Exhibit 10.149
LOAN AND SECURITY AGREEMENT
BY AND AMONG
DISPLAY TECHNOLOGIES, INC. AND AFFILIATES, AS BORROWER,
AND
SOUTHTRUST BANK, AS LENDER
LOAN AND SECURITY AGREEMENT
THIS AGREEMENT made this 11th day of January, 2001, between DISPLAY
TECHNOLOGIES, INC., a Nevada corporation ("Display" or "Parent"), XXX XXXX
INDUSTRIES, INC., a Florida corporation ("Xxx Xxxx"); X. X. XXXXXXX
MANUFACTURING, INC., a Florida corporation ("Xxxxxxx Manufacturing"); LA-MAN
CORPORATION, a Nevada corporation ("La-Man"); X. X. XXXXXXX CORPORATION, a
Florida corporation ("Xxxxxxx Corporation"); X. X. XXXXXXX INDUSTRIES. INC., a
Florida corporation ("Xxxxxxx Industries"); VISION TRUST MARKETING, INC., a
Florida corporation ("VisionTrust"); XXXXXXXX SIGN GROUP, INC., a Florida
corporation ("Xxxxxxxx"); AMERIVISION OUTDOOR, INC., a Florida corporation
("AmeriVision") (collectively, the "Borrower"); and SOUTHTRUST BANK, an Alabama
banking corporation formerly doing business as SouthTrust Bank, National
Association, with its principal office in Birmingham, Alabama ("Bank").
R E C I T A L S:
As more particularly described in the Restructuring Agreement, the
Borrower has requested Bank to restructure certain outstanding obligations of
the Borrower to the Bank and, as part of such restructure, to lend to the
Borrower up to the sum of $14,877,510.44 on a revolving loan basis, to renew and
restructure an outstanding term note in the original principal amount of
$1,000,000.00, and to maintain the issuance of a letter of credit in the amount
of $2,500,000.00, and the Bank is willing to do so, but only upon the terms and
subject to the conditions hereinafter set forth and set forth in the
Restructuring Agreement.
NOW, THEREFORE, Bank and Borrower agree as follows:
1. DEFINED TERMS. As used in this Loan and Security Agreement, the
following terms shall have the following meanings:
1.1 ACCOUNT DEBTOR -- any Person who is or may become obligated
under or on account of an Account, Chattel Paper, General Intangible, or
Instrument (as defined in the Code).
1.2 ACCOUNTS -- all accounts, accounts receivable, chattel paper,
leases, instruments, documents, promissory notes, contracts for receipt of
money, conditional sates contracts, and evidences of Debt of or owing to or
acquired by Borrower whether now existing or hereafter arising, whether or not
it has been earned by performance, and whether or not it has been billed,
including (i) all accounts and other rights to payment of money which arise or
result from Borrower's selling, leasing, or other disposition of Borrower's
goods or the providing of services by Borrower, (ii) the proceeds of any
insurance covering the Collateral, and (iii) the return of unearned insurance
premiums.
1.3 AD ART -- Ad Art Electronic Sign Corporation, a Florida
corporation.
1.4 AFFILIATE -- any director or officer of Borrower or any Person
who directly, indirectly or beneficially, owns 5% or more of the capital stock
of any Borrower or 5% of the voting stock or rights of any Borrower, or any
member of the immediate family of any such officer, director, or stockholder, or
any corporation or other entity which is controlled by, controls, or is under
common control with, any Borrower; provided, however, that any Affiliate of
Xxxxxxx Xxxxx Capital Partners, L.P. other than Borrower shall not be an
Affiliate hereunder.
1.5 AGGREGATE LOAN VALUES -- the lesser of (i) the sum of
$14,877,510.44 or (ii) the sum of the Loan Value of Accounts and the Loan Value
of Inventory.
1.6 AGREEMENT -- this Loan and Security Agreement.
1.7 AMENDED AND RESTATED TERM LOAN -- the Existing Term Loan, as
amended and restated pursuant to this Agreement.
1.8 AMENDED AND RESTATED TERM NOTE -- the Amended and Restated Term
Note in the principal amount of $456,915.66 to be made by the Borrowers payable
to the order of the Bank and which shall evidence the Amended and Restated Term
Loan.
1.9 BANK -- SouthTrust Bank, an Alabama banking corporation formerly
known as SouthTrust Bank, National Association, and its successors and assigns.
1.10 BASE RATE -- the rate of interest designated by Bank
periodically as its Base Rate. The Base Rate is not necessarily the lowest
interest rate charged by Bank.
1.11 BORROWER -- Display Technologies, Inc., a Nevada corporation;
Xxx Xxxx Industries, Inc., a Florida corporation; X. X. Xxxxxxx Manufacturing,
Inc., a Florida corporation; La-Man Corporation. a Nevada corporation; X. X.
Xxxxxxx Corporation, a Florida corporation; X. X. Xxxxxxx Industries. Inc., a
Florida corporation; Vision Trust Marketing, Inc., a Florida corporation;
Xxxxxxxx Sign Group, Inc., a Florida corporation; and AmeriVision Outdoor, Inc.,
a Florida corporation; each a party to this Agreement, and any other corporation
that from time to time joins in this Agreement as a Borrower.
1.12 CASH CAPITAL EXPENDITURES -- expenditures made from cash or
from proceeds of the Revolving Loan (but not from the proceeds of a term loan or
purchase money financing) for the acquisition 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.
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1.13 CASH FLOW FORECAST -- the 13-week cash flow forecasts prepared
by the Remaining Businesses, a true and correct of the original of which is
attached hereto as EXHIBIT 1.13, as the same shall be updated from time to time.
1.14 CAPITALIZED LEASE OBLIGATIONS -- any Debt represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Debt shall be
the capitalized amount of such obligations determined in accordance with GAAP.
1.15 CHATTEL PAPER -- all writing or writings which evidence both a
monetary obligation and a security interest in or the lease of specific goods,
together with any guarantees, letters of credit, and other security therefor.
1.16 CODE -- the Uniform Commercial Code, as in effect in Alabama
from time to time.
1.17 COLLATERAL -- collectively, Borrower's Accounts, Documents,
Instruments, Equipment, Real Estate, Chattel Paper, General Intangibles, and
Inventory, the other property and interests described in Section 8.1 ("Security
Interest") hereof, and elsewhere in the Loan Documents, wherever located and
whether now owned by Borrower or hereafter acquired, and the parts, proceeds,
products, profits, replacements, and substitutions of each, as the case may be.
1.18 CONTINGENT OBLIGATIONS -- means any obligation, contingent or
otherwise. of any Person directly or indirectly guaranteeing any Debt of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt of such Person (whether arising by virtue of agreements to
keep well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part). Excludes any contingent obligation to issue stock under an
acquisition agreement.
1.19 CONTRACTUAL OBLIGATION -- any provision of any security issued
by a Person or of any agreement, instrument, or undertaking to which such Person
is a party or by which it or any of its property is bound.
1.20 DEBT -- the sum of (i) indebtedness for borrowed money or for
the deferred purchase price of property or services, (ii) Capitalized Lease
Obligations, and (iii) all other items which in accordance with GAAP would be
included in determining total liabilities as shown on a balance sheet of a
Person as at the date as of which Debt is to be determined.
1.21 DEFAULT RATE -- the highest lawful rate of interest per annum
specified in any Note to apply after a default under such Note or, if no such
rate is specified, a rate equal to
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the lesser of (a) one percent (1.0%) over the interest rate specified to be the
applicable contract interest rate in this Agreement or (b) the highest rate of
interest allowed by law.
1.22 DISPLAY MORTGAGE -- the Mortgage and Security Agreement dated
June 2, 1999 executed by Display in favor of SouthTrust and recorded on June 21,
1999 at Book 4447, Page 3893 in the office of the Clerk of Court of Volusia
County, Florida, pursuant to which Display granted SouthTrust a first mortgage
lien on certain real property located in Volusia County, Florida, as amended by
that certain Amendment to Mortgage and Security Agreement dated September 26,
2000 executed by Display in favor of the Banks.
1.23 DOCUMENT -- means any paper that is treated in the regular
course of business as adequate evidence that the person in possession of the
paper is entitled to receive, hold, and dispose of the goods the paper covers,
and includes warehouse receipts, bills of lading, certificates of title, and
applications for certificates of title.
1.24 ELIGIBLE ACCOUNT -- an Account arising in the ordinary course
of Borrower's business from the sale of goods or rendition of services which
Bank, in its sole credit judgment, deems to be an Eligible Account. Without
limiting the generality of the foregoing, no Account shall be an Eligible
Account if: (i) it arises out of a sale made by Borrower to a Subsidiary or to
an Affiliate of Borrower or to a Person controlled by an Affiliate or Subsidiary
of Borrower; or (ii) it is unpaid for more than 30 days after the original due
date shown on the invoice if the due date is 60 days or more after invoice date,
or (iii) if the terms are less than 60 days, it is due or unpaid more than
ninety (90) days after the original invoice date; or (iv) fifty percent (50%) or
more of the Accounts from the Account Debtor are not deemed Eligible Accounts
hereunder; or (v) the total unpaid Accounts of the Account Debtor exceed twenty
five percent (25%) of the net amount of all Accounts, to the extent of such
excess; or (vi) any covenant, representation or warranty contained in this
Agreement with respect to such Account has been breached; or (vii) the Account
Debtor is also Borrower's or an Affiliate's creditor or supplier, or has
disputed liability with respect to such Account, or has made any claim with
respect to any other Account due from such Account Debtor to Borrower or an
Affiliate, or the Account otherwise is or may become subject to any right of
setoff by the Account Debtor or an affiliate of the Account Debtor; or (viii)
the Account Debtor has commenced a voluntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or made an assignment for the
benefit of creditors, or a decree or order for relief under the federal
bankruptcy laws has been filed against the Account Debtor, or if the Account
Debtor has failed, suspended business, ceased to be Solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed of it or
for all or a significant portion of its assets or affairs; or (ix) it arises
from a sale to an Account Debtor outside the United States or Canada, unless
credit insured by a surety acceptable to Bank or backed by a letter of credit
issued in Borrower's favor; or (x) it arises from a sale to the Account Debtor
on a xxxx-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
consignment, or any other repurchase or return basis; or (xi) Bank believes, in
its sole reasonable judgment, that collection of such Account is insecure or
that payment thereof is doubtful or will be delayed by reason of the Account
Debtor's financial condition; or (xii) the
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Account Debtor is the United States of America or any department, agency or
instrumentality thereof, unless Borrower assigns its right to payment of such
Account to Bank, in form and substance satisfactory to Bank, so as to comply
with the Assignment of Claims Act of 1940, as amended; or (xiii) the Account
Debtor is located in any state that requires the filing of a Business Activities
Report, including the State of New Jersey or the State of Minnesota, unless
Borrower has filed a Notice of Business Activities Report with the appropriate
officials for the then current year; or (xiv) the Account is subject to a Lien;
or (xv) the goods giving rise to such Account have not been delivered to and
accepted by the Account Debtor or the services giving rise to such Account have
not been performed by Borrower in all material respects and accepted by the
Account Debtor or the Account otherwise does not represent a final sale
(including accounts arising from Borrower's maintenance contracts, to the extent
not earned by services); or (xvi) the total unpaid Accounts of the Account
Debtor exceed a credit limit determined by Bank, in its sole discretion, to the
extent such Account exceeds such limit; or (xvii) the Account is evidenced by
Chattel Paper, a note, or an instrument of any kind, or has been reduced to
judgment; or (xviii) Borrower has made any agreement with the Account Debtor for
any deduction therefrom, except for discounts or allowances which are made in
the ordinary course of business for prompt payment and which discounts or
allowances are reflected in the calculation of the face value of each invoice
related to such Account; or (xix) Borrower has made an agreement with the
Account Debtor to extend the time of payment thereof; or (xx) the Account arises
from a retail sale of goods to a Person who is purchasing same primarily for
personal, family, or household purposes; or (xxi) the Account arises out of a
shipment of Inventory, goods, or products to an address other than an address in
the United States, unless credit insured by a surety acceptable to Bank or
backed by a letter of credit issued in Borrower's favor; or (xxii) the Account
Debtor is not a resident citizen of the United States or a corporate entity or
partnership formed and existing under the laws of the United States or a
political subdivision thereof, unless credit insured by a surety acceptable to
Bank or backed by a letter of credit issued in Borrower's favor; or (xxiii) the
Account consists of uncollected progress xxxxxxxx under contracts that are not
complete in all material respects; or (xxiv) the Account consists of contractual
retainage; or (xxv) the Account is deemed ineligible by Bank in its sole
reasonable judgment and discretion.
