INBRAND CORPORATION
AMENDED AND RESTATED LOAN AGREEMENT
Dated: as of October 1, 1996
$35,000,000.00
SOUTHTRUST BANK OF GEORGIA, N.A.
TABLE OF CONTENTS
SECTION 1. GENERAL DEFINITIONS 1
1.1. Defined Terms 1
1.2. Accounting and Other Terms 17
1.3. Certain Matters of Construction 17
SECTION 2. CREDIT FACILITIES 18
2.1. Revolver Facility 18
2.2. Termination of Credit Facility. 19
2.3. Acquisition Loan Facility 20
2.4. Share Repurchase Loan Facility 20
2.5. Letter of Credit Facility 21
2.6. All Loans to Constitute One Obligation 24
2.7. Loan Account 24
SECTION 3. INTEREST AND REPAYMENT 25
3.1. Interest, Fees and Charges 25
3.2. Payments 30
3.3. Closing Fee 31
3.4. Unused Line Fee 31
3.6. Statements of Account 32
SECTION 4. PROPERTY OF BORROWER 32
4.1. Insurance of Borrower's Property 32
4.2. Protection of Borrower's Property 32
SECTION 5. REPRESENTATIONS AND WARRANTIES 33
5.1. General Representations and Warranties 33
5.2. Reaffirmation and Survival of Representations 35
SECTION 6. COVENANTS AND CONTINUING AGREEMENTS 35
6.1. Affirmative Covenants 35
6.2. Negative Covenants 39
6.3. Specific Financial Covenants 42
SECTION 7. CONDITIONS PRECEDENT 43
7.1. Documentation 43
7.2. Other Conditions 44
SECTION 8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT 45
8.1. Events of Default 45
8.2. Acceleration of the Obligations 46
8.3. Remedies 47
8.4. Remedies Cumulative; No Waiver 48
SECTION 9. MISCELLANEOUS 48
9.1. Indemnity 48
9.2. Modification of Agreement; Sale of Interest 48
9.3. Reimbursement of Expenses 49
9.4. Indulgences Not Waivers 50
9.5. Severability 50
9.6. Successors and Assigns 50
9.7. Cumulative Effect 50
9.8. Execution in Counterparts 50
9.9. Notice 51
9.10. Lender's Consent 51
9.11. Demand Obligations 51
9.12. Time of Essence 52
9.13. Entire Agreement 52
9.14. Amendment and Restatement; No Novation 52
9.15. Payments Set Aside 52
9.16. Independence of Covenants, Representations and
Warranties 52
9.17. Governing Law; Consent to Forum 52
9.18. General Waivers by Borrower 53
9.19. Jury Trial Waiver 53
EXHIBITS
Exhibit A -- Revolving Credit Note
Exhibit B -- Compliance Certificate
Exhibit C -- Permitted Liens
Exhibit D -- Borrower's Business Locations
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT is made as of October 1, 1996,
by and between SOUTHTRUST BANK OF GEORGIA, N.A. ("Lender"), a national banking
association with an office at One Georgia Center, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000; and INBRAND CORPORATION ("Borrower"), a Georgia
corporation with its chief executive office and principal place of business at
0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000.
R E C I T A L S:
Borrower and Lenders are parties to a certain Loan Agreement, dated
December 21, 1993 (as at any time amended, the "Original Loan Agreement").
Borrower and Lender desire to amend and restate the Original Loan
Agreement so that, as so amended and restated, it shall read as hereinafter set
forth.
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and in
consideration of the premises, Borrower and Lender hereby agree to amend and
restate the Original Loan Agreement so that, as hereby amended and restated, it
shall read as follows:
SECTION 1
GENERAL DEFINITIONS
1.1. Defined Terms. When used herein, the following terms shall have the
following meanings (terms defined in the singular to have the same meaning when
used in the plural and vice versa):
Account - any right of Borrower to payment for goods sold or
leased or for services rendered which is not evidenced by an Instrument
or Chattel Paper, whether or not earned by performance.
Account Debtor - any Person who is or may become obligated
under or on account of an Account.
Acquisition Factor - for purposes of determining the Inbrand
France EBITDA in connection with Borrower's Consolidated EBITDA, (i)
for the 1996 fourth fiscal quarter, Inbrand France's EBITDA shall be
deemed to be Inbrand France's EBITDA for such quarter, times (x) four
(4); (ii) for the first three fiscal quarters of Borrower's 1997 fiscal
year, Inbrand France's EBITDA shall be deemed to be Inbrand France's
EBITDA for such fiscal quarter plus Inbrand France's EBITDA for all
preceding 1997 fiscal quarter(s), plus Inbrand France's EBITDA for the
1996 fiscal fourth quarter, times (x) the appropriate annualizing
multiple; and (iii) commencing with the last fiscal quarter of 1997 and
with respect to each fiscal quarter thereafter, Inbrand France's EBITDA
shall be determined with reference to the four quarterly periods then
ending.
Acquisition Loan Funding Conditions - shall mean each of the
following:
(a) no Default or Event of Default shall exist;
(b) the requested Acquisition Loan shall be for a
Qualified Acquisition Loan Purpose;
(c) on a Consolidated pro-forma basis, after giving
effect to all acquisition and consolidating adjustments in
accordance with GAAP, as to Borrower, its Consolidated
Subsidiaries and the proposed acquisition target, (i) the
Consolidated entities would have complied with the provisions
of Section 6.3 of this Agreement for the 12 month period
preceding the proposed acquisition date (with such pro-formas
to assume the completion of the proposed acquisition as of the
first day of such 12 month period), (ii) after giving effect
to the proposed acquisition, the Consolidated opening balance
sheet of Borrower will show Borrower to be in compliance with
the provisions of 6.3 of this Agreement, and (iii) for six (6)
months after the funding of any Acquisition Loan hereunder,
Borrower will have available additional Loans under Section
2.1 of this Agreement of not less than (i) of $5,000,000 for
working capital purposes for so long as the Obligations remain
unsecured or (ii) $3,000,000 for so long as the Obligations
are secured;
(d) the proposed acquisition shall comply with all
Applicable Laws, including without limitation, federal and
state anti-trust, fraudulent conveyance, licensure, securities
or other laws, and all applicable state bulk transfer laws;
(e) all real and personal Property proposed to be
acquired shall be free and clear of all Liens or other
encumbrances except as my be specifically consented to by
Lender in writing; and
(f) Lender and its counsel shall have reviewed all
material documents evidencing or securing the proposed
acquisition and shall have been satisfied as to the form and
manner of the proposed acquisition, Borrower shall have
collaterally assigned its rights thereunder to Lender (in form
satisfactory to Lender) and the seller(s) with respect thereto
shall have consented to such collateral assignment.
Acquisition Loan - a loan made by Lender as provided in
Section 2.3 of this Agreement.
Adjusted LIBO Rate - with respect to any LIBOR Loan for any
Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the quotient of (a) the
LIBO Rate in effect for such Interest Period divided by (b) a
percentage (expressed as a decimal) equal to 100% minus Statutory
Reserves.
Adjusted Net Earnings - with respect to any fiscal period,
means the net earnings after provision for income taxes for such fiscal
period of Borrower, all as reflected on the financial statement of
Borrower supplied to Lender pursuant to Section 6.1(J) hereof, but
excluding: (i) any gain arising from any write-up of assets; (ii)
earnings of any Subsidiary accrued prior to the date it became a
Subsidiary; (iii) earnings of any corporation, substantially all the
assets of which have been acquired in any manner by Borrower, realized
by such corporation prior to the date of such acquisition; (iv) net
earnings of any business entity (other than a Subsidiary) in which
Borrower has an ownership interest unless such net earnings shall have
actually been received by Borrower in the form of cash distributions;
(v) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to Borrower; (vi) the
earnings of any Person to which any assets of Borrower shall have been
sold, transferred or disposed of, or into which Borrower shall have
merged, or been a party to any consolidation or other form of
reorganization, prior to the date of such transaction; and (vii) any
gain arising from the acquisition of any Securities of Borrower.
Adjusted Tangible Assets - all assets except: (i) any surplus
resulting from any write-up of assets subsequent to December 21, 1993;
(ii) patents, copyrights, trademarks, trade names, non-compete
agreements, franchises and other similar intangibles; (iii) good will,
(iv) Restricted Investments; (v) unamortized debt discount and expense;
and (vi) Accounts, notes and other receivables due from Affiliates or
employees.
Adjusted Tangible Net Worth - at any date means a sum equal
to: (i) the net book value (after deducting related depreciation,
obsolescence, amortization, valuation, and other proper reserves) at
which the Adjusted Tangible Assets of a Person would be shown on a
balance sheet at such date in accordance with GAAP, less (ii) the
amount at which such Person's liabilities (other than capital stock and
surplus) would be shown on such balance sheet in accordance with GAAP,
and including as liabilities all reserves for contingencies and other
potential liabilities.
Affiliate - a Person (other than a Subsidiary or Inbrand
Asia): (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, Borrower; (ii) which beneficially owns or holds 5% or
more of any class of the voting Securities of Borrower; or (iii) 5% or
more of the voting Securities (or in the case of a Person which is not
a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by Borrower or a Subsidiary of Borrower. For
purposes hereof, "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting Securities, by contract or otherwise.
Agreement - this Amended and Restated Loan Agreement.
Applicable Law - all laws, rules and regulations applicable to
the Person, conduct, transaction, covenant or Other Agreements in
question, including, but not limited to, all applicable common law and
equitable principles; all provisions of all applicable state and
federal constitutions, statutes, rules, regulations and order of
governmental bodies; and all orders, judgments and decrees of all
courts and arbitrators.
Applicable Margin - for each quarterly period, the rate
indicated below determined with reference to Borrower's Consolidated
Funded Debt/EBITDA Ratio as of the end of the second preceding
quarterly period (that is, by way of example, the Applicable Margin
during the third quarter of each fiscal year would be determined with
reference to the Consolidated Funded Debt/EBITDA Ratio of Borrower as
of the end of the first fiscal quarter of such year), reflected in the
financial statements of Borrower delivered to the Lender pursuant to
Section 6.1(J) for such second preceding quarter:
Applicable Applicable
Margin for Margin for
Libor Loans Base Rate Loans
100 Basis Points -0- Funded Debt/EBITDA Ratio
less than 1.0 to 1.0
150 Basis Points -0- Funded Debt/EBITDA Ratio
equal to or greater than
1.0 to 1.0 but less than
2.0 to 1.0
200 Basis Points -0- Funded Debt/EBITDA Ratio
equal to or greater than
2.0 to 1.0 but less than
3.0 to 1.0
If financial statements are not timely delivered in accordance with
Section 6.1(J) and as a result Lender is unable to determine the
Consolidated Funded Debt/EBITDA Ratio prior to the beginning of the
relevant quarter, the Applicable Margin for such quarter shall be 1%
with respect to Base Rate Loans and 300 basis points with respect to
LIBOR Loans. For purposes of determining Consolidated EBITDA at any
date under this definition Inbrand France's EBITDA shall be calculated
in accordance with the Acquisition Factor.
Average Monthly Loan Balance - the amount obtained by adding
the unpaid balance of Loans owing by Borrower to Lender at the end of
each day for each day during the month in question and by dividing such
sum by the number of days in such month.
Base Rate - the rate of interest announced or quoted by Lender
from time to time as its base rate, whether or not Lender actually
charges such rate and whether or not such rate is the lowest rate
charged by Lender; and if the base rate is discontinued by Lender as a
standard, a comparable reference rate designated by Lender as a
substitute therefor shall be the Base Rate.
Base Rate Loan - each Loan bearing interest based on the Base
Rate as provided herein.
Borrowing - the incurrence of Loans of a single Type made by
Lender on a single date and having, in the case of LIBOR Loans, a
single Interest Period (except as otherwise provided in Sections 3.1(D)
and (E)) or the continuation or conversion of an existing Borrowing or
Borrowings in whole.
Board of Governors - the Board of Governors of the Federal
Reserve Board of the United States Federal Reserve System.
Business Day - any day that is not a Saturday, Sunday or a
legal holiday on which banks are authorized or required to be closed in
Birmingham, Alabama.
Capital Expenditures - expenditures made and liabilities
incurred for the acquisition (including by way of Capital Leases) of
any fixed assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than one year,
including the direct or indirect acquisition of such assets by way of
increased product or service charges, offset items or otherwise.
Capital Lease - any lease of Property which in accordance with
GAAP would be capitalized on the lessee's balance sheet or for which
the amount of the asset or liability thereunder, if so capitalized,
should be disclosed in a note to such balance sheet.
Chattel Paper - shall have the meaning ascribed to "chattel
paper" under the Code.
Closing Date - the date on which all of the conditions
precedent in Section 7 are satisfied and the initial Revolver Loan is
made hereunder.
Code - the Uniform Commercial Code as adopted and in force in
the State of Georgia.
Consolidated - the consolidation in accordance with GAAP of
the accounts or other items as to which such term applies.
Consolidated Subsidiaries - Inbrand Europe, B.V., and Hygieia
Healthcare Holdings Limited, and their respective Subsidiaries.
Commitment - shall have the meaning ascribed to it in Section
2.1 hereof.
Controlled Disbursement Account - as to Borrower, the account
maintained with Lender for the purpose of disbursing Revolver Loan
proceeds pursuant to Section 2.1 hereof.
Credit Facility - collectively, the credit facilities
established by Lender in favor of Borrower pursuant to Section 2
hereof.
Current Assets - at any date, the amount at which all of the
current assets of Borrower would be properly classified as current
assets on a balance sheet at such date in accordance with GAAP.
Current Liabilities - at any date, the amount at which all of
the current liabilities of Borrower would be properly classified as
current liabilities on a balance sheet at such date in accordance with
GAAP, excluding, to the extent treated as Current Liabilities under
GAAP, the Obligations.
Current Ratio - at any date, the ratio of Current Assets to
Current Liabilities.
Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an
Event of Default.
Default Rate - as defined in Section 3.1 of this Agreement.
Document - shall have the meaning ascribed to "document" under
the Code.
Dollars - and the sign "$" shall refer to currency of the
United States of America.
