EXHIBIT 10.1
BB&T
LOAN AGREEMENT
9660812870-01
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Account Number
This Loan Agreement (the "Agreement") is made this ____ day of September, 2005
by and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking
corporation ("Bank"), and:
Xxxxx Systems, Inc., a South Dakota corporation ("Borrower"), having its chief
executive office at Bainbridge, Georgia.
Xxxxx Corporation as "Guarantor".
The Borrower has applied to Bank for and the Bank has agreed to make, subject to
the terms of this Agreement, the following loan(s) (hereinafter referred to,
singularly or collectively, if more than one, as "Loan"):
LINE OF CREDIT ("Line of Credit") in the maximum principal amount not to exceed
$3,500,000 at any one time outstanding for the purpose of pre-export working
capital which shall be evidenced by the Borrower's Promissory Note dated on or
after the date hereof which shall mature twelve months from note date, when the
entire unpaid principal balance then outstanding plus accrued interest thereon
shall be paid in full. Prior to maturity or the occurrence of any Event of
Default hereunder and subject to any Borrowing Base limitations, as applicable,
the Borrower may borrow, repay, and reborrow under the Line of Credit through
maturity. The Line of Credit shall bear interest at the rate set forth in any
such Note evidencing all or any portion of the Line of Credit, the terms of
which are incorporated herein by reference.
Additional terms, conditions and covenants of this Agreement are described in
Schedule DD, or other schedule attached hereto, the terms of which are
incorporated herein by reference. The promissory note evidencing the Line of
Credit is referred to herein as the "Note" and shall include all extensions,
renewals, modifications and substitutions thereof. The Line of Credit shall be
secured by the collateral described in the security documents described below.
SECTION 1 CONDITIONS PRECEDENT
The Bank shall not be obligated to make any disbursement of loan proceeds until
all of the following conditions have been satisfied by proper evidence,
execution, and/or delivery to the Bank of the following items in addition to
this Agreement, all in form and substance satisfactory to the Bank and the
Bank's counsel in their sole discretion:
NOTE: The Note evidencing the Loans duly executed by the Borrower.
SECURITY AGREEMENT(S): Security Agreement(s) in which Borrower and any other
owner (a "Debtor") of personal property collateral shall grant to Bank
a first priority security interest in the personal property specified
therein. (If Bank has or will have a security interest in any
collateral which is inferior to the security interest of another
creditor, Borrower must fully disclose to Bank any and all prior
security interests, and Bank must specifically approve any such
security interest which will continue during the Loan.)
CONTROL AGREEMENT: A Control Agreement pertaining to Deposit Accounts,
Letter-of-Credit Rights and/or Electronic Chattel Paper, as required in
connection with the Security Agreement(s).
UCC FINANCING STATEMENTS: Acknowledged copies of UCC Financing Statements duly
filed in Borrower's or other owner's state of incorporation,
organization or residence, and in all jurisdictions necessary, or in
the opinion of the Bank desirable, to perfect the security interests
granted in the Security Agreement(s), and certified copies of
Information Requests identifying all previous financing statements on
record for the Borrower or other owner, as appropriate from all
jurisdictions indicating that no security interest has previously been
granted in any of the collateral described in the Security
Agreement(s), unless prior approval has been given by the Bank.
AUTHORIZATION AND CERTIFICATE: An Authorization and Certificate executed by each
Debtor under which such Debtor authorizes Bank to file a UCC Financing
Statement describing collateral owned by such Debtor.
COMMITMENT FEE: A commitment fee (or balance thereof) of $8,750 payable to the
Bank on the date of execution of the Loan Documents.
CORPORATE RESOLUTION: A Corporate Resolution duly adopted by the Board of
Directors of the Borrower authorizing the execution, delivery, and
performance of the Loan Documents on or in a form provided by or
acceptable to Bank.
ARTICLES OF INCORPORATION: A copy of the Articles of Incorporation and all other
charter documents of the Borrower, all filed with and certified by the
Secretary of State of the State of the Borrower's incorporation.
BY-LAWS: A copy of the By-Laws of the Borrower, certified by the Secretary of
the Borrower as to their completeness and accuracy.
CERTIFICATE OF INCUMBENCY: A certificate of the Secretary of the Borrower
certifying the names and true signatures of the officers of the
Borrower authorized to sign the Loan Documents.
CERTIFICATE OF EXISTENCE: A certification of the Secretary of State (or other
government authority) of the State of the Borrower's Incorporation or
Organization as to the existence or good standing of the Borrower and
its charter documents on file.
OPINION OF COUNSEL: An opinion of counsel for the Borrower satisfactory to the
Bank and the Bank's counsel.
GUARANTY: Guaranty Agreement(s) duly executed by the Guarantor(s).