1.25 ENVIRONMENTAL REGULATIONS -- all federal, state, and local
laws, rules. regulations, ordinances, programs, permits, guidances, orders, and
consent decrees relating to the environment or to public health, safety, and
environmental matters, including the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Toxic Substances Control Act, the Clean Water Act, the Clean Air Act, the River
and Harbor Act, the Water Pollution Control Act, the Marine Protection Research
and Sanctuaries Act, the Deep Water Port Act, the Safe Drinking Water Act, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Insecticide,
Fungicide and Rodenticide Act, the Mineral Lands and Leasing Act, the Surface
Mining Control and Reclamation Act, the Oil Pollution Act of 1990, state and
federal super lien and environmental cleanup programs and laws, U.S. Department
of Transportation regulations and laws regulating hazardous, radioactive and
toxic materials and underground petroleum products storage tanks. and all
similar state, federal, and local laws and regulations.
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1.26 EQUIPMENT -- all machinery, equipment, fixtures, and other
property used in or purchased for Borrower's business, together with all
increases, parts, fittings, accessories, repairs, equipment, and special tools
now or later affixed to or used in connection with the foregoing property, all
transferable rights of Borrower to the licenses and warrantees (express or
implied) received from the sellers and manufacturers of the foregoing property,
all related claims, credits, setoffs, and other rights of recovery.
1.27 ERISA -- the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated thereunder.
1.28 EVENT OF DEFAULT -- any one of the events enumerated in Article
10 ("Events of Default") hereof.
1.29 EXISTING LOAN AGREEMENT -- Loan and Security Agreement dated
June 2, 1999 between Borrower and Bank, as amended by the Amendment No. 1 to
Loan and Security Agreement dated as of March 3, 2000 between Borrower and Bank,
as amended by the Joinder and Forbearance Agreement dated September 26, 2000
between Borrower and Bank, as amended by the Amendment to Joinder and
Forbearance Agreement dated as of October 31, 2000
1.30 EXISTING REVOLVING LOAN -- the revolving loan in the maximum
principal amount of $23,000,000.00 made by Lender to Borrower, among others,
pursuant to the Existing Loan Agreement.
1.31 EXISTING TERM LOAN -- the term loan in the original principal
amount of $1,000,000.00 made by Lender to Borrower, among others, pursuant to
the Existing Loan Agreement.
1.32 FINANCIAL STATEMENTS -- notwithstanding anything contained
herein to the contrary, all references contained in this Agreement to financial
statements of Borrower which must be satisfied by Borrower, shall be deemed to
refer to the consolidated financial statements and consolidated financial
position of Display Technologies, Inc., and all of its Subsidiaries, whether or
not Borrowers, excluding Ad Art and Xxxxxxxx.
1.33 FLORIDA MORTGAGES - the Display Mortgage and the La-Man
Mortgage.
1.34 FLORIDA REAL ESTATE- the real property and improvements
described in the Florida Mortgages.
1.35 GAAP -- generally accepted accounting principles in the United
States of America as defined by the Financial Accounting Standards Board or its
successor, as in effect from time to time consistently applied.
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1.36 GENERAL INTANGIBLES -- all general intangibles of Borrower of
any kind, whether now owned or hereafter acquired, including all intangible
personal property other than Accounts, Documents, Instruments, and Chattel
Paper, and includes money, contract rights, choses in action, causes of action,
corporate or other business records, deposit accounts, inventions, designs,
formulas, patents, patent applications and/or continuation applications now
pending before the United States Patent Office, trademarks and associated
goodwill, trademarks for which "statements-of-use" have been filed with the
Trademark Office, but specifically excluding "intent-to-use" trademark
applications, trade names, trade secrets, engineering drawings, goodwill, rights
to prepaid expenses, copyrights, registrations, licenses, franchises, customer
lists, tax refund claims, computer programs and other software, royalty,
licensing, and product rights, 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 rights to
retrieval from third parties of electronically processed and recorded data
pertaining to any Collateral, things in action, items, checks, drafts, and
orders in transit to or from Borrower, credits or deposits of Borrower (whether
general or special) that are held by Bank, and all other intangible property of
every kind and nature.
1.37 GOVERNMENTAL AUTHORITY -- means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
pertaining to government.
1.38 HAMILTON -- Xxxxxxxx Digital Designs, Ltd., an Ontario
corporation.
1.39 INSTRUMENT -- means every instrument of any kind, as that term
is used in the UCC, and includes every promissory note, negotiable instrument,
certificated security, or other writing that evidences a right to payment of
money, that is not a lease or security agreement, and that is transferred in the
ordinary course of business by delivery with any necessary assignment or
indorsement.
1.40 INTELLECTUAL PROPERTY -- has the meaning set forth in Section
5.18.
1.41 INVENTORY -- all inventory of whatever kind or nature of
Borrower, now owned or hereafter acquired by Borrower, and wherever located,
including all goods held for sale or lease or furnished or to be furnished under
a contract for services, and supplies, packaging, raw materials, goods in
transit, work in process, materials used or consumed or to be used or consumed
in Borrower's business or in the processing, packaging, or shipping of same, all
finished goods, and all property, the sale or lease of which has given rise to
Accounts, Chattel Paper, or Instruments, and that has been returned to Borrower
or repossessed by Borrower or stopped in transit, and all warranties and related
claims, credits, setoffs, and other rights of recovery with respect to any of
the foregoing.
1.42 LA-MAN MORTGAGE. -- the Real Estate Mortgage and Security
Agreement dated August 1, 1997 and recorded at Book 4230, Page 4153 on September
2, 1997 in the office of the Clerk of Court of Volusia County, Florida ,
pursuant to which La-Man and Xxx Xxxx granted SouthTrust a first mortgage lien
on certain real property located in Port Orange, Volusia County, Florida.
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1.43 LETTER OF CREDIT. -- the 1997 Letter of Credit.
1.44 LIEN -- any interest in property (real, personal, or mixed, and
tangible or intangible) 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 a 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. The term "Lien" shall
include covenants, conditions, restrictions, leases, and other encumbrances
affecting any property, except real property covenants running with the land.
For the purpose of this Agreement, Borrower shall be deemed to be the owner of
any property which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes.
1.45 LOAN OR LOANS -- the Restructured Revolving Loan, the Amended
and Restated Term Loan, the Letter of Credit, and any substitutions therefor,
extensions thereof or renewals thereof.
1.46 LOAN ACCOUNT -- The loan account established on the books of
Bank pursuant to Section 2.2 ("Loan Account").
1.47 LOAN DOCUMENTS -- this Agreement, and each and every mortgage,
deed of trust, note, indenture, security agreement, financing statement or other
instrument executed and delivered to evidence the Loans or any other Obligation,
to constitute collateral for the Loans or any other Obligation, or to evidence
security for the Loans or any other Obligation, and any and all other
agreements, instruments, and documents heretofore, now or hereafter, executed by
Borrower and delivered to Bank in respect to the transactions contemplated by
this Agreement, including, without limitation, the Financing Documents, as that
term is defined in the Indenture.
1.48 LOAN VALUE OF ACCOUNTS -- at any time, an amount which is not
more than 80% of the aggregate Eligible Accounts of the Remaining Businesses.
The Loan Value of Accounts will be reduced by the aggregate amount of deposits
from customers held by the Remaining Businesses.
1.49 LOAN VALUE OF INVENTORY -- an amount which is 50% of the
Inventory of the Remaining Businesses valued at the lesser of cost or current
market value. The Inventory must, at any given time, be (a) not damaged or
defective in any way; (b) not sold or segregated for sale and reflected as an
Account of the Remaining Businesses, (c) not consigned Inventory; (d) not
located in a place other than at the locations listed in EXHIBIT "1.49" or in
another location
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of which Bank is notified, has UCC-1 Financing Statements on record and, if
applicable, has received a vendor lien waiver in form and substance satisfactory
to Bank; (e) not Inventory evidenced by negotiable warehouse receipts or by
non-negotiable warehouse receipts or documents of title which have not been
issued in the name of Bank; (f) not packaging Inventory; (g) not Inventory
acquired in an acquisition of another company or business, unless Bank has
approved in writing the Inventory as eligible Inventory; and (h) not Inventory
deemed ineligible by Bank in its sole discretion; provided, however, the Loan
Value of Inventory shall not at any time exceed the lesser of $7,285,943.51 or
one-half (1/2)of the aggregate outstanding balance of the Revolving Loan, unless
otherwise agreed in writing by Bank at any time in its sole discretion.
Remaining Businesses may supplement the EXHIBIT "1.49" from time to time with
more locations of which they have notified Bank and where Bank has filed a UCC-1
Financing Statement.
1.50 XXXXXXXX MORTGAGE -- the mortgage to be executed
contemporaneously herewith by Xxxxxxxx in favor of the Bank as security for all
the Obligations, granting the Bank a third priority mortgage lien on the
Xxxxxxxx Real Estate.
1.51 XXXXXXXX REAL ESTATE -- the real property and improvements
described in the Xxxxxxxx Mortgage.
1.52 MATERIAL ADVERSE EFFECT -- with respect to a Person, a material
adverse effect on its business, assets, properties, prospects, results of
operation, or condition (financial or other).
1.53 MORTGAGES -- the Mortgages executed by Borrower granting to
Bank a Lien on the parcels of Real Estate to secure repayment of the Loans,
including, without limitation, the Florida Mortgages and the Xxxxxxxx Mortgage.
1.54 MULTIEMPLOYER PLAN -- has the meaning set forth in Section
4001(a)(3) of ERISA.
1.55 1997 LETTER OF CREDIT --- the letter of credit dated August 28,
1997, issued by Bank in favor of the Trustee under the 1997 Indenture, as
security for the 1997 Notes.
1.56 NOTES -- each promissory note executed and delivered by
Borrower to Bank evidencing all or part of the Loans, as further described
hereinafter.
1.57 OBLIGATIONS -- all Loans and all other advances, debts,
liabilities, obligations, covenants, and duties owing, arising, due or payable
from Borrower to Bank of any kind or nature, present or future whether or not
evidenced by any note, guaranty or other instrument, whether arising under this
Agreement or any of the other Loan Documents or otherwise, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising
and however evidenced or acquired. The term includes, without limitation, all
interest, charges,
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expenses, fees, attorneys' fees and any other sums chargeable to Borrower under
any of the Loan Documents and all rights Bank may at any time or times have to
reimbursement in connection with any letter of credit or guaranty issued for
Borrower's benefit.
1.58 PERMITTED LIENS -- any Lien of a kind specified as permitted in
Section 7.2 ("Liens and Security Interests").
1.59 PARENT --- Display.
1.60 PERSON -- an individual, partnership, corporation, joint stock
company, firm, land trust, business trust, unincorporated organization, limited
liability company, or other business entity, or a government or agency or
political subdivision thereof.
1.61 PLAN -- an employee benefit plan now or hereafter maintained
for employees of Borrower that is covered by Title IV of ERISA.
1.62 PROHIBITED TRANSACTION -- any transaction set forth in Section
406 of ERISA or Section 4975 of the Internal Revenue Code of 1986.
1.63 XXXXXXX XXXXX CONTINGENT NOTE -- the Subordinated Promissory
Note of even date herewith in the principal amount of $1,750,000.00 made by
Borrower to order of Xxxxxxx Xxxxx Capital Partners, L.P.
1.64 REAL ESTATE -- the Florida Real Estate and the Xxxxxxxx Real
Estate.
1.65 REMAINING BUSINESSES -- the Borrower.
1.66 REMAINING BUSINESSES COLLATERAL -- the Collateral.
1.67 REMAINING BUSINESSES OBLIGATIONS - the Obligations for which
the Remaining Businesses, or any of them, are liable.
1.68 REPORTABLE EVENT -- any of the events set forth in Section
4043( h) of ERISA.
1.69 REQUIREMENT OF LAW -- as to any Person, the articles of
incorporation and bylaws or other organizational or governing documents of the
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding on the Person or any of its property or to which the Person or a
any of its property is subject.
1.70 RESTRUCTURED REVOLVING LOAN -- the Revolving Loan.
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1.71 RESTRUCTURED REVOLVING NOTE -- the Revolving Note.
1.72 RESTRUCTURING AGREEMENT -- the Restructuring Agreement of even
date herewith by and among the Borrower and Lender, among others.
1.73 REVOLVING LOAN -- has the meaning set forth in Section 2.1.
1.74 REVOLVING NOTE -- has the meaning set forth in Section 2.1.
1.75 SOLVENT -- as to any Person, means such Person (i) owns
property, real, personal, and mixed, whose aggregate fair saleable value is
greater than the amount required to pay all of such Person's Debt and Contingent
Obligations, and (ii) is able to pay all of its Debt as such Debt matures, and
(iii) has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage.
1.76 SPECIAL COLLECTION ACCOUNT -- one or more bank accounts
established by Borrower pursuant to Section 4.2 ("Special Collection Accounts")
hereof, from which Bank has the exclusive right to withdraw or debit funds, and
into which Borrower shall deposit on receipt all checks, drafts, cash, and other
remittances in payment or on account of the Accounts.
1.77 STANDBY LETTER OF CREDIT -- has the meaning set forth in
Section 2.3.