Dollar Equivalent - with respect to any monetary amount in any
foreign currency at any date for the determination thereof, the amount
of Dollars obtained by converting such foreign currency into Dollars at
the spot rate for the purchase of Dollars with such foreign currency as
quoted by a Lender at approximately 11:00 a.m. (Atlanta, Georgia time)
on the date of determination thereof.
EBITDA - for any fiscal period of Borrower, an amount equal to
Borrower's Adjusted Net Earnings for such fiscal period, plus, to the
extent deducted in computing such net income (without duplication) the
sum of: (a) Interest Expense, (b) all federal, state, local and foreign
income taxes, (c) depreciation and amortization expense, (d) any
extraordinary, unusual or non-recurring gains or losses or charges or
losses or charges or gains or losses, all as determined in accordance
with GAAP.
Environmental Laws - all federal, state and local laws, rules,
regulations, ordinances, programs, permits, guidances, orders and
consent decrees relating to pollution, toxic waste or other
environmental matters, including, without limitation, the Comprehensive
Environmental Response, Conservation and Recovery Act and the Georgia
Hazardous Waste Management Act.
Environmental Liens - Liens in favor of a governmental entity
arising under or in connection with any Environmental Law.
Equipment - all machinery, apparatus, equipment, fittings,
furniture, fixtures, motor vehicles and other tangible personal
Property (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower or in which Borrower has an
interest, whether now owned or hereafter acquired by Borrower and
wherever located, and all parts, accessories and special tools and all
increases and accessions thereto and substitutions and replacements
therefor.
ERISA - the Employee Retirement Income Security Act of 1974,
and all rules and regulations from time to time promulgated thereunder.
Eurocurrency Liabilities - shall have the meaning ascribed
thereto in Regulation D issued by the Board of Governors.
Event of Default - as defined in Section 8.1 of this
Agreement.
Facility Amount - $35,000,000, as amended from time to time.
FASB-52 - Financial Accounting Standards Board Statement
No. 52, as in effect at any time, specifying applicable accounting
principles with respect to translation of foreign currencies.
Fixed Charge Coverage Ratio - shall mean, at any date of
determination thereof, the ratio of (a)(i) Adjusted Net Earnings plus
depreciation, amortization expense and Interest Expense for the period
of four (4) consecutive fiscal quarters ending on such date of
determination, plus (ii) all payments made by Borrower in respect to
operating leases for such period, to (b) the sum of (i) Interest
Expense for such period plus (ii) all payments made on operating leases
for such period, plus (iii) regularly scheduled principal payments on
Funded Debt due during such period.
Funded Debt - shall mean, collectively, (a) the aggregate
principal amount of Indebtedness for borrowed money which would, in
accordance with GAAP, be classified as long-term debt, together with
the current maturities thereof; (b) all Indebtedness outstanding under
the Notes, notwithstanding that any such Indebtedness is created within
one year of the expiration of such agreement; and (c) all Capital
Leases.
Funded Debt/EBITDA Ratio - shall mean, at any date of
determination thereof, the ratio of Funded Debt to EBITDA.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time. The effects of foreign
currency translation adjustments shall be made in accordance with
FASB-52.
General Intangibles - all general intangibles of Borrower,
whether now owned or hereafter created or acquired by Borrower,
including, without limitation, all choses in action, causes of action,
corporate or other business records, deposit accounts, inventions,
blueprints, designs, patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, goodwill, brand
names, copyrights, registrations, licenses, franchises, customer lists,
tax refund claims, computer programs, operational manuals, all claims
under guaranties, security interests or other security held by or
granted to Borrower to secure payment of any of the Accounts by an
Account Debtor, all rights to indemnification and all other intangible
property of every kind and nature (other than Accounts).
Holdings - Inbrand Holdings Limited, a private company
organized under the laws of England.
Inbrand Asia - Inbrand Asia PTE, a corporation organized under
the laws of Singapore, the capital stock of which is owned 40% by
Borrower.
Inbrand France - Inbrand France S.A., a societe anonyme
organized under the laws of France, the capital stock of which is owned
100% by Inbrand Europe B.V.
Indebtedness - as applied to a Person means, without
duplication (i) all items which in accordance with GAAP would be
included in determining total liabilities as shown on the liability
side of a balance sheet of such Person as at the date as of which
Indebtedness is to be determined, including, without limitation,
capitalized lease obligations, (ii) all obligations of other Persons
which such Person has guaranteed and (iii) in the case of Borrower
(without duplication), the Obligations.
Instrument - shall have the meaning ascribed to "instrument"
under the Code.
Interest - shall have the meaning ascribed to it in Section
3.2 of this Agreement.
Interest Expense - for any period, total interest expense,
whether paid, accrued or capitalized (including the interest component
of obligations under Capital Leases), of Borrower, including, but not
limited to, all origination and other fees, all amortization of
original issue discount and the net amount payable under any interest
rate swap, cap or collar or similar agreement between Borrower and any
person, all as calculated on a consolidated basis in accordance with
GAAP.
Interest Period - as defined in Section 3.1(C) hereof.
Inventory - all of Borrower's inventory, whether now owned or
hereafter acquired by Borrower and wherever located, including, but not
limited to, all goods intended for sale or lease by Borrower or to be
furnished under contracts of service; all work in process; and all raw
materials and other materials and supplies of every nature and
description used or which might be used in connection with the
manufacture, printing, packing, shipping, advertising, selling, leasing
or furnishing of such goods or otherwise used or consumed in Borrower's
business.
Issuer - SouthTrust Bank of Alabama, National Association, a
national banking association.
LC Application - a written application to Issuer, in the form
approved by Issuer and duly executed by Borrower for the issuance of a
Letter of Credit.
LC Conditions - the following conditions, the satisfaction of
each of which is required before Lender shall be obligated to submit to
Issuer any LC Application in connection with a request for the issuance
of a Letter of Credit: (i) no Default or Event of Default exists; and
(ii) after giving effect to the issuance of the requested Letter of
Credit and each Letter of Credit for which an LC Application has been
executed by Borrower, the LC Obligations would not exceed $7,500,000.
LC Documents - any and all agreements, instruments and
documents (other than an LC Application) required by Issuer or Lender
to be executed by Borrower or any other Person and delivered to Issuer
and Lender in connection with the application for or issuance of a
Letter of Credit.
LC Obligations - on any date of determination thereof, an
aggregate Dollar amount equal to (i) all Reimbursement Obligations,
plus (ii) the aggregate undrawn amount of all Letters of Credit then
outstanding or to be issued by Issuer under an LC Application
theretofore submitted to Issuer.
LC Request - Borrower's delivery to Lender of a duly executed
LC Application for the issuance of a Letter of Credit by Issuer, which
LC Application shall specify the identity and address of the intended
beneficiary of the requested Letter of Credit, the purpose for issuance
of the requested Letter of Credit, the proposed amount and expiry date
of the requested Letter of Credit, the conditions to payment under the
requested Letter of Credit, whether the requested Letter of Credit may
be drawn upon in a single or multiple draws.
Letter of Credit - a standby letter of credit at any time
issued by Issuer for the account of Borrower.
Leverage Ratio - at any date, the ratio of Borrower's total
Indebtedness to Adjusted Tangible Net Worth.
LIBO Rate - the offered rate (rounded upwards, if necessary,
to the next 1/16 of 1%) as determined by Lender for Dollar deposits in
an amount approximately equal in principal amount to the LIBOR Loan for
which the LIBO Rate is being determined and for a maturity comparable
to the Interest Period for which such LIBO Rate will apply which rate
appears on Telerate Page 3750 (or, if such Telerate Page 3750 is not
available, as published by a comparable service selected by Lender) at
approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period.
LIBOR Loan - each Revolver Loan, Acquisition Loan or Share
Repurchase Loan bearing interest based on the Adjusted LIBO Rate as
provided herein.
Lien - any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract,
and including, but not limited to, the security interest, security
title or lien arising from a security agreement, mortgage, deed of
trust, deed to secure debt, encumbrance, pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security
purposes.
Loan Account - the loan account established on the books of
Lender pursuant to Section 2.7 hereof and in which Lender will record
all Loans, payments made on such Loans and other appropriate debits and
credits as provided by this Agreement.
Loans - all loans and advances made by Lender pursuant to this
Agreement, including, without limitation, all Revolver Loans, all
Acquisition Loans, all Share Repurchase Loans, all payments made by
Lender to a beneficiary under any Letter of Credit and all payments
made by Lender to Issuer pursuant to Section 2.5(A)(iii) of this
Agreement.
Margin Stock - as defined in Regulation U.
Material Adverse Effect - the effect of any event or condition
which, alone or when taken together with other events or conditions
occurring or existing concurrently therewith, (a) has or may be
reasonably expected to have a material adverse effect upon the
business, operations, Properties, condition (financial or otherwise) or
business prospects of Borrower or any Subsidiary, or the industry in
which Borrower or any Subsidiary operates; (b) has or may be reasonably
expected to have any material adverse effect whatsoever upon the
validity or enforceability of this Agreement or any of the Other
Agreements; or (c) materially impairs the ability of Borrower to
perform its Obligations under this Agreement, any of the Other
Agreements or of Lender to enforce or collect the Obligations in
accordance with the Loan Agreement and Applicable Law.
Maximum Rate - shall have the meaning ascribed to it in
Section 3.2 of this Agreement.
Note - the Revolving Credit Note to be executed by Borrower on
or about the Closing Date in favor of Lender to evidence the Revolver
Loans, the Acquisition Loans, the Share Repurchase Loans and the
Reimbursement Obligations, which note shall be in the form of Exhibit A
attached hereto.
Obligations - all indebtedness, liabilities and obligations
owing, arising, due or payable from Borrower to Lender of every kind or
nature, whether absolute or contingent, due or to become due, joint or
several, liquidated or unliquidated, matured or unmatured, primary or
secondary, now existing or hereafter incurred, purchase money or
nonpurchase money, or arising under this Agreement, any of the Other
Agreements or otherwise, and regardless of the form or purpose of such
indebtedness, liabilities or obligations, including, without
limitation, all liabilities of Borrower to Lender under any indemnity,
reimbursement, letter of credit, guaranty, deposit or other agreement
heretofore or hereafter executed by Borrower with or in favor of Lender
and all overdrafts. The term includes, without limitation, all
interest, charges, expenses, attorneys' fees and other sums chargeable
to Borrower under this Agreement or any of the Other Agreements and all
obligations Borrower may have (under contract or Applicable Law) to
reimburse Lender in connection with any letter of credit or guaranty
issued by Lender for Borrower's benefit.
Original Term - as defined in Section 2.2 of this Agreement.
Other Agreements - any and all agreements, instruments and
documents heretofore, now or hereafter executed by Borrower in favor of
or delivered to Lender in respect to the transactions contemplated by
this Agreement, including, without limitation, the Note.
Overadvance - as defined in Section 2.1 hereof.
Overadvance Condition - at any date, a condition such that the
principal amount of the Revolver Loans, Acquisition Loans, Share
Repurchase Loans and LC Obligations outstanding on such date exceeds
the Commitment on such date.
Participating Lender - shall mean each Person who shall be
granted the right by Lender to participate in any of the Loans
described in this Agreement and who shall have entered into a
participation agreement in form and substance satisfactory to Lender.
Permitted Liens - any Lien of a kind specified in
subparagraphs (i) through (xii) of Section 6.2(E) of this Agreement.
Permitted Purchase Money Indebtedness - Purchase Money
Indebtedness of Borrower incurred after the date hereof which is
secured by a Purchase Money Lien and which, when aggregated with the
principal amount of all other Obligations of Borrower at the time
outstanding does not exceed $1,000,000 for any fiscal year of Borrower.
For the purposes of this definition, the principal amount of any
Purchase Money Indebtedness consisting of Capital Leases shall be
computed as a Capital Lease obligation.
Person - an individual, partnership, corporation, joint
venture, joint stock company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
Plan - an employee benefit plan now or hereafter maintained
for employees of Borrower that is covered by Title IV of ERISA.
Prohibited Transaction - any transaction set forth in Section
406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time.
Property - any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
Purchase Money Lien - a Lien upon fixed assets granted by
Borrower to secure Indebtedness incurred by Borrower to purchase such
fixed assets.
Qualified Acquisition Purposes - with respect to any proposed
acquisition candidate ("Target"), the Target shall be in the same or
similar businesses to those currently engaged in by Borrower.
Regulation U - Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
to all or a portion thereof establishing margin requirements.
Reimbursement Obligations - all unpaid reimbursement
obligations owing by Borrower to Issuer in connection with Issuer's
honor of payment under any Letter of Credit.
Reportable Event - any of the events set forth in Section
4043(b) of ERISA.
Restricted Investment-shall mean any investment except:(A)
investments, loans and advances by Borrower or any Subsidiary in and
to Borrower or any Subsidiary, including any investment in a Person
which, after giving affect to such investment, will become a
subsidiary and guaranties of obligations of Borrower or any
Subsidiary; (B) investments in Property used or useful in the business
of Borrower or any subsidiary; (C) investments in commercial paper
maturing in 270 days or less from the date of issuance which at the
time of acquisition by Borrower or any Subsidiary is rated A1 or
better by Standard & Poor's Corporation or P1 or better by Xxxxx'x
Investors Services, Inc.; (D) investments in direct obligations of the
United States of America, or any agency thereof which represents the
full faith and credit of the United States of America, maturing in
twelve (12) months or less from the date of acquisition thereof, and
repurchase agreement arrangements for any such obligations, in either
case, entered into with any bank meeting the requirements of paragraph
(E) of this definition or with Salomon Brothers Inc. or other
recognized substantial brokers; (E) investments, deposits,
certificates of deposit or bankers' acceptances maturing within one
(1) year from the date of origin, issued by a bank or trust company
organized under the laws of the United States of America or any state
thereof, having capital, surplus and undivided profits aggregating at
least $100,000,000; (F) short-term deposits with the maturity of 180
days or less with commercial banks having capital, surplus and
undivided profits of not less than $100,000,000; provided, however,
that the aggregate outstanding amount of such deposit shall not exceed
$300,000 in the aggregate or $100,000 at any time in any one bank
(except for the cash management account at NationsBank, N.A., the
balance of which shall not exceed $1,000,000 at any time); (G)
investments in obligations of any state of the United States or
political subdivision thereof or in any preferred stock of any
corporation organized under the laws of any state of the United States
of America which is subject to a remarketing undertaking at intervals
not exceeding 180 days issued by any substantial broker and which, in
either the case of municipal obligations or preferred stock, is rated
A+ or A1 or better by Standard & Poor's Corporation; and (H) other
investments not defined herein which are related to Borrower's
existing lines of business and which in the aggregate do not exceed
$1,000,000.
