EXHIBIT 10.1
LOAN AGREEMENT
BY AND BETWEEN:
HIBERNIA NATIONAL BANK
AND
LABORATORY SPECIALISTS, INC.
LBA - August 25,1998 (9:51AM)
UNITED STATES OF AMERICA
STATE OF LOUISIANA
PARISH OF ORLEANS
CITY OF NEW ORLEANS
BE IT KNOWN, that as of the 25th day of August, 1998 (the "Effective
Date"),
BEFORE ME, a Notary Public, duly commissioned and qualified, and in the
presence of the undersigned witnesses,
PERSONALLY CAME AND APPEARED:
LABORATORY SPECIALISTS, INC., a Louisiana corporation represented herein by
Xxxxxx X. Xxxxxxxx, Xx., its President, duly authorized by virtue of a
resolution of the Board of Directors of the corporation, a certified copy
of which is annexed hereto and made a part hereof,
(hereinafter the "Borrower"),
and
HIBERNIA NATIONAL BANK, a national banking association having its
domicile and principal place of business in New Orleans, Louisiana,
appearing herein through and by its duly authorized officer
(hereinafter the "Lender"),
each of whom did say and declare as follows:
A. The Borrower has applied to the Lender for a credit facility in
the maximum aggregate principal sum not exceeding One Million and
No/100 ($1,000,000.00) Dollars (the "Loan").
B. The Lender has agreed to provide the Borrower with the Loan
subject to the terms and
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conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lender to provide the Loan, the Borrower and the Lender hereby covenant and
agree as follows:
ARTICLE I
INTERPRETATIVE PROVISIONS
SECTION 1.01. Basic Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Advance" shall mean the disbursement of any portion of the Loan.
"Agreement" shall mean this Loan Agreement, as the same may hereafter be
amended.
"Business Day" shall mean any day except a Saturday, Sunday, or other day on
which banks in New Orleans, Louisiana are required to close.
"Closing Date" shall mean the Effective Date.
"Collateral" shall mean all of the security interests, liens, mortgages,
encumbrances, or other rights in or relating to property, whether real or
personal, whether tangible or intangible, required to be held by or granted
to Lender under Section 3.01 of this Agreement.
"Collateral Documents" shall mean, collectively, the documents to be
delivered to the Lender as set forth in Section 3.02 of this Agreement.
"Default After Notice" shall have the meaning ascribed to it in Section 8.02
below.
"Effective Date" shall mean the Effective Date determined pursuant to the
first sentence of this Agreement.
"Event of Default" shall mean any of the events or occurrences set forth in
Section 8.01 of this Agreement.
"Governmental Authority" shall mean any municipal, parish, state or federal
governmental authority having or claiming jurisdiction over the Borrower, the
Loan and/or the Collateral.
"Grantor" shall mean Borrower and any Guarantor and any other person who
grants Lender any Collateral for the Loan.
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"Indebtedness" shall mean any and all amounts and/or liabilities owing
from time to time from Borrower to Lender, whether now or in the
future, whether evidenced in writing or not, whether relating to a
promissory note or other formal evidence of indebtedness or arising out
of some other source or obligation, whether pursuant to this Agreement
or any other instrument, including, without limitation, principal,
interest, late charges, penalties, attorney's fees and amounts advanced
by the Lender.
"Loan" shall have the meaning ascribed to it in Recital A.
"Loan Documents" shall mean, collectively, this Agreement, the Note, the
Collateral Documents, and any other documents or instruments executed or to
be executed in the future pursuant to this Agreement or in connection with
the Loan.
"Loan Year" shall mean each period of one year commencing on the anniversary
date of the Closing Date and ending one year later. The "First Loan Year"
shall commence on the Closing Date and shall end on the day prior to the
Closing Date one year later, and the "Second Loan Year" shall commence on the
first annual anniversary of the Closing Date and shall end one year later and
so on.
"Note" shall mean the promissory note executed by Borrower as maker, payable
to the order of Lender, dated the Closing Date, in the principal sum of One
Million and No/100 ($1,000,000.00) Dollars.
"Parent" shall mean any person that owns more than fifty (50%) percent of the
total issued and outstanding ownership interests in another person.
"Person" or "person" shall mean any natural or juridical person including any
human being or any entity whether incorporated or not, such as without
limitation, a corporation, limited liability company, or partnership.
"Subsidiary" shall mean any person with respect to which more than fifty
(50%) percent of the total issued and outstanding ownership interests is
owned by another person.
SECTION 1.02. Additional Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" shall mean (a) any Guarantor, (b) any Subsidiary of Borrower, (c)
any Parent of Borrower, and (d) any other Subsidiary of the Parent of
Borrower (collectively "Affiliates").
"Commitment" shall mean the commitment letter addressed by Lender to Borrower
under date of April 8, 1998, accepted by Borrower on June 11, 1998.