1.78 SUBORDINATED DEBT -- the Debt of Borrower which is fully
subordinated to the Loans (including principal, interest, and agreed charges) in
a manner satisfactory to Bank (which may be either according to its terms or by
separate agreement) and which debt arises from Borrower's actual receipt of cash
loans and not from "in kind" or non-cash consideration or purchase money
financing sources, including Debt of Borrower owed to the Subordinate Lenders.
1.79 SUBORDINATE LENDERS --- collectively, Renaissance Capital
Growth and Income Fund III, Inc., Renaissance U.S. Growth and Income Trust PLC,
Xxxxxxx Enterprises, Inc., and Xxxxxxx Xxxxx Capital Partners, L.P.
1.80 SUBSIDIARY -- any corporate entity or partnership, or other
business entity which constitutes a subsidiary for purposes of GAAP. Includes
all Borrowers except Parent.
1.81 TERM LOAN -- the Amended and Restated Term Loan.
1.82 TERM NOTE -- the Amended and Restated Term Note.
1.83 CERTAIN OTHER WORDS -- all accounting terms used herein have
the respective meanings attributed to them under, and shall be construed in
accordance with, GAAP. 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 pronouns
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used shall be deemed to cover all genders. As used in this Agreement, (a) the
word "including" is always without limitation; (b) words in the singular number
include words of the plural number and vice versa; (c) the word "costs" includes
all internal out-of-pocket expenses, fees, costs, and expenses of experts and
collection agents, supersedeas bonds, and all attorneys' fees, costs, and
expenses, whether incurred before, during, or after demand or litigation, and
whether pursuant to trial, appellate, arbitration, bankruptcy, or
judgment-execution proceedings; and (d) the word "property" includes both
tangible and intangible property, unless the context otherwise requires. 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 references to any of the Loan Documents,
shall include any and all modifications or amendments thereto and any and all
extensions or renewals thereof. All other terms contained in this Agreement
shall, unless otherwise defined herein or unless the context otherwise indicate,
have the meanings provided for by the Uniform Commercial Code of the State of
Alabama.
1.84 DIRECTLY AND INDIRECTLY -- when any provision of this Agreement
or any Loan Document requires or prohibits action to be taken by a Person, the
provision applies regardless of whether the action is taken directly or
indirectly by the Person.
2. THE LOANS.
2.1 REVOLVING LOAN.
(a) Subject to the terms and conditions of this Agreement,
provided no Event of Default exists, Bank shall loan to Borrower, when requested
by Borrower, Revolving Loans aggregating up to the lesser of (i) $14,877,510.44
or (ii) the sum of (A) the Aggregate Loan Values as determined by Bank from the
periodic reports submitted by Borrower to Bank, plus (B) $2,600,000.00. Within
these limits, Borrower may borrow, make payments, and reborrow under this
Agreement.
(b) Borrower shall execute and deliver to Bank one promissory
note (the "Revolving Note") in the face amount of the Revolving Loan, payable to
the order of Bank and evidencing Borrower's obligation to repay the Revolving
Loan. The outstanding principal balance of the Revolving Loan shall bear
interest until paid in full at a rate per annum equal to the Base Rate plus
2.75%. Interest shall be paid to Bank on the amount of the Revolving Loan
outstanding and shall be payable monthly in arrears on the first day of each
month beginning with February 1, 2001, and continuing on the same day of each
month thereafter until the unpaid principal balance of the Revolving Loan has
been repaid in full. The Base Rate on the date of this Agreement is 9.0 percent.
Interest shall be calculated based on a 360-day year.
(c) Borrower shall submit a Borrower's Report in the form
attached hereto as EXHIBIT "2.1(C)" (or in such other form as may be furnished
by Bank from time to time) on the date of this Agreement and at least weekly
thereafter during the term of this Agreement. Each such Borrower's Report shall
be signed by an officer or employee of Borrower authorized
12
by the Board of Directors of that corporation to execute such reports, whose
name(s) shall be included in a certified resolution furnished to Bank. Bank
shall make disbursements under the Revolving Loan on an automatic basis by
funding checks drawn on a controlled disbursement account to be established by
Borrower with Bank. Bank shall make any disbursements under the Revolving Loan
only if the terms and provisions of this Agreement have been satisfied,
including the absence of an Event of Default.
(d) If the outstanding principal amount of the Revolving Loan
at any time exceeds the lesser of (1) $14,877,510.44 or (2) the sum of (A) the
Aggregate Loan Values as reflected on Borrower's Report plus (B) $2,600,000.00,
Borrower shall immediately pay Bank such excess as a reduction of the principal
amount of the Revolving Loan. Borrower may request and Bank may be willing in
its sole and absolute discretion to make advances in excess of such maximum
principal amounts. Bank shall enter any such advances as debits in the Loan
Account. All advances in excess of the maximum principal amount shall be payable
on demand, secured by the Collateral, and bear interest as provided in this
Agreement for Revolving Loans generally.
(e) Borrower shall pay to Bank on June 30, 2001 all
outstanding principal and accrued interest with respect to the Revolving Loan
not previously repaid.
(f) From the date of this Agreement to and including the
maturity date of the Revolving Loan, the outstanding principal balance of the
Revolving Loan shall bear interest until paid in full at a rate per annum equal
to the Base Rate plus 2.75%.
2.2 TERM LOAN.
(a) The Borrowers shall continue to be fully liable for the
repayment of the Term Loan on the terms set forth in the Amended and Restated
Term Note.
(b) In accordance with the terms of the Amended and Restated
Term Note, Borrower shall continue to make equal monthly principal installments
of $27,777.78 during the period of the Term Loan on the first day of each month
from the date hereof through June 1, 2001. Borrower shall also pay accrued
interest at the per annum rate of two and three-quarters percent (2.75%) in
excess of the Base Rate on the first day of each month and continuing on the
same day of each month thereafter until the full balance of the Term Loan is
paid. The applicable interest rate on the Term Loan shall change as and when the
Base Rate changes from time to time. Borrower shall pay to Bank all outstanding
principal and interest on the Term Loan and a final payment on or before June
30, 2001, or on any earlier date on which the Revolving Loan becomes due and
payable.
2.3 TERMS GOVERNING ALL LOANS.
(a) Borrower shall make all payments of interest and principal
under the Notes without setoff or counterclaim, and in such coin or currency of
the United States of
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America that at the time of payment is legal tender for the payment of public
and private debt. Payments shall be applied in accordance with terms of the
Restructuring Agreement.
(b) Each borrowing under a Loan shall be effected by crediting
the amount thereof to the regular checking account of Borrower maintained with
Bank or with another bank approved by Bank.
(c) Any payments not made as and when due with respect to any
Loan (whether at stated maturity, by acceleration, or otherwise) shall bear
interest at the Default Rate from the date due until paid, payable on demand.
2.4 LOAN ACCOUNT. Amounts due under the Notes and otherwise under
this Agreement and under the Loan Documents shall be reflected in the Loan
Account. Bank shall enter disbursements hereunder or under the Notes as debits
to the Loan Account and shall also record in the Loan Account all payments made
by Borrower and all proceeds of Collateral which are finally paid to Bank, and
may record therein, in accordance with customary accounting practice, all
charges and expenses properly chargeable to Borrower hereunder.
2.5 PREPAYMENT. Subject to the provisions hereof, Borrower shall
have the right at any time and from time to time to prepay the Loans, in whole
or in part, without premium or penalty but with accrued interest to the date of
such prepayment on the amounts prepaid. Subject to the terms of the
Restructuring Agreement, such prepayments shall be made to Bank in immediately
available funds and, shall be applied to the last of the installment(s) to
mature. Any such prepayment shall not affect or vary the obligation of Borrower
to pay any installment when due.
2.6 USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Loan to support its working capital needs and to satisfy, in part, the
Borrower's obligations under the Existing Revolving Loan. Borrower shall use the
Letter of Credit as credit support for the Demand Notes, as described in Article
2A of this Agreement.
2.7 TERM. This Agreement shall remain in force and effect until the
Loans, and any renewals or extensions, and all interest thereon and costs
provided for herein with regard to either of them have been indefeasibly paid or
satisfied in full and until Bank has no further obligation to advance funds to
Borrower hereunder and until the 1997 Letter of Credit has been released or all
reimbursement obligations with respect to the 1997 Letter of Credit have been
paid in full. Borrower may terminate without penalty the Loan facilities at any
time before the scheduled maturity date by (a) paying in full the Loans and all
other Obligations and (b) obtaining the release of or paying in full the 1997
Letter of Credit or deliver to Bank a backup letter of credit reasonably
satisfactory to Bank for the 1997 Letter of Credit. The indemnities provided for
in Article 11 hereof shall survive the payment in full of the Loans and the
other Obligations and the termination of this Agreement.
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2.8 PAYMENTS. All sums paid to Bank by Borrower hereunder shall be
paid directly to Bank in immediately available funds. Bank shall send Borrower
statements of all amounts due hereunder, which statements shall be considered
correct and conclusively binding on Borrower, absent manifest error, unless
Borrower notifies Bank to the contrary within ten (10) days of its receipt of
any statement which it deems to be incorrect. Bank may, in its sole discretion
(a) charge against any deposit account of Borrower all or any part of any amount
due hereunder and (b) advance to Borrower, and charge to the Revolving Loan, a
sum sufficient each month to pay all interest accrued on the Revolving Loan and
fees due under this Agreement during or for the immediately preceding month.
Borrower shall be deemed to have requested an advance under the Revolving Loan
upon the occurrence of an overdraft in any of Borrower's checking accounts
maintained with Bank or another bank owned by SouthTrust Corporation.
2.9 FEES. The Remaining Businesses shall pay to Bank a one-time loan
restructuring fee in the amount of $100,000.00, earned and payable on the
Closing Date. An administrative/servicing fee of $500 will be assessed monthly
throughout the term of the Loans. The Remaining Businesses shall also pay to
Bank monthly in arrears a commitment fee of one-eight percent (1/8%) per annum
on the average daily unused portion of the Revolving Loan. The Remaining
Businesses shall also pay a one percent (1 %) per annum fee, payable monthly, in
arrears on the amounts drawn under the Revolving Loan in excess of the Aggregate
Loan Values, pursuant to Section 2.1(b) hereof. The Remaining Businesses shall
also pay the fees due with respect to the Letter of Credit, as provided in
Section 2A.4 hereof. Further, the Remaining Businesses shall pay to Bank an
agent fee of $5,000 that will be assessed annually throughout the term of the
Loans, and shall be due and payable on the 1st day of March of each year of the
term hereafter.
2.10 LIMITATION ON INTEREST CHARGES. Bank and Borrower intend to
comply strictly with applicable law regulating the maximum allowable rate or
amount of interest that Bank may charge and collect on the Loans to Borrower
pursuant to this Agreement. Accordingly, and notwithstanding anything in any
Note or in this Agreement to the contrary, the maximum, aggregate amount of
interest and other charges constituting interest under applicable law that are
payable, chargeable, or receivable under any Note and this Agreement shall not
exceed the maximum amount of interest now allowed by applicable law or any
greater amount of interest allowed because of a future amendment to existing
law. Borrower is not liable for any interest in excess of the maximum lawful
amount, and any excess interest charged or collected by Bank will constitute an
inadvertent mistake and, if charged but not paid, will be canceled
automatically, or, if paid, will be either refunded to Borrower or credited
against the outstanding principal balance of the applicable Note, at the
election of Borrower.
2.11 NON-PAYMENT FEE. If the Borrower does not, on or before the
maturity date of the Revolving Loan, (a) pay in full the Loans and all other
Obligations and (b) obtain the release of or pay in full the 1997 Letter of
Credit or deliver to Bank a backup letter of credit reasonably satisfactory to
Bank for the 1997 Letter of Credit, then (x) the Remaining Businesses shall
remain fully liable for the payment of any and all fees and charges due under
the Loan
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Documents, and (y) the Remaining Businesses shall pay to Bank, upon
maturity of the Revolving Loan, a non-payment fee equal to Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) in cash.
2A. LETTERS OF CREDIT
2A.1 DEFINITIONS.
As used in this Article 2A, the following terms have the following
meanings:
A DRAWING --- means a drawing under a Letter of Credit to pay
the principal of the Demand Notes due to maturity, redemption, or acceleration.
ACTUAL/360 BASIS --- a method of computing interest or other
charges hereunder on the basis of an assumed year of 360 days for the actual
number of days elapsed, meaning that interest or other charges accrued for each
day will be computed by multiplying the rate applicable on that day by the
unpaid principal balance (or other relevant sum) on that day and dividing the
result by 360.
B DRAWING --- a drawing under a Letter of Credit to pay
interest on the Demand Notes.
C DRAWING --- a drawing under a Letter of Credit to pay the
purchase price of Tendered Notes.
DEMAND NOTES --- the 1997 Notes.
FINANCING DOCUMENTS -- has the same meaning as ascribed to
such term in the Indenture.