ADDITIONAL DOCUMENTS: Receipt by the Bank of other approvals, opinions, or
documents as the Bank may reasonably request.
SECTION 2 REPRESENTATIONS AND WARRANTIES
The Borrower and Guarantor(s) represent and warrant to Bank that:
2.01. FINANCIAL STATEMENTS. The balance sheet of the Borrower and its
subsidiaries, if any, and the related Statements of Income and Retained
Earnings of the Borrower and its subsidiaries, the accompanying
footnotes together with the accountant's opinion thereon, and all other
financial information previously furnished to the Bank, are true and
correct and fairly reflect the financial condition of the Borrower and
its subsidiaries as of the dates thereof, including all contingent
liabilities of every type, and the financial condition of the Borrower
and its subsidiaries as stated therein has not changed materially and
adversely since the date thereof. Each Guarantor further represents and
warrants that all financial statements provided by such Guarantor to
Bank concerning such Guarantor's financial condition are true and
correct and fairly represent such Guarantor's financial condition as of
the dates thereof.
2.02. NAME, CAPACITY AND STANDING. The Borrower's exact legal name is
correctly stated in the initial paragraph of the Agreement. Borrower
and/or any Guarantor each warrants and represents that it is duly
organized and validly existing under the laws of its respective state
of incorporation or organization; that it and/or its subsidiaries, if
any, are duly qualified and in good standing in every other state in
which the nature of their business shall require such qualification,
except for any such state in which the failure to be so qualified would
not reasonably be anticipated to result in a material adverse effect on
such corporation, its property or financial condition (a "Material
Adverse Effect"), and are each duly authorized by their board of
directors, to enter into and perform the obligations under the Loan
Documents.
2.03. NO VIOLATION OF OTHER AGREEMENTS. The execution of the Loan
Documents, and the performance by the Borrower, by any and all pledgors
(whether the Borrower or other owners of collateral property securing
payment of the Loan (hereinafter sometimes referred to as the
"Pledgor")) or by the Guarantor(s) thereunder will not violate any
provision, as applicable, of its articles of incorporation, by-laws,
articles of organization, operating agreement, agreement of
partnership, limited partnership or limited liability partnership, or
of any law, other agreement, indenture, note, or other instrument
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LOAN AGREEMENT
binding upon the Borrower, Pledgor or Guarantor(s), or give cause for
the acceleration of any of the respective obligations of the Borrower
or Guarantor(s).
2.04. AUTHORITY. All authority from and approval by any federal, state,
or local governmental body, commission or agency necessary to the
making, validity, or enforceability of this Agreement and the other
Loan Documents has been obtained.
2.05. ASSET OWNERSHIP. The Borrower and each Guarantor have good and
marketable title to all of the properties and assets reflected on the
balance sheets and financial statements furnished to the Bank, and all
such properties and assets are free and clear of mortgages, deeds of
trust, pledges, liens, and all other encumbrances except as otherwise
disclosed by such financial statements. In addition, each other owner
of collateral has good and marketable title to such collateral, free
and clear of any liens, security interests and encumbrances, except as
otherwise disclosed to Bank.
2.06. DISCHARGE OF LIENS AND TAXES. The Borrower and its subsidiaries,
if any, and each Guarantor have filed, paid, and/or discharged all
taxes or other claims which may become a lien on any of their
respective properties or assets, excepting to the extent that such
items are being appropriately contested in good faith and for which an
adequate reserve (in an amount acceptable to Bank) for the payment
thereof is being maintained.
2.07. REGULATION U. None of the Loan proceeds shall be used directly or
indirectly for the purpose of purchasing or carrying any margin stock
in violation of the provisions of Regulation U of the Board of
Governors of the Federal Reserve System.
2.08. ERISA. Each employee benefit plan, as defined by the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained by the Borrower or by any subsidiary of the Borrower or
Guarantor(s) meets, as of the date hereof, the minimum funding
standards of Section 302 of ERISA, all applicable requirements of ERISA
and of the Internal Revenue Code of 1986, as amended, and no
"Reportable Event" nor "Prohibited Transaction" (as defined by ERISA)
has occurred with respect to any such plan.
2.09. LITIGATION. Except as disclosed in filings by Guarantor with the
Securities and Exchange Commission, there is no claim, action, suit or
proceeding pending, threatened or reasonably anticipated before any
court, commission, administrative agency, whether State or Federal, or
arbitration which will materially adversely affect the financial
condition, operations, properties, or business of the Borrower or its
subsidiaries, if any, or the Guarantor(s), or the ability of the
Borrower or the Guarantor(s) to perform their obligations under the
Loan Documents.