"Compliance Certificate" shall mean the certificate, certified correct by the
chief executive officer
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of Borrower or other officer of Borrower reasonably acceptable to Lender,
affirming and certifying that Borrower is, as of the date of said
certificate, in full compliance with all covenants and obligations expressed
in this Agreement or any other Loan Documents.
"Guarantor" shall mean LSAI.
"Guaranty Agreement" shall mean the continuing guaranty agreement
establishing the guaranty described in Section 3.03 below.
"LSAI" shall mean Laboratory Specialists of America, Inc., an Oklahoma
corporation.
"Mortgage" shall mean an encumbrance of immovable property.
"Maturity Date" shall mean the date that is two years after the Closing Date.
"Security Agreement" shall mean a document pursuant to which there is created
and established a Security Interest.
"Security Interest" shall mean an encumbrance of movable property, and shall
include proceeds unless otherwise specifically provided herein.
SECTION 1.03. Specific Financial Definitions.
"EBITDA" shall mean earnings before interest expense, income taxes. non-cash
depreciation, amortization and any extraordinary, non-recurring income.
"Long Term Debt" shall mean all indebtedness of the Borrower for borrowed
money maturing more than twelve (12) months after the date of determination,
whether secured or unsecured, which would be classified as long-term debt in
accordance with generally accepted accounting principles.
"Senior Debt" shall mean the Indebtedness plus any other debt of the Borrower
not subordinated to Lender.
SECTION 1.04. Rules of Interpretation.
(a) All terms defined in this Agreement shall have their defined meanings
when used in the Note, the Collateral Documents or in any certificates or
other document made or delivered pursuant hereto, unless the context shall
otherwise require.
(b) Words used herein in the singular, where the context so permits, shall
be deemed to include the plural and vice versa. Likewise, the definitions of
words used in the singular herein shall also apply to such words when used in
the plural and vice versa, unless the context shall otherwise
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require.
(c) The words "hereof ", and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.
(d) Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
(e) Captions and section headings are inserted for convenience only and
shall not affect any construction or interpretation of this Agreement.
ARTICLE II
BASIC ELEMENTS OF THE LOAN
SECTION 2.01. The Loan. Subject to the terms and conditions and relying
on the representations and warranties contained in this Agreement, Lender
agrees to provide Borrower with the Loan, evidenced by the Note. Some of the
salient terms and conditions of the Loan are set forth below. The terms and
provisions of the Note are more fully set forth in the Note, and in the event
of any conflict between the provisions of this Section 2.01 and the
provisions of the Note, the provisions of the Note will govern.
(a) The maximum outstanding balance due under the Note shall not exceed
One Million and No/100 ($1,000,000) Dollars.
(b) The Note shall bear interest from the date of each Advance until
paid in full at the interest rate(s) as provided in the Note.
(c) The entire principal balance outstanding under the Note and all
accrued interest shall be due and payable on the Maturity Date. The Note may
be renewed in whole or in part for one or more one (1) year periods
thereafter, all in Lender's sole discretion. In the event of any such
renewal, all provisions of this Agreement and the other Loan Documents shall,
to the maximum extent applicable to the Note, remain in full force and
effect, without the need for any additional documentation, provided that
Borrower agrees to execute any additional documentation relating to any such
renewal that Lender may reasonably request.
(d) The Note may be prepaid in full or in part at any time, as provided
in the Note.
(e) There shall be a fee, payable quarterly in arrears, of one-quarter
(.25%) percent of the unused portion of the maximum aggregate principal sum
of the Loan.
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SECTION 2.02. Advances. The original principal amount of the Loan shall
be advanced by Lender to Borrower on a periodic basis, as requested by
Borrower, but same shall be advanced only (i) as permitted by Lender's
business practices then in effect, and (ii) provided all other applicable
terms and conditions of this Agreement have been satisfied.
SECTION 2.03. Termination of Advances. The Lender's obligation to make
Advances shall terminate in the event that:
(a) the amount of Advances made to date under the Loan equals One
Million and No/100 ($1,000,000.00) Dollars; or
(b) the Maturity Date occurs.
ARTICLE III
SECURITY FOR THE LOAN
SECTION 3.01. Collateral. The Loan and the Note shall be secured by the
following rights and interests in favor of Lender, all of which shall have a
first ranking and priority except as specifically indicated below:
(a) a Mortgage encumbering the property at 000 Xxxxxxx Xxxxx, Xxxxx
Xxxxxx, Xxxxxxxxx;
(b) a Mortgage encumbering the property at 0000 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxx 00000;
(c) the guaranty of the Guarantor in the amount as provided in Section
3.03;
(d) the grant of a Security Interest in the following movable property
of Borrower:
(1) all accounts receivables; and
(2) all contract rights and general intangibles; and
(3) all equipment; and
(4) all furniture; and
(5) all inventory.
