EXHIBIT 10.9
EUROPEAN AMERICAN BANK
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT NOTE AND AGREEMENT
The within is an amendment and restatement of that certain
Amended and Restated Credit Note and Agreement in the
principal amount of $9,000,000 dated November 8, 1993 and
executed by the Borrower as hereinafter defined; said Note
having been previously amended and restated by a Second
Amended and Restated Revolving Credit Note and Agreement in
the principal amount of $10,000,000 dated August 9, 1994;
said Note having been previously modified by a Note
Modification Agreement dated February 10, 1995, and by a
Third Amended and Restated Revolving Credit Note and
Agreement dated October 24, 1995.
November 6, 1997
$12,000,000 Office Address: 000 Xxxxxxxx Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
FOR VALUE RECEIVED, MEDICAL ACTION INDUSTRIES INC. (the "Borrower")
promises to pay to the order of EUROPEAN AMERICAN BANK (the "Bank") on or
before September 30, 2000 at the office of the Bank located at the place first
above stated or such other place as the holder thereof may from time to time
designate in writing, in lawful money of the United States of America in
immediately available funds, the principal sum of Twelve Million ($12,000,000)
Dollars (or such lesser amount as may then be the aggregate unpaid principal
balance of all loans made by the Bank to the Borrower hereunder (each a "Loan"
and collectively the "Loans"). The Borrower also promises to pay interest
(computed on the basis of a 360 day year for actual days elapsed) at said
office in like money on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity at that rate equal to the
Bank's Prime Rate (the rate stated by the Bank to be its prime rate as in
effect from time to time), which interest rate shall change when and as the
Prime Rate changes. Interest shall be payable monthly on the first day of each
month commencing on the first such day to occur after the date hereof and upon
payment in full of the unpaid principal amount hereof. If any payment of
principal or interest becomes due on a day on which banks in New York, New York
are required or permitted by law to remain closed, such payment may be made on
the next succeeding business day on which such banks are open, and such
extensions shall be included in computing interest in connection with such
payment. The Borrower further agrees that this Note shall bear interest after
any stated or accelerated maturity hereof at a rate of three (3%) percent per
annum in excess of the rate hereinbefore provided for, payable on demand. In no
event shall interest payable hereunder be in excess of the maximum rate of
interest permitted under applicable law, the Borrower authorizes the Bank to
charge any of the Borrower's accounts for payments of principal and interest
hereunder.
In consideration of the granting of the Loans evidenced by this Note,
the Borrower hereby agrees as follows:
1. Revolving Credit Commitment.
(a) The loan evidenced by this Note is available in one or
more advances (each a "Loan" and collectively the "Loans")
during the period which commences on the date hereof and ends
on September 30, 2000 (the "Credit Period") in an aggregate
principal amount up to, but not exceeding at any time
outstanding, the said principal sum of Twelve Million
($12,000,000) Dollars (the "Commitment"). During the Credit
Period, the Borrower may use the Commitment by borrowing,
prepaying in whole or in part and reborrowing, on a revolving
basis, all in accordance with the terms and conditions
hereof; provided, however, that each such Loan or prepayment
be in an amount not less than One Hundred Thousand ($100,000)
Dollars.
(b) The date and amount of each Loan and of each payment of
principal shall be maintained by the Bank in its books and
records at the time of each Loan or payment. All such
notations shall be presumed to be correct and the aggregate
net unpaid amount of Loans set forth therein shall be
presumed to be the principal balance hereof, except for
manifest error.
(c) Each request for a Loan shall be subject to the
satisfaction of the following conditions precedent:
(i) The Borrower shall have given the Bank notice of
such request, setting forth the amount of the Loan requested and the date
thereof. Such notice may be written or oral and shall be sufficient if received
by 1 p.m. of the date the Loan is requested. If the request is oral it shall be
thereafter confirmed in writing by the Borrower by telecopier to the Bank.
(ii) No Event of Default, or event which would be an
Event of Default but for the giving of notice or the passage of time or both,
has occurred and is continuing; and all of the representations and warranties
made by the Borrower in Section 4 hereof shall be true and correct on and as of
the date of such request as if made on and as of such date.