INDENTURE --- the 1997 Indenture.
1997 INDENTURE --- the Trust Indenture dated as of August 1,
1997, between La-Man Corporation (a Borrower) and Bank, for the 1997 Notes.
1997 NOTES --- the Variable/Fixed Rate Credit Enhanced Notes
in the initial principal amount of $2,500,000 issued by Borrower pursuant to the
1997 Indenture.
PLEDGED NOTES --- Demand Notes purchased pursuant to the
Optional or Mandatory Tender provisions of the Indenture with money drawn under
the Letter of Credit.
TENDERED NOTES --- Demand Notes tendered (or Demand tendered)
for purchase pursuant to the Optional or Mandatory Tender provisions of the
Indenture.
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TERMINATION DATE --- the Stated Expiration Date, or such
earlier date on which the Letter of Credit terminates in accordance with its
terms.
In addition, other capitalized terms in this Article 2A that are not
defined in this Agreement have the meanings set forth in the Indenture.
17
2A.2 ISSUANCE OF LETTERS OF CREDIT.
(a) Bank has issued the Letter of Credit to the Trustee as
credit support for the 1997 Notes, in accordance with the terms of the 1997
Indenture, and shall maintain the Letter of Credit in accordance with its terms.
(b) The initial term of the Letter of Credit will expire,
subject to earlier termination, as provided in the Letter of Credit.
(c) Bank may determine in its sole discretion to extend the
term of the Letter of Credit, but no course of dealing or other circumstance
shall require Bank to extend the term of the Letter of Credit.
2A.3 REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTER OF CREDIT.
(a) On each date that Bank honors any A Drawing or B Drawing
under the Letter of Credit, Borrower shall immediately reimburse Bank for the
amount of such draw.
(b) Borrower shall reimburse Bank for the amount of any C
Drawing within 90 days after the date such C Drawing is honored (or, if sooner,
on the Termination Date). In addition, Borrower shall pay to Bank interest on
the unreimbursed amount of each C Drawing at a variable per annum rate equal to
the Base Rate per annum plus 2.75% from the date such C Drawing is paid by Bank
until the amount of such C Drawing is reimbursed in full to Bank. Such interest
shall be payable in arrears on the first day of each month following such C
Drawing and on the date that such C Drawing is reimbursed in full to Bank.
(c) No interest shall be payable with respect to a C Drawing
if Bank is reimbursed in full after such C Drawing is honored by 2:00 p.m.
(Birmingham, Alabama time) on the same date that such C Drawing is paid by Bank.
(d) All amounts received by Bank in respect of principal,
premium or interest on Pledged Notes shall be credited first against interest
payable on the unreimbursed amount of the C Drawing with respect to such Pledged
Notes and the balance, if any, shall be credited against the amount of such C
Drawing.
(e) Anything herein to the contrary notwithstanding, Borrower
will not reimburse Bank for any A Drawing, B Drawing, or C Drawing until the
same has been honored in full by Bank, and no such reimbursement need be
prepaid.
2A.4 LETTER OF CREDIT COMMISSIONS AND FEES.
(a) As consideration for the issuance of the Letter of Credit,
Borrower shall pay to Bank commissions at the rate of one percent (1%) per annum
on the daily average of the
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Credit Amount available under the Letter of Credit for (1) the period beginning
on the date of issuance of the Letter of Credit and ending on the first
anniversary of its issuance and (2) each succeeding period thereafter. Such
commissions shall be payable in advance on the date of issuance of the Letter of
Credit and thereafter on each anniversary of the issuance date during, said
period (or, if sooner, the Letter of Credit Termination Date).
(b) The commission payable on each due date specified in this
subsection shall be calculated on the assumption that the Credit Amount
available on such due date will be available for the entire period for which
such commission is payable. At the end of such period the commission shall be
recalculated based on the actual daily average of the Credit Amount for such
period and the difference, if any, shall be added to or subtracted from, as the
case may be, the commission payable for the next ensuing period or, if no
commission is payable for the ensuing period, shall be paid to the party
entitled thereto within 10 days. If a Substitute Letter of Credit is obtained by
Borrower, no refund of commissions already paid shall be allowed for the period
after the cancellation of the Letter of Credit unless Bank has notified Borrower
(after such commission was paid) that increased costs will be payable pursuant
to Section 2A.5.
(c) On each date that the Letter of Credit is transferred in
accordance with its terms, Borrower shall pay to Bank such amount as shall at
the time of such transfer then be the charge which the Bank is customarily
making for transfers of similar letters of credit.
(d) Borrower shall pay to Bank its normal fee for each draw
under a Letter of Credit, on the date that reimbursement for the amount of such
draw is made pursuant to Section 2A.3.
2A.5 INCREASED COSTS.
(a) ADDITIONAL PAYMENTS. If any change in any law or
regulation or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof, or in GAAP,
shall either (i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against letters of credit issued by Bank or (ii) impose
on Bank any other condition relating, directly or indirectly, to this Agreement
or the Letter of Credit, and the result of any event referred to in the
preceding clause (i) or (ii) shall be to increase the cost to Bank of issuing or
maintaining the Letter of Credit, then, upon demand by Bank, Borrower shall pay
promptly to Bank, from time to time as specified by Bank, such additional
amounts as shall be sufficient to compensate Bank for such increased cost. A
certificate of Bank claiming compensation under this subsection and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive absent manifest error. In determining any such amount, Bank may use
any reasonable averaging and attribution methods.
(b) CAPITAL ADEQUACY. If, after the date of this Agreement,
Bank shall have determined that the adoption or implementation of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
19
administration thereof, or compliance by Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on Bank's capital, on this credit facility or
otherwise, as a consequence of its obligations hereunder and under the Letter of
Credit to a level below that which Bank could have achieved but for such
adoption, change or compliance (taking into consideration Bank's policies with
respect to capital adequacy) by an amount determined by Bank to be material,
then from time to time, promptly upon demand by Bank, Borrower shall pay Bank
such additional amount or amounts as will compensate Bank for such reduction. A
certificate of Bank claiming compensation under this subsection and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive absent manifest error. In determining any such amount, Bank may use
any reasonable averaging and attribution methods.
2A.6 PLACE AND TIME OF PAYMENTS.
(a) All payments by Borrower to Bank hereunder shall be made
in lawful currency of the United States of America and in immediately available
funds to Bank at its address set forth herein or at such other address within
the continental United States as shall be specified by Bank by notice to
Borrower; provided, nothing herein shall be construed to require payment of any
amount in advance of its due date.
(b) All amounts payable by Borrower to Bank hereunder for
which a payment date is expressly set forth herein (including payments due
pursuant to Sections 2A.4 and 2A.5) shall be payable without notice or written
demand by Bank. All amounts payable by Borrower to Bank hereunder for which no
payment date is expressly set forth herein shall be payable on written demand by
Bank to Borrower.
(c) Bank may, at its option, send written notice to Borrower
of amounts payable pursuant to sections 2A.4 and 2A.5, but the failure to send
such notice will not affect or excuse Bank's obligation to pay the amounts
required by such sections on the due date specified in such sections.
(d) Payments which are due on a day which is not a business
day shall be payable on the next succeeding Business Day, and any interest
payable thereon shall be payable for such extended time at the specified rate.
2A.7 LATE CHARGES AND INTEREST ON OVERDUE AMOUNTS.
With respect to all amounts payable to the Bank by Borrower pursuant to
this article which are not paid on the due date, in the case of amounts payable
on a specified date, or which are not paid within ten days of written notice to
the Borrower, in the case of amounts payable on demand, Borrower agrees to pay
to Bank on demand (i) a late charge of five percent (5%) of any
20
such amount or amounts which shall not have been paid within 10 days of the due
date as specified above and (ii) interest on such amounts or amounts at a
variable per annum rate equal to the Base Rate plus 2.75%, plus 2% for each day
from the specified date of payment, or the date of written demand for payment,
as the case may be, to the date such payment is made.
2A.8 COMPUTATION OF CHARGES.
The interest and charges provided for in this Agreement payable in
arrears based upon annual rates shall be computed on an Actual/360 Basis. All
interest rates based upon the Base Rate shall change when and as the Base Rate
shall change, effective on the opening of business on the date of any such
change, unless such change is announced after the close of regular banking
hours, in which case such change shall be effective on the following day.
2A.9 STATEMENTS OF ACCOUNT.
Upon receipt of the written request of Borrower, Bank shall account to
Borrower annually with a statement of charges and payments made pursuant to this
Agreement.
2A.10 PLEDGED NOTES.
(a) As additional security for the performance of the
Obligations, Borrower pledges, assigns, hypothecates and transfers to Bank all
its right, title and interest in the Pledged Notes, and grants to Bank a
security interest in the Pledged Notes and all amounts payable thereon and the
proceeds thereof.
(b) If Bank is reimbursed for the purchase price of less than
all Pledged Notes with respect to which a C Drawing has been made, the Pledged
Notes with respect to which Bank has been reimbursed shall, upon reinstatement
of the Letter of Credit in the manner therein described and if no Event of
Default exists, be released from the pledge and delivered to Borrower.
(c) All payments of principal of and interest on Pledged Notes
shall be made directly to Bank. If, while Bank or its designated agent or the
Tender Agent holds Pledged Notes, Borrower shall receive any interest or
principal payment in respect of such Pledged Notes. Borrower shall accept the
same as agent for Bank and hold the same in trust on behalf of Bank and to
deliver the same forthwith to Bank. All sums of money so paid in respect of
principal, premium or interest on such Pledged Notes which are received by
Borrower and paid to Bank, or which are received directly by Bank from the
Trustee, shall be credited against the reimbursement obligation of Borrower as
provided in Section 2A.2(d).
(d) If an Event of Default exists, Bank may, without notice,
exercise all rights. privileges or options pertaining to any Pledged Notes as if
it were the absolute owner thereof, upon such terms and conditions as it may
determine, all without liability except to account to
21
Borrower for property actually received by it. In addition to the rights and
remedies granted to it in this Agreement, Bank or its designated agent shall
have the authority to exercise all rights and remedies of a secured party under
the Alabama Uniform Commercial Code. Borrower shall be liable for the deficiency
if the proceeds of any sale or other disposition of the Pledged Notes and the
Collateral are insufficient to pay all amounts to which the Bank is entitled.
The Bank has no duty to exercise any of such rights, privileges or options, and
shall not be responsible for any failure to do so or any delay in so doing.
(e) Except as contemplated herein, without the prior written
consent of Bank. Borrower shall not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Pledged Notes,
nor will it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance with
respect to any of the Pledged Notes, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this
Agreement.
(f) Borrower shall do or cause to be done all such other
reasonable acts and things as may be necessary to make any disposition or sale
of any portion or all of the Pledged Notes permitted by this Agreement valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts or governmental
authorities having jurisdiction over any such disposition or sales, all at
Borrower's expense.
2A.11 PARTICIPATIONS.
Borrower understands that Bank may, in accordance with this section,
from time to time enter into a participation agreement or agreements with one or
more persons (the "PARTICIPANTS"), pursuant to which the Participants shall be
given participations in the Letter of Credit and that the Participants may from
time to time similarly grant to one or more other persons (also included in the
term "PARTICIPANTS") subparticipations in the Letter of Credit. Borrower grants
to each Participant (in addition to any other rights which such Participant may
have) a continuing security interest in any money, securities and other real or
personal property of Borrower which are in the possession of such Participant.
Borrower further agrees that any Participant may exercise any and all rights of
banker's lien or set-off with respect to Borrower as fully as if such
Participant had made a loan directly to Borrower in the amount of the
participation or subparticipation given to such Participant in the Letter of
Credit under the conditions herein permitting exercise of the same. For the
purposes of this Section only, Borrower shall be deemed to be directly obligated
to each Participant in the amount of its participating interest in the amount of
principal of, and interest on, the Letter of Credit; provided, however, that
nothing contained in this section shall affect Bank's right of set-off (under
this Section or applicable law) with respect to the entire amount of any of such
credit facilities, notwithstanding any such participation or subparticipation.
Bank may divulge to any Participant all information, reports, financial
statements, certificates and documents obtained by it from Borrower or any other
person under any provision of this Agreement or otherwise.
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2A.12 SPECIAL REMEDIES WITH RESPECT TO LETTER OF CREDIT.