SECTION 3.02. Collateral Documents. The Borrower shall execute and/or
deliver on the Closing Date, any and all documents which may be necessary in
order to create, establish, attach or perfect the Collateral, including but
not limited to the following, all of which shall be in form and content
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acceptable to Lender and Lender's counsel, in their discretion:
(a) an acknowledgment that achieves the Collateral described in Section
3.01(a) above;
(b) an acknowledgment that achieves the Collateral described in Section
3.01(b) above;
(c) a Security Agreement encumbering the Collateral described in Section
3.01
(d) above together with a reference therein to previously-recorded UCC-1
Financing Statements covering same;
(d) the Guaranty Agreement.
SECTION 3.03. Guaranty Agreement . The Loan and all other Indebtedness
shall be guaranteed by each Guarantor in solids, up to the maximum amount of
same.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. General. To induce the Lender to make the Loan, the
Borrower hereby makes the following representations and warranties to the
Lender:
(a) With respect to each Borrower and each Guarantor:
(i) If any such person is a natural person, the marital status of
such person recited in the appearance section of this Agreement
or in any document by which such person grants Collateral to
Lender is true and correct.
(ii) The mailing addresses of any such persons set forth in Section
9.06 of this Agreement pertaining to notices are correct.
(iii) If any such person is an entity, each such entity
a) is duly organized and validly existing under the laws
of the state of its organization,
b) has all requisite power and authority to execute any of
the Loan Documents to which it is a signatory, and
c) if a corporation, is in good standing in the state of
its incorporation.
(iv) Each such person has all requisite capacity and authority to
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a) own its property,
b) to transact business in connection with the matters
described in this Agreement, and
c) to enter into and perform its obligations under the Loan
Documents.
(v) Each such person indicated as the owner of any property in any of
the Loan Documents has full, complete, good and merchantable
title to such property.
(b) (1) The execution, delivery and performance by any person of or
under the Loan Documents requires no action by or in respect of, or filing
with, any Governmental Authority (other than actions or filings in connection
with the perfection of a Security Interest or privilege in any Collateral
hereunder) and does not contravene, or constitute a default under or
violation of any provision of applicable law or regulation or of any
documents governing any such person or of any agreement, judgment,
injunction, order, decree or other instrument which is binding upon such
person or to which any of such person's property is subject.
(2) The execution of any Loan Documents by any person signatory
thereto constitutes and stands as the free act and deed of such person,
without the necessity of any further actions or approvals of any kind from
any persons or entities.
(c) The Loan Documents all constitute the legal, valid and binding
obligations of the person signatory thereto, and said documents are fully
enforceable in accordance with their respective terms.
(d) The financial statements heretofore delivered to the Lender are
true and correct in all material respects, and fairly represent the financial
condition of persons described therein, as of the date thereof. No material
adverse change has occurred in the conditions or operations reflected in any
such financial statement since the respective dates thereof, and no person
described therein is the subject of any bankruptcy, reorganization, or
insolvency proceeding.
(e) All information, reports, papers, financial projections and data
given to the Lender by Borrower or any other person pursuant to this
Agreement or in connection with the application for or the making of the Loan
are accurate and correct in all material respects.
(f) (i) The principal address from which Borrower conducts its business
is: 0000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000.
(ii) The address of Borrower's chief financial office is: 0000
Xxxxxx Xxxxxx, Xxxxxx, XX 00000.
(iii) The address of Borrower's registered office is: 000 Xxxxxxx
Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxx 00000.
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(g) The fiscal year of Borrower ends on December 31.
(h) As of the Closing Date, neither Borrower nor any Guarantor is in
default under or in violation of any document or agreement with or in favor
of Lender, or any other document or agreement the default under or violation
of which would have a material adverse impact upon such person, nor does
there exist any state of facts which with the passage of time or the giving
of notice or both would constitute such a default or violation.
(i) There are no actions, suits or proceedings pending, at law or in
equity, or before any Governmental Authority, involving or affecting any of
the Collateral) nor involving or affecting the validity or enforceability or
priority of any of the Collateral, nor are any of same threatened or likely.
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. General. Unless the Lender consents otherwise in writing,
continuing for as long as any Indebtedness remains unpaid, Borrower shall
keep, maintain, comply, preserve and be responsible for the satisfaction of
each of the following covenants:
(a) Borrower will indemnify the Lender from claims of brokers with whom
Borrower has dealt in the execution hereof or the consummation of the
transactions contemplated hereby.
(b) Borrower will pay all fees and expenses incurred by the Borrower
and the Lender in connection with the transactions contemplated hereunder,
including, without limitation, all service fees, legal fees (including the
fees of counsel for the Lender) and all other costs, expenses and fees
required to satisfy the conditions of this Agreement.