(d) The outstanding principal balance of the Loans
shall at no time exceed the lesser of the Commitment or the
aggregate amount available under the following Borrowing Base
(as such amount shall fluctuate from time to time):
(i) an amount equal to eighty (80%) percent of the
Borrower's "Eligible Accounts Receivable", which shall be defined as all
accounts of the Borrower, less (w) uncollectible accounts; (x) accounts
remaining unpaid after a date which is ninety (90) days after invoice date (120
days in the case of accounts due from hospitals); (y) accounts of account
debtors of which at least twenty-five (25%) percent of the sum of such accounts
remain unpaid after a date which is 90 days after invoice date (120 days in the
case of accounts due from hospitals); and (z) maximum discounts, rebates,
credits and allowances which may be taken by or granted to account debtors;
plus
(ii) an amount equal to fifty-five (55%) percent of
the purchase price of inventory acquired pursuant to commercial letters of
credit (each an "L/C" and collectively the "L/Cs") issued hereunder; plus
(iii) the lesser of $8,000,000, or the amount equal
to fifty-five (55%) percent of the market value of "Eligible Inventory" on
hand. Eligible Inventory shall be defined as raw materials, inventory in
transit, all finished goods and shall not include work in process, packaging
material and inventory held outside the territorial jurisdiction of the United
States of America.
(e) Sublimits under the Commitment are available to
the Borrower in an amount equal to the lesser of the
Borrowing Base or $3,000,000 each for documentary Letters of
Credit (each an "Acceptance" and collectively the
"Acceptances"). For any advance made for an L/C, the Borrower
shall pay one-eighth of one (0.125%) percent upon each of the
opening and one-quarter of one (0.25%) percent upon
negotiation of the L/C. For each Standby L/C the Borrower
shall pay a fee equal to one and one-quarter (1.25%) percent
per annum upon the issuance of the Standby L/C. For any
advance made for an Acceptance, the Borrower shall pay a fee
equal to one and one-quarter (1.25%) percent per annum upon
the issuance of the Acceptance. Each L/C shall have a maximum
tenor of one (1) year, and shall be evidenced by the Bank's
standard letter of credit agreement. Each Standby L/C shall
have a maximum tenor of one hundred eight (180) days, and
shall be evidenced by the Bank's standard letter of credit
agreement. Acceptances have a maximum tenor of one hundred
eighty (180) days and shall be evidenced by the Bank's
standard acceptance credit agreement.
(f) Notwithstanding anything to the contrary herein
contained, the amount available for direct borrowings under
the Commitment, as set forth in Subsection 1(d) hereof, shall
be reduced by any and all amounts outstanding pursuant to the
borrowing sublimit set forth in Section 1(e) hereof.
2. Commitment Fee.
As additional compensation for providing the Loans described
herein, the Borrower agrees to pay the Bank a commitment fee for the Credit
Period at the rate of one-quarter of one (0.25%) percent per annum on the
average daily unused portion of the Commitment. Such commitment fee shall be
payable quarterly, on the first day of each December, February, May and August
during the Credit Period commencing on December 1, 1997.
3. Conditions Precedent.
Prior to the first Loan, the Borrower shall satisfy the
following conditions precedent including delivery to the Bank of the following:
(a) A favorable written opinion, dated of even date
herewith, of the Borrower's counsel (which counsel must be satisfactory to the
Bank) with respect to the matters set forth in Section 4 hereof with the
exception of Subsection 4(g);
(b) A copy of the resolutions passed by the
Borrower's Board of Directors certified by its Secretary as being in full force
and effect on the date of this Agreement, authorizing the Loan herein provided
for, the execution, delivery and performance of this Note and any other
instrument or agreement required hereunder and containing a certificate of
incumbency as to the person or persons authorized to execute and deliver the
same;
(c) Evidence that the Bank has been named as loss
payee on the insurance maintained by the Borrower on its inventory. Said
insurance policy shall be issued by a financially sound and reputable insurance
company reasonably satisfactory to the Bank;
(d) The Bank shall have received at the closing the
sums of (i) Fifteen Thousand ($15,000) Dollars which represents the fee due
from the Borrower for the increase represented hereby, and Twelve Thousand Five
Hundred ($12,500) Dollars which represents the fee due from the Borrower for
the extension represented hereby.