(a) If any Event of Default shall have occurred and be
continuing, in addition to the remedies described in Article 10, Bank may
exercise any one or more of the following remedies:
(1) it may, pursuant to and in accordance with the applicable
section of an Indenture, give written notice of such Event of Default
to the Trustee and direct the Trustee to effect a Mandatory Tender of
the Demand Notes in accordance with the terms thereof and the Indenture
and to make a draw under the Letter of Credit to pay the purchase price
of the Demand Notes due on the Mandatory Tender Date therefor; or
(2) it may give written notice of such Event of Default to the
Trustee and direct the Trustee to declare the Demand Notes to be
immediately due and payable under the section of the Indenture,
whereupon an event of default shall occur under the Indenture and the
Trustee shall declare the Demand Notes immediately due and payable
under the section of the Indenture and shall make a draw under the
Letter of Credit to pay the principal of the Demand Notes and the
interest accrued thereon to the date of such declaration; or
(3) it may, upon notice to Borrower, declare the entire unpaid
amount of the Obligations immediately due under this Agreement to be,
and all such amounts shall thereupon become, due and payable to Bank,
without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived, anything in this Agreement to the
contrary notwithstanding; or
(4) it may exercise its banker's lien of right of set-off; or
(5) it may proceed to protect its rights by suit in equity,
action at law or other appropriate proceedings, whether for the
specific performance of any covenant or agreement of Borrower herein
contained or in aid of the exercise of any power or remedy granted to
Bank under any of the other Financing Documents.
(b) Bank may proceed directly against Borrower hereunder
without resorting to any other remedies which it may have and without proceeding
against any other security held by Bank.
2A.13 SPECIAL REMEDIES REGARDING LETTER OF CREDIT UPON AN
EVENT OF DEFAULT.
(a) If any Event of Default shall have occurred and be
continuing, and the maturity of the Demand Notes shall not have been
accelerated, Bank may make demand upon
23
Borrower to, and forthwith upon such demand Borrower shall, pay to Bank in
immediately available funds at Bank's office designated such demand, for deposit
by Bank in a special noninterest bearing cash collateral account (the "CASH
COLLATERAL ACCOUNT") to be maintained at such office of Bank as may be
designated by Bank, an amount equal to the maximum amount then available to be
drawn under the Letter of Credit (assuming compliance with all conditions for
drawing thereunder). The Cash Collateral Account shall be in the name of
Borrower (as a cash collateral account), but under the sole dominion and control
of Bank and subject to the terms of this Agreement.
(b) If requested by Borrower and subject to the right of Bank
to withdraw funds from the Cash Collateral Account as provided below, Bank shall
from time to time invest funds on deposit in the Cash Collateral Account in
investments satisfactory to Bank, reinvest proceeds of any such investments
which may mature or be sold, and invest interest or other income received from
any such investments, in each case as Borrower may elect and notify to Bank.
(c) If at any time Bank determines that any funds held in the
Cash Collateral Account are subject to any right or claim of any person or
entity other than Bank and the Trustee or that the total amount of such funds is
less than the maximum amount at such time available to be drawn under the Letter
of Credit, Borrower will, forthwith upon demand by Bank, pay to Bank, as
additional funds to be deposited and held in the Cash Collateral Account, an
amount equal to the excess of (i) such maximum amount at such time available to
be drawn under the Letter of Credit over (ii) the total amount of funds, if any,
then held in the Cash Collateral Account which Bank determines to be free and
clear of any such right and claim.
(d) Borrower hereby pledges, and grants to Bank a security
interest in, all funds held in the Cash Collateral Account (including Collateral
Securities) from time to time and all proceeds thereof, as security for the
payment of all amounts due and to become due from the Borrower to Bank under
this Agreement.
(e) Bank may, at any time or from time to time after funds are
deposited in the Cash Collateral Account or invested in Collateral Securities,
after selling, if necessary, any Collateral Securities, apply funds then held in
the Cash Collateral Account to the payment of any amounts, in such order as Bank
may elect, as shall have become or shall become due and payable by the Borrower
to Bank under this Agreement. Borrower agrees that, to the extent notice of sale
of any Collateral Securities shall be required by law, at least five days'
notice to Borrower of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
Bank may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(f) Neither Borrower nor any Person claiming on behalf of or
through Borrower shall have any right to withdraw any of the funds held in the
Cash Collateral Account,
24
except as otherwise provided in subsection (g) below and except that after the
termination of the Letter of Credit in accordance with its terms and the payment
of all amounts payable by Borrower to Bank under this Agreement, any funds
remaining in the Cash Collateral Account shall be returned by Bank to Borrower
or paid to whomever may be legally entitled thereto.
(g) So long as any Notes shall remain outstanding, Bank will
release to Borrower or at its order (i) interest or other income received on
Collateral Securities and (ii) at the written request of Borrower, funds held in
the Cash Collateral Account in an amount up to but not exceeding the excess, if
any (immediately prior to the release of any such funds), of (x) the total
amount of funds held in the Cash Collateral Account over (y) the maximum amount
available to be drawn under the Letter of Credit.
(h) Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Cash Collateral Account or any funds held
therein, or (ii) create or permit to exist any lien, security interest or other
charge or encumbrance upon or with respect to the Cash Collateral Account or any
funds held therein, except as provided in or contemplated by this Agreement.
(i) Bank shall exercise reasonable care in the custody and
preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which Bank accords its own property, it being
understood that Bank shall not have any responsibility for taking any necessary
steps to preserve rights against any parties with respect to any such funds.
2A.14 SPECIAL INDEMNITY FOR LETTER OF CREDIT. Borrower
indemnifies and holds Bank harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses which Bank may incur or which
may be claimed against Bank by any person or entity by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to make lawful payment under, the Letter of Credit; provided, however, that
Borrower shall not be required to indemnify Bank pursuant to this section for
any claims, damages, losses, liabilities, costs or expenses to the extent caused
by (1) Bank's willful misconduct or gross negligence in determining whether
documents presented under the Letter of Credit comply with the terms of the
Letter of Credit or (2) Bank's willful failure to make lawful payment under the
Letter of Credit after the presentation to it by the Trustee or a successor
trustee under the Indenture of a draft and certificate strictly complying with
the terms and conditions of the Letter of Credit. Nothing in this section limits
the Borrower's obligations contained in this Agreement. Without prejudice to the
survival of any other obligation of Borrower hereunder, the indemnities and
obligations of Borrower contained in this section shall survive the payment in
full of amounts payable pursuant herein and the termination of the Letter of
Credit.
2A.15 OBLIGATIONS OF BORROWER ABSOLUTE.
(a) The obligations, covenants and agreements of Borrower
under this Agreement shall be absolute, unconditional and irrevocable, and
Borrower separately covenants
25
and agrees to timely pay in full in strict accordance herewith all amounts which
may become due and owing hereunder and to timely observe and perform all other
agreements and covenants to be observed and performed by Borrower hereunder,
such payment, observance and performance to be made hereunder under all
circumstances whatsoever, including, the following:
(1) any lack of validity or enforceability of any Financing
Documents;
(2) any amendment or waiver of or any consent to departure
from all or any of the Financing Documents;
(3) the existence of any claim, set-off, defense or other
rights which Borrower may have at any time against any Person,
whether in connection with this Agreement, the Letter of Credit, the
Demand Notes or any of the other Financing Documents, or any
unrelated transaction;
(4) any statement or any other document presented Lender a
Letter of Credit proves to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein proves to be
untrue or inaccurate in any respect whatsoever;
(5) payment by Bank under a Letter of Credit against
presentation of a draft or certificate which does not comply with
the terms of the Letter of Credit, provided such payment shall not
have constituted gross negligence or willful misconduct by Bank; and
(6) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, provided the same does not
constitute gross negligence or willful misconduct by Bank.
(b) No act of commission or omission of any kind at any time
on the part of Bank in respect of any matter whatsoever shall in any way affect
or impair any right, power or benefit of Bank under this Agreement and, to the
extent permitted by applicable law, no setoff, claim, reduction, diminution of
any obligation, or any defense of any kind or nature which Borrower may have
against Bank shall be available against Bank in any suit or action brought by
Bank to enforce any right, power or benefit under this Agreement.
2A.16 LIABILITY OF THE BANK. Neither Bank nor any of its
officers or directors shall be liable or responsible for: (i) the use which may
be made of the Letter of Credit or for any acts or omissions of the Trustee and
any transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents, or of any endorsements) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (iii) payment by Bank against presentment of
documents which do not strictly comply with the terms of the Letter of Credit,
including but not limited to, failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (iv) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except only that
26
Borrower shall have a claim against Bank, and Bank shall be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Borrower which the Borrower proves were
caused by (A) Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit comply with the terms of
the Letter of Credit, or (B) Bank's willful or grossly negligent failure to pay
under the Letter of Credit after the presentation to it by the Trustee of a
draft and certificate strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the foregoing, Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
3. CONDITIONS OF LENDING.
3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. In addition to
any other requirements set forth in this Agreement, Bank shall not be obligated
to make any of the Loans, or any advance under any Loan, or renew the Letter of
Credit, unless at the time thereof the following conditions shall have been met:
(a) CORPORATE PROCEEDINGS. All proper corporate
proceedings shall have been taken by Borrower to authorize this Agreement and
the transactions contemplated hereby.
(b) DOCUMENTATION. All instruments and proceedings in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Bank, and Bank shall have received on the
date of this Agreement copies of all documents including records of corporate
proceedings, which it may have requested in connection therewith. including
certified copies of resolutions adopted by the Board of Directors of Borrower,
certificates of good standing, and certified copies of the Articles of
Incorporation and Bylaws, and all amendments thereto, of Borrower.
(c) LOAN DOCUMENTS. Bank shall have received executed
copies of all instruments evidencing security for the Loans and copies of the
insurance policies and related certificates of insurance referred to in Sections
6.1 ("Insurance") and 9.5 ("Insurance") hereof.
(d) NO DEFAULT. No event shall have occurred or be
continuing which constitutes an Event of Default or which would constitute an
Event of Default with the giving of notice or the lapse of time or both.
(e) PERFECTION OF LIENS. UCC-I financing statements,
collateral assignments, trademark and patent assignments, and, if applicable,
certificates of title covering the Collateral executed by Borrower shall have
been duly recorded or filed in the manner and places required by law to
establish, preserve, protect, and perfect the interests and rights created or
intended to be created by this Agreement and any other security agreement.
27
(f) REPORTS; QUARTERLY FINANCIAL STATEMENTS. Bank shall
have received all reports and information from Borrower called for under the
Agreement as and when due. Bank shall have received the financial statements for
Borrower's first quarter ended September 30, 2000.
(g) INCUMBENCY CERTIFICATE. Bank shall have received an
incumbency certificate, dated as of the date of this Agreement, executed by the
Secretary or Assistant Secretary of Borrower, which shall identify by name and
title and bear the signature of the officer of such Borrower authorized to sign
this Agreement and the Notes on behalf of Borrower. Bank shall be entitled to
rely upon such incumbency certificate in completing the transactions
contemplated herein or in any Loan Document.
(h) CONSENTS. Bank shall have received consents and
agreements of the landlords of each of the premises leased by Borrower on which
the Collateral is located ?as provided in Section 4.1 ("Security") hereof, all
in form satisfactory to Bank.
(i) REAL ESTATE MORTGAGES. Except for the Xxxxxxxx
Mortgage, Bank shall have received and recorded the Mortgages duly executed by
the applicable Borrower granting to Bank a first Lien on each parcel of the Real
Estate, except for the Xxxxxxxx Real Estate upon which the Bank shall be granted
a third-priority Lien, junior only to the liens of First Union Bank and BB&T
thereon.
(j) LIEN SEARCH. Bank shall have received a report from
the Departments of State of all jurisdictions in which any of the Collateral is
located or in which any Borrower is located indicating that there are no Liens
against that portion of the Collateral constituting personal property, except
the Liens permitted by Section 7.2 ("Liens and Security Interests") hereof.
(k) FEES AND EXPENSES. Bank shall have received all
amounts required to be paid by Borrower or another Person pursuant to the
Restructuring Agreement.
(l) SUBORDINATION AGREEMENT. Bank shall have received a
subordination agreement from each Subordinated Lender.
(m) CERTIFICATES OF TITLE. Borrower shall have delivered
Certificates of Title, or duly-executed powers of attorney sufficient to obtain
such Certificates of Title from the applicable jurisdiction, for any vehicles
constituting part of the Equipment as shown on EXHIBIT "3.1(M)".
(n) ADDITIONAL DOCUMENTS. Bank shall have received such
additional legal opinions, certificates, proceedings, instruments, and other
documents as Bank or its counsel may reasonably request to evidence (i)
compliance by Borrower with legal requirements, (ii) the
28
truth and accuracy, as of the date of this Agreement, of the representations of
Borrower contained herein, and (iii) the due performance or satisfaction by
Borrower, at or prior to the date hereof, of all agreements required to be
performed and all conditions required to be satisfied by Borrower pursuant
hereto.
3.2 CONDITIONS PRECEDENT TO EACH ADVANCE. The following conditions,
in addition to any other requirements set forth in this Agreement must have been
met or performed before each advance under any Loan:
(a) BORROWER'S REPORT. To the extent required by Bank, the
Remaining Businesses have delivered to Bank a Borrower's Report.
(b) SUPPLEMENTARY CORPORATE PROCEEDINGS. Any supplementary
corporate proceedings necessary to authorize the transaction have been taken by
Borrower.