(c) The Lender shall have the right from time to time at all times
during normal business hours to examine any or all of the books, records and
accounts at the office of the Borrower or other person maintaining such
books, records, and accounts and to make such copies or extracts thereof as
the Lender shall desire. In addition, Borrower shall furnish to the Lender
within fifteen (15) days, after request, such further detailed information
covering the financial affairs of the Borrower, as the Lender in its sole
discretion may request.
(d) Borrower shall observe and perform each and every term to be
observed or performed by the Borrower pursuant to the terms of (i) all
agreements and other instruments (including but not limited to the Loan
Documents) to which the Borrower and the Lender are parties; and (ii) any
other agreement or recorded instrument the breach of which (a) would
materially adversely affect the ownership, operation or management of the
Borrower's business or (b) would adversely affect the priority or
enforceability of any of the Loan Documents.
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(e) Borrower shall make, execute and deliver to Lender such security
agreements, instruments, documents and other agreements reasonably necessary
to document or confirm the Loan and any matters set forth in any of the Loan
Documents or to evidence, confirm or continue any of the Security Interests
in the Collateral intended to be granted by the Loan Documents.
(f) If any of the addresses specified in Section 9.06 below are
changed, Borrower shall give Lender five (5) prior Business Days' notice
thereof.
(g) Borrower shall comply with all applicable statutes, regulations and
orders of any Governmental Authority, and of any court, arbitrator or grand
jury, in respect to the conduct of its businesses and the ownership of its
properties, except such as are being contested in good faith.
(h) Borrower shall maintain all of its operating accounts with Lender,
including an automated wholesale lockbox.
(i) Borrower shall pay, as and when due, all accounts and trade
payables in a manner consistent with normal business practices for companies
engaged in similar operations in the same area.
(j) Borrower will and does hereby indemnify and hold harmless Lender
against any and all liabilities, obligations, losses, damages (including, but
not limited to, environmental liability), penalties, claims, actions, suits,
costs and expenses of whatever kind or nature which may be imposed on,
incurred by or asserted at any time against Lender in any way relating to, or
arising in connection with the transaction of Borrower's business.
(k) Borrower shall provide Lender copies of all audits or inspections
or reports performed at the request of a governmental entity within thirty
(30) days after Lender's request for same.
SECTION 5.02. Financial Reports. Unless the Lender consents otherwise
in writing, continuing for as long as any Indebtedness remains unpaid,
Borrower shall keep, maintain, comply, preserve and be responsible for the
satisfaction of each of the following covenants:
(a) Borrower will keep true books and records and accounts concerning
its business transactions.
(b) Borrower and Guarantor will, during the term of the Loan, furnish
to Lender as soon as available and in any event within forty-five (45) days
after the end of each fiscal quarter of each entity, financial statements,
including all financial statements filed with any Governmental Authority
which regulates securities (collectively the "Required Statements") covering
each entity, signed by the chief financial officer of the entity as to which
the Required Statements are issued.
(c) The Required Statements shall be prepared according to generally
accepted accounting principles, consistently applied; shall in all events
include balance sheets, income statements, sources and uses of cash,
statements of profit and loss, statements of changes in equity,
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and statements of cash flows; and shall be addressed to Lender.
(d) Further, within ninety (90) days after the end of the fiscal year
of Borrower and Guarantor, each entity shall submit to Lender the Required
Statements, audited, unqualified and certified by a certified public
accountant.
(e) Borrower will notify Lender immediately of any material change in
its financial condition or that of any Guarantor or other Grantor.
(f) Within forty-five (45) days after the end of each fiscal quarter of
Borrower, Borrower shall provide to Lender a certified statement that it is
in full compliance with all of the terms of all of the Loan Documents and
that there exists no Event of Default under this Agreement nor any state of
facts that with the passage of time or the giving of notice or both would
constitute such an Event of Default, except for such facts and circumstances
as may be specifically described in such certificate, a certification and
computation of all of the financial covenants of Borrower, with reference to
the preceding 12-month period ended on the last day of the calendar quarter
covered by such certificate.
(g) Borrower will provide to Lender such other financial information as
Lender may reasonably request.
SECTION 5.03. Financial Covenants. Unless the Lender consents otherwise
in writing, continuing for as long as any Indebtedness remains unpaid,
Borrower shall keep, maintain, comply, preserve and be responsible for the
satisfaction of each of the following covenants:
(a) Borrower shall maintain a positive net income, as defined by
generally accepted accounting principles. This covenant shall be tested
annually.
(b) Borrower shall maintain a ratio of Senior Debt to EBITDA of no more
than 3.00: 1.00. This covenant shall be tested quarterly.