2.10. OTHER AGREEMENTS. The representations and warranties made by
Borrower to Bank in the other Loan Documents are true and correct in
all respects on the date hereof.
2.11. BINDING AND ENFORCEABLE. The Loan Documents, when executed, shall
constitute valid and binding obligations of the Borrower and Guarantors
respectively, the execution of such Loan Documents has been duly
authorized by the parties thereto, and are enforceable in accordance
with their terms, except as may be limited by bankruptcy, insolvency,
moratorium, or similar laws affecting creditors' rights generally.
2.12. COMMERCIAL PURPOSE. The Loan(s) are not "consumer transactions",
as defined in the Georgia Uniform Commercial Code, and none of the
collateral was or will be purchased or held primarily for personal,
family or household purposes.
SECTION 3 AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that from the date hereof and until payment in
full of all indebtedness and performance of all obligations owed under the Loan
Documents, Borrower shall:
3.01. MAINTAIN EXISTENCE AND CURRENT LEGAL FORM OF BUSINESS. (a)
Maintain its existence and good standing in the state of its
incorporation or organization, (b) maintain its current legal form of
business indicated above, and, (c), as applicable, qualify and remain
qualified as a foreign corporation, general partnership, limited
partnership, limited liability partnership or limited liability company
in each jurisdiction in which the failure to be so qualified would
reasonably be anticipated to have a Material Adverse Effect.
3.02. MAINTAIN RECORDS. Keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the
Borrower.
3.03. MAINTAIN PROPERTIES. Maintain, keep, and preserve all of its
properties (tangible and intangible) including the collateral necessary
or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
3.04. CONDUCT OF BUSINESS. Continue to engage in an efficient, prudent,
and economical manner in a business of the same general type as now
conducted.
3.05. MAINTAIN INSURANCE. Maintain insurance with financially sound and
reputable insurance companies or associations in such amounts and
covering such risks as are usually carried by companies engaged in the
same or a similar business, and business interruption insurance if
required by Bank, which insurance may provide for reasonable
deductible(s). The Bank shall be named as loss payee (Long Form) on all
policies which apply to the Bank's collateral, and the Borrower shall
deliver certificates of insurance at closing evidencing same. All such
insurance policies shall provide, and the certificates shall state,
that no policy will be terminated without 20 days prior written notice
to Bank.
3.06. COMPLY WITH LAWS. Comply in all respects with all applicable
laws, rules, regulations, and orders including, without limitation,
paying before the delinquency of all taxes, assessments, and
governmental charges imposed upon it or upon its property, and all
Environmental Laws.
3.07. RIGHT OF INSPECTION. Permit the officers and authorized agents of
the Bank, at any reasonable time or times in the Bank's sole
discretion, to examine and make copies of the records and books of
account of, to visit the properties of the Borrower, and to discuss
such matters with any officers, directors, managers, members or
partners, limited or general of the Borrower, and the Borrower's
independent accountant as the Bank deems necessary and proper.
3.08. REPORTING REQUIREMENTS. Furnish to the Bank:
MONTHLY FINANCIAL STATEMENTS: As soon as available and not more
than thirty (30) days after the end of each month, balance
sheets, statements of income, cash flow, and retained earnings
for the period ended and a statement of changes in the financial
position, all in reasonable detail, and all prepared in
accordance with GAAP consistently applied and certified as true
and correct by an officer, general partner or manager (or
member(s)) of the Borrower, as appropriate.
ANNUAL FINANCIAL STATEMENTS: As soon as available and not more
than one hundred twenty (120) days after the end of each fiscal
year, balance sheets, statements of income, and retained earnings
for the period ended and a statement of changes in the financial
position, all in reasonable detail, and all prepared in
accordance with GAAP consistently applied. The financial
statements must be of the following quality or better: Audited.
LOAN BASE REPORT: On or before the 20th day of each month, a Loan
Base Report in a form acceptable to Bank signed by the President,
chief financial officer, general partner or manager (or
member(s)) of the Borrower, as appropriate.
NOTICE OF LITIGATION: Promptly after the receipt by the Borrower,
or by any Guarantor of which Borrower has knowledge, of notice or
complaint of any action, suit, and proceeding before any court or
administrative agency of any type which, if determined adversely,
could have a material adverse effect on the financial condition,
properties, or operations of the Borrower or Guarantor, as
appropriate.
NOTICE OF DEFAULT: Promptly upon discovery or knowledge thereof,
notice of the existence of any event of default under this
Agreement or any other Loan Documents.
OTHER INFORMATION: Such other information as the Bank may from
time to time reasonably request.
3.09. DEPOSIT ACCOUNTS. Maintain substantially all of its demand
deposit/operating accounts with the Bank.