(c) ACCURACY OF REPRESENTATIONS. All representations and
warranties made by Borrower in this Agreement or otherwise in writing in
connection with this Agreement are true and correct in all material respects as
if made on and as of the proposed date of the advance of Loan proceeds, except
for any changes in the nature of Borrower's business or operations that would
render the information contained in any exhibit attached hereto either
inaccurate or incomplete, so long as Bank has consented to such changes or such
changes are expressly permitted by this Agreement.
(d) NO DEFAULT. No Event of Default has occurred and is
continuing, and to the extent requested by Bank, Borrower has so certified in
writing.
(e) FURTHER ASSURANCES. Borrower shall have delivered such
further documentation or assurances that Bank reasonably requires.
4. SECURITY FOR OBLIGATIONS AND SPECIAL COLLECTION ACCOUNTS.
4.1 SECURITY. The Loans, each Note, the reimbursement
obligations under this Agreement and all other Obligations shall be secured by
each of the following:
(a) Except as provided in Section 4.1(b) below, a
first-priority security interest in Borrower's Accounts, Documents, Instruments,
Chattel Paper, General Intangibles, Equipment, and Inventory, and other
properties and interests as provided for in Article 8 ("Grant of Security
Interest") hereof.
(b) A second-priority security interest on Xxxxxxxx'x
Equipment, Accounts, General Intangibles, and Inventory, and proceeds thereof,
junior only to the Permitted Liens;
29
(c) A first priority mortgage Lien on each parcel of the
Real Estate other than the Xxxxxxxx Real Estate;
(d) A third priority mortgage Lien on the Xxxxxxxx Real
Estate.
Borrower agrees to execute and deliver, or cause the
execution and delivery of, such security agreements, deeds of trust, mortgages,
assignments, guaranties, consents, subordination agreements, and financing
statements as may be required by Bank to evidence such security, all in form
satisfactory to Bank, as well as such consents and agreements of the landlords
of each of the premises leased by Borrower on which the Collateral is located,
all in form satisfactory to Bank.
4.2 SPECIAL COLLECTION ACCOUNTS. Borrower represents that
Borrower has opened with Bank special collection accounts bearing account
numbers 00000000 (Display Technologies Inc. - Master Special Collection
Account), 00000000 (Display Technologies. Inn., Corporate Special Collection
Account), 00000000 (La-Man Corporation - Subsidiary Special Collection Account),
670J86495 (X.X. Xxxxxxx Manufacturing, Inc. -Subsidiary Special Collection
Account), 00000000 (Xxx Xxxx Industries, Inc. - Subsidiary Special Collection
Account), 00000000 (X.X. Xxxxxxx Corporation - Subsidiary Special Collection
Account). 00000000 (X.X. Xxxxxxx Industries, Inc. - Subsidiary Special
Collection Account), 78385-199 (Ad Art Electronic Sign Corp. - Subsidiary
Special Collection Account) and 78386-104 (Xxxxxxxx Sign Group - Subsidiary
Special Collection Account) (collectively, the "Special Collection Accounts"),
in which all funds received by Borrower from sales of Inventory, all refunds of
taxes, all remittances by Borrower's Account Debtors, and all other proceeds of
Collateral, shall be deposited no later than the next regular banking day
following receipt. All returned checks shall be charged to account number
Borrower shall pay all fees for the Special Collection Accounts and expenses or
adjustments for collected funds. Under no circumstances will Bank be charged for
them. Borrower shall pay normal and customary fees to Bank for its maintenance
of the Special Collection Accounts. Bank shall have the exclusive right to
withdraw or debit funds from the Special Collection Accounts, which may be
accomplished by any directive signed by any two authorized employees of Bank. At
least weekly and more often if Bank so elects, the collected balances in the
Special Collection Accounts shall be swept into a concentration account and
withdrawn by Bank and applied to the Revolving Loan. If any report by Borrower
required by this Agreement shall show insufficient Aggregate Loan Values to
entitle Borrower to maintain the then-current balance owing under the Revolving
Loan after applying thereto the collected balance of the Special Collection
Accounts, then Borrower shall immediately deposit into one of the Special
Collection Accounts sufficient immediately available funds from which Bank may
draw in order to reduce the principal balance of the Revolving Loan to the
amount allowable under the provisions of this Agreement. At the request of Bank,
Borrower shall execute documents provided by Bank to allow officers of Bank to
sign checks drawn on accounts of Borrower maintained in other banks for the
purpose of transferring funds to an account or accounts of Borrower maintained
with Bank or another bank owned by SouthTrust Corporation, including, without
limitation, the Special Collection Accounts.
30
5. REPRESENTATIONS, WARRANTIES, AND GENERAL COVENANTS. Borrower (but
excluding AmeriVision in each instance unless specifically stated otherwise in
such section) represents, warrants, and covenants to and with Bank, which
representations, warranties, and covenants shall survive until the Obligations
are indefeasibly satisfied in full, that:
5.1 ORGANIZATION AND QUALIFICATION. Including AmeriVision,
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of its respective state of incorporation; has the corporate power
to own its properties and to carry on its business as now being conducted; and
is duly qualified to do business and is in good standing in every jurisdiction
in which the character of the properties owned by it or in which the transaction
of its business makes its qualification necessary.
5.2 CORPORATE POWER AND AUTHORIZATION; COMPLIANCE WITH LAW.
Including AmeriVision, Borrower has full power and authority to enter into this
Agreement, to borrow hereunder, to execute and deliver the Notes and the other
Loan Documents, and to incur the obligations provided for herein, all of which
have been authorized by all proper and necessary corporate action. Including
AmeriVision, Borrower further (x) is in compliance with all Requirements of Law
applicable to it and (y) possesses all governmental franchises, licenses, and
permits that are necessary to own or lease its assets and to carry on its
business as now conducted.
5.3 ENFORCEABILITY; NO LEGAL BAR. This Agreement has been, and
each other Loan Document to which it is a party will be, duly executed and
delivered to Bank on behalf of Borrower, including AmeriVision. This Agreement
and each of the other Loan Documents constitute, and each Note when executed and
delivered for value received will constitute, a valid and legally binding
obligation of Borrower, including AmeriVision enforceable in accordance with
their respective terms. The execution, delivery, and performance by Borrower,
including AmeriVision of this Agreement and the other Loan Documents to which it
is a party, Borrower's borrowings pursuant to this Agreement, and use of the
loan proceeds, will not violate any Requirement of Law applicable to Borrower,
including AmeriVision or constitute a breach or violation of, a default under,
or require any consent under, any of its Contractual Obligations, and will not
result in a breach or violation of, or require the creation or imposition of any
Lien on any of its properties or revenues pursuant to any Requirement of Law or
Contractual Obligation.
5.4 PENDING ACTIONS. Except as described on EXHIBIT 5.4
attached hereto, no action or investigation is pending or, so far as Parent's
officers and directors know, threatened before or by any court or administrative
agency against Borrower, businesses, properties or revenues (a) with respect to
any of the Loan Documents or any of the transactions contemplated by them, or
(b) which might result in any Material Adverse Effect to the Borrower.
5.5 FINANCIAL STATEMENTS. The financial statements of Borrower
dated June 30, 2000 (the "Financial Statement Date"), delivered to Bank, and all
other financial statements and reports furnished by Parent to Bank are complete
and correct in all material respects
31
and fairly present the financial condition of Parent and its Subsidiaries on a
consolidated and consolidating basis and the results of their operations and
transactions as of the dates and for the periods to which they refer. The
Parent's June 30, 2000 financial statements have been prepared in accordance
with GAAP. Except for contingent liabilities of Parent with respect to
obligations of other Borrowers or Subsidiaries, there are no liabilities, direct
or indirect, fixed or contingent, of Borrower as of the date of such financial
statements of the type which would be required to be disclosed on the financial
statements in accordance with GAAP which are not reflected therein or in the
notes thereto. Neither said financial statements nor any other financial
statements, reports, and information furnished by Parent to Bank contains any
untrue statement of a material fact or omits a material fact necessary to make
the statements contained therein or herein not misleading. There is no fact of
which Borrower has knowledge which Parent has failed to disclose to Bank which
materially affects adversely or, so far as Parent can now foresee, will
materially affect adversely the Collateral, business, prospects, profits, or
condition (financial or otherwise) of any of the Remaining Businesses or the
ability of Borrower to perform this Agreement.
5.6 NO CHANGE. Since the Financial Statement Date there has
not been: ( i ) except as disclosed to Bank, any material adverse change in the
assets, liabilities, business, or condition (financial or other) of Parent and
its Subsidiaries on a consolidated basis; (ii) any loss, damage, or destruction,
whether or not covered by insurance, that has had a Material Adverse Affect on
the assets or property of Parent and its Subsidiaries on a consolidated basis;
(iii) any dividend or distribution by Parent to its shareholders in cash,
securities, or other property, except for a preferred stock dividend paid on
September 30, 2000; (iv) any change in any of Parent's accounting methods,
practices, or principles or depreciation and amortization rates or policies,
except as required by law or to conform with GAAP; or (v) except in the usual
and ordinary course of business, any of the following: (A) except as disclosed
to Bank, any breach, execution, extension, modification, or termination by
Borrower of any Contractual Obligation; (B) any disposition by Borrower of, or
the imposition of a Lien on any asset of Borrower, except for a Lien permitted
under Section 5.7 ("Title to Properties") hereof; or (C) any cancellation of a
debt owed to, or a claim held by, Borrower. Except as disclosed to Bank, no
Contractual Obligation of Borrower or any of its Subsidiaries, and no
Requirement of Law, materially adversely affects, or to the extent that Borrower
can reasonably foresee, might have a Material Adverse Effect on Borrower.
5.7 TITLE TO PROPERTIES. Borrower has good and marketable
title to all of its assets, subject to no Lien, except inchoate Liens arising by
operation of law for obligations which are not yet due and except for the
Permitted Liens. Borrower enjoys peaceable and undisturbed possession under all
leases under which it is operating, and none of such leases contain any
provisions which may materially and adversely affect or impair the operations of
Borrower, and all of such leases are valid and subsisting and in full force and
effect.
5.8 BENEFIT PLANS. Except as set forth on EXHIBIT "5.8" to
this Agreement, neither Borrower nor any of its Subsidiaries has established or
is a party to any Plan or to any
32
stock option or deferred compensation plan or contract for the benefit of its
employees or officers, any pension, profit sharing or retirement plan, stock
redemption agreement, or any other agreement or arrangement with any officer,
director, or stockholder, members of their families, or trusts for their
benefit. Borrower and its Subsidiaries are in compliance with all applicable
provisions of ERISA. Neither Borrower nor any of its Subsidiaries has 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 that could result in a material adverse change in the financial
condition of Borrower, including, but not limited to, any Reportable Event or
Prohibited Transaction, exists in connection with any Plan. Neither Borrower nor
any of its Subsidiaries has any withdrawal liability in connection with a
Multiemployer Plan.
5.9 TAXES. Borrower has filed all federal, state, and local
tax returns which are required to be filed and have paid, or made adequate
provision for the payment of, all taxes which have or may become due pursuant to
said returns or to assessments received by them. Borrower has paid all
withholding, FICA and other payments required by federal, state or local
governments with respect to any wages paid to employees.
5.10 COLLATERAL. The security interests granted to Bank herein
and pursuant to any other security agreement (a) constitute and, as to
subsequently acquired property include in the Collateral covered by the security
agreement, will constitute, a security interest under the Code entitled to all
of the rights, benefits and priorities provided by the Code and (b) are, and as
to such subsequently acquired Collateral will be, fully perfected, superior, and
prior to the rights of all third persons, now existing or hereafter arising,
subject only to Liens permitted pursuant to this Agreement. All of the
Collateral is intended for use solely in Borrower's business. Borrower shall
defend the Collateral against all claims and demands of all other parties who at
any time claim any interest in the Collateral.
5.11 LABOR LAW MATTERS. No goods or services have been or will
be produced by Borrower or any of its Subsidiaries in violation of any
applicable labor laws or regulations or any collective bargaining agreement or
other labor agreements or in violation of any minimum wage, wage-and-hour, or
other similar laws or regulations. Except for Ad Art Electronic Sign
Corporation, no collective bargaining agreement concerning any employees of
Borrower exists or is being negotiated.
5.12 JUDGMENT LIENS. None of Borrower, its Subsidiaries, nor
their assets are subject to more than $10,000 in the aggregate of unpaid
judgments (whether or not stayed) (excluding any judgments for claims on which
AmeriVision is liable) or judgment liens in any jurisdiction.