Revolver Loan - a loan made by Lender as provided in Section
2.1 of this Agreement.
Security - shall have the same meaning as in Section 2(l)
of the Securities Act of 1933, as amended.
Shares - the common, voting stock of Borrower.
Share Repurchase Loans - as defined in Section 2.4 hereof.
Share Repurchase Loan Funding Conditions - shall mean each of
the following:
(a) no Default or Event of Default shall exist;
(b) the requested Share Repurchase Loan shall be for
the sole purpose of acquiring Shares from Persons who are not
officers or directors of Borrower or Persons related by blood
or marriage to such officers or directors;
(c) the proposed Share repurchase shall comply with
all Applicable Laws, including without limitation, all federal
and state securities laws, and Borrower shall have made or
issued all applicable filings, registrations statements,
notices and other disclosure documents in connection with such
repurchase;
(d) after giving effect to the proposed Share
repurchase, not more than 30% of the value of the assets of
Borrower shall consist of Margin Stock; and
(e) the making of any Share Repurchase Loan or the
use of the proceeds thereof would violate or be inconsistent
with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, or Lender, in its
sole discretion, determines that the proceeds of a Share
Repurchase Loan will be used by Borrower to purchase or carry
any Margin Stock in violation of Regulation U or to extend
credit for the purpose of purchasing or carrying any Margin
Stock in violation of Regulation U.
Solvent - as to any Person, such Person (i) owns Property the
fair value of which is greater than the amount required to pay all of
such Person's Indebtedness (including contingent debts), (ii) owns
Property the present fair salable value of which is greater than the
amount that will be required to pay the probable liability of such
Person on its existing Indebtedness as such becomes absolute and
matured, (iii) is able to pay all of its Indebtedness as such
Indebtedness matures, and (iv) has capital sufficient to carry on its
business and transactions and all business and transactions in which it
is about to engage.
Statutory Reserves - on any date, the percentage (expressed as
a decimal) established by the Board of Governors or any other banking
authority which is the then stated maximum rate for all reserves
(including, but not limited to, any emergency, supplemental or other
marginal reserve requirements) applicable to any member bank of the
Federal Reserve System in respect to Eurocurrency Liabilities (or any
successor category of liabilities under Regulation D issued by the
Board of Governors, as in effect from time to time). Such reserve
percentage shall include, without limitation, those imposed pursuant to
said Regulation D. The Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in such
percentage.
Subordinated Debt - Indebtedness of Borrower that is expressly
subordinated to the Obligations.
Subsidiary - any corporation of which a Person owns, directly
or indirectly through one or more intermediaries, more than 50% of the
voting Securities at the time of determination.
Type - a LIBOR Loan or a Base Rate Loan.
1.2. Accounting and Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
consistent with that applied in preparation of the financial statements referred
to in Section 6.1(J), and all financial data pursuant to the Agreement shall be
prepared in accordance with such principles consistently applied. All other
terms contained in this Agreement shall have, when the context so indicates, the
meanings provided for by the Code to the extent the same are used or defined
therein.
1.3. Certain Matters of Construction. The terms "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. The section
titles, table of contents and list of exhibits appear as a matter of convenience
only and shall not affect the interpretation of this Agreement. All references
to -statutes and related regulations shall include any amendments of same and
any successor statutes and regulations. All references to any instruments or
agreements, including, without limitation, references to this Agreement and any
of the Other Agreements, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof.
SECTION 2 CREDIT FACILITIES
2.1. Revolver Facility. (A) For so long as no Default or Event
of Default exists and during the period from the date hereof through the day
before the last day of the Original Term, Lender shall make Revolver Loans to
Borrower from time to time, up to a maximum principal amount at any time
outstanding equal to $35,000,000, minus, on any date of determination, (i) the
outstanding principal balance of the Acquisition Loans, (ii) the outstanding
principal balance of the Share Repurchase Loans and (iii) the amount of the LC
Obligations (the "Commitment"). If the unpaid balance of the Loans should exceed
the Commitment, such Loans shall nevertheless constitute Obligations that are
entitled to all of the benefits thereof. The presentation by a Borrower for
payment by Lender of any check or other item of payment drawn on the Controlled
Disbursement Account shall also be deemed irrevocably to be a request for a Loan
under Section 2.1 hereof in the amount of such check or other item of payment.
Insofar as Borrower may request and Lender may be willing in its discretion to
make Revolver Loans to Borrower at a time when the unpaid balance of Loans
exceeds, or would exceed with the making of any such Revolver Loan, the
Commitment (any such Revolver Loan or Revolver Loans being herein referred to
individually as an "Overadvance" and collectively as "Overadvances"), Lender
shall enter such Overadvances as debits in the Loan Account. All Overadvances
shall be repaid on demand. The Revolver Loans shall be used solely for
Borrower's working capital needs to the extent not inconsistent with the
provisions of this Agreement. All Revolver Loans shall be evidenced by the Note
and shall bear interest pursuant to Section 3 hereof.
(B) If Borrower shall dispose of any fixed assets (including any real
estate, machinery, plants or equipment), Borrower shall pay to Lender, as a
mandatory prepayment of the Revolver Loans, if any are then outstanding, an
amount equal to the proceeds of such sale (net of reasonable fees and expenses)
realized by Borrower from any such sale.
2.2. Termination of Credit Facility.
(A) Subject to Lender's right to cease making Loans to Borrower at any time
upon or after the occurrence of a Default or an Event of Default, the Credit
Facility shall be in effect for a period commencing on the date hereof and
ending on September 30, 1999 (the "Original Term").
(B) Upon at least thirty (30) days prior written notice to Lender, Borrower
may, at its option, terminate the Credit Facility. If termination by Borrower is
to be effective on any day other than the last day of the Original Term, then at
the effective date of any such termination, Borrower shall pay to Lender (in
addition to the then outstanding principal, accrued interest and other charges
owing under the terms of this Agreement and any of the other Loan Documents,
including prepayment premiums or penalties under any promissory note from
Borrower to Lender), as liquidated damages for the loss of the bargain and not
as a penalty, an amount equal to one percent (1.0%) of the highest Average
Monthly Loan Balance for the three (3) months immediately preceeding the
Borrower's notive of termination if termination occurs during the first
twelve-month period of the Original Term (October 1, 1996 through September 30,
1997); three quarters of one percent (.75%) of the highest Average Monthly Loan
Balance for the three (3) months immediately preceeding the Borrower's notive of
termination if termination occurs during the second twelve-month period of the
Original Term (October 1, 1997 through September 30, 1998); and one half of one
percent (.50%) of the highest Average Monthly Loan Balance for the three (3)
months immediately preceeding the Borrower's notice of termination if
termination occurs during the third twelve-month period of the Original Term
(October 1, 1998 through September 30, 1999). Notwithstanding the foregoing,
Borrower shall have no obligation to pay the liquidated damages described above
if the funds used by Borrower to repay the Obligations then outstanding are
derived solely from Borrower's internally generated cash flow from normal
business operations or from a private or public offering of the capital stock of
Borrower.
(C) Lender may immediately terminate the Credit Facility, without notice to
Borrower, upon or after the occurrence of an Event of Default.
(D) Upon the effective date of any termination of the Credit Facility, all
of the Obligations shall be forthwith due and payable and Lender may discontinue
making further Loans to Borrower. No termination (regardless of cause or
procedure) of the Credit Facility shall in any way affect or impair the powers,
obligations, duties, rights, and liabilities of Borrower or Lender in any way
relating to (i) any transaction or event occurring prior to such termination or
cancellation or (ii) any of the undertakings, agreements, covenants, warranties
or representations of Borrower contained in this Agreement or any of the Other
Agreements. All such undertakings, agreements, covenants, warranties and
representations shall survive such termination, and Lender shall retain all of
its rights and remedies under this Agreement and the Other Agreements
notwithstanding such termination or cancellation until all of the Obligations
have been paid in full, in immediately available funds.
2.3. Acquisition Loan Facility.
(A) Acquisition Loans. Lender agrees, for so long as
the Acquisition Loan Funding Conditions have been satisfied in form and
substance satisfactory to Lender, to make Acquisition Loans to Borrower
from time to time, as requested by Borrower, up to a maximum principal
amount at any time outstanding equal to $20,000,000 in the aggregate.
The proceeds of the Acquisition Loans shall be used solely for
Qualified Acquisition Purposes. At any time when the Obligations
hereunder are secured by any Property of Borrower, assets located
outside of the United States shall not be included in any
loans-to-collateral ratios as may be then applicable under the Loan
Agreement. All Acquisition Loans shall be evidenced by the Note and
shall bear interest pursuant to Section 3 hereof.
(B) Method of Borrowing Acquisition Loans. Whenever
Borrower desires to make a Borrowing under this Section 2.3, Borrower
shall give Lender prior written notice (or telephonic notice promptly
confirmed in writing) of such Borrowing (a "Notice of Acquisition
Borrowing"). Such Notice of Acquisition Borrowing shall be given prior
to 11:00 a.m. (Atlanta, Georgia time) at Lender's main office in
Atlanta, Georgia twenty (20) Business Days prior to the requested date
of such Borrowing and shall specify in writing, in detail reasonably
acceptable to Lender, (i) the amount of such requested Loan, (ii) the
manner and method of Borrower's satisfaction of each of the Acquisition
Loan Funding Conditions, and (iii) the Qualified Acquisition Purpose
for the requested Acquisition Loan.
2.4. Share Repurchase Loan Facility.
(A) Share Repurchase Loans. Lender agrees, for so
long as the Share Repurchase Loan Funding Conditions have been
satisfied in form and substance satisfactory to Lender, to make Share
Repurchase Loans to Borrower from time to time, as requested by
Borrower, up to a maximum principal amount at any time outstanding
equal to $10,000,000 in the aggregate. The proceeds of the Share
Repurchase Loans shall be used solely for the repurchase of Shares. All
Share Repurchase Loans shall be evidenced by the Note and shall bear
interest pursuant to Section 3 hereof.
(B) Method of Borrowing Share Repurchase Loans.
Whenever Borrower desires to make a Borrowing under this Section 2.4,
Borrower shall give Lender prior written notice (or telephonic notice
promptly confirmed in writing) of such Borrowing (a "Notice of Share
Repurchase Borrowing"). Such Notice of Share Repurchase Borrowing shall
be given prior to 11:00 a.m. (Atlanta, Georgia time) at Lender's main
office in Atlanta, Georgia three (3) Business Days prior to the
requested date of such Borrowing and shall specify in writing, in
detail reasonably acceptable to Lender, (i) the amount of such
requested Loan, and (ii) a certificate in the form of Exhibit "E"
attached hereto indicating the manner and method of Borrower's
satisfaction of each of the Share Repurchase Loan Funding Conditions.
(C) Mandatory Prepayments. If Borrower subsequently
resells any of the Shares repurchased with the proceeds of a Share
Repurchase Loan or makes a public or private offering of any Shares
after the date hereof, Borrower shall pay to Lender as a mandatory
prepayment of the Share Repurchase Loans, if any are then outstanding,
an amount equal to the proceeds (net of reasonable commissions, fees
and other expenses of Borrower directly related to any such Share
resale or offering) realized by Borrower from any such Share resale or
offering.
2.5. Letter of Credit Facility.
(A) Letters of Credit. Lender agrees, during the term of this
Agreement and for so long as no Default or Event of Default exists, to endeavor
to procure from Issuer one or more Letters of Credit on Borrower's request
therefor, subject to the following terms and conditions:
(i) Borrower acknowledges that Issuer's willingness
to issue any Letter of Credit is conditioned upon Issuer's receipt of
(A) an LC Application remitted by Lender to Issuer with respect to the
requested Letter of Credit and (B) such other instruments and
agreements as Issuer may customarily require for the issuance of a
letter of credit of equivalent type and amount as the requested Letter
of Credit. Lender shall have no obligation to execute any LC Guaranty
or to join with Borrower in executing an LC Application unless (x)
Lender receives from Borrower, at least 3 Business Days prior to the
date on which Borrower desires to submit such LC Application to Issuer,
an LC Request, and (y) each of the LC Conditions is satisfied on the
date of Lender's receipt of the LC Request.
(ii) In no event shall Lender have any liability or
obligation to Borrower for any failure or refusal by Issuer to issue,
for Issuer's delay in issuing, or for any error of Issuer in issuing
any Letter of Credit.
(iii) Borrower shall comply with all of the terms and
conditions imposed on Borrower by Issuer, whether such terms and
conditions are contained in an LC Application or in any agreement with
respect thereto, and subject to the rights of Issuer, Lender shall have
the same rights and remedies that Issuer has under any agreements that
Borrower may have with Issuer in addition to any rights and remedies
contained in any of the Loan Documents. Borrower hereby irrevocably
authorizes Lender to charge to Borrower as an additional Revolver Loan
under Section 2.1 hereof, for application to the Reimbursement
Obligations owing to Issuer, the Dollar Equivalent of the amount of any
draw under any Letter of Credit immediately upon demand (whether by
Issuer or Lender) plus all other liabilities and obligations payable to
Issuer under or in connection with any Letter of Credit, irrespective
of any claim, setoff, defense or other right that Borrower may have at
any time against Issuer, Lender or any other Person, in each case
together with interest from and after the date of Issuer's payment
under such Letter of Credit until payment in full is made by Borrower
at a variable rate per annum in effect from time to time hereunder for
Revolver Loans constituting Base Rate Advances.