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LOAN AGREEMENT
3.10. AFFIRMATIVE COVENANTS FROM OTHER LOAN DOCUMENTS. All affirmative
covenants contained in any Security Deed, Security Agreement,
Assignment of Leases and Rents, or other security document
executed by the Borrower which are described in paragraph 2
hereof are hereby incorporated by reference herein.
SECTION 4 GUARANTOR(S) COVENANTS
Each Guarantor covenants and agrees that from the date hereof and until payment
in full of all indebtedness and performance of all obligations owed under the
Loan Documents, Guarantor shall:
4.01. MAINTAIN EXISTENCE AND CURRENT LEGAL FORM OF BUSINESS. If
Guarantor is a corporation, partnership, limited partnership,
limited liability partnership or limited liability company, (a)
maintain its existence and good standing in the state of its
incorporation or organization, (b) maintain its current legal
form of business as shown on the guaranty agreement provided by
Guarantor to Bank in connection with the Loan, and (c) as
applicable, qualify and remain qualified as a foreign
corporation, general partnership, limited partnership, limited
liability partnership or limited liability company in each
jurisdiction in which such qualification is required.
4.02. [INTENTIONALLY OMITTED]
4.03. COMPLY WITH LAWS. Comply in all respects with all applicable
laws, rules, regulations, and orders including, without
limitation, paying before the delinquency of all taxes,
assessments, and governmental charges imposed or assessed upon
Guarantor or upon Guarantor's property, and all Environmental
Laws.
4.04. REPORTING REQUIREMENTS. Furnish to the Bank:
ANNUAL FINANCIAL STATEMENTS: As soon as available and not more
than one hundred twenty (120) days after the end of each fiscal
year, balance sheets, statements of income, and retained earnings
for the period ended and a statement of changes in the financial
position, all in reasonable detail, and all prepared in
accordance with GAAP consistently applied. The financial
statements must be of the following quality or better: Audited.
NOTICE OF LITIGATION: Promptly after the receipt by Guarantor, or
by Borrower of which Guarantor has knowledge, of notice of any
action, suit, and proceeding before any court or governmental
agency of any type which, if determined adversely, could have a
material adverse effect on the financial condition, properties,
or operations of the Guarantor or Borrower, as appropriate.
4.05. [INTENTIONALLY OMITTED]
4.06. OTHER INFORMATION: Furnish such other information as the Bank may
from time to time reasonably request.
SECTION 5 FINANCIAL COVENANTS
The Borrower covenants and agrees that from the date hereof until payment in
full of all indebtedness and the performance of all obligations under the Loan
Documents, the Borrower shall at all times maintain the following financial
covenants and ratios all in accordance with GAAP unless otherwise specified:
TANGIBLE NET WORTH. A minimum tangible net worth of not less than
$4,400,000 through December 31, 2005, and increasing by at least 50% of
after tax profit over the prior fiscal year-end result each fiscal year
thereafter. Tangible Net Worth is defined as net worth, plus
obligations contractually subordinated to debts owed to Bank, minus
goodwill, contract rights, and assets representing claims on
stockholders or affiliated entities.
DEBT TO WORTH. Borrower shall maintain a maximum Debt/Tangible Net
Worth Ratio of 2.0:1 for the term of the loan. This ratio shall be
defined as total liabilities divided by tangible net worth. Tangible
Net Worth is defined as net worth, plus obligations contractually
subordinated to debts owed to Bank, minus goodwill, contract rights,
and assets representing claims on stockholders or affiliated entities.
SECTION 6 NEGATIVE COVENANTS
The Borrower covenants and agrees that from the date hereof and until payment in
full of all indebtedness and performance of all obligations under the Loan
Documents, the Borrower shall not, without the prior written consent of the
Bank:
6.01. LIENS. Create, incur, assume, or suffer to exist any lien upon or
with respect to any of Borrower's properties, or the properties of any
Pledgor securing payment of the Loan, now owned or hereafter acquired,
except:
(a) Liens and security interests in favor of the Bank;
(b) Liens for taxes not yet due and payable or otherwise being
contested in good faith and for which appropriate reserves are
maintained;
(c) Other liens imposed by law not yet due and payable, or
otherwise being contested in good faith and for which appropriate
reserves are maintained;
(d) Purchase money security interests on any property hereafter
acquired, provided that such lien shall attach only to the
property acquired.
(e) Liens and security interests incurred by refinancing existing
debt on real property.
6.02. DEBT. Create, incur, assume, or suffer to exist any debt, except:
(a) Debt to the Bank;
(b) Debt outstanding on the date hereof and shown on the most
recent financial statements submitted to the Bank;
(c) Accounts payable to trade creditors incurred in the ordinary
course of business;
(d) Debt secured by purchase money security interests as outlined
above in Section 6.01 (e);
(e) Additional debt not to exceed $1,000,000 in the aggregate
during any fiscal year of the Borrower.