4. Representations and Warranties. The Borrower hereby represents and
warrants to the Bank that:
(a) It is duly organized, validly existing and in
good standing under the laws of the state of its incorporation and is qualified
to do business and in good standing under the laws of each state where its
failure to so qualify would have a material adverse effect on its business,
operations and properties.
(b) This Note has been duly authorized, executed and
delivered and constitutes the valid and legally binding obligation of the
Borrower, enforceable in accordance with its terms.
(c) The execution and delivery of this Note and
performance hereunder will not violate any provision of law.
(d) There are no actions or proceedings pending
before any court or governmental authority, bureau or agency with respect to or
threatened against or affecting the Borrower, or any Subsidiary, which if
determined adversely would have a material adverse effect on the business, the
assets or the financial condition of the Borrower or any Subsidiary. As used
herein, the term "Subsidiary" or "Subsidiaries" means any corporation or
corporations of which the Borrower alone, or the Borrower and/or one or more of
its Subsidiaries, owns, directly or indirectly, at least a majority of the
securities having ordinary voting power for the election of directors.
(e) Neither the Borrower nor any Subsidiary is in
default under, or in violation of, any term of any agreement, ordinance,
resolution, decree, bond, note, indenture, or judgment to which it is a party
or by which it is bound, or by which any of the properties or assets owned by
it or used in the conduct of its business is affected, which default or
violation may have a materially adverse effect on the business, the assets or
the financial condition of the Borrower or any Subsidiary. The operations of
the Borrower and each Subsidiary comply in all respects with all laws,
ordinances and regulations applicable to them.
(f) Neither the Borrower nor any Subsidiary is a
party to or bound by, nor are any of the properties or assets owned by it or
used in the conduct of its business affected by any agreement, ordinance,
resolution, decree, bond, note, indenture, order or judgment, or subject to any
charter or other corporate restriction, which materially and adversely affects
the business assets or financial condition of the Borrower or any Subsidiary.
(g) All balance sheets, profit and loss statements
and other financial information heretofore furnished to the Bank are true,
correct and complete and present fairly the financial condition of the Borrower
and its Subsidiaries as at the dates thereof and for the periods covered
thereby, including contingent liabilities of every kind which financial
condition has not materially adversely changed since the date of the most
recently dated balance sheet of the Borrower heretofore furnished to the Bank.
(h) No part of the proceeds of the Loans will be
used directly or indirectly for the purpose of purchasing or carrying, or for
payment in full or in part of indebtedness which was incurred for the purpose
of purchasing or carrying, any margin stock as such term is defined in Sec.
221.2 of Regulation U of the Board of Governors of the Federal Reserve System.
(i) The Borrower and its Subsidiaries are in
compliance in all material respects with the Employee Retirement Income
Security Act of 1974 ("ERISA") and all rules and regulations thereunder.
Neither the Borrower nor any of its Subsidiaries has any unfunded vested
liability under any type of plan described in Section 4021(a) of ERISA ("Plan")
and no reportable event, as set forth in Section 4043(b) of ERISA, has occurred
or is continuing with respect to any Plan.
5. Financial Statements. The Borrower shall deliver to the Bank:
(a) Annually, as soon as available, but in any event within
120 days after the last day of each of its fiscal years, the consolidated and
consolidating balance sheet of the Borrower, as at such last day of the fiscal
year, and consolidated and consolidating statements of income, retained
earnings and cash flows for such fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, in reasonable
detail. The consolidated statements delivered pursuant to this Section 5(a)
shall be certified without qualification by a firm of independent certified
public accountants satisfactory to the Bank and the consolidating statements
shall be internally prepared by the Borrower.
