice prior to Bank's taking possession or control of any
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collateral or any bond or security which might be required by any court
prior to allowing Bank to exercise any of Bank's remedies, including the
issuance of an immediate writ of possession; (iii) the benefit of all
valuation, appraisement and exemption laws; (iv) any right upon payment in
full of the Obligations to require Bank to terminate its security interest
in any collateral until the execution of an agreement indemnifying Bank
from any loss or damage Bank may incur as the result of dishonored checks
or other items of payment received by Bank from any obligor or any Account
Debtor and applied to the obligations owed to Bank; and (v) notice of
Bank's acceptance hereof or of any document required hereby.
j. Loan Documents. From and after the date hereof, all references in
any of the Loan Documents to any document or agreement amended by this
Agreement shall mean and refer to such document or agreement as amended by
this Amendment.
k. Representations and Warranties. The parties hereto, and the
individuals executing this Agreement on behalf of all entity signatories
hereto, represent and warrant to Bank that (a) each entity is in existence
and in good standing under the laws of the state of Georgia and their
respective states of organization, (b) the Articles of Incorporation and
Bylaws of all entities have not been amended since June 30, 2001, and (c)
the execution and delivery of this Agreement have been authorized by all
requisite corporate action by and on behalf of all entities. Delaware Color
and Guarantors hereby reaffirm and restate each and every warranty and
representation set forth in the Loan Agreement and the other documents
evidencing, securing or otherwise relating to the Obligations.
l. Release. Delaware Color, Logical, Kings Brothers and Xx. Xxxx
hereby waive, release and discharge Bank from any and all claims, demands,
actions or causes of action arising out of or in any way relating to the
Obligations and any documents, agreements, dealings, or other matters
connected with the Obligations, including, without limitation, all known
and unknown matters, claims, transactions, or things occurring prior to the
date of Closing.
m. No Novation. This Agreement shall not constitute a novation of the
Obligations or of the terms and provisions of the documents evidencing,
securing and otherwise relating to the Obligations shall remain valid and
in full force and effect as amended here.
n. No Waiver or Implication. Nothing herein shall constitute a waiver
by Bank of any default, whether known or unknown, which may exist under the
Loan Documents. No action, inaction or agreement by Bank, including,
without limitation, any release, extension, indulgence, waiver, consent or
agreement of modification which may have occurred or have been granted or
entered into (or which may be occurring or be granted or entered into
hereunder or otherwise) with respect to nonpayment of the Loan or any
portion thereof, or with respect to matters involving security or obligors
for the Loan, or with respect to any other matter relating to the Loan,
shall require or imply any future extension, indulgence, waiver, consent or
agreement by Bank. Delaware Color and Guarantors hereby acknowledge and
agree that Bank has made no agreement, and is in no way obligated, to grant
any future release, extension, indulgence, waiver or consent with respect
to the Loan or any matter relating to the Loan.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first above written.
SOUTHTRUST BANK
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------
Xxxxx X. Xxxxx
Its: Assistant Vice President
[BANK SEAL]
COLOR IMAGING, INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxx Xxxxxxx
-------------------------------------------
Xxxxxx X. Xxx Xxxxxxx
Its: Executive Vice President
Attest: /s/ Chia-an Xxxxx
---------------------------------------
Chia-an Xxxxx
Its: Assistant Secretary
[CORPORATE SEAL]
LOGICAL IMAGING SOLUTIONS, INC., a
California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx
Its: Chief Executive Officer
Attest: /s/ Xxxx X. Xxxxx
---------------------------------------
Xxxx X. Xxxxx
Its: Assistant Secretary
[CORPORATE SEAL]
KINGS BROTHERS, LLC, a Georgia limited
liability company
By: /s/ Xxxxxxx Xxxx (SEAL)
-------------------------------------------
Xxxxxxx Xxxx
Its: Managing Member
/s/ Xx. Xxxxxxx Xxxx (SEAL)
-----------------------------------------------
Xx. Xxxxxxx Xxxx
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