6.02 CAPITAL EXPENDITURES. Expenditures for fixed assets in any fiscal
year shall not exceed in the aggregate the sum of $500,000.
6.03. CHANGE OF LEGAL FORM OF BUSINESS; PURCHASE OF ASSETS. Change
Borrower's name or the legal form of Borrower's business as shown
above, whether by merger, consolidation, conversion or otherwise, and
Borrower shall not purchase all or substantially all of the assets or
business of any Person.
6.04. LEASES. Create, incur, assume, or suffer to exist any leases,
except:
(a) Leases outstanding on the date hereof and showing on the most
recent financial statement submitted to the Bank;
(b) Operating Leases for machinery and equipment which do not in
the aggregate require payments in excess of $100,000 in any
fiscal year of the Borrower.
6.05. GUARANTIES. Assume, guarantee, endorse, or otherwise be or become
directly or contingently liable for obligations of any Person, except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business.
6.06. TRANSFER OF OWNERSHIP. If Borrower is a corporation, (a) issue,
transfer or sell any new class of stock, or (b) issue, transfer or
sell, in the aggregate, from its treasury stock and/or currently
authorized but unissued shares of any class of stock, more than 10% of
the total number of all such issued and outstanding shares as of the
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LOAN AGREEMENT
date of this Agreement. If Borrower is a general partnership, limited
partnership, limited liability partnership or limited liability
company, issue, transfer or sell any interest in Borrower.
SECTION 7 HAZARDOUS MATERIALS AND COMPLIANCE WITH ENVIRONMENTAL LAWS
7.01. INVESTIGATION. Borrower hereby certifies that it has exercised
due diligence to ascertain whether its real property, including without
limitation the Mortgaged Property, is or has been affected by the
presence of asbestos, oil, petroleum or other hydrocarbons, urea
formaldehyde, PCBs, hazardous or nuclear waste, toxic chemicals and
substances, or other hazardous materials (collectively, "Hazardous
Materials"), as defined in applicable Environmental Laws. Borrower
represents and warrants that there are no such Hazardous Materials
contaminating its real property, nor have any such materials been
released on or stored on or improperly disposed of on its real property
during its ownership, occupancy or operation thereof. Borrower hereby
agrees that, except in strict compliance with applicable Environmental
Laws, it shall not knowingly permit any release, storage or
contamination as long as any indebtedness or obligations to Bank under
the Loan Documents remains unpaid or unfulfilled. In addition, Borrower
does not have or use any underground storage tanks on any of its real
property, including the Mortgaged Property which are not registered
with the appropriate Federal and/or State agencies and which are not
properly equipped and maintained in accordance with all Environmental
Laws. If requested by Bank, Borrower shall provide Bank with all
necessary and reasonable assistance required for purposes of
determining the existence of Hazardous Materials on the Mortgaged
Property, including allowing Bank access to the Mortgaged Property, and
access to Borrower's employees having knowledge of, and to files and
records within Borrower's control relating to the existence, storage,
or release of Hazardous Materials on the Mortgaged Property.
7.02. COMPLIANCE. Borrower agrees to comply with all applicable
Environmental Laws, including, without limitation, all those relating
to Hazardous Materials. Borrower further agrees to provide Bank, and
all appropriate Federal and State authorities, with immediate notice in
writing of any release of Hazardous Materials on the Mortgaged Property
and to pursue diligently to completion all appropriate and/or required
remedial action in the event of such release.
7.03. REMEDIAL ACTION. Bank shall have the right, but not the
obligation, to undertake all or any part of such remedial action in the
event of a release of Hazardous Materials on the Mortgaged Property and
to add any expenditures so made to the principal indebtedness secured
by the Security Deed. Borrower agrees to indemnify and hold Bank
harmless from any and all loss or liability arising out of any
violation of the representations, covenants, and obligations contained
in this Section 7, or resulting from the recording of the Security
Deed.
SECTION 8 EVENTS OF DEFAULT
The following shall be "Events of Default" by Borrower or any Guarantor:
8.01. The failure to make prompt payment of any installment of
principal or interest on any of the Note(s) when due or payable, and
the continuation of such failure for a period of 10 days.
8.02. Should any representation or warranty made in the Loan Documents
prove to be false or misleading in any material respect.
8.03. Should any report, certificate, financial statement, or other
document furnished prior to the execution of or pursuant to the terms
of this Agreement prove to be false or misleading in any material
respect.
8.04. Should the Borrower or any Guarantor default on the performance
of any other obligation of indebtedness when due or in the performance
of any obligation incurred in connection with money borrowed, in either
case involving indebtedness on money in an amount in excess of
$100,000.