(b) As soon as available, but in any event within 60 days
after the end of each of its fiscal quarters, the 10-Q report filed or to be
filed with the Securities and Exchange Commission, and the consolidated and
consolidating balance sheet of the Borrower as at the last day of such fiscal
quarter, and consolidated and consolidating statements of income, retained
earnings and cash flows for the portion of the fiscal year through such date,
all in reasonable detail, each such statement to be prepared in accordance with
generally accepted accounting principles consistently applied. The consolidated
statements and consolidating statements referred to herein shall be internally
prepared by the Borrower.
(c) Promptly after a written request therefor, such other
financial data or information as the Bank may reasonably request from time to
time.
(d) At the same time as it delivers the financial statements
required under the provisions of Subsections 5(a) and 5(b), a certificate
signed by the president and principal accounting officer of the Borrower, to
the effect that no Event of Default hereunder or under any
other agreement to which the Borrower or any Subsidiary is a party or by which
it is bound, or by which any of its properties or assets may be affected, and no
event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, has occurred.
6. Affirmative Covenants. The Borrower will, and with respect to the
agreements set forth in Subsections 6(a) through 6(f) hereof, cause each
Subsidiary to:
(a) with respect to its properties, assets and business,
maintain insurance against loss or damage, to the extent that property, assets
and businesses of similar character are usually so insured by companies
similarly situated and operating like properties, assets or businesses with
responsible insurance companies satisfactory to the Bank; such insurance to be
endorsed to name the Bank as loss payee;
(b) duly pay and discharge all taxes or other claims which
might become a lien upon any of its property except to the extent that such
items are being in good faith appropriately contested;
(c) maintain, preserve and keeps its properties in good
repair, working order and condition, and make all reasonable repairs,
replacements, additions, betterments and improvements thereto;
(d) conducts its business in substantially the same manner
and in substantially the same fields as such business is now carried on and
conducted;
(e) comply with all statutes, rules and regulations and
maintain its corporate existence;
(f) permit the Bank to make or cause to be made annual field
audits of any books, records and papers of the Borrower at the Borrower's sole
cost and expense at times reasonably required by the Bank, and to permit the
Bank to make such other audits of its books, records and papers at the Bank's
expense at all such reasonable times and as often as the Bank may require;
(g) use the proceeds of the Loans for the following purposes
and for no other purpose: To finance inventory purchases by and accounts
receivable of the Borrower, and to refinance any amounts outstanding under an
existing line of credit provided to the Borrower from the Bank;
(h) deliver to the Bank, as soon as available, but in any
event within 60 days after the end of each of its fiscal quarters, a
certificate signed by the president and principal accounting officer certifying
the value of the Borrower's Eligible Accounts Receivable and Inventory;
(i) deliver to the Bank, as soon as available, but in any
event within 15 days after the end of each calendar month, borrowing base
certificates, accounts receivable aging and inventory schedules all in form and
substance satisfactory to the Bank;
(j) maintain a minimum Capital Base ("Capital Base") (to be
equal to the sum of capital surplus, earned surplus and capital stock minus
deferred charges, intangibles, treasury
stock, officer and employee loans receivable, and joint venture investments and
advances and assets held for disposition) of not less than the following:
Period Minimum Capital Base
------ --------------------
Through March 31, 1998 $10,000,000
April 1, 1998 through March 31, 1999 $10,750,000
April 1, 1999 through March 31, 2000 $11,500,000
April 1, 2000 through Maturity $12,250,000
(k) maintain a Current Ratio, the ratio of current assets to
current liabilities (current liabilities shall include all borrowings
hereunder) of not less than 1.6:1 at all times during the term hereof;
(m) maintain a maximum ratio of total unsubordinated
liabilities ("TUL") to Capital Base of not greater than the following:
Period Maximum TUL to Capital Base
------ ---------------------------
Through March 31, 1998 1.7:1
April 1, 1998 through March 31, 1999 1.55:1
April 1, 1997 through Maturity 1.5:1
(n) maintain at each fiscal year end a ratio of Earnings
Before Interest and Taxes for each fiscal year to interest expenditure for such
fiscal year of not less than 1.25:1.