5.13 PLACE OF BUSINESS. Parent's chief executive office is
located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx, and it has not changed the
location of its chief executive office from a location in a different state
within the last five (5) years. The Inventory is and shall be located only at
the locations listed on EXHIBIT "1.49" to this Agreement, or on locations of
33
which Bank is notified pursuant to Section 6.14, except for inventory on
customer locations being supplied under contracts with an aggregate value of
less than $50,000. Except as indicated on said exhibit, the real estate
constituting each said location is owned by Borrower. With respect to locations
not owned by Borrower, said exhibit sets forth the name and address of each
landlord, vendor or customer, the location of the property, and the remaining
term of the lease or purchase agreement. Borrower has separately furnished to
Bank true and correct copies of the lease agreements or purchase agreements for
each said parcel.
5.14 FULL DISCLOSURE. All information furnished by Parent to
Bank concerning Borrower, its financial condition, the Collateral, or otherwise
for the purpose of obtaining credit or an extension of credit, is, or will be at
the time the same is furnished, accurate and correct in all material respects
and complete insofar as completeness may be necessary to give Bank a true and
accurate knowledge of the subject matter. The books of account, minute books,
and stock record books of Borrower are complete and correct and have been
maintained in accordance with good business practices, and there have been no
transactions adversely affecting the business of Borrower that should have been
set forth therein and have not been so set forth.
5.15 BORROWER'S NAME. Except for the change in Parent's name
from La-Man Corporation to its current name, Borrower has not changed its name
or been known by any other name within the last five (5) years, nor has it been
the surviving corporation in a merger effected within the last five (5) years,
except for merger transactions involving Ad Art and Xxxxxxxx.
5.16 EXISTING DEBT. Neither Borrower nor any of its
Subsidiaries is subject to any federal, state or local tax Liens, nor has such
Person received any notice of deficiency or other official notice to pay any
taxes. Borrower and its Subsidiaries have paid all sales and excise taxes
payable by them.
5.17 INSOLVENCY. Borrower, after giving effect to the
transactions contemplated hereby, at all times will be, Solvent.
5.18 INTELLECTUAL PROPERTY. Borrower owns or is licensed to
use, all patents, trademarks, trade names, copyrights, technology, know-how, and
processes necessary for the conduct of their business as currently conducted
(the "Intellectual Property") all of which is described in EXHIBIT "5.18" to
this Agreement. Any material licenses of the Intellectual Property are set forth
in EXHIBIT "5.18" to this Agreement. No claim has been asserted and is pending
by any Person with respect to the use of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any such
Intellectual Property and Borrower does not know of any valid basis for any such
claim. The use of the Intellectual Property by Borrower does not infringe on the
rights of any Person.
5.19 SUBSIDIARIES. Borrower has no Subsidiaries, except as
indicated on EXHIBIT "5.19" to this Agreement. Parent represents and warrants
that the following Subsidiaries are shell
34
corporations and have tangible assets of less than $25,000: (i) E.S.C. of
Nevada, Inc., ( ii) Xxx Xxxx Industries of Nevada, Inc., and (iii) Nevada Semco,
Inc.
5.20 ENVIRONMENTAL MATTERS. Borrower is in compliance with all
Environmental Regulations and with all other federal, state, and local laws and
regulations relating to the environment and pollution, including such laws and
regulations regulating hazardous, radioactive and toxic materials and
underground petroleum products storage tanks. No assessment, notice of (primary
or secondary) liability or notice of financial responsibility, or the amount
thereof, or to impose civil penalties has been received by Borrower, and there
are no facts, conditions, or circumstances known to Borrower which could result
in any investigation or inquiry if all such facts, conditions, and
circumstances, if any, were fully disclosed to the applicable governmental
authority. Borrower has paid any environmental excise taxes due and payable,
including without limitation, those imposed pursuant to Sections 4611, 4661, or
4681 of the Internal Revenue Code of 1986, as amended from time to time.
Borrower represents and warrants that Borrower has not obtained and is not
required to obtain any permits, licenses. or similar authorizations to
construct, occupy, operate, or use any buildings, improvements, fixtures, or
equipment in connection with its business by reason of any Environmental
Regulations. Borrower represents and warrants that no oil, toxic or hazardous
substances. or solid wastes have been disposed of or released by Borrower in
connection with the operation of its business and that Borrower will not dispose
of or release oil, toxic or hazardous substances, or solid wastes at any time in
its operation of its business (the terms "hazardous substance" and "release"
shall have the meanings specified in the Comprehensive Environmental Response.
Compensation and Liability Act of 1980, as amended ("CERCLA"), and the terms
"solid waste" and "disposal," "dispose," or "disposed" shall have the meanings
specified in the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), except that if such acts are amended to broaden the meanings thereof,
the broader meaning shall apply herein). Each of the foregoing representations
is also accurate with respect to any Subsidiary that is not a Borrower.
5.21 OWNERSHIP. Parent is a public company. All issued and
outstanding capital stock of each other Borrower is owned by Parent. Except as
set forth in the annual fiscal year-end audited financial statements of Parent
as of June 30, 2000, there are not outstanding any warrants, options, or rights
to purchase any shares of capital stock of any Subsidiary, nor does any Person
have a Lien upon any of the capital stock of any Subsidiary, except as set forth
on EXHIBIT 5.21 attached hereto.
5.22 INVENTORY. All Inventory is marketable in the ordinary
course of business. All Inventory has been produced, and during the term hereof
will be produced, in compliance with the requirements of the Federal Fair Labor
Standards Act. No Inventory is now, nor shall any Inventory at any time or times
hereafter be, stored with a bailee, warehouseman or similar party without Bank's
prior written consent and, if Bank gives such consent, Borrower will
concurrently therewith cause any such bailee, warehouseman, or similar party to
issue and deliver to Bank, in form and substance acceptable to Bank, warehouse
receipts therefor in Bank's name. No Inventory is or will be consigned to any
Person without Bank's prior written consent, and, if
35
such consent is given, Borrower shall, prior to the delivery of any Inventory,
on consignment, (i) provide Bank with all consignment agreements to be used in
connection with such consignment, all of which shall be acceptable to Bank, (ii)
prepare, execute, and file appropriate financing statements with respect to any
consigned Inventory, showing Bank as assignee, (iii) conduct a search of all
filings made against the consignee in all jurisdictions in which any consigned
Inventory is to be located and deliver to Bank copies of the results of all such
searches, and (iv) notify, in writing, all the creditors of the consignee which
are or may be holders of Liens in the Inventory to be consigned that Borrower
expects to deliver certain Inventory to the consignee, all of which Inventory
shall be described in such notice by item or type.
5.23 SEC FILINGS. Borrower previously has furnished or made
available to Bank accurate and complete copies of forms, reports, and documents
filed by Borrower with the Securities and Exchange Commission ("SEC") since
January 1, 1998 (the "SEC Documents"), which include all reports, schedules,
proxy statements, and registration statements filed or required to be filed by
Borrower with the SEC since January 1, 1998. As of their respective dates, the
SEC Documents did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated in those documents are necessary to
make the statements in those documents not misleading, in light of the
circumstances in which they were made.
5.24 REPRESENTATIONS TRUE. No representation or warranty by
Borrower contained herein or in any certificate or other document furnished by
Borrower pursuant hereto contains any untrue statement of material fact or omits
to state a material fact necessary to make such representation or warranty not
misleading in light of the circumstances under which it was made.
6. AFFIRMATIVE COVENANTS. The Borrower (but excluding AmeriVision in
each instance unless specifically stated otherwise in such section) agrees and
covenants that until the Obligations have been indefeasibly paid in full and
until Bank has no further obligation to make advances under the Loans, each of
them shall, unless waived by Bank in writing:
6.1 INSURANCE. Maintain insurance with insurance companies
satisfactory to Bank on such of its properties, in such amounts and against such
risks as is customarily maintained in similar businesses operating in the same
vicinity, and shall file with Bank upon request, from time to time, a detailed
list of the insurance then in effect, stating the names of the insurance
companies, the amounts and rates of the insurance, dates of expiration thereof,
and the properties and risks covered thereby, and, within 10 days after notice
in writing from Bank, shall obtain such additional insurance as Bank may
reasonably request. All such policies shall name Bank as a named insured and
provide that any losses payable thereunder shall (pursuant to loss payable
clauses, in form and content acceptable to Bank, to be attached to each policy)
be payable to Bank, and provide that the insurance provided thereby, as to the
interest of Bank, shall not be invalidated by any act or neglect of the
Remaining Businesses, nor by the commencing of any proceedings by or against
Borrower in bankruptcy, insolvency, receivership , or any other proceedings
36
for the relief of a debtor, nor by any foreclosure, repossession, or other
proceedings relating to the property insured, nor by, any occupation of such
property or the use of such property for purposes more hazardous than permitted
in the policy. The Remaining Businesses hereby assign to Bank all right to
receive proceeds, directs any insurer to pay all proceeds directly to Bank, and
authorize Bank to endorse any check or draft for such proceeds and apply the
same toward satisfaction of the Obligations. The Remaining Businesses shall
furnish to Bank insurance certificates, in form and substance satisfactory to
Bank, evidencing compliance by it with the terms of this Section and, upon the
request of Bank at any time, the Remaining Businesses shall furnish Bank with
photostatic copies of the policies required by the terms of this Section. The
Remaining Businesses will cause each insurer under each of the policies to agree
(either by endorsement upon such policy or by letter addressed to Bank) to give
Bank at least 30 days' prior written notice of the cancellation of such policies
in whole or in part or the lapse of any coverage thereunder. Each of the
Remaining Businesses agrees that it will not take any action or fail to take any
action which action or inaction would result in the invalidation of any
insurance policy required hereunder. At least 10 days prior to the date the
premiums on each such policy or policies shall become due and payable, the
Remaining Businesses shall furnish to Bank evidence of the payment of such
premiums. The Remaining Businesses shall furnish to Bank such evidence of
insurance as Bank may require.
6.2 CORPORATE EXISTENCE; QUALIFICATION. Maintain its corporate
existence and, in each jurisdiction in which the character of the property owned
by it or in which the transaction of its business makes its qualification
necessary, maintain good standing.
6.3 TAXES. For each Borrower, during their respective fiscal
years, accrue all current tax liabilities of all kinds, all required withholding
of income taxes of employees, all required old age and unemployment
contributions, all required payments to employee benefit plans, and pay the same
when they become due.
6.4 COMPLIANCE WITH LAWS. For each Borrower, comply in all
material respects with all Requirements of Law, including Environmental
Regulations, and pay all taxes, assessments, charges, claims for labor,
supplies, rent, and other obligations which, if unpaid, might give rise to a
Lien against property of Borrower, except claims being contested in good faith
by appropriate proceedings (provided Borrower promptly notifies Bank in writing
of such contest), and against which reserves deemed adequate by Bank have been
set up. Specifically, Borrower shall pay when due all taxes and assessments upon
the Collateral, this Agreement, the Notes, or any Loan Document, including,
without limitation, any stamp taxes or intangibles taxes imposed by virtue of
the transactions outlined herein.
6.5 ANNUAL FINANCIAL STATEMENTS. Within 90 days after the
close of each fiscal year, Parent shall furnish Bank with annual audited
financial statements of Parent and its Subsidiaries on a consolidated basis,
with supplemental unaudited consolidating financial statements consisting of
balance sheets, operating statements and such other statements as Bank may
reasonably request, for the period(s) involved, prepared in accordance with GAAP
37
consistently applied for the period involved and for the preceding fiscal year
and certified as correct by independent certified public accountants acceptable
to Bank.
6.6 INTERIM FINANCIAL STATEMENTS. Within 45 days after the
close of each calendar month, Parent shall furnish Bank with unaudited monthly
and year-to-date financial statements of Parent and its Subsidiaries on a
consolidated and consolidating basis, consisting of balance sheets and operating
statements and a listing of all contingent liabilities of Parent and its
Subsidiaries for the periods involved and such other statements as Bank may
request, consistently prepared with the monthly financial statement(s)
previously furnished to Bank, taken from the books and records of Parent and its
Subsidiaries, and certified as correct by the Chief Financial Officer of Parent.
6.7 CERTIFICATES; OTHER INFORMATION. Parent shall furnish to
Bank:
(a) concurrently with the delivery of the financial
statements referred to in Sections 6.5 and 6.6 hereof, a certificate from the
President and Chief Financial Officer of Parent (i) stating that after diligent
investigation, they have determined that Borrower during the period has observed
or performed all of its covenants in this Agreement and in the other Loan
Documents, and (ii) stating that the officers do not know of any default or
Event of Default by Borrower under this Agreement or the other Loan Documents;
and
(b) all other information regarding the affairs of
Borrower and its Subsidiaries that Bank from time to time reasonably requests.
6.8 COLLATERAL REPORTS. Furnish to Bank at least monthly
before the thirtieth (30th) day of the month (and more frequently if requested
by Bank) a detailed accounts receivable aging report as of the last day of the
previous month, a detailed accounts payable aging report, and an inventory
report, all in form and substance, and containing such detail and information as
Bank shall request, and furnish to Bank copies of all physical inventory
listings when prepared by Parent.