8.05. Should the Borrower, any Guarantor or any Pledgor breach any
covenant, condition, or agreement made under any of the Loan Documents,
and should such breach continue unremedied for a period of 30 days
after the Bank shall have given the Borrower written notice thereof,
provided however, in the event Borrower cannot complete the cure of the
breach within such 30-day period, the Borrower shall have an additional
period, not to exceed 30 days to cure such breach, provided that the
Borrower has commenced the cure of the breach during the initial 30-day
period and thereafter diligently pursues the cure of such breach to
completion and provided further, that in no event shall the Borrower
have a period of more than 60 days to cure such breach.
8.06. Should a custodian be appointed for or take possession of any or
all of the assets of the Borrower or any Guarantor, or should the
Borrower or any Guarantor either voluntarily or involuntarily become
subject to any insolvency proceeding, including becoming a debtor under
the United States Bankruptcy Code, any proceeding to dissolve the
Borrower or any Guarantor, any proceeding to have a receiver appointed,
or should the Borrower or any Guarantor make an assignment for the
benefit of creditors, or should there be an attachment, execution, or
other judicial seizure of all or any portion of the Borrower's or any
Guarantor's assets, including an action or proceeding to seize any
funds on deposit with the Bank, and in the case of any such
appointment, proceeding, attachment, execution or seizure that is
involuntary, the same is not discharged or stayed within 60 days.
8.07. Should final judgment for the payment of money be rendered
against the Borrower or any Guarantor which is not covered by insurance
and shall remain undischarged for a period of 30 days unless such
judgment or execution thereon be effectively stayed.
8.08. Upon the death of, or termination of existence of, or
dissolution of, any Borrower, Pledgor or Guarantor.
8.09. Should any lien or security interest granted to Bank to secure
payment of the Note(s) terminate, fail for any reason to have the
priority agreed to by Bank on the date granted, or become unperfected
or invalid for any reason, provided that such failure is not the result
of gross negligence on the part of the Bank.
SECTION 9 REMEDIES UPON DEFAULT
Upon the occurrence of any of the above listed Events of Default, the Bank may
at any time thereafter, at its option, take any or all of the following actions,
at the same or at different times:
9.01. Declare the balance(s) of the Note(s) to be immediately due and
payable, both as to principal and interest, without presentment,
demand, protest, or notice of any kind, all of which are hereby
expressly waived by Borrower and, each Guarantor, and such balance(s)
shall accrue interest at the Default Rate as provided herein until paid
in full;
9.02. Require the Borrower or Guarantor(s) to pledge additional
collateral to the Bank from the Borrower's or any Guarantor's assets
and properties, the acceptability and sufficiency of such collateral to
be determined in the Bank's sole discretion;
9.03. Take immediate possession of and foreclose upon any or all
collateral which may be granted to the Bank as security for the
indebtedness and obligations of Borrower or any Guarantor under the
Loan Documents;
9.04. Exercise any and all other rights and remedies available to the
Bank under the terms of the Loan Documents and applicable law,
including the Georgia Uniform Commercial Code;
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9.05. Any obligation of the Bank to advance funds to the Borrower or
any other Person under the terms of under the Note(s) and all other
obligations, if any, of the Bank under the Loan Documents shall
immediately cease and terminate unless and until Bank shall reinstate
such obligation in writing.
SECTION 10 MISCELLANEOUS PROVISIONS
10.01. DEFINITIONS.
"BORROWING BASE" shall mean the lesser of (i) $3,500,000 or (ii)
the Total Available Loan Base shown on the Loan Base Report
furnished by Borrower to Bank on or before the 20th day of each
Month as long as this Agreement shall remain in force. The
percentages of acceptable collateral, as defined by Bank, which
will be used to determine the Total Available Loan Base, shall be
the following: Eligible Inventory - 75%; Insured Foreign Accounts
Receivable -90%.
"DEFAULT RATE" shall mean a rate of interest equal to Bank's
Prime Rate plus five percent (5%) per annum (not to exceed the
legal maximum rate) from and after the date of an Event of
Default hereunder which shall apply, in the Bank's sole
discretion, to all sums owing, including principal and interest,
on such date.
"LOAN DOCUMENTS" shall mean this Agreement including any schedule
attached hereto, the Note(s), the Security Deed(s), the
Mortgage(s), the Deed(s) of Trust, the Security Agreement(s),the
Assignment(s) of Leases and Rents, all UCC Financing Statements,
the Guaranty Agreement(s), and all other documents, certificates,
and instruments executed in connection therewith, and all
renewals, extensions, modifications, substitutions, and
replacements thereto and therefore.