(c) Borrower shall maintain a Debt Service Coverage Ratio of no less
than 2.00: 1.00. As used herein, the phrase "Debt Service Coverage Ratio"
shall mean the ratio obtained by dividing the Borrower's net income plus
non-cash depreciation and amortization expenses by the total "debt service"
of Borrower. As used herein "debt service" shall mean the total of the
current maturities of Long Term Debt plus all current lease obligations.
This covenant shall be tested annually at the end of each fiscal year of
Borrower.
(d) Borrower shall maintain an Interest Coverage Ratio of no less than
5.00: 1.00. As used herein, the phrase "Interest Coverage Ratio" shall mean
the ratio obtained by dividing the Borrower's EBITDA by the total interest
expense of Borrower on all loans and bank indebtedness (including the Loan
and any loans in favor of Lender). This covenant shall be tested annually at
the end of each fiscal year of Borrower.
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(e) Borrower shall maintain accounts receivable of no less than
$2,800,000.00 at any given time.
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. Lender's Consent Required. Unless Lender consents
otherwise in writing, continuing for as long as any Indebtedness remains
unpaid, Borrower shall be responsible and liable that:
(a) Borrower shall not assign, transfer, alienate, pledge or encumber
any interest in this Agreement.
(b) Neither Borrower nor any Guarantor shall dispose of all or
substantially all of its property, accounts, assets or business.
(c) Borrower shall not change or expand its business as presently
conducted, consolidate with or merge into any other business, acquire
interest or ownership in any other business, or lend funds to any other
business, provided that Lender's consent to any such action shall not be
unreasonably withheld.
(d) Borrower shall not permit, cause or suffer there to occur (1) any
change in the identity or ownership percentages of the owners of Borrower
(2) any change in the management of any Borrower, (3) any change in the
identity of the President, Chief Executive Officer, or Chairman of the Board
of Directors of Borrower, from that in existence as of the Closing Date, or
(4) any transfer, encumbrance or pledge of any interest in Borrower.
(e) Borrower shall not sell, convey, lease, donate or otherwise
alienate or dispose of any of the property encumbered by the Collateral,
whether voluntarily or involuntarily, in any manner whatsoever, except
(1) where explicitly permitted under other provisions of this
Agreement, or
(2) for bona fide, arms' length sales or leases of portions of said
property where such sales or leases are part of the business
regularly engaged in by Borrower with respect to said property,
such as (without limitation) sales of condominium lots, or leases
of apartments or office space.
(f) Borrower shall not grant or suffer or permit to be filed any
mortgage, Security Interest, lien, pledge, hypothecation, or other
encumbrance of or against any of the property encumbered by the Collateral,
whether voluntarily or involuntarily, in any manner whatsoever, regardless of
whether same is superior or subordinate to the lien of any of the Collateral.
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(g) Borrower shall not use or expend any portion of the Loan proceeds for
any purpose or matter other than the working capital of Borrower.
(h) Borrower shall not incur any indebtedness or other obligation,
including any guaranty or other contingent obligation, to any bank, financial
institution or institutional lender.
ARTICLE VII
CONDITIONS OF LENDING
SECTION 7.01. General Conditions to Lend. The obligation of Lender to
make the Loan hereunder is and shall be subject to satisfaction of each of
the following conditions:
(a) All proceedings to be taken in connection with the transactions
contemplated by this Agreement and all documents incident to such
transactions shall be satisfactory in form and substance to Lender and its
counsel, and Lender shall have received all documents or other evidence which
Lender and its counsel may reasonably have requested in connection with such
transactions.
(b) Borrower shall be in compliance with all the terms and conditions
of the Commitment, this Agreement and the other Loan Documents as of the date
of any Advance.
(c) No Event of Default shall have occurred, nor shall there exist any
state of facts which with the passage of time or the giving of notice or both
would constitute an Event of Default hereunder.
(d) Lender shall have received duly executed originals or counterparts
of each of the Loan Documents.
(e) Lender shall have been furnished with favorable opinions from
Borrower's counsel, which opinion shall cover such matters as Lender may
require and be in form and substance satisfactory to Lender.
(f) Lender shall have received the Required Statements in conformity
with Section 5.02 above, dated with respect to Borrower as of a date not
later than thirty (30) days prior to the Closing Date, and on the Closing
Date there shall have occurred no material changes in the financial condition
of Borrower from that reflected in said financial statements.
(g) The representations and warranties of Borrower contained in Article
IV shall be true on and as of the date of any Advance as though such
representations and warranties had been made on the dates of such Advance.
(h) All proceedings to be taken in connection with the transactions
contemplated by this Agreement and all documents incident to such
transactions shall be satisfactory in form and
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substance to Lender and its special counsel and Lender shall have received
all documents or other evidence which Lender and its special counsel may
reasonably have requested in connection with such transactions, including
copies of records of all corporate proceedings, if any, in connection with
such transactions, in form and substance satisfactory to Lender and its
counsel.