(iv) Borrower assumes all risks of the acts,
omissions or misuses of any Letter of Credit by the beneficiary
thereof. The obligation of Borrower to reimburse Issuer for any payment
made by Issuer under a Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid without regard to any
lack of validity or enforceability of any Letter of Credit, the
existence of any claim, setoff, defense or other right which Borrower
may have at any time against a beneficiary of any Letter of Credit, or
untimely or improper honor by Issuer of any draw request under a Letter
of Credit. Without limiting the generality of the foregoing, if
presentation of a demand, draft or certificate or other document does
not comply with the terms of a Letter of Credit and Borrower contends
that, as a consequence of such noncompliance it has no obligation to
reimburse Issuer for any payment made with respect thereto, Borrower
shall nevertheless be obligated to reimburse Lender for any payment
made to Issuer under clause (iii) with respect to such Letter of
Credit, but without waiving any claim Borrower may have against Issuer
in connection therewith.
(v) If any LC Obligations, whether or not then due or
payable, shall for any reason be outstanding (i) at any time that an
Event of Default exists, or (ii) on the effective date of termination
of this Agreement, then Borrower shall, upon demand, forthwith deposit
with Lender, in cash, an amount equal to the maximum aggregate amount
of all LC Obligations then outstanding. If Borrower fails to make such
deposit on Lender's demand therefor, Lender may advance such amount as
a Revolver Loan. Such cash (together with any interest accrued thereon)
shall be held by Lender in a Cash Collateral Account and may be
invested, in Lender's discretion, in Cash Equivalents. Borrower hereby
pledges, and grants to Lender a security interest in, all of Borrower's
right, title and interest in the Cash Collateral Account and all Cash
Collateral held in the Cash Collateral Account from time to time and
all proceeds thereof, as security for the payment of the LC
Obligations, whether or not then due or payable. From time to time
after cash is deposited in the Cash Collateral Account, Lender may
apply any Cash Collateral then held in the Cash Collateral Account to
the payment of any amounts, in such order as Lender may elect, as shall
be or shall become due and payable by Borrower to Lender with respect
to the Obligations which may then be outstanding. Neither Borrower nor
any other Person claiming by, through or under or on behalf of Borrower
shall have any right to withdraw any of the funds held in the Cash
Collateral Account, including any accrued interest, provided that upon
termination of all Letters of Credit and the payment and satisfaction
in full of the LC Obligations, any Cash Collateral remaining in the
Cash Collateral Account shall be returned to Borrower unless an Event
of Default then exists (in which event Lender may apply such funds to
the payment of any other Obligations outstanding).
(vi) No Letter of Credit shall be extended or amended
in any respect that is not solely ministerial, unless all of the LC
Conditions are met as though a new Letter of Credit were being
requested and issued.
(vii) In addition to and without limiting any other
right or remedy of Lender contained in this Agreement or in any of the
other Loan Documents, Lender shall be fully subrogated to the rights
and remedies of Issuer under any agreement made between Borrower and
Issuer, including each LC Application, relating to the issuance of any
Letter of Credit, each such agreement being incorporated herein by
reference, and Lender shall be entitled to exercise all such rights and
remedies thereunder and under Applicable Law in such regard as fully as
if it were Issuer. If any Letter of Credit is drawn upon to discharge
any obligation of Borrower to the beneficiary of such Letter of Credit,
in whole or in part, Lender shall be fully subrogated to the rights of
such beneficiary with respect to the obligation of Borrower to such
beneficiary discharged with the proceeds of such Letter of Credit.
(B) Indemnification. In addition to any other indemnity which
Borrower may have to Issuer or Lender under this Agreement, any of the other
Loan Documents any of the LC Documents, and without limiting such other
indemnification provisions, Borrower hereby agrees to indemnify Issuer and
Lender from and to defend and hold Issuer and Lender harmless against any and
all claims that Issuer or Lender may (other than as the result of its own gross
negligence or willful misconduct) incur or be subject to as a consequence,
directly or indirectly, of (i) the issuance of, payment or failure to pay or any
performance or failure to perform under any Letter of Credit or (ii) any suit,
investigation or proceeding as to which Issuer or Lender is or may become a
party to as a consequence, directly or indirectly, of the issuance of any Letter
of Credit or the payment or failure to pay thereunder. This indemnity shall
survive payment in full of the Obligations and termination of this Agreement.
(C) Letter of Credit Fees. In addition to Issuer's customary
administrative fees, Borrower shall pay to Lender an issuance fee equal to 1.0%
per annum of the face amount of each Letter of Credit issued from time to time
during the term of this Agreement, which fee shall be due and payable upon the
issuance of a Letter of Credit, and an additional fee equal to 1.0% per annum of
the face amount of such Letter of Credit payable upon each renewal or extension
thereof, all of which fees and charges shall not be subject to rebate or
proration upon the termination of this Agreement for any reason.
2.6. All Loans to Constitute One Obligation. All
Loans shall constitute one general obligation of Borrower.
2.7. Loan Account. Lender shall enter all Loans as debits to
the Loan Account and shall also record in the Loan Account all payments made by
Borrower on Loans, and may record therein, in accordance with customary
accounting practice, all charges and expenses properly chargeable to Borrower
hereunder.
SECTION 3 INTEREST AND REPAYMENT
3.1. Interest, Fees and Charges.
(A) Interest Rates on Loans. Borrower agrees to pay
interest in respect of all unpaid principal amounts of the Loans from
the respective dates such principal amounts are advanced until paid
(whether at stated maturity, on acceleration, or otherwise) at a
variable rate per annum equal to the sum of the Base Rate or Adjusted
LIBO Rate, as the case may be, plus the Applicable Margin. Borrower
shall give Lender prior written notice at least two (2) Business Days'
prior to the first day of each month hereafter (or telephonic notice
promptly confirmed in writing) of its election to convert or continue
the Loans then outstanding and all Borrowings to be made thereafter
during such month as either Base Rate Loans or as LIBOR Loans. Any such
election shall be irrevocable with respect to the following month and
shall apply to all Loans. Borrower shall not be entitled to elect
different interest rates for any portion of the Loans. Such notice (a
"Notice of Conversion/Continuation") shall be given prior to 11:00 a.m.
(Atlanta, Georgia time) on the date specified. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify whether
the Loans during the immediately following month are to be Base Rate
Loans or LIBOR Loans. If Borrower shall have failed, or pursuant to the
following sentence be unable, to deliver the Notice of
Conversion/Continuation, Borrower shall be deemed to have elected to
convert or continue, as the case may be, all Loans as Base Rate Loans
for the following month. So long as any Default or Event of Default
shall have occurred and be continuing, no Borrowing may be converted
into or continued as a LIBOR Loan.
Interest on each Loan shall accrue from and including the date
of such Loan to, but excluding the date of any repayment thereof;
provided, however, that, if a Loan is repaid on the same day made, one
day's interest shall be paid on such Loan. Interest on all outstanding
Loans shall be calculated on a daily basis commencing on the date of
such Loan, and shall be payable monthly, in arrears, on the first day
of each month. Interest accrued on the outstanding principal amount of
the Loans that are LIBOR Loans shall be paid, in arrears, on the first
day of each month and on the last day of the applicable Interest
Period. The rate of interest applicable to Base Rate Loans shall be
increased or decreased, as the case may be, by an amount equal to any
increase or decrease in the Base Rate, with such adjustments to be
effective as of the opening of business on the day that any such change
in the base rate becomes effective. The rate of interest applicable to
LIBOR Loans on the first day of any month shall be the rate of interest
for the balance of such month. Interest accrued on Loans or other
monetary obligations arising under this Agreement or any of the other
Loan Documents after the date such amount is due and payable (whether
due at stated maturity, upon acceleration or otherwise) shall be
payable on demand. Lender, upon determining the Adjusted LIBO Rate for
any period hereunder, shall promptly notify Borrower by telephone
(confirmed in writing) or in writing. Such determination shall, absent
manifest error, be final, conclusive and binding on all parties and for
all purposes. Borrower hereby irrevocably authorizes Lender, in
Lender's sole discretion, to advance to Borrower, and to charge to
Borrower for its account hereunder as a Revolver Loan, a sum sufficient
each month to pay all interest accrued on the Obligations during the
month then ending. The rate of interest in effect hereunder for Base
Rate Loans as of the date hereof expressed in simple interest terms, is
8.25% per annum, based upon a Base Rate in effect as of the date hereof
of 8.25%. The rate of interest in effect hereunder for LIBOR Loans as
of the date hereof expressed in simple interest terms, is 6.94% per
annum, based upon a Adjusted LIBO Rate in effect as of the date hereof
of 5.44%. Interest shall be computed on the actual number of days
elapsed over a year of 360 days. Borrower acknowledges that the
calculation of interest on the basis of a 360-day year, as opposed to a
year of 365 days, results in a higher effective rate of interest
hereunder.
(B) Default Rate of Interest. Upon and after the
occurrence of an Event of Default, the principal amount of the
Obligations shall automatically (without notice to or demand upon
Borrower) bear interest, calculated daily (computed on the actual days
elapsed over a year of 360 days), at a fluctuating rate per annum equal
to two percent (2%) above the Base Rate (the "Default Rate"). Borrower
acknowledges that the cost and expense to Lender attendant upon the
occurrence of an Event of Default are difficult to ascertain or
estimate and that the Default Rate is a fair and reasonable estimate to
compensate Lender for such added cost and expense.
(C) Interest Period. In connection with the making or
continuation of, or conversion into, each LIBOR Loan, the interest
period ("Interest Period") to be applicable to each such LIBOR Loan,
shall be one (1) month; provided, however, that:
(i) if any Interest Period would otherwise
expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day,
provided that if any Interest Period in respect of LIBOR Loans
(other than LIBOR Loans made pursuant to Section 3.1(D)
hereof) would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(ii) any Interest Period in respect of LIBOR
Loans which begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period shall expire on the last Business Day of such
calendar month;
(iii) the Interest Period for a LIBOR Loan which
is converted pursuant to Section 3.1(D) hereof shall commence
on the date of such conversion and shall expire on the date of
which the Interest Periods for the LIBOR Loans which were not
converted expire; and
(iv) no Interest Period shall extend beyond
the termination date specified in Section 2.2 of this
Agreement.
(D) Interest Rate Not Ascertainable. If Lender shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for
determining the Adjusted LIBO Rate for any Interest Period, by reason
of any changes rising after the date of this Agreement affecting the
interbank Eurodollar market or Lender's position in such market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted
LIBO Rate, then, and in any such event, Lender shall forthwith give
notice (by telephone confirmed in writing) to Borrower of such
determination. Until Lender notifies Borrower that the circumstances
giving rise to the suspension described herein no longer exist, the
obligation of Lender to make or commit portions of the Loans to remain
outstanding as LIBOR Loans shall be suspended, and such affected Loans
shall bear the interest rates applicable to Base Rate Loans.
(E) Illegality. If Lender shall have determined
(which determination shall, absent manifest error, be final, conclusive
and binding upon all parties) at any time that the making or
continuance of any LIBOR Loan has become unlawful by compliance by
Lender, in good faith, with any applicable law, governmental rule,
regulation, guideline or order (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful),
then, in any such event, Lender shall give prompt notice (by telephone
confirmed in writing) to Borrower of such determination. Upon the
giving of the aforesaid notice to Borrower, (i) Borrower's right to
request and Lender's obligation to make LIBOR Loans or convert Loans to
LIBOR Loans shall be immediately suspended, and Lender shall make a
Loan as part of any requested Borrowing of LIBOR Loans as a Base Rate
Loan (which Base Rate Loan shall, for all other purposes, be considered
part of such Borrowing), and (ii) if the affected LIBOR Loan or Loans
are then outstanding, Lender shall immediately, or if permitted by
applicable law, no later than the date permitted thereby, upon at least
one Business Day's written notice to Borrower, convert each such LIBOR
Loan into a Base Rate Loan.
(F) Indemnification of Lender. Borrower shall
compensate Lender, upon Lender's written request (which request shall
set forth the basis for requesting such amounts and which request
shall, absent manifest error, be final, conclusive and binding), for
all losses, expenses and liabilities (including, without limitation,
any interest paid by Lender to lenders of funds borrowed by Lender to
make or carry LIBOR Loans to the extent not recovered by Lender in
connection with the re-employment of such funds and including losses of
anticipated profits), which Lender may sustain: (i) if for any reason
(other than a default by Lender) a Borrowing of, or conversion to or
continuation of, LIBOR Loans does not occur on the date specified
therefor in a Notice of Borrowing or Notice of Conversion/ Continuation
(whether or not withdrawn), or (ii) if, for any reason, Borrower
defaults in its obligation to repay LIBOR Loans when required by the
terms of this Agreement.
(G) Increased Cost. If, by reason of (y) after the
date hereof, the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation, or
(z) the compliance with any guideline or request from any central bank
or other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally
(whether or not having the force of law):
(i) Lender shall be subject to any tax, duty
or other charge with respect to its LIBOR Loan or its
obligation to make LIBOR Loans, or shall be subject to any
change in the basis of taxation of payments to Lender of the
principal of or interest on its LIBOR Loans or its obligation
to make LIBOR Loans (except for changes in the rate of tax on
the overall net income of Lender imposed by the jurisdiction
in which Lender's principal executive office is located); or
(ii) any reserve (including, without
limitation, any imposed by the Board of Governors), special
deposits of similar requirement against assets of, deposits or
with or for the account of, or credit extended by, Lender
shall be imposed or deemed applicable or any other condition
affecting its LIBOR Loans or its obligation to make LIBOR
Loans shall be imposed on Lender or the interbank Eurodollar
market;
and as a result thereof there shall be any increase in the
cost to Lender of agreeing to make or making, funding or
maintaining LIBOR Loans (except to the extent already included
in the determination of the applicable LIBO Rate for LIBOR
Loans), or there shall be a reduction in the amount received
or receivable by Lender, then Borrower shall from time to
time, upon written notice from and demand by Lender, pay to
Lender, within five (5) Business Days after the date specified
in such notice and demand, additional amount sufficient to
indemnify Lender against such increased cost. A certificate as
to the amount of such increased cost, submitted to Borrower by
Lender, shall, except for manifest error, be final, conclusive
and binding for all purposes. If Lender shall determine at any
time, because of the circumstances described hereinabove in
this Paragraph (E) of this Section 3.1, or any other
circumstances arising after the date of this Agreement
affecting Lender or the interbank Eurodollar market or
Lender's position in such market, the LIBO Rate, as determined
by Lender, will not adequately and fairly reflect the cost to
Lender of funding its LIBOR Loans, then, and in any such
event:
(i) the Lender shall forthwith
give notice (by telephone confirmed in writing) to
Borrower of such determination;
(ii) Borrower's right to request and
Lender's obligation to make or permit Loans to remain
outstanding as LIBOR Loans shall be immediately suspended; and
(iii) Lender shall make a Loan as part of the
requested Borrowing of LIBOR Loans as a Base Rate Loan, which
Base Rate Loan shall, for all purposes, be considered part of
such Borrowing.