"PERSON" shall mean an individual, partnership, corporation,
trust, unincorporated organization, limited liability company,
limited liability partnership, association, joint venture, or a
government agency or political subdivision thereof.
"GAAP" shall mean generally accepted accounting principles as
established by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants, as amended
and supplemented from time to time.
"PRIME RATE" shall mean the rate of interest per annum announced
by the Bank from time to time and adopted as its Prime Rate,
which is one of several rate indexes employed by the Bank when
extending credit, and may not necessarily be the Bank's lowest
lending rate.
10.02. NON-IMPAIRMENT. If any one or more provisions contained in the
Loan Documents shall be held invalid, illegal, or unenforceable in any
respect, the validity, legality, and enforceability of the remaining
provisions contained therein shall not in any way be affected or
impaired thereby and shall otherwise remain in full force and effect.
10.03. APPLICABLE LAW. The Loan Documents shall be construed in
accordance with and governed by the laws of the State of Georgia.
10.04. WAIVER. Neither the failure or any delay on the part of the Bank
in exercising any right, power or privilege granted in the Loan
Documents shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise of any
other right, power, or privilege which may be provided by law.
10.05. MODIFICATION. No modification, amendment, or waiver of any
provision of any of the Loan Documents shall be effective unless in
writing and signed by the Borrower and Bank.
10.06. PAYMENT AMOUNT ADJUSTMENT. In the event that any Loan(s)
referenced herein has a variable (floating) interest rate and the
interest rate increases, Bank, at its sole discretion, may at any time
adjust the Borrower's payment amount(s) to prevent the amount of
interest accrued in a given period to exceed the periodic payment
amount or to cause the Loan(s) to be repaid within the same period of
time as originally agreed UPON.
10.07. STAMPS and Fees. The Borrower shall pay all federal or state
stamps, taxes, or other fees or charges, if any are payable or are
determined to be payable by reason of the execution, delivery, or
issuance of the Loan Documents or any security granted to the Bank; and
the Borrower and Guarantor agree to indemnify and hold harmless the
Bank against any and all liability in respect thereof.
10.08. ATTORNEYS' FEES. In the event the Borrower or any Pledgor or
Guarantor shall default in any of its obligations hereunder and the
Bank believes it necessary to employ an attorney to assist in the
enforcement or collection of the indebtedness of the Borrower to the
Bank, to enforce the terms and provisions of the Loan Documents, to
modify the Loan Documents, or in the event the Bank voluntarily or
otherwise should become a party to any suit or legal proceeding
(including a proceeding conducted under the Bankruptcy Code), the
Borrower and Guarantors agree to pay the reasonable attorneys' fees of
the Bank and all related costs of collection or enforcement that may be
incurred by the Bank. The Borrower and Guarantor shall be liable for
such attorneys' fees and costs whether or not any suit or proceeding is
actually commenced.
10.09. BANK MAKING REQUIRED PAYMENTS. In the event Borrower shall fail
to maintain insurance, pay taxes or assessments, costs and expenses
which Borrower is, under any of the terms hereof or of any Loan
Documents, required to pay, or fail to keep any of the properties and
assets constituting collateral free from new security interests, liens,
or encumbrances, except as permitted herein, Bank may at its election
make expenditures for any or all such purposes and the amounts expended
together with interest thereon at the Default Rate, shall become
immediately due and payable to Bank, and shall have benefit of and be
secured by the collateral; provided, however, the Bank shall be under
no duty or obligation to make any such payments or expenditures.
10.10. RIGHT OF OFFSET. Any indebtedness owing from Bank to Borrower
may be set off and applied by Bank on any indebtedness or liability of
Borrower to Bank, at any time and from time to time after maturity,
whether by acceleration or otherwise, and without demand or notice to
Borrower. Bank may sell participations in or make assignments of any
Loan made under this Agreement, and Borrower agrees that any such
participant or assignee shall have the same right of setoff as is
granted to the Bank herein.
10.11. UCC AUTHORIZATION. Borrower authorizes Bank to file such UCC
Financing Statements describing the collateral in any location deemed
necessary and appropriate by Bank.
10.12. MODIFICATION AND RENEWAL FEES. Bank may, at its option, charge
any fees for modification, additional advance, renewal, extension, or
amendment of any terms of the Note(s)as permitted by law.
10.13. CONFLICTING PROVISIONS. If provisions of this Agreement shall
conflict with any terms or provisions of any of the Note(s) or Security
Agreement(s), the provisions of such Note(s) or Security Agreement(s),
as appropriate, shall take priority over any provisions in this
Agreement.