(i) Lender shall have received evidence satisfactory to Lender that
Borrower has paid (or will pay from the initial disbursement made hereunder)
for all costs incident to this transaction, including without limiting the
generality of the foregoing, a non-refundable fee to Lender in the amount of
Five Thousand ($5,000.00) Dollars, closing costs and Lender's attorney's fees.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. The occurrence of any of the following
events shall constitute a default hereunder ("Event of Default"):
(a) Payment. The failure of the Borrower to pay any interest or
principal on the Note or any other Indebtedness when due, or any other cost
or expense due hereunder or under the Note, or any "default event" under the
terms of the Note or under this Agreement or any of the other Loan Documents.
(b) Other Obligations.
(1) the violation, default, or breach of any other covenant,
obligation, warranty, provision, clause or representation in favor of Lender
under this Agreement or any other Loan Document; or
(2) the violation, default, or breach of any covenant, obligation,
warranty, provision, clause or representation in favor of Lender under any
other document between Borrower and Lender, including but not limited to the
following documents: Loan Agreement dated January 9, 1997, as amended;
Promissory Note executed by Borrower as maker, payable to the order of
Lender, in the original principal amount of One Million Seven Hundred
Thousand and No/100 ($1,700,000.00) Dollars dated January 9, 1997; Loan
Agreement dated July 22, 1997; Promissory Note executed by Borrower as maker,
payable to the order of Lender, in the original principal amount of Seven
Hundred Twenty Thousand and No/100 ($720,000.00)Dollars, dated July 2, 1997; or
(3) the violation, default, or breach of any covenant, obligation,
warranty, provision, clause or representation in favor of Lender under any
other document or instrument representing any part of the Indebtedness.
(c) Misrepresentations. If any report, certificate, financial
statement or other instrument furnished in connection with the Commitment or
the Loan Documents shall prove to be false or
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misleading in any material respect.
(d) Receivership. If an order, judgment or decree shall be entered by
any competent court appointing a receiver of the property of the Borrower or
any Guarantor, unless such appointment shall have been sought by the Lender
to enforce some provision of this Agreement, and such order, judgment or
decree is not appealed from within the time allowed by law, or if appealed
from shall have been affirmed.
(e) Insolvency. If the Borrower or any Guarantor shall: (i) apply for,
or consent to, the appointment of a receiver, trustee or liquidator of
Borrower or any Guarantor, or all or a substantial part of the assets of
same; (ii) be adjudicated a bankrupt or insolvent, or file a voluntary
petition in bankruptcy, or admit in writing the inability to pay debts as
they become due; (iii) make a general assignment for the benefit of
creditors; (iv) file a petition or answer seeking reorganization or
arrangement with creditors, or to take advantage of any insolvency law, or;
(v) file an answer admitting the material allegations of, or consent to, or
default in answering, a petition filed against Borrower or any Guarantor in
any bankruptcy, reorganization or insolvency proceeding; or if any
involuntary petition for bankruptcy is filed against Borrower and such
petition is not dismissed within sixty (60) days of its filing date.
(f) Seizure. If the property or any part thereof of Borrower be seized
in the execution of a writ of seizure or sale, attachment, fieri facias or
any other legal process, or an order be issued in any judicial proceeding,
and such writ of seizure and sale, attachment, fieri facias or any other
legal process or order for the sale of such assets or any part thereof,
issued in any judicial proceeding be not released, revoked, stayed or set
aside within forty-five (45) days from issuance thereof.
(g) Adverse Change. If, in the opinion of Lender, any material adverse
change occurs in the financial condition of Borrower or any Guarantor for any
reason whatsoever.
(h) Termination of Entities. If any person comprising Borrower or any
Guarantor, not a natural person, should cease to exist as a duly organized
and existing entity under the laws of the State of its organization, or not
be in good standing under such laws, or be dissolved or liquidated.
(i) Non-Compliance. Failure or refusal of Borrower to cause to be
corrected within a reasonable time of discovery thereof, the failure of any
materials, fixtures, or articles used in the Borrower's business, or to be
used in the operation thereof, to meet the specifications and requirements
of, or to comply with any Governmental Authority.
(j) Advance. Failure or refusal of Borrower to satisfy any conditions
to its right to the receipt of an Advance hereunder for a period in excess of
thirty (30) days.
(k) Other Default After Notice. A Default After Notice shall be deemed
to exist under this Agreement if a Lack of Balance occurs with respect to the
Loan and Restoration of Balance is not achieved by Borrower within the time
period required under Section 2.02(b) above.
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SECTION 8.02. Remedies.