(H) Maximum Interest. In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder
or under the Note and charged or collected pursuant to the terms of
this Agreement or the Note exceed the highest rate permissible under
any Applicable 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.
3.2. Payments. All payments shall be made by Borrower in U.S. currency and
without any defense, offset or counterclaim of any kind. The Obligations shall
be paid as follows:
(A) Principal, payable on account of the Loans, shall be payable by
Borrower to Lender immediately upon the earliest of (i) the occurrence of an
Event of Default in consequence of which Lender elects to accelerate the
maturity and payment of the Revolver Loans, or (ii) termination of the Credit
Facility pursuant to Section 2.2 hereof; provided, however, that if an
Overadvance Condition shall exist, Borrower shall, on demand, repay the Loans in
an amount sufficient to eliminate such Overadvance Condition;
(B) Interest accrued on the principal amount of the Loans shall be due on
the earliest of (i) the first day of each month (for the immediately preceding
month), computed through the last calendar day of the preceding month, (ii) the
occurrence of an Event of Default in consequence of which Lender elects to
accelerate the maturity and payment of the Obligations or (iii) termination of
the Credit Facility pursuant to Section 2.2 hereof; provided, however, that
Borrower hereby irrevocably authorizes Lender, in Lender's sole discretion, to
advance to Borrower, and to charge to the Loan Account hereunder as a Revolver
Loan, a sum sufficient each month to pay all interest accrued on the Obligations
during the immediately preceding month; and
(C) The balance of the Obligations requiring the payment of money, if any,
shall be payable by Borrower to Lender as and when provided in this Agreement or
the Other Agreements, or on demand, whichever is earlier.
3.3. Closing Fee. Borrower shall pay to Lender an closing fee
of $43,750, which shall be deemed fully earned at the closing of the
transactions contemplated hereby, shall be paid concurrently with the initial
Revolver Loan hereunder and shall not be subject to rebate except as may be
required by Applicable Law. Such fee shall compensate Lender for the costs
associated with the origination, structuring, processing, approving and closing
of the transactions contemplated by this Agreement, including, but not limited
to, administrative, out-of-pocket, general overhead and lost opportunity costs,
but not including any expenses for which Borrower has agreed to reimburse Lender
pursuant to any other provisions of this Agreement or any of the other Loan
Documents, such as, by way of example, legal fees and expenses.
3.4. Unused Line Fee. Borrower shall pay to Lender, a fee
("Unused Line Fee") for each fiscal quarter of Borrower in which the Average
Loan Balance during such fiscal quarter is less than $10,000,000, with such fee
to be in an amount equal to (i) the Facility Amount in effect as of the first
day of each such fiscal quarter, less (ii) the Average Loan Balance during such
fiscal quarter (the result being hereafter referred to as "Unused Facility"),
multiplied by (iii) one sixteenth of one percent (.0625%) per annum of the
amount of Unused Facility, such fees to be calculated on the basis of a 360-day
year for the actual number days elapsed and to be payable quarterly, in arrears,
on the first day of each month commencing on January 1, 1997.
3.5. Application of Payments and Collections. Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by Lender from or on
behalf of Borrower, and Borrower does hereby irrevocably agree that Lender shall
have the continuing exclusive right to apply and reapply any and all such
payments and collections received at any time or times hereafter by Lender or
its agent against the Obligations, in such manner as Lender may deem advisable,
notwithstanding any entry by Lender upon any of its books and records.
3.6. Statements of Account. Lender will account to Borrower
monthly with a statement of Loans, charges and payments made pursuant to this
Agreement, and such account rendered by Lender shall be deemed final, binding
and conclusive upon Borrower unless Lender is notified by Borrower in writing to
the contrary within thirty (30) days after the date each account is mailed to
Borrower. Such notice shall only be deemed an objection to those items
specifically objected to therein.
SECTION 4 PROPERTY OF BORROWER
4.1. Insurance of Borrower's Property. Borrower agrees to
maintain and pay for insurance upon all of its Properties wherever located, in
storage or in transit in vehicles, including goods evidenced by documents,
covering casualty, hazard, public liability and such other risks and in such
amounts and with such insurance companies as shall be reasonably satisfactory to
Lender. Borrower shall deliver copies of such policies to Lender. Each policy of
insurance or endorsement shall contain a clause requiring the insurer to give
not less than thirty (30) days prior written notice to Lender in the event of
cancellation of the policy for any reason whatsoever. If Borrower fails to
provide and pay for such insurance, Lender may, at Borrower's expense, procure
the same, but shall not be required to do so. Borrower agrees to deliver to
Lender, promptly as rendered, true copies of all reports made in any reporting
forms to insurance companies. In addition to the insurance required herein with
respect to Borrower's Properties, Borrower shall maintain, with financially
sound and reputable insurers, insurance with respect to its business against
such casualties and contingencies of such type (including product liability,
larceny, embezzlement, or other criminal misappropriation insurance) and in such
amounts as is customary in the business or as otherwise required by Lender.
4.2. Protection of Borrower's Property. Borrower shall pay and discharge
when due all claims to and levies and charges upon any of its Properties.
SECTION 5 REPRESENTATIONS AND WARRANTIES
5.1. General Representations and Warranties. To induce Lender to enter into
this Agreement and to make advances hereunder, Borrower represents, warrants and
covenants to Lender as follows:
(A) Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia; has duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
all states and jurisdictions where the character of its Properties or the nature
of its activities make such qualification necessary; and does not use any
corporate, fictitious or trade names.
(B) Borrower has the power and is duly authorized to enter into, deliver
and perform this Agreement and each of the Other Agreements to which it is a
party, and this Agreement is, and each of the Other Agreements when delivered
under this Agreement will be, a legal, valid and binding obligation of Borrower
enforceable against it in accordance with their respective terms.
(C) Borrower is not engaged principally, or as one of its important
activities, in the business of purchasing or carrying "margin stock" (within the
meaning of Regulation G or U of the Board of Governors), and no part of the
proceeds of any Loans to Borrower will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock, or he used for any purpose which violates or is inconsistent
with the provisions of Regulation X of the Board of Governors.
(D) Borrower has all governmental consents, approvals, authorizations,
permits, certificates, inspections, and franchises necessary to conduct its
business as heretofore or proposed to be conducted by it and to own or lease and
operate its Properties as now owned or leased by it.
(E) Borrower owns, possesses or has applied for registration of all the
patents, trademarks, service marks, trade names, copyrights and licenses
necessary for the present and planned future conduct of its business without any
known conflict with the rights of others.
(F) There are no actions, suits, proceedings or investigations pending, or
to the knowledge of Borrower, threatened, against or affecting Borrower or any
of its Properties in any court or before any governmental authority or
arbitration board or tribunal which involve the possibility of materially and
adversely affecting the Properties or condition (financial or otherwise) of
Borrower or the ability of Borrower to perform this Agreement.
(G) Borrower has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of its other Property, in each case, free and
clear of all Liens except Permitted Liens.
(H) The Consolidated balance sheet of Borrower and its Consolidated
Subsidiaries as of June 29, 1996, and the related Consolidated statements of
income, Consolidated stockholder's equity, and Consolidated cash flows for the
periods ended on such dates, have been prepared in accordance with GAAP, and
present fairly the financial positions of Borrower and its Consolidated
Subsidiaries at such dates and the results of Borrower's operations for such
periods. Since June 29, 1996, there has been no material adverse change in the
condition, financial or otherwise, of Borrower and its Consolidated Subsidiaries
as shown on the Consolidated balance sheet as of such date and no change in the
aggregate value of Property owned by Borrower or such Consolidated Subsidiaries,
except as to (i) changes in the ordinary course of business, none of which
individually or in the aggregate has been materially adverse, and (ii) changes
occurring as a result of Borrower's acquisition of the JTH Group as of July 31,
1996.
(I) There is no fact which Borrower has failed to disclose to Lender in
writing which materially affects adversely or, so far as Borrower can now
foresee, will materially affect adversely the Properties, business, prospects,
profits, or condition (financial or otherwise) of Borrower or the ability of
Borrower to perform this Agreement.
(J) Borrower has not received any notice to the effect that it is not in
full compliance with any of the requirements of ERISA and the regulations
promulgated thereunder. No fact or situation, including, but not limited to, any
Reportable Event, or Prohibited Transaction exists in connection with any Plan.
(K) Borrower has filed all federal, state and local tax returns and other
reports it is required by law to file and has paid, or made provision for the
payment of, all taxes, assessments, fees and other government charges that are
due and payable.
(L) Borrower has duly complied with, and its Properties, business
operations and leaseholds are in compliance in all material respects with, the
provisions of all Applicable Laws, including, without limitation, all
Environmental Laws.
(M) No Default or Event of Default exists or will exist or result from the
execution and delivery of this Agreement or Borrower's performance hereunder.
(N) There are no claims for brokerage commissions, finder's fees or
investment banking fees in connection with the transactions contemplated by this
Agreement.
5.2. Reaffirmation and Survival of Representations. Each
request for a Revolver Loan made by Borrower pursuant to this Agreement or any
of the Other Agreements shall constitute (i) an automatic representation and
warranty by Borrower to Lender that there does not then exist any Default or
Event of Default and (ii) a reaffirmation as of the date of said request of all
of the representations and warranties of Borrower contained in this Agreement
and the Other Agreements. Borrower covenants, warrants and represents to Lender
that all representations and warranties of Borrower contained in this Agreement
or any of the Other Agreements shall be true at the time of Borrower's execution
of this Agreement and the Other Agreements, and shall survive the execution,
delivery and acceptance thereof by Lender and the parties thereto and the
closing of the transactions described therein or related thereto.
SECTION 6 COVENANTS AND CONTINUING AGREEMENTS
6.1. Affirmative Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Lender, Borrower
covenants that, unless otherwise consented to by Lender in writing, it shall:
(A) Pay and discharge all taxes, assessments and governmental charges upon
it, its income and Properties as and when such taxes, assessments and charges
are due and payable, except and to the extent only that such taxes, assessments
and charges are being actively contested in good faith and by appropriate
proceedings, Borrower gives Lender prompt written notice of such contest,
Borrower maintains adequate reserves on its books therefor and the nonpayment of
such taxes does not result in a Lien upon any Properties of Borrower other than
a Permitted Lien. Borrower shall also pay and discharge any lawful claims which,
if unpaid, might become a Lien against any of Borrower's Properties except for
Permitted Liens.
(B) File all federal, state and local tax returns and other reports
Borrower is required by law to file and maintain adequate reserves for the
payment of all taxes, assessments, governmental charges, and levies imposed upon
it, its income, or its profits, or upon any Property belonging to it.
(C) Pay to Lender, on demand, any and all fees, costs or expenses which
Lender or any Participating Lender pays to a bank or other similar institution
(including, without limitation, any fees paid by the Lender to any Participating
Lender) arising out of or in connection with (i) the forwarding to Borrower or
any other Person on behalf of Borrower, by Lender or any Participating Lender,
proceeds of Loans made by Lender to Borrower pursuant to this Agreement and (ii)
the depositing for collection, by Lender or any Participating Lender, of any
check or item of payment received or delivered to Lender or any Participating
Lender on account of the Obligations.
(D) Preserve and maintain its separate corporate existence and all rights,
privileges, and franchises in connection therewith, and maintain its
qualification and good standing in all states in which such qualification is
necessary.
(E) Maintain its Properties in good condition and make all necessary
renewals, repairs, replacements, additions and improvements thereto.
(F) Comply with all Applicable Laws (including, without limitation, all
Environmental Laws and all laws relating to the collection and remittance of
payroll taxes), the violation of which would have a Material Adverse Effect, and
obtain and keep in force any and all licenses, permits, franchises, or other
governmental authorizations necessary to the ownership of its Properties or to
the conduct of its business.
(G) (i) At all times make prompt payment of contributions required to meet
the minimum funding standards set forth in ERISA with respect to each Plan; (ii)
promptly after the filing thereof, furnish to Lender copies of any annual report
required to be filed pursuant to ERISA in connection with each Plan and any
other employee benefit plan of it and its Affiliates subject to ERISA; (iii)
notify Lender as soon as practicable of any Reportable Event and of any
additional act or condition arising in connection with any Plan which Borrower
believes might constitute grounds for the termination thereof by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate United
States district court of a trustee to administer the Plan; and (iv) furnish to
Lender, promptly upon Lender's request therefor, such additional information
concerning any Plan or any other such employee benefit plan as may be reasonably
requested.
(H) Keep adequate records and books of account with respect to its business
activities in which proper entries are made in accordance with GAAP reflecting
all its financial transactions.
(I) Permit representatives of Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours upon prior notice
from Lender, to visit and inspect the Properties of Borrower, inspect and make
extracts from its books and records, and discuss with its officers, its
employees and its independent accountants, Borrower's business, assets,
liabilities, financial condition, business prospects and results of operations.