10.14. NOTICES. All notices, requests, demands, waivers, and other
communications given as provided in this Agreement will be in writing,
and unless otherwise specifically provided in this Agreement, will be
deemed to have been given: (i) if delivered in person, upon delivery,
or (ii) if mailed by certified or registered mail, postage prepaid,
return receipt requested, and addressed to either Borrower or Bank at
the addresses provided below on the second business day after deposit
in the United States Mail if addressed to an address located in the
same State in which the notice is being mailed or on the third business
day after deposit in the United States Mail if addressed to an address
located within a State other than the State in which the notice is
being mailed, or (iii) if sent by overnight express delivery service,
enclosed in a prepaid envelope and addressed to Bank or Borrower at the
address provided below, on the first business day after deposit with
the service, or (iv) if sent by tested telex, telegram, telecopy,
facsimile, or other form of rapid transmission confirmed by mailing (as
provided in this section), at substantially the same time as the rapid
transmission. Either Borrower or Bank may change its respective address
as provided in this section by giving written notice of the change as
provided in this section. The addresses for notice are:
Notice to Borrower: Xxxxx Systems, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
-5-
BB&T
LOAN AGREEMENT
Attention: Chief Executive Officer
and
Xxxxx Corporation
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Chief Executive Officer
Notice to Bank: Branch Banking and Trust Company
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attn: City Executive
10.15. CONSENT TO JURISDICTION. Borrower hereby irrevocably agrees that
any legal action or proceeding arising out of or relating to this
Agreement may be instituted in the Superior Court of any County in the
State of Georgia in which Bank maintains an office, or in any United
States District Court in Georgia, or in such other appropriate court
and venue as Bank may choose in its sole discretion. Borrower consents
to the jurisdiction of such courts and waives any objection relating to
the basis for personal or in rem jurisdiction or to venue which
Borrower may now or hereafter have in any such legal action or
proceedings.
10.16. COUNTERPARTS. This Agreement may be executed by one or more
parties on any number of separate counterparts and all of such
counterparts taken together shall be deemed to constitute one and the
same instrument.
10.17. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
between Borrower and Bank with respect to the Loans, and there are no
oral or parol agreements existing between Bank and Borrower with
respect to the Loans which are not expressly set forth in the Loan
Documents.
10.18. ASSIGNMENT BY BORROWER. Borrower may not assign this Agreement
or any of its rights or obligations hereunder without the prior written
consent of Bank, which consent may be withheld by the Bank in its sole
and absolute discretion.
10.19. SUCCESSORS AND ASSIGNED INCLUDED PARTIES. Whenever in this
Agreement a party hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties shall be
included, and all covenants and agreements contained in this Agreement
by or on behalf of Borrower or by or on behalf of Bank shall bind and
adhere to the benefit of their respective heirs, legal representatives,
successors and assigns whether so expressed or not.
10.20. NO PARTNERSHIP OR JOINT VENTURE. Borrower and Bank acknowledge
and agree that nothing contained in this Agreement or in the other Loan
Documents, and that nothing contained in any other instrument or
document between Borrower and Bank relating to the Loan or Mortgaged
Property, shall be construed to establish Borrower and Bank as joint
ventures or partners.
10.21. NO AGENCY. Bank is not the agent or representative of Borrower,
and Borrower is not the agent or representative of Bank, and nothing in
this Agreement shall be construed to make Bank liable to anyone for
goods delivered to or labor or services performed upon the Mortgaged
Property or for debts or claims accruing against Borrower or Bank.
Nothing herein shall be construed to create a relationship of any kind
between Bank and anyone supplying labor or materials or services for or
to the Mortgaged Property.
10.22. ADDENDA AND EXHIBITS. Any addenda, schedules, riders or exhibits
to this Agreement shall be deemed incorporated herein by reference
thereto.
[SIGNATURES ON FOLLOWING PAGE]
SIGNATURE PAGE
IN WITNESS WHEREOF, the Bank, Borrower and Guarantor(s) have caused this
Agreement to be duly executed under seal all as of the date first above written.
BORROWER IS A CORPORATION:
Xxxxx Systems, Inc.
Attest: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxx
--------------------------- ---------------------------
Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx
Title: Secretary Title: President
--------------------------- ---------------------------
By:
---------------------------
(Corporate Seal)
Title: ---------------------------
ADDITIONAL CO-BORROWERS OR GUARANTORS:
WITNESS:
Xxxxx Corporation
/s/ /s/ Xxxx X. Xxxxxxx
--------------------------- --------------------------- (SEAL)
--------------------------- --------------------------- (SEAL)
BRANCH BANKING AND TRUST COMPANY
Attest: /s/ By: /s/ Xxxxxxxx X. Xxxx
--------------------------- ---------------------------
Xxxxxxxx X. Xxxx
(Corporate Seal) Title: Vice President
-----------------------------
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