(o) immediately give notice to the Bank that an Event of
Default has occurred or that an event which, with the giving of notice or lapse
of time, or both, would constitute an Event of Default, has occurred and
specifying the action which the Borrower has taken and proposes to take with
respect thereto.
7. Negative Covenants. The Borrower will not, and will not permit any
Subsidiary to:
(a) incur, or permit to exist, any indebtedness for borrowed
money, exclusive of borrowings hereunder and of any other loans made by the
Bank in its discretion to the Borrower or any Subsidiary, other than existing
loans for the purchase of equipment and existing indebtedness disclosed on the
Borrower's balance sheet as of the date hereof, and future purchase money loans
for the purchase of equipment.
(b) enter into any merger or consolidation or liquidation,
wind up or dissolve itself or sell, transfer or lease or otherwise dispose of
all or any substantial part of its assets (other than in the ordinary course of
business) or acquire by purchase or otherwise the business or assets of, or
stock of, another corporation except to the extent permitted by paragraph 7(g)
below; except that any Subsidiary may merge into or consolidate with any other
Subsidiary which is wholly-owned by the Borrower, and any Subsidiary which is
wholly-owned by the Borrower may merge with or consolidate into the Borrower
provided that the Borrower is the surviving corporation;
(c) lend or advance money, credit or property to or invest in
(by capital contribution, loan, purchase or otherwise) any firm, corporation,
or other person other than existing loans made prior to March 31, 1992 or
officer loans in the maximum amount of Two Hundred Fifty Thousand ($250,000)
Dollars per officer and Five Hundred Thousand ($500,000) Dollars in the
aggregate, except investments in United States Government obligations and
certificates of deposit of any banking institution with combined capital and
surplus of at least Two Hundred Thousand ($200,000) Dollars;
(d) create, assume or permit to exist, any mortgage, pledge,
lien or encumbrance of or upon or security interest in, any of its property or
assets now owned or hereafter acquired except (i) mortgages, liens, pledges and
security interests in favor of the Bank; (ii) other liens, charges and
encumbrances incidental to the conduct of its business or the ownership of its
property and assets which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit and which do not materially impair
the use thereof in the operation of its business; (iii) liens for taxes or
other governmental charges which are not delinquent or which are being
contested in good faith and for which a reserve shall have been established in
accordance with generally accepted accounting principles; and (iv) mortgage
liens existing as of the date hereof;
(e) assume, endorse, be or become liable for or guarantee the
obligations of any person except by the endorsement of negotiable instruments
for deposit or collection in the ordinary course of business;
(f) declare or pay any dividends on its capital stock (other
than dividends payable solely in shares of its own common stock), or purchase,
redeem, retire or otherwise acquire any of its capital stock at any time
outstanding, except that any Subsidiary wholly-owned by the Borrower may
declare and pay dividends to the Borrower;
(g) expend in excess of Two Million ($2,000,000) Dollars per
fiscal year, or Five Million ($5,000,000) Dollars in the aggregate during the
term hereof, for the acquisition of any other company or entity, or the assets
thereof (provided, however, that no such acquisition shall be permitted unless
the Borrower shall have demonstrated to the Bank on a pro forma basis that the
Borrower shall remain in full compliance with all requirements and covenants
herein after said acquisition).
(h) expend annual capital expenditures in excess of Six
Million Five Hundred Thousand ($6,500,000) Dollars during the fiscal year
ending March 31, 1998 and One Million Five Hundred Thousand ($1,500,000)
Dollars thereafter (capital expenditures under the aforementioned maximum
levels can be applied to
the next two fiscal years).