If an Event of Default should occur, Lender, without notice to
Borrower, shall have no obligation to make any further Advance hereunder. If
such default is not cured within ten (10) Business Days from the date of
giving of Lender's notice to Borrower ("Default After Notice"), then Lender
shall have the right to immediately declare the Note, the Indebtedness and
all amounts secured to be immediately due and payable, whereupon the same
shall be immediately due and payable without presentment, demand, protest, or
notice of any kind (all of which are hereby expressly waived by Borrower),
and Lender may thereupon institute proceedings to collect the same, including
the right to institute foreclosure and/or enforcement proceedings on the Loan
Documents, or any of them. However, if the Event of Default is other than an
obligation of Borrower to pay money, then before a Default After Notice shall
have occurred, Borrower shall have thirty (30) days from the date of delivery
of Lender's notice to Borrower within which to cure it, and if the Event of
Default cannot be reasonably cured within such thirty (30) day period, and if
Borrower commences the action required to cure such default and diligently
pursues such action, then the period shall be extended for such time as may
be required in the sole judgment of Lender to cure such default. In addition
to all other rights and remedies available to Lender hereunder, Lender shall
have all rights and remedies available under the law against any person or
persons for damages or other compensation or remuneration that may be owed to
Lender on account of the violation, default, or breach of any covenant,
obligation, warranty, provision, clause or representation in Lender's favor.
ARTICLE IX
GENERAL PROVISIONS
Throughout the term of this Agreement:
SECTION 9.01. Cumulative Rights. The rights and remedies of Lender
under this Agreement, the Note, and the other Loan Documents shall be
cumulative, and the exercise or partial exercise of any such right or remedy
shall not preclude the exercise of any other right or remedy.
SECTION 9.02. Approval by Lender. All proceedings relating to the Loan
and all documents required or contemplated by this Agreement, and the persons
responsible for the execution and preparation thereof, shall be satisfactory
to Lender, and Lender's counsel shall have received copies (or certified
copies where appropriate in such counsel's judgment) of all documents
requested.
SECTION 9.03. No Waiver. No Advance shall constitute a waiver of any of
the conditions to Lender's obligation to make further Advances. If Borrower
is unable to satisfy any such condition, no Advance or waiver shall have the
effect of precluding Lender from thereafter declaring an Event of Default
because any such condition shall remain unsatisfied.
SECTION 9.04. Facts. Any condition of this Agreement which requires the
submission of evidence of the existence or non-existence of a specified fact
or facts implies as a condition the
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existence or non-existence, as the case may be, of such fact or facts, and
Lender shall, at all times, be free independently to establish to its
reasonable satisfaction such existence or non-existence.
SECTION 9.05. Third Party Beneficiaries. All conditions and obligations
of Lender to make Advances hereunder are imposed solely and exclusively for
the benefit of Lender and its assigns. No other person shall have standing
to require satisfaction of such conditions or be entitled to assume that
Lender will refuse to make Advances in the absence of strict compliance with
any or all thereof, and no other person shall, under any circumstances, be
deemed to be a beneficiary of such conditions, any or all of which may be
freely waived, in whole or in part, by Lender at any time in its sole
discretion.
SECTION 9.06. Notices. All notices required hereunder shall be in
writing and shall be deemed to have been given (i) when delivered or (ii) if
delivery is refused, then on the date of attempted delivery, by the United
States mail by certified or registered mail, return receipt requested, or by
commercial overnight courier service, addressed to any party hereof at its
address stated below, or at such other address of which it shall have given
notice in writing. The respective addresses of the parties are as follows:
To the Lender: Hibernia National Bank
Commercial Banking Department
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
To the Borrower: Laboratory Specialists, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
To the Guarantor: Laboratory Specialists of America, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
SECTION 9.07. Amendment. Neither this Agreement nor any provisions
hereof may be changed, waived, discharged or terminated orally, or in any
manner other than by an instrument in writing signed by the party against
whom enforcement of the change, waiver, discharge or termination is sought.
SECTION 9.08. Assignment by the Lender. This Agreement, the Loan and
any documents executed pursuant hereto may be assigned or serviced by Lender,
its successors or assigns and Lender, its successors, or assigns may receive
service, brokerage or other fees.
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SECTION 9.09. Entire Agreement. This Agreement sets forth the entire
agreement of the Lender and the Borrower, and the Guarantor with respect to
the Loan, and supersedes all prior written or oral understandings with
respect thereto; provided, however, that all written representations,
warranties and certifications made by the Borrower or Guarantor to the Lender
with respect to the Loan and the Collateral shall survive the execution of
this Agreement.
SECTION 9.10. Conflict with Collateral Documents. If any substantive
provision of this Agreement is in conflict with a corresponding provision of
the Collateral Documents, the provisions of this Agreement shall prevail.
SECTION 9.11. Time is of the Essence. Time shall be deemed of the
essence with respect to performance of all the terms, provisions and
conditions on the part of the Borrower to be performed hereunder.