(J) Cause to be prepared and furnished to Lender the following (all to be
kept and prepared in accordance with GAAP applied on a consistent basis, unless
Borrower's certified public accountants concur in any change therein and such
change is disclosed to Lender and is consistent with GAAP):
(i) as soon as possible, but not later than 120 days after the
close of each fiscal year of Borrower, unqualified audited financial
statements of Borrower and its Subsidiaries as of the end of such year,
on a consolidated and consolidating basis, certified by a firm of
independent certified public accountants of recognized national
standing or otherwise acceptable to Lender;
(ii) as soon as possible, but not later than 45 days after the end
of each month hereafter, unaudited interim financial statements of
Borrower and its Subsidiaries as of the end of such month and of the
portion of Borrower's fiscal year then elapsed, on a consolidated and
consolidating basis, certified by the principal financial officer of
Borrower as prepared in accordance with GAAP and fairly presenting the
consolidated financial position and results of operations of Borrower
and its Subsidiaries for such month and period;
(iii) promptly after the sending or filing thereof, as the case may
be, and, with respect to Borrower's 8-K, 10-K or 10-Q filings, in no
event later than 45 days after the last day of each fiscal quarter, or
90 days after the last day of each fiscal year in the case of
Borrower's 10-K, copies of proxy statements, financial statements or
reports which Borrower has made available to its shareholders and
copies of any regular, periodic and special reports or registration
statements with the Securities and Exchange Commission or any national
securities exchange as Lender may request; and
(iv) such other data and information (financial and otherwise) as
Lender, from time to time, may reasonably request, bearing upon or
related to Borrower's financial condition or results of operations,
including, without limitation, federal income tax returns of Borrower,
accounts payable ledgers, and bank statements.
Concurrently with the delivery of the financial statements described in
clause (i) of this Section 6.1(J), Borrower shall furnish to Lender a copy of
the accountants' letter to Borrower's management that is prepared in connection
with such financial statements and shall also cause to be prepared and furnish
to Lender a certificate of the aforesaid certified public accountants certifying
to Lender that, based upon their examination of the financial statements of
Borrower and its Subsidiaries performed in connection with their examination of
said financial statements, they are not aware of any Default or Event of
Default, or, if they are aware of such Default or Event of Default, specifying
the nature thereof.
(K) At Lender's request, promptly execute or cause to be executed and
deliver to Lender any and all documents, instruments and agreements deemed
necessary by Lender to give effect to or carry out the terms or intent of this
Agreement or any of the Other Agreements.
(L) Within forty-five (45) days after the end of each fiscal quarter of
Borrower and concurrently with the delivery of its annual financial statements
under this Agreement, Borrower shall prepare and deliver to Lender a Compliance
Certificate from the chief financial officer of Borrower in the form of Exhibit
B attached hereto, with appropriate insertions.
(M) Notify Lender in writing: (i) promptly after Borrower's learning
thereof, of the commencement of any litigation affecting Borrower or any of its
Properties, whether or not the claim is considered by Borrower to be covered by
insurance, and of the institution of any administrative proceeding which may
have a material adverse effect upon the Borrower's operations or Borrower's
financial condition or prospects; (ii) at least sixty (60) days prior thereto,
of Borrower's opening of any new office or place of business or Borrower's
closing of any existing office or place of business; (iii) promptly after
Borrower's learning thereof, of any labor dispute to which Borrower may become a
party, any strikes or walkouts relating to any of its plants or other
facilities, and the expiration of any labor contract to which it is a party or
by which it is bound; (iv) promptly after Borrower's learning thereof, of any
material default by Borrower under any note, indenture, loan agreement,
mortgage, lease, deed, guaranty or other similar agreement relating to any
Indebtedness of Borrower exceeding $100,000; (v) promptly after the occurrence
thereof, of any Default or Event of Default; (vi) promptly after the occurrence
thereof, of any default by any obligor under any note or other evidence of
Indebtedness payable to Borrower; and (vii) promptly after the rendition
thereof, of any judgment rendered against Borrower or any of its Subsidiaries in
an amount exceeding $100,000.
(N) Upon or at any time after the occurrence of a Default or an Event of
Default, Borrower shall, promptly upon Lender's request, furnish to Lender all
books, records or other information relating to Borrower's Accounts, Inventory,
Equipment, General Intangibles and real Property.
(O) Upon Lender's written request at any time after the occurrence of any
Event of Default, (a) grant to Lender a first priority security interest in
and/or security title to or lien against all real and personal Property of
Borrower (including all real estate, machinery, plant and equipment and all cash
and non-cash proceeds thereof), subject only to Permitted Encumbrances then in
existence, and will promptly after such request from Lender execute and deliver
such security agreements, mortgages, deeds of trust, security deeds, financing
statements, certificates of title and other documents, instruments and
agreements as are reasonably necessary to grant and perfect such security
interest, security title and lien in favor of Lender, and (b) reaffirm
Borrower's covenant not to grant or permit any Lien to exist on any of the
remainder of its Property except for Permitted Liens.
6.2. Negative Covenants. During the term of this Agreement, and thereafter
for so long as there are any Obligations to Lender, Borrower covenants that,
unless Lender has first consented thereto in writing, it will not:
(A) Merge or consolidate, or permit any Subsidiary to merge or consolidate,
with any Person, except a consolidation or merger involving only Borrower and
one or more wholly owned Subsidiaries; nor acquire all or any substantial part
of the Properties of any Person.
(B) Create, incur, assume, or suffer to exist, or permit any Subsidiary to
create incur or suffer to exist, any Indebtedness, except: (i) Obligations owing
to Lender; (ii) Subordinated Debt; (iii) Indebtedness of any Subsidiary to
Borrower; (iv) accounts payable to trade creditors which are not aged more than
one hundred twenty (120) days from billing date and current operating expenses
(other than for Money Borrowed) which are not more than sixty (60) days past
due, in each case incurred in the ordinary course of business and paid within
such time period, unless the same are actively being contested in good faith and
by appropriate and lawful proceedings and Borrower shall have set aside such
reserves, if any, with respect thereto as are required by GAAP and deemed
adequate by Borrower and its independent public accountants; (v) Obligations to
pay Rentals permitted by Section 6.2(P); (vi) Permitted Purchase Money
Indebtedness; (vii) contingent liabilities arising out of endorsements of checks
and other negotiable instruments for deposit or collection in the ordinary
course of business; (viii) taxes not yet past due or payable; (ix) Indebtedness
under loan documents entered into by certain Subsidiaries consented to by
Lender; (x) overdrafts owing from time to time to NationsBank, N.A. up to an
aggregate amount not to exceed $2,000,000 at any time; and (xi) Indebtedness not
included in clauses (i) through (x) above which does not exceed at any time, in
the aggregate, the sum of $500,000.
(C) Enter into any transaction with any Affiliate or stockholder, except in
the ordinary course of and pursuant to the reasonable requirements of Borrower's
business and upon fair and reasonable terms which are fully disclosed to Lender
and which are no less favorable to Borrower than would obtain in a comparable
arm's length transaction with a Person not an Affiliate or stockholder of
Borrower.
(D) Guarantee, assume, endorse or otherwise, in any way, become directly or
contingently liable with respect to the Indebtedness of any Person except by
endorsement of instruments or items of payment for deposit or collection and
except for the guaranty of indebtedness of Subsidiaries in an aggregate amount
not to exceed $5,000,000 and such additional indebtedness incurred by
Subsidiaries under credit facilities consented to by Lender under Section 6.2(Q)
hereof.
(E) Create or suffer to exist any Lien upon any of its or any Subsidiary's
Property, income or profits, whether now owned or hereafter acquired, except:
(i) Liens at any time granted in favor of Lender; (ii) Liens for taxes
(excluding any Lien imposed pursuant to any of the provisions of ERISA) not yet
due or being contested as permitted by Section 6.1(A) hereof; (iii) Liens
securing the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons for labor, materials, supplies or
rentals incurred in the ordinary course of Borrower's or a Subsidiary's
business, but only if the payment thereof is not at the time required; (iv)
Liens resulting from deposits made in the ordinary course of business in
connection with workmen's compensation, unemployment insurance, social security
and other like laws; (v) attachment, judgment and other similar non-tax Liens
(excluding Environmental Liens) arising in connection with court proceedings,
but only if and for so long as the execution or other enforcement of such Liens
is and continues to be effectively stayed and bonded on appeal in a manner
satisfactory to Lender for the full amount thereof, the validity and amount of
the claims secured thereby are being actively contested in good faith and by
appropriate lawful proceedings and such Liens do not, in the aggregate,
materially detract from the value of the Property of Borrower or a Subsidiary or
materially impair the use thereof in the operation of Borrower's business or a
Subsidiary's business; (vi) Purchase Money Liens to secure Indebtedness that is
not incurred in violation of this Agreement; (vii) reservations, exceptions,
easements, rights of way, and other similar consensual encumbrances affecting
real Property, provided that, in Lender's sole judgment, they do not in the
aggregate materially detract from the value of said Properties or materially
interfere with their use in the ordinary conduct of Borrower's business or a
Subsidiary's business, Lender has consented thereto; (viii) Liens securing
Indebtedness of a Subsidiary to Borrower or another Subsidiary; (ix) Liens of a
bank or other financial institution with respect to funds on deposit with such
institution; (x) Liens granted by a Subsidiary to banks or financial
institutions providing factoring services; (xi) such other Liens as appears on
Exhibit C attached hereto; and (xii) such other Liens as Lender may hereafter
approve in writing.
(F) Hereafter create any Subsidiary or divest itself of any material assets
by transferring them to any Subsidiary to whose existence Lender has consented;
provided, however, that Borrower may create a Subsidiary wholly-owned by
Borrower and transfer assets to such Subsidiary if:
(i) no Default or Event of Default exists; and
(ii) contemporaneously with such creation and transfer, such
Subsidiary enters into an agreement, in form and substance satisfactory
to Lender, which amends and restates this Agreement and pursuant to
which such Subsidiary and Borrower agree to be jointly and severally
liable for all Obligations.
(G) Make Capital Expenditures (including, without limitation, by way of
Capital Leases) which, in the aggregate, exceed $27,000,000 during Borrower's
1997 fiscal year or $30,000,000 during any fiscal year of Borrower thereafter.
(H) Transfer its principal place of business or chief executive office, or
open new manufacturing plants, or transfer existing manufacturing plants, or
maintain warehouses or records, to or at any locations other than those at which
the same are presently kept or maintained, as set forth on Exhibit D hereto,
except upon at least thirty (30) days prior written notice to Lender.
(I) Enter into any new business or make any material change in any of
Borrower's business objectives, purposes and operations; provided, however, that
Borrower may enter into a new business or change its business objective so long
as Borrower's Capital Expenditures for such new business or new business
objective does not exceed $1,000,000.
(J) 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 (i) sales of Inventory in the ordinary course of
Borrower's business for so long as no Event of Default exists hereunder, (ii) a
transfer of Property to Borrower by a Subsidiary or (iii) dispositions of
obsolete or unnecessary Equipment in the ordinary course of business.
(K) Use any corporate name (other than its own) or any fictitious name or
"d/b/a" except for names disclosed in writing to Lender on or before the Closing
Date and the names disclosed in Section 5.1(A) of this Agreement.
(L) Own, purchase or acquire (or enter into any contract to purchase or
acquire) any "margin security" as defined by any regulation of the Board of
Governors as now in effect or as the same may hereafter be in effect unless,
prior to any such purchase or acquisition or entering into any such contract,
Lender shall have received an opinion of counsel satisfactory to Lender to the
effect that such purchase or acquisition will not cause this Agreement to
violate Regulations G or U or any other regulation of the Board of Governors
then in effect.
(M) Make or have any Restricted Investment.
(N) Change its fiscal year or permit any Subsidiary to have a fiscal year
different from that of Borrower.
(O) Become a lessee under any operating lease of Property if the aggregate
Rentals payable during any current or future period of twelve (12) consecutive
months under the lease in question and all other leases under which Borrower is
then lessee would exceed $2,000,000. The term "Rentals" means, as of the date of
determination, all payments which the lessee is required to make by the terms of
any lease.
(P) File or consent to the filing of any consolidated income tax return
with any Person other than a Consolidated Subsidiary.
(Q) Permit any Subsidiary to enter into credit facilities for
the purpose of working capital or acquisition financing without prior written
consent of Lender; provided, however, that Lender shall not unreasonably
withhold its consent from certain Subsidiaries entering into an unsecured credit
facility in an aggregate amount not to exceed $15,000,000 on terms and
conditions substantially similar to those obtaining under this Agreement.
6.3. Specific Financial Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Lender, Borrower
covenants that, unless otherwise consented to by Lender in writing, it shall:
(A) Maintain at all times a Consolidated Current Ratio of not
less than 1.25 to 1.0.
(B) Maintain at all times a Consolidated Adjusted Tangible Net
Worth of not less than the amount shown below for the fiscal periods
corresponding thereto:
Period Amount
As of the last day of the $29,000,000
1996 fiscal year
As of the last day of $30,000,000
each of the first three
fiscal quarters of 1997
As of the last day of $35,000,000
the 1997 fiscal year and
the last day of each the
first three fiscal quarters
of 1998 fiscal year
As of the last day of $40,000,000
the 1998 fiscal year and
the last day of each the
first three fiscal quarters
of 1999 fiscal year
As of the last day of $45,000,000
each fiscal quarter thereafter
and as of the last day of
each fiscal year thereafter
(C) Maintain at all times a ratio of total Consolidated
Indebtedness to Consolidated Adjusted Tangible Net Worth of not greater than the
ratio of 2.50 to 1.0 through the last day of Borrower's 1997 fiscal year and
2.25 to 1.0 as of the last day of each fiscal quarter and fiscal year
thereafter.
(D) Maintain as of the last day of each fiscal quarter for the
four fiscal quarters then ending a Consolidated Funded Debt/EBITDA Ratio of not
greater than 3.0 to 1 as of the last day of each fiscal quarter hereafter.
(E) Maintain as of the last day of each fiscal quarter for the
four fiscal quarters then ending a Consolidated Fixed Charge Coverage Ratio of
not less than 1.5 to 1.0.
SECTION 7 CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any of the
Other Agreements, and without affecting in any manner the rights of Lender under
the other Sections of this Agreement, it is understood and agreed that Lender
may decline to honor any request for a Revolver Loan under this Agreement unless
and until each of the conditions set forth in Sections 7.1 and 7.2 hereof has
been and continues to be satisfied, all in form and substance satisfactory to
Lender and its counsel:
7.1. Documentation. Lender shall have received the following documents,
each to be in form and substance satisfactory to Lender and its counsel:
(A) A closing certificate signed by the President and Chief Financial
Officer of Borrower dated as of the date hereof, stating that (i) the
representations and warranties set forth in Section 5 hereof are true and
correct on and as of such date, (ii) Borrower is on such date in compliance with
all the terms and provisions set forth in this Agreement and (iii) on such date
no Default or Event of Default has occurred or is continuing;
(B) The Other Agreements duly executed and delivered by Borrower and each
other signatory thereto; and
(C) Such other documents, instruments and agreements as Lender shall
reasonably request in connection with the foregoing matters.