(i) (i) terminate any Plan so as to result in any material
liability to The Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (the "PBGC"), (ii) engage in or permit any
person to engage in any "prohibited transaction" (as defined in Section 406 or
ERISA or Section 4975 of the Internal Revenue Code of 1954, as amended)
involving any Plan which would subject the Borrower to any material tax,
penalty or other liability, (iii) incur or suffer to exist any material
"accumulated funding deficiency" (as defined in Section 302 of ERISA), whether
or not waived, involving any Plan, or (iv) allow or suffer to exist any event
or condition which presents a material risk of incurring a material liability
to the PBGC by reason of termination of any Plan.
8. Collateral Security. As collateral security for the payment of any
and all sums owing under this Note and all other obligations, direct or
contingent, joint, several or independent, of the Borrower and of any
Subsidiary and each endorser or guarantor hereof now or hereafter existing, due
to or to become due to, or held, or to be held by, the Bank, whether created
directly or acquired by assignment or otherwise (all of such obligations,
including this Note, are hereinafter called the "Obligations"), the Borrower
hereby grants to the Bank a first priority lien on and security interest in all
of the Borrower's inventory and accounts receivable and any and all deposits or
other sums at any time credited by or due from the Bank to the Borrower,
whether in regular or special depository accounts or otherwise, and any and all
monies, securities and other property of the Borrower, and the proceeds
thereof, now or hereafter held or received by or in transit to the Bank from or
for the Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and any such deposits, sums, monies, securities and
other property may at any time after the occurrence of any Event of Default be
set-off, appropriated and applied by the Bank against any of the Obligations
whether or not such Obligations are then due or are secured by any collateral,
or, if they are so secured, whether or not such collateral held by the Bank is
considered to be adequate and with respect to all collateral security the Bank
shall have all the rights and remedies available to it under the Uniform
Commercial Code of New York and other applicable law.
9. Events of Default. If any one or more of the following events
("Events of Default") shall occur, the entire unpaid balance of the principal
of and interest on the Obligations shall immediately become due and payable:
(a) Failure to make any payment of principal or interest in
respect of any of the Obligations when due; or,
(b) Failure to observe any of the covenants in Sections 6 and
7 hereof; or,
(c) Failure by the Borrower to perform any other term,
condition or covenant of this Note or any other agreement, instrument or
document delivered pursuant hereto or in connection herewith or therewith,
which shall remain unremedied for a period of 15 days after notice thereof
shall have been given by the Bank to the Borrower; or,
(d) (i) Failure to perform any term, condition or covenant of
any bond, note, debenture, loan agreement, indenture, guaranty, trust
agreement, mortgage or other instrument or agreement in connection with the
borrowing of money or the obtaining of advances or credit to which the Borrower
or any Subsidiary is a party or by which it is bound, or by which any of its
properties or assets may be affected (a "Debt Instrument"), so that, as a
result of any such failure to perform (regardless of the satisfaction of any
requirement for the giving of appropriate notice thereof or the lapse of time),
the indebtedness included therein or secured or covered thereby may be declared
due and payable prior to the date on which such indebtedness would otherwise
become due and payable; or,
(ii) any event or condition referred to in any Debt
Instrument shall occur or fail to occur, so that, as a result thereof
(regardless of the satisfaction of any requirement for the giving of appropriate
notice thereof or the lapse of time), the indebtedness included therein or
secured or covered thereby may be declared due and payable prior to the date on
which such indebtedness would otherwise become and payable; or,
(iii) any indebtedness included in any Debt
Instrument or secured or covered thereby is not paid when due; or
(e) Any representation or warranty made in writing to the
Bank in this Note or in connection with the making of the Loans evidenced
hereby or any certificate, statement or report made in compliance with this
Note, shall have been false in any material respect when made; or,
(f) An order for relief under the United States Bankruptcy
code as now or hereafter in effect, shall be entered against the Borrower or
any Subsidiary; or the Borrower or any Subsidiary shall become insolvent,
generally fail to pay its debts as they become due, make an assignment for the
benefit of creditors, file a petition or apply to any tribunal for the
appointment of a receiver or any trustee for its or a substantial part of its
assets, or shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation law or statute
of any jurisdiction, whether now or hereafter in effect; or if there shall have
been filed any such petition or application, or any such proceeding shall have
been commenced against it, which remains undismissed for a period of thirty
days or more; or the Borrower or any Subsidiary or endorser or guarantor hereof
by any act or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or the appointment
of a receiver of or any trustee for it or any substantial part of any of its
properties, or shall suffer any such receivership or trusteeship to continue
undischarged for a period of thirty days or more; or,
(g) Any judgment in excess of $100,000 against the Borrower
or any Subsidiary or any attachment, levy or execution against any of its
properties for any amount shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of sixty days or more; or,
(h) The Bank shall have determined, in its sole discretion,
that one or more conditions exist or events have occurred which may result in a
material adverse change in the business, properties or financial condition of
the Borrower.