SECTION 9.12. Consent to Loan Participation. Borrower agrees and
consents to Lender's sale or transfer, whether now or later, of one or more
participation interests in the Loan to one or more purchasers, whether
related or unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any other
matter relating to the Loan, and Borrower hereby waives any rights to privacy
it may have with respect to such matters and specifically consents to the
release of such information. Borrower additionally waives any and all
notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. Borrower also agrees that the
purchasers of any such participation interest will be considered as the
absolute owners of such interest in the Loan and will have all the rights
granted under the participation agreement or agreements governing the sale of
such participation interests. Borrower further waives all rights of offset
or counterclaim that it may have now or later against Lender or against any
purchaser of such participation interests and unconditionally agrees that
either Lender or such purchaser may enforce Borrower's obligation under the
Loan irrespective of the failure or insolvency of any holder of any interest
in the Loan. Borrower further agrees that the purchaser of any such
participation interests may enforce its interest irrespective of any personal
claims or defenses that Borrower may have against Lender.
SECTION 9.13. Non-Waiver of Rights. Neither failure nor delay of Lender
to exercise any right, power or privilege under this Agreement shall operate
as a waiver thereof. The single or partial exercise by Lender of any right,
power or privilege shall not preclude any other or further exercise of any
right, power or privilege hereunder.
SECTION 9.14. Governing Law. This Agreement and all aspects of the Loan
shall be governed by laws of the State of Louisiana.
SECTION 9.15. Intervention by Guarantors. Each Guarantor intervenes in
this Agreement for the express purpose of becoming a party to this Agreement
and to acknowledge all of the terms, provisions, conditions and obligations
of this Agreement, including specifically the representations,
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warranties, and covenants herein made with respect to each Guarantor and its
property. Without limiting the generality of the foregoing, by virtue of
this intervention, each Guarantor takes cognizance of and affirms each such
representation, warranty, covenant and obligation of Borrower set forth in
this Agreement, binds and obligates himself or itself, jointly and in solids
with Borrower and each other Guarantor, and guarantees to Lender, its
successors and assigns, the full and complete performance of all terms,
conditions, provisions of this Agreement and all obligations undertaken by
Borrower, and each Guarantor herein.
SECTION 9.16. Relationship between the Parties. The relationship
between Lender and Borrower shall be solely that of lender and borrower, and
such relationship shall not, under any circumstances whatsoever, be construed
to be a joint venture, joint adventure, or partnership.
SECTION 9.17. Survival. All warranties, representations, and covenants
made by Borrower and Guarantor herein or in any certificate or other
instrument delivered by them or on their behalf under this Agreement shall be
considered to have been relied upon by Lender and shall survive the making of
the Loan and delivery to Lender of the Note, regardless of any investigation
made by the Lender or on its behalf. All statements in any such certificate
or other instrument shall constitute warranties and representations by
Borrower and Guarantor hereunder.
SECTION 9.18. Separate Covenants. Each covenant contained in this
Agreement shall be construed (absent an express contrary provision therein)
as being independent of each other covenant contained herein and compliance
with any one covenant shall not (absent such an express contrary provision)
be deemed to excuse compliance with any or all other covenants.
SECTION 9.19. Severability. If any provision or the application of any
provision of this Agreement shall to any extent be invalid or unenforceable,
then the remainder of this Agreement or the application of such provision in
other circumstances (other than those as to which it is invalid or
unenforceable) shall not be affected, and each provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
SECTION 9.20. Limitation of Liability. This Agreement, the Note, and
the other Loan Documents, are executed by an officer of Lender, and by
acceptance of the Loan, Borrower agrees that for the payment of any claim or
the performance of any obligations hereunder resulting from any default by
Lender, resort shall be had solely to the assets and property of Lender, and
no shareholder, officer, employee or agent of Lender shall be personally
liable therefor.
SECTION 9.21. Multiple Parties. All of the covenants, agreements, and
obligations undertaken by Borrower shall bind each of the persons comprising
Borrower, in solids.
THUS DONE AND SIGNED by the parties hereto at New Orleans, Louisiana, on
the date first above written, in the presence of the undersigned witnesses
and me, Notary, after due reading of the whole.
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WITNESSES: BORROWER:
LABORATORY SPECIALISTS, INC.
Xxxx X. Xxxxx By: Xxxxxx X. Xxxxxxxx, Xx.
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx, Xx.
Its: President
LENDER:
HIBERNIA NATIONAL BANK
By: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Its: Vice President
Xxxxxx X. Xxxxx
NOTARY PUBLIC
INTERVENTION and agreement, per Section 9.15 above:
Laboratory Specialists of America, Inc.
By: Xxxxxx X. Xxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxx, Xx.
Its: Treasurer
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