7.2. Other Conditions. The following conditions have been and shall
continue to be satisfied, as determined by Lender in its sole discretion:
(A) No Default or Event of Default shall exist;
(B) Each of the conditions precedent set forth in the Other Agreements
shall have been satisfied;
(C) Since June 29, 1996, there shall not have occurred any material adverse
change in the business, financial condition or results of operations of
Borrower, or the existence or value of its Properties, or any event, condition
or state of facts which would reasonably be expected materially and adversely to
affect the business, financial condition or results of operations of Borrower;
(D) No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to obtain damages
from any Person in respect of, the consummation of the transactions contemplated
hereby or which, in Lender's sole discretion, would make it inadvisable to
consummate the transactions contemplated by this Agreement or any of the Other
Agreements; and
(E) Lender shall have received such certificates and documents reflecting
the Solvency of Borrower, after giving effect to the transactions contemplated
by this Agreement, as Lender shall find acceptable.
SECTION 8 EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
8.1 Events of Default. The occurrence of any one or more of
the following events or conditions shall constitute an "Event of Default,"
whatever the reason for such event or condition and whether it shall be
voluntary or involuntary, or within or without the control of Borrower or any
Subsidiary, or be effected by operation of law or pursuant to any order of
judgment of a court or otherwise: Borrower shall fail to pay any of the
Obligations on the due date thereof (whether due at stated maturity, on demand,
upon acceleration or otherwise); any warranty, representation, or other
statement made or furnished to Lender by or on behalf of Borrower or in any
instrument, certificate or financial statement furnished in compliance with or
in reference to this Agreement or any of the Other Agreements proves to have
been false or misleading in any material respect when made or furnished;
Borrower shall fail or neglect to perform, keep or observe (i) any covenant
contained in Sections 4.1, 6.1(A), 6.1(F), 6.1(J), 6.1(K), 6.2 or 6.3 of this
Agreement or (ii) any other covenant contained in this Agreement (other than a
covenant a default in the performance or observance of which is dealt with
specifically elsewhere in this Section 8.1) and the breach of such other
covenant is not cured to Lender's satisfaction within thirty (30) days after the
sooner to occur of Borrower's receipt of notice of such breach from Lender or
the date on which such failure or neglect becomes known to any officer of
Borrower; any event of default shall occur under, or Borrower shall default in
the performance or observance of any term, covenant, condition or agreement
contained in, any of the Other Agreements and such default shall continue beyond
any applicable period of grace; there shall occur any default or event of
default on the part of Borrower or a Consolidated Subsidiary under any
agreement, guaranty, document or instrument to which Borrower or any such
Subsidiary is a party or by which Borrower or any such Subsidiary or any of
their respective Properties is bound, creating or relating to any Indebtedness
exceeding $500,000 if the payment or maturity of such Indebtedness is
accelerated in consequence of such event of default or demand for payment of
such Indebtedness is made; any material loss, theft, damage or destruction not
fully covered by insurance (as required by this Agreement and subject to such
deductibles as Lender shall have agreed to in writing) or the making of any
levy, seizure, or attachment thereof or thereon except in all cases as may be
specifically permitted by other provisions of this Agreement; there shall occur
any material adverse change in the financial condition or business prospects of
Borrower; Borrower shall cease to be Solvent or shall suffer the appointment of
a receiver, trustee, custodian or similar fiduciary, or shall make an assignment
for the benefit of creditors, or any petition for an order for relief shall be
filed by or against Borrower under the Bankruptcy Code (if against Borrower, the
continuation of such proceeding for more than thirty (30) days), or Borrower
shall make any offer of settlement, extension or composition to their respective
unsecured creditors generally, or any motion, complaint or other pleading is
filed in any bankruptcy case of any Person 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; a Reportable Event
shall occur which Lender, in its sole discretion, shall determine constitutes
grounds for the termination by the Pension Benefit Guaranty Corporation of any
Plan or for the appointment by the appropriate United States district court of a
trustee for any Plan, or if any Plan shall be terminated or any such trustee
shall be requested or appointed; or (J) demand shall have been made under any
guaranty given by Borrower in respect of any indebtedness exceeding $500,000 of
a Subsidiary or an Affiliate.
8.2. Acceleration of the Obligations. Without in any way
limiting the right of Lender to demand payment of any portion of the Obligations
payable on demand in accordance with this Agreement or any of the Other
Agreements, upon or at any time after the occurrence of an Event of Default, all
of the Obligations then outstanding (whether under this Agreement, any of the
Other Agreements or otherwise) shall, at the option of Lender and without notice
or demand by Lender, become at once due and payable and Borrower shall forthwith
pay to Lender, in addition to any and all sums and charges due, the entire
principal of and interest accrued on the Obligations plus reasonable attorneys'
fees, not to exceed fifteen percent (15%) of the Obligations, if the same are
collected by or through an attorney at law. From and after the date of such
acceleration of the maturity of the Obligations, the unpaid principal amount of
the Obligations shall bear interest at the Default Rate until paid in full.
Nothing herein shall be construed to permit Lender to charge or collect any
unmatured or unearned interest.
8.3. Remedies. Upon or at any time after the occurrence of an Event of
Default, Lender shall have and may exercise from time to time the following
rights and remedies:
(A) The right to terminate the Credit Facility without further notice to
Borrower;
(B) The right to declare all or any portion of the Obligations to be, and
the same shall thereupon become immediately due and payable without notice or
demand by Lender;
(C) The right at any time or times, to the fullest extent permitted by
Applicable Law and without notice or demand of any kind to Borrower, to hold,
set off and apply any and all deposits (general or special, time or demand, or
provisional or final) at any time held and other indebtedness at any time owing
by Lender to or for the credit or the account of Borrower (regardless of whether
such accounts are general or special and regardless of whether such accounts are
individual or joint) against any and all of the Obligations, irrespective of
whether or not Lender shall have made any demand under this Agreement or any of
the Other Agreements and whether or not any of the Obligations (other than
interest) may be unmatured.
(D) All remedies set forth in this Agreement and the Other Agreements; and
(E) All the rights Lender has under Applicable Law or in equity.
(F) Upon the termination of the Loan Agreement or at any time
after the occurrence of an Event of Default, Lender shall have and may exercise,
with respect to the undrawn amount under any Letter of Credit issued by Lender
or Issuer and then outstanding, the right, at Lender's option, to require
Borrower to deposit with Lender funds equal to such undrawn amount, and if
Borrower fails promptly to make such deposit, Lender may advance such amount as
a Revolver Loan. Any such deposit or advance shall be held by Lender as a
collateral security reserve to fund future drawings against any such Letters of
Credit and Lender shall have (and is hereby granted) a lien upon and security
interest in all monies in such reserve. At such time as all Letters of Credit
have been drawn upon or expired without having been drawn upon, any amounts
remaining in such reserve shall be applied against any outstanding Obligations,
or to the extent all Obligations have been indefeasibly paid in full, returned
to Borrower. The foregoing shall not be deemed to limit in any respect the
rights and remedies of Lender under the Loan Agreement.
8.4. Remedies Cumulative; No Waiver. All covenants,
conditions, provisions, warranties, guaranties, indemnities, and other
undertakings of Borrower contained in this Agreement and the Other Agreements,
or in any document referred to herein or contained in any agreement
supplementary hereto or in any schedule given to Lender or contained in any
other agreement between Lender and Borrower, heretofore, concurrently, or
hereafter entered into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or agreements of
Borrower herein contained. The failure or delay of Lender to exercise or enforce
any rights, powers, or remedies hereunder or under any of the aforesaid
agreements or other documents shall not operate as a waiver of such rights,
powers and remedies, but all such rights, powers, and remedies shall continue in
full force and effect until all of the Loans and all other Obligations owing or
to become owing from Borrower to Lender shall have been fully satisfied, and all
rights, powers, and remedies herein provided for are cumulative and none are
exclusive.
SECTION 9 MISCELLANEOUS
9.1. Indemnity. Borrower hereby agrees to indemnify Lender and
hold Lender harmless from and against any liability, loss, damage, suit, action
or proceeding ever suffered or incurred by Lender as the result of Borrower's
failure to observe, perform or discharge Borrower's duties hereunder. Without
limiting the generality of the foregoing, this indemnity shall extend to any
claims asserted against Lender by any Person under any Environmental Laws.
Additionally, if any taxes (excluding taxes imposed upon or measured by the net
income of Lender, but including, without limitation, any intangibles tax, stamp
tax, recording tax or franchise tax) shall be payable by Lender, Borrower on
account of the execution or delivery of this Agreement, or the execution,
delivery, issuance or recording of any of the Other Agreements, or the creation
of any of the Obligations hereunder, by reason of any existing or hereafter
enacted federal, state, foreign or local statute, rule or regulation, Borrower
will pay (or will promptly reimburse Lender for the payment of) all such taxes,
including, but not limited to, any interest and penalties thereon, and will
indemnify and hold Lender harmless from and against liability in connection
therewith. The indemnity obligation of Borrower under this Section 9.1 and any
other provision of this Agreement shall survive the payment in full of the
Obligations.
9.2. Modification of Agreement; Sale of Interest. This
Agreement may not be modified, altered or amended, except by an agreement in
writing signed by Borrower and Lender. Borrower may not sell, assign or transfer
any interest in this Agreement or any of the Other Agreements, or any portion
thereof, including, without limitation, Borrower's rights, title, interests,
remedies, powers, and duties hereunder or thereunder. Borrower hereby consents
to Lender's participation, sale, assignment, transfer or other disposition, at
any time or times hereafter, of this Agreement and any of the Other Agreements,
or of any portion hereof or thereof, including, without limitation, Lender's
rights, title, interests, remedies, powers, and duties hereunder or thereunder.
In the event of any such participation, sale, assignment, transfer or other
disposition, Lender shall be authorized to provide to each Participating Lender,
assignee or transferee all information in Lender's possession regarding
Borrower, including, without limitation, information required to be disclosed
pursuant to Banking Circular 181 (Rev., Aug. 2, 1984), issued by the Comptroller
of the Currency.
9.3 Reimbursement of Expenses. If, at any time or times prior
or subsequent to the date hereof, Lender employs counsel for advice or other
representation, or incurs legal expenses or other costs or out-of-pocket
expenses in connection with: the negotiation and preparation of this Agreement
or any of the Other Agreements, any amendment of or modification of this
Agreement or any of the Other Agreements; the administration of this Agreement
or any of the Other Agreements and the transactions contemplated hereby and
thereby; any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Lender, Borrower or any other Person) in any way relating to the
Property, this Agreement or any of the Other Agreements or Borrower's affairs;
or any attempt to enforce any rights or remedies of Lender against Borrower or
any other Person which may be obligated to Lender by virtue of this Agreement or
any of the Other Agreements; then, in any such event, the attorneys' fees
arising from such services and all expenses, costs, charges and other fees of
such counsel or of Lender or relating to any of the events or actions described
in this Section shall be payable, ON DEMAND, by Borrower to Lender and shall be
additional Obligations hereunder. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include accountants' fees,
costs and expenses; costs and expenses incurred by Lender's loan administration
staff, audit staff and appraisal staff; court costs and expenses; photocopying
and duplicating expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram charges; secretarial over-time
charges; and expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal services. Borrower acknowledges
and agrees that legal counsel to Lender does not represent Borrower as
Borrower's attorney, that Borrower has retained counsel of its own choice and
has not and will not rely upon any advice from Lender's counsel, and that
Borrower's reimbursement of expenses pursuant to this Agreement (even if
effected by payment directly by Borrower to Lender's counsel) shall not be
deemed to establish any attorney-client relationship between Borrower and
Lender's counsel.
9.4. Indulgences Not Waivers. Lender's failure, at any time or
times hereafter, to require strict performance by Borrower of any provision of
this Agreement shall not waive, affect or diminish any right of Lender
thereafter to demand strict compliance and performance therewith. Any suspension
or waiver by Lender of an Event of Default by Borrower under this Agreement or
any of the Other Agreements shall not suspend, waive or affect any other Event
of Default by Borrower under this Agreement or any of the Other Agreements,
whether the same is prior or subsequent thereto and whether of the same or of a
different type. None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or any of the Other
Agreements and no Event of Default by Borrower under this Agreement or any of
the Other Agreements shall be deemed to have been suspended or waived by Lender,
unless such suspension or waiver is by an instrument in writing specifying such
suspension or waiver and is signed by a duly authorized representative of Lender
and directed to Borrower.
9.5. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
9.6. Successors and Assigns. This Agreement and the Other Agreements shall
be binding upon and inure to the benefit of the successors and assigns of
Borrower and Lender. This provision, however, shall not be deemed to modify
Section 9.2 hereof.
9.7. Cumulative Effect. The provisions of the Other Agreements are hereby
made cumulative with the provisions of this Agreement.
9.8. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which counterparts taken together shall constitute but
one and the same instrument. In proving this Agreement in any judicial
proceeding, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.
9.9. Notice. Except as otherwise provided herein, all notices,
requests and demands to or upon a party hereto shall be in writing and shall be
sent by certified or registered mail, return receipt requested, personal
delivery against receipt or by telecopier or other facsimile transmission and,
unless otherwise expressly provided herein, shall be deemed to have been validly
served, given or delivered when delivered against receipt or one Business Day
after deposit in the U.S. mail, postage prepaid, or, in the case of facsimile
transmission, when received at the office of the noticed party, addressed as
follows:
(A) If to Lender: SouthTrust Bank of Georgia, N. A.
One Georgia Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Corporate Banking Group
Telecopier No.: (000) 000-0000
(B) If to
Borrower: Inbrand Corporation
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
or to such other address as each party may designate for itself by like notice
given in accordance with this Section 9.9; provided, however, that any notice to
or upon Lender pursuant to Section 2.1 or 2.2 shall not be effective until
received by Lender. Any written notice that is not sent in conformity with the
provisions hereof shall nevertheless be effective on the date that such notice
is actually received by the noticed party.