10. Interest Adjustment. Notwithstanding anything to the contrary
contained in this Note, the rate of interest payable on this Note shall never
exceed the maximum rate of interest permitted under applicable law. If at any
time the rate of interest otherwise prescribed herein shall exceed such maximum
rate, and such prescribed rate is thereafter below such maximum rate, the
prescribed rate shall be increased to the maximum rate for such period of time
as is required so that the total amount of interest received by the Bank is
that which would have been received by the Bank, except for the operation of
the first sentence of this Section 10.
11. Miscellaneous.
(a) All agreements, representations and warranties made
herein shall survive the delivery of this Note. The Borrower waives trial by
jury, set-off and counterclaim of any nature or description other than
mandatory counterclaims in any litigation in any court with respect to, in
connection with, or arising out of, this Note or any instrument or document
delivered pursuant hereto or the validity, protection, interpretation,
collection or enforcement hereof.
(b) No modification or waiver of or with respect to any provision of this
Note, or consent to any departure by the Borrower from any of the
terms or conditions hereof, shall in any event be effective unless it
shall be in writing and signed by the Bank, and then such waiver or
consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Borrower in any
case shall, of itself, entitle it to any other or further notice or
demand in similar or other circumstances.
(c) Each and every right granted to the Bank hereunder or
under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of the Bank or the holder of this Note to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other further exercise thereof or the exercise of any other right.
(d) In the event that this Note is placed in the hands of an
attorney for collection by reason of any default hereunder, the Borrower agrees
to pay reasonable attorney's fees so incurred. The Borrower promises to pay all
expenses of any nature as soon as incurred whether in or out of court and
whether incurred before or after this Note shall become due at is maturity date
or otherwise and costs which the Bank may deem necessary or proper in
connection with the satisfaction of the indebtedness or the administration,
supervision, preservation, protection (including but not limited to maintenance
of adequate insurance) of or the realization upon the collateral.
(e) The Borrower hereby waives presentment, demand for
payment, protest, notice of protest, notice of dishonor, and any or all other
notices or demands except as otherwise expressly provided for herein.
(f) All accounting terms not otherwise defined in this Note
shall have the meanings ascribed thereto under generally accepted accounting
principles.
12. Notices. All notices, requests and other communications pursuant
to this Note shall be in writing, either by letter (delivered by hand or sent
by certified mail, return receipt requested) or overnight mail, addressed as
follows:
(a) if to the Borrower:
Medical Action Industries Inc.
000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Satin
Vice President and General Counsel
and, (b) if to the Bank:
European American Bank
000 Xxxxxxxx Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Vice President
Any notice, request or communication hereunder shall be deemed to have been
given when deposited in the mails, postage prepaid, or in the case of
telegraphic notice, when delivered to the telegraph company, addressed as
aforesaid. Any party may change the person or address to whom or which the
notices are to be given hereunder, but any such notice shall be effective only
when actually received by the party to whom it is addressed.
13. Governing Law. This Note and the rights and obligations of the
parties shall be construed and interpreted in accordance with the laws of the
State of New York and the Borrower consents to the jurisdiction of the courts
of New York in any action brought to enforce any rights of the Bank under this
Note.
MEDICAL ACTION INDUSTRIES INC.
By: s/ Xxxx X. Xxxxxxxxx
--------------------------------------
Xxxx X. Xxxxxxxxx, President