9.10. Demand Obligations. Nothing in this Agreement shall
affect or abrogate the demand nature of any portion of the Obligations expressly
made payable on demand by this Agreement or by any instrument evidencing or
securing same, and the occurrence of an Event of Default shall not be a
prerequisite for Lender's requiring payment of such Obligations.
9.11. Time of Essence. Time is of the essence of this Agreement and the
Other Agreements.
9.12. Entire Agreement. This Agreement and the Other
Agreements, together with all other instruments, agreements and certificates
executed by the parties in connection therewith or with reference thereto,
embody the entire understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and supersede all
prior agreements, understandings and inducements, whether express or implied,
oral or written.
9.13. Amendment and Restatement; No Novation. This Agreement constitutes a
consolidation, amendment and restatement of the Original Loan Agreement
effective from and after the date of this Agreement. The execution and delivery
of this Agreement shall not constitute a novation of any indebtedness or other
obligations owing to Lender based on any facts or events occurring or existing
prior to the execution and delivery of this Agreement.
9.14. Payments Set Aside. To the extent that Borrower makes a
payment or payments to Lender, or Lender exercises its rights of setoff, and
such payment or payments or setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
recovery, the Obligations or part thereof originally intended to be satisfied,
and all rights and remedies therefor, shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or
setoff had not occurred.
9.15. Independence of Covenants, Representations and
Warranties. All covenants hereunder shall be given independent effect so that,
if a particular action or conditions is not permitted by any such covenant or
any representation or warranty hereunder, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant,
representation or warranty shall not avoid the occurrence of a Default or an
Event of Default if such action is taken or condition exists.
9.16. Governing Law; Consent to Forum. THIS AGREEMENT HAS BEEN
NEGOTIATED, EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
ATLANTA, GEORGIA. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF GEORGIA. AS PART OF THE
CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE
DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER OR LENDER, BORROWER HEREBY
CONSENTS AND AGREES THAT AT LENDER'S OPTION, (i) THE SUPERIOR COURT OF XXXXXX
COUNTY, GEORGIA, OR, (ii) THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF GEORGIA, ATLANTA DIVISION, SHALL HAVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER AND LENDER PERTAINING TO THIS
AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT;
PROVIDED, HOWEVER, LENDER MAY, AT ITS OPTION, COMMENCE ANY ACTION, SUIT OR
PROCEEDING IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION, TO OBTAIN ANY LEGAL
OR EQUITABLE RELIEF, TO ENFORCE ANY JUDGMENT OR ORDER OBTAINED BY LENDER AGAINST
BORROWER, TO ENFORCE ANY OTHER RIGHT OR REMEDY UNDER THIS AGREEMENT OR TO OBTAIN
ANY OTHER RELIEF DEEMED NECESSARY OR APPROPRIATE BY LENDER. BORROWER EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH
BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR
FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
9.17. General Waivers by Borrower. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER WAIVES (i) PRESENTMENT, DEMAND AND PROTEST
AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, 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 LENDER ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO IN THIS REGARD; (ii) THE BENEFIT OF
ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (iii) NOTICE OF LENDER'S
ACCEPTANCE HEREOF.
9.18. Jury Trial Waiver. BORROWER AND LENDER EACH WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OF THE OTHER AGREEMENTS OR
THE OBLIGATIONS. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS A MATERIAL
INDUCEMENT TO LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING
UPON THE FOREGOING WAIVER IN ITS FUTURE DEALINGS WITH BORROWER. BORROWER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL
COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, this Agreement has been duly executed under seal in
Atlanta, Georgia, as of the day and year specified at the beginning hereof.
ATTEST: INBRAND CORPORATION
("Borrower")
By:
Secretary
[CORPORATE SEAL] Title:
SOUTHTRUST BANK OF GEORGIA, N.A.
("Lender")
By:
Title:
sotrust\inbrand\lsa4.wpd
EXHIBIT A
REVOLVING CREDIT NOTE
$35,000,000.00 October 1, 0000
Xxxxxxx, Xxxxxxx
FOR VALUE RECEIVED, the undersigned (hereinafter referred to as
"Borrower") hereby promises to pay to the order of SOUTHTRUST BANK OF GEORGIA,
N.A. (herein, together with any subsequent holder hereof, "Lender"), at Lender's
principal office 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 THIRTY-FIVE MILLION AND NO/100 DOLLARS ($35,000,000.00), or so
much thereof as may be disbursed and remain outstanding from time to time
hereafter under that certain Amended and Restated Loan Agreement, dated as of
October 1, 1996, as amended between Lender and Borrower (the "Loan Agreement"),
with interest from and after the date hereof on the unpaid principal amount
outstanding from time to time at the rate per annum applicable under Section 3
of the Loan Agreement.
This Revolving Credit Note (the "Note") evidences Loans under, and is
the "Note" referred to in, and is issued pursuant to, the Loan Agreement and is
entitled to all of the benefits and security of the Loan Agreement and the Other
Agreements. All of the terms, covenants and conditions of the Loan Agreement are
hereby made a part of this Note and are deemed incorporated herein in full. All
capitalized terms used herein, unless otherwise specifically defined in this
Note, shall have the meanings ascribed to them in the Loan Agreement.
Borrower acknowledges that the Base Rate merely serves as a basis upon
which effective rates of interest are calculated for loans making reference to
the per annum rate of interest publicly announced by Lender from time to time as
its base rate, that the Base Rate may not be the lowest rate available from
Lender and that loans and other extensions of credit from Lender may be priced
at, above or below the Base Rate. The Base Rate in effect on the date hereof is
8.25% per annum and, therefore, the rate per annum on the date hereof applicable
to Base Rate Loans expressed in terms of simple interest, is 8.25% per annum.
The Adjusted LIBO Rate in effect on the date hereof is 5.44% per annum, and,
therefore, the rate per annum on the date hereof applicable to LIBOR Loans
expressed in forms of simple interest, is 6.94% per annum. Interest hereunder
shall be computed on the basis of actual days elapsed over the period of a
360-day year unless reference to a 365 or a 366-day year is necessary in order
not to exceed the highest lawful rate permissible under Applicable Law. From and
after the occurrence of an Event of Default, the outstanding principal balance
of this Note shall bear interest at a variable rate per annum equal to the
Default Rate.
In no contingency or event whatsoever, whether by reason of advancement
whether by reason of advancement of the proceeds hereof or otherwise, shall the
amount paid or agreed to be paid to Lender for the use, forbearance or detention
of money advanced hereunder exceed the Maximum Rate. In the event that such a
court determines that Lender has charged or received interest hereunder in
excess of Maximum Rate, such rate shall automatically be reduced to the Maximum
Rate and Lender shall promptly refund to Borrower any interest received by
Lender in excess of the Maximum Rate or, if so requested by Borrower, shall
apply such excess to the principal balance of this Note. 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 the Maximum Rate. All interest paid or agreed to be paid to Lender
shall, to the extent permitted by Applicable Law, be amortized, pro-rated,
allocated and spread throughout the full term of this Note until payment in full
of the principal amount hereof (including the period of any renewal or extension
thereof) so that interest on such principal amount for such full period will not
exceed the Maximum Rate.
Principal and interest accrued hereunder shall be repaid by Borrower as
follows:
(A) Principal, payable on account of the Loans, shall be paid
by Borrower to Lender immediately upon the earliest of (i) the
occurrence of an Event of Default in consequence of which Lender elects
to accelerate the maturity and payment of such Loans, or (ii) the date
on which the Credit Facility is terminated pursuant to Section 2.2 of
the Loan Agreement;
(B) Interest accrued on the principal amount of the Loans
shall be due on the earliest of (i) the first day of each month (for
the immediately preceding month), computed through the last calendar
day of the preceding month, (ii) occurrence of an Event of Default in
consequence of which Lender elects to accelerate the maturity in
payment of the Obligations, or (iii) the date on which the Credit
Facility is terminated pursuant to Section 2.2 of the Loan Agreement.
The occurrence or existence of an Event of Default under the Loan
Agreement, including, without limitation, the failure to pay any installment of
principal or interest on this Note in full on the due date thereof, shall
constitute an event of default under this Note and shall entitle Lender, at its
option, upon or at any time after the occurrence of any such event of default to
declare the then outstanding principal balance and accrued interest hereof to
be, and the same shall thereupon become, immediately due and payable without
notice to or demand upon Borrower, all of which Borrower hereby expressly
waives. If this Note is collected by or through an attorney at law, then
Borrower shall be obligated to pay, in addition the principal balance and
accrued interest hereof, reasonable attorney's fees, not to exceed fifteen
percent (15%) of such principal and interest, and court costs.
Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, Borrower hereby waives demand, protest, notice of demand,
protest and non-payment and any other notice required by law relative hereto,
except to the extent as otherwise may be provided for in the Loan Agreement.
Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Lender in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Lender
of any right or remedy preclude any other right or remedy. Lender, at its
option, may enforce its rights against any collateral securing this Note without
enforcing its rights against Borrower, any guarantor of the indebtedness
evidenced hereby or any other property or indebtedness due or to become due to
Borrower. Borrower agrees that, without releasing or impairing Borrower's
liability hereunder, Lender may at any time release, surrender, substitute or
exchange any collateral securing this Note and may at any time release any party
primarily or secondarily liable for the indebtedness evidenced by this Note.
This Note shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Georgia, and is intended to
take effect as an instrument under seal. This Note shall supersede and replace
that (i) certain Revolving Credit Note, dated February 6, 1996, made by Borrower
to the order of Lender, in the stated principal amount of $25,000,000 and (ii)
certain Revolving Credit Note (Bridge Note), dated May 1, 1996, made by Borrower
to the order of Lender, in the stated principal amount of $10,000,000.
IN WITNESS WHEREOF, Borrower has caused this Note to be signed and
sealed as of the day and year first above written.
ATTEST: INBRAND CORPORATION, a Georgia
corporation ("Borrower")
By:
Secretary
[CORPORATE SEAL] Title:
EXHIBIT B
COMPLIANCE CERTIFICATE
[LETTERHEAD OF BORROWER]
_____________, 19__
TO: SouthTrust Bank of Georgia, N.A.
One Georgia Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
The undersigned, the Chief Financial Officer of INBRAND CORPORATION, a
Georgia corporation ("Borrower"), gives this certificate to SOUTHTRUST BANK OF
GEORGIA, N. A. ("Bank") in accordance with the requirements of Section 6.1(L) of
that certain Amended and Restated Loan Agreement dated as of October 1, 1996,
between Borrower and Bank ("Loan Agreement"). Capitalized terms used in this
Certificate, unless otherwise defined herein, shall have the meanings ascribed
to them in the Loan Agreement:
(1) Based upon my review of the balance sheets and statements of income
of Borrower for the fiscal quarter ending __________________, 19__, copies of
which are attached hereto, I hereby certify that:
(a) Consolidated Current Ratio is ___ to 1.0;
(b) Consolidated Adjusted Tangible Net Worth is $ _____;
(c) The ratio of total Consolidated Indebtedness to
Consolidated Adjusted Tangible Net Worth is
___ to 1;
(d) The Consolidated Funded Debt/Consolidated EBITDA
Ratio is ___ to 1;
(e) The Consolidated Fixed Charge Coverage Ratio is ___
to 1;
(f) Consolidated Capital Expenditures during the fiscal
year to-date total $__________.
(2) No Default exists on the date hereof, other than: ________
(if none, so state);
and
(3) No Event of Default exists on the date hereof, other than:
____________ (If none, so state).
Very truly yours,
EXHIBIT C
PERMITTED LIENS
1. UCC-1 financing statement no. 85-8104 naming Medical Disposables Company
as Debtor and Signal Capital Credit Corporation as Secured Party filed August
24, 1985 with the Clerk of Superior Court of Xxxx County, Georgia.
2. UCC-1 financing statement no. 89-7082 naming Medical Disposables Company
as Debtor and Fleet Credit Corporation as Secured Party filed June 30, 1989 with
the Clerk of Superior Court of Xxxx County, Georgia.
3. UCC-1 financing statement no. 89-7083 naming Medical Disposables Company
as Debtor and Fleet Credit Corporation as Secured Party filed June 30, 1989 with
the Clerk of Superior Court of Xxxx County, Georgia.
4. UCC-1 financing statement no. 9012196 naming Medical Disposables Company
as Debtor and Danka Business Systems as Secured Party filed December 27, 1990
with the Clerk of Superior Court of Xxxx County, Georgia.
5. UCC-1 financing statement no. 912900 naming Medical Disposables Company
as Debtor and Savin Business Credit Corporation as Secured Party filed April 9,
1991 with the Clerk of Superior Court of Xxxx County, Georgia as assigned to The
King Companies.
EXHIBIT D
BORROWER'S BUSINESS LOCATIONS
(1) Borrower currently has the following business locations, and
no others:
1145, 1155, 1160, 1165 and 0000 Xxxxx
Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Suite A, 000 Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
(2) Borrower maintains its books and records at:
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
EXHIBIT E
SHARE REPURCHASE LOAN CERTIFICATE
[LETTERHEAD OF BORROWER]
TO: SOUTHTRUST BANK OF GEORGIA, N.A.
One Georgia Center
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
The undersigned, the Chief Financial Officer of INBRAND CORPORATION, a
Georgia corporation ("Borrower"), gives this certificate to SOUTHTRUST BANK OF
GEORGIA, N.A. ("Lender") in accordance with the requirements of that certain
Amended and Restated Loan Agreement, dated as of October 1, 1996, as amended,
between Borrower and Lender ("Loan Agreement"). Capitalized terms used in this
Certificate, unless otherwise defined herein, shall have the meanings ascribed
to them in the Loan Agreement:
(a) Borrower hereby requests a Share Repurchase Loan in
the amount of $________;
(b) No Default exists on the date hereof, other
than: _______________________ (if none, so state);
(c) No Event of Default exists on the date hereof,
other than: _______________ (if none, so state);
(d) The proceeds of the Share Repurchase Loan will be
used to acquire ______ Shares;
(e) In connection with the proposed Share repurchase, copies
of all filings, if any, that have been made with the Securities and Exchange
Commission are attached hereto; and
(f) After giving effect to the proposed Share repurchase, less
than 30% of the value of the assets of Borrower will consist of Margin Stock.
Very truly yours,