6.9 SEC FILINGS. (i) As soon as available and in any event
within ninety-five (95) days following the end of each of Parent's fiscal years,
a copy of its Annual Report on Form 10-K as filed with the SEC; (ii) as soon as
available and in any event within fifty (50) days following the end of each of
Parent's first three fiscal quarters of each year, a copy of its Quarterly
Report on Form 10-Q; and (iii) promptly on becoming available, any other report
or statement that Parent files with the SEC or mails to its shareholders.
6.10 VISITS AND INSPECTIONS. For each Borrower, (a) give
agents and representatives of Bank full and unrestricted access from time to
time during normal business hours to its business premises, offices, properties,
books, records and information; (b) permit agents and representatives of Bank to
make such audit and examination thereof, and conduct such other investigation,
as they consider appropriate to determine and verify its business properties,
38
operation, or condition (financial or other) and to consummate the transactions
contemplated by this Agreement; and (c) furnish to Bank and its agents and
representatives such additional information with respect to its business and
affairs as they reasonably request from to time. Borrower shall bear the cost of
such audits, reports, and inspections.
Borrower shall keep true books, records, and accounts that
completely, accurately, and fairly reflect all dealings and transactions
relating to its and its Subsidiaries' assets, business, and activities and shall
record all transactions in such manner as is necessary to permit preparation of
its financial statements in accordance with GAAP.
6.11 PAYMENTS ON NOTES. Duly and punctually pay the principal
and interest on the Notes, in accordance with the terms of this Agreement and of
the Notes, and pay all other Debt of Borrower or any Subsidiary reflected on the
financial statements delivered to Bank and referred to in Section 5.5
("Financial Statements") hereof, and all other Debt incurred after the date
hereof in accordance with the terms of such Debt.
6.12 CONDUCT OF BUSINESS. Conduct its business as now
conducted and do all things necessary to preserve, renew, and keep in full force
and effect its rights, patents, permits, licenses, franchises, and trade names
necessary to continue its business. The Remaining Businesses shall comply with
all Contractual Obligations applicable to it and its business and properties.
6.13 MAINTENANCE OF PROPERTIES. For each Borrower, keep its
properties in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all needed and proper repairs, renewals,
replacements, additions, and improvements thereto and comply with the provisions
of all leases to which it is a party or under which it occupies property so as
to prevent any loss or forfeiture thereof or thereunder.
6.14 LOCATION OF COLLATERAL. Notify Bank on a monthly basis
within thirty (30) days of a change in a location at which Collateral is
maintained, except for Inventory that is (i) shipped to customers and vendors,
(ii) shipped between locations listed on EXHIBIT "1.49" or (iii) Inventory
stored at customers' premises for those contracts involving an aggregate sale
price of less than $50,000.
6.15 ADDITIONAL DOCUMENTS. Join Bank in executing any security
agreements, assignments, consents, financing statements or other instruments, in
form satisfactory to Bank. as Bank may from time to time request in connection
with the Collateral and the other security for the Loans.
6.16 NOTICE TO BANK. Promptly notify Bank of: (a) any default
or Event of Default, (b) the acceleration of the maturity of any Debt or
Contractual Obligation; (c) a default in the performance of, or compliance with,
any Requirement of Law, Environmental Regulation, or Contractual Obligation of
Borrower or any of its Subsidiaries; (d) any litigation, dispute, or
39
proceeding that is pending or known by Borrower's officers to be threatened
against Borrower or any of its Subsidiaries and that might involve a claim for
damages or a request for injunctive, enforcement, or other relief that, if
granted, might reasonably be expected to have a Material Adverse Effect on
Borrower; (e) a change in either the name or the principal place of business of
Borrower or the office where its books and records are kept; (f) any change in
its accounting methods, policies, or practices for financial reporting purposes
or any material change in its accounting methods, policies, or practices for tax
reporting purposes; and (g) a change that has a Material Adverse Effect in the
business, operations, assets, property, or condition (financial or other) of any
of the Remaining Businesses. Borrower shall provide with each notice pursuant to
this section a statement of an officer of Borrower setting forth details of the
occurrence referred to in the notice and stating what action Borrower proposes
to take with respect to it. Borrower shall also promptly notify Bank of any
agreement to acquire another company, including in the notice a copy of the
acquisition agreement and financial information regarding the acquired company.
6.17 SUBORDINATION OF DEBT. Provide Bank with a debt
subordination agreement, in form and substance satisfactory to Bank, executed by
Borrower and each Subordinate Lender, and a debt and subordination agreement, in
form and substance satisfactory to Bank, executed by Borrower and any Person who
is an officer, director, shareholder or Affiliate of Borrower to whom Borrower
is or hereafter becomes indebted, subordinating in right of payment and claim
all of such Debt and any future advances thereon to the full and final payment
of the Obligations.
6.18 COLLECTION OF ACCOUNTS. Diligently pursue collection of
all Accounts and other amounts due the Remaining Businesses from others,
including Affiliates of Borrower.
6.19 LANDLORD AND STORAGE AGREEMENTS. Provide Bank with copies
of all agreements between Borrower and any landlord or warehouseman which owns
any premises at which any Inventory or other Collateral may, from time to time,
be kept.
6.20 AUDITORS' LETTERS. Furnish Bank with a copy of each
finally issued letter written to Parent by its independent certified public
accountant concerning internal controls and management review immediately upon
receipt of same.
6.21 ERISA COMPLIANCE.
(a) At all times make prompt payment of contributions
required to meet the minimum funding standards set forth in ERISA with respect
to each Plan;
(b) Promptly after the filing thereof, furnish to Bank
copies of an 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;
40
(c) Notify Bank 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
(d) Furnish to Bank, promptly upon Bank's request
therefor, such additional information concerning any Plan or any other such
employee benefit plan as may be reasonably requested.
6.22 PHYSICAL INVENTORY. Borrower shall at least one time
during each fiscal year conduct a physical inventory of all of its Inventory and
shall promptly certify to Bank the results of such inventory in detail
satisfactory to Bank.
6.23 CASH FLOW FORECASTS. The Remaining Businesses shall
update its 13-week Cash Flow Forecasts on a monthly basis and shall provide the
Bank with a copy thereof by the 5th calendar day of each month hereafter. The
Remaining Businesses shall, at all times prior to the scheduled maturity of the
Revolving Loan and the Term Loan, operate their businesses and operations with
respect to total cash disbursements in accordance with the terms of the then
current Cash Flow Forecasts.
7. NEGATIVE COVENANTS. Until the Obligations have been indefeasibly
repaid in full and until Bank has no further obligation to make advances under
the Loans, without the prior written consent of Bank, the Remaining Businesses
shall not:
7.1 INDEBTEDNESS. Except as permitted or contemplated by this
Agreement and unless Borrower is in compliance with all of its financial
covenants, create, incur, assume, or suffer to exist any Debt or obligation for
money borrowed, or guarantee, or endorse, or otherwise be or become contingently
liable in connection with the obligations of any person, firm, or corporation
(including any Affiliate), except:
7.1.1 Indebtedness for taxes not at the time due and
payable or which are being actively contested in good faith by appropriate
proceedings and against which reserves deemed adequate by Bank have been
established by but only if the non-payment of such taxes does not result in a
Lien upon any property of Borrower that has priority over the Lien held by Bank;
7.1.2 Contingent liabilities arising out of the
endorsement of negotiable instruments in the ordinary course of collection or
similar transactions in the ordinary course of business;
41
7.1.3 Debt, other than for borrowed money, incurred in
the ordinary course of business, including that evidenced by trade promissory
notes with a maturity of less than one year;
7.1.4 Debt to third parties for purchase money borrowing
incurred in connection with the purchase of capital assets and/or capital lease
obligations used in the business of Borrower, as long as this Debt does not
cause an Event of Default;
7.1.5 Debt for money borrowed from Bank;
7.1.6 Debt incurred prior to the date of this Agreement
and reflected on the financial statements referred to in Section 5.5 ("Financial
Statements") hereof which is not to be repaid with the proceeds of the Loans;
7.1.7 Debt with respect to the Xxxxxxx Xxxxx Contingent
Note; and
7.1.8 Debt with respect to the Series A-1 Preferred
Stock of the Company issued to the current holders of the Company's Preferred
Stock.
7.2 LIENS AND SECURITY INTERESTS. Create, incur, assume, or
suffer to exist any mortgage, security deed, deed of trust, security interest,
pledge, encumbrance, Lien or charge of any kind (including charges on property
purchased under conditional sales or other title retention agreements) on any of
its property or assets, now owned or hereafter acquired, except:
7.2.1 Liens for taxes not yet due or which are being
contested in good faith by appropriate proceeding and against which reserves
deemed adequate by Bank have been set up (excluding any Lien imposed pursuant to
any of the provisions of ERISA), but only if the non-payment of such taxes does
not result in a Lien upon any property of Borrower that has priority over the
Lien held by Bank;
7.2.2 Other Liens incidental to the conduct of its
business or the ownership of its property and assets and created by operation of
law so long as the obligations secured thereby are not past due;
7.2.3 Purchase money Liens created to secure the
indebtedness permitted by Section 7.1.4;
7.2.4 Liens in favor of Bank; and
7.2.5 Liens reflected on EXHIBIT "7.2.5" to this
Agreement.
7.3 DIVIDENDS AND DISTRIBUTIONS. Declare any dividends on any
shares of any class of its capital stock, or apply any of its property or assets
to the purchase, redemption or other
42
retirement of, or set apart any sum for the payment of any dividends on, or for
the purchase, retirement of, or make any other distribution by reduction of
capital or otherwise in respect of, any shares of any class of capital stock of
Borrower, unless after any of the foregoing payments, Borrower remains in
compliance with all of its financial covenants.
7.4 AFFILIATE TRANSACTIONS. (a) Purchase, acquire, or lease
property from, or sell, transfer or lease property to, any Affiliate of
Borrower, except for (i) the exercise of stock options and (ii) arms-length
transactions at fair market value in the ordinary course of business, or (b)
engage in any other transaction or arrangement with a Subsidiary that is not a
Borrower that involves loans, advances, or transfers of cash or property to the
non-Borrower Subsidiary, except for such transactions involving the proceeds of
equity or Subordinated Debt offerings.
7.5 FINANCING STATEMENTS. Permit any financing statement
(except Bank's financing statements) to be on file with respect to the
Collateral, except for those filed to perfect Permitted Liens.
7.6 NAME CHANGE/LOCATION OF CHIEF EXECUTIVE OFFICE. Change the
name, identity or corporate structure of Borrower, or change the location of its
chief executive office, unless notice has been given to Bank in advance of the
move.
7.7 DESTRUCTION OF COLLATERAL. Waste or destroy the Collateral
or use it in violation of any statute or ordinance.
7.8 LIQUIDATION, MERGER OR CONSOLIDATION. (a) Except for the
contemplated sale of La-Man's assets to Air Systems Enterprises, Inc.,
liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution); or (b) enter into any merger or consolidation of which it is not
the surviving corporation or otherwise suffer a "Change in Control" in Parent,
as defined below; or (c) sell, lease, or otherwise dispose of any of its assets
in an aggregate amount exceeding $100,000 during any fiscal year, except sales
of obsolete or worn-out equipment and sales of Inventory in the ordinary course
of its business.
For purposes of this Agreement, the term "Change in Control" means (a) any
"person" or "group" of persons (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended) have acquired beneficial ownership,
direct or indirect, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of, control over 30%
or more of the votes attributable to the voting stock of Parent; or (b)
individuals who at the beginning of any period of twenty-four (24) consecutive
calendar months were directors of Parent (together with any new directors whose
election to the board of directors of Parent or whose nomination for election by
the shareholders of Parent was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of Parent then in office.
43
7.9 LOANS OR ADVANCES. Make loans or advances or pay any
management or similar fees to any Affiliate or officer of Borrower or any
Subsidiary, except advances or payment of management or similar fees made in the
ordinary course of business, but under no circumstances to a non-Borrower
Subsidiary.
7.10 CASH CAPITAL EXPENDITURES. Make or commit to make any
Cash Capital Expenditures except as provided in the Cash Flow Forecasts and
reasonably acceptable to the Bank.
7.11 ACQUISITIONS. Purchase or acquire the obligations or
stock of or any other interest in any Person, unless the transaction does not
result in an Event of Default. Borrower acknowledges that Bank, in its sole and
absolute discretion, will determine whether or not the addition of acquired
assets will result in more Eligible Inventory and Eligible Accounts for
borrowing base purposes. In making this determination, Borrower agrees to make
available to Bank any and all information Bank deems necessary or appropriate to
conduct its due diligence investigation concerning the acquired assets.
7.12 PREPAYMENT OF DEBT. Prepay any Debt, except (i) Debt to
Bank, (ii) permitted payments with respect to Subordinated Debt described in
Section 7.16 ("Subordinated Debt") hereof, and (iii) accounts payable arising in
the ordinary course of business; provided, however, Borrower may pay accounts
payable and take ordinary trade discounts on purchases made in the ordinary
course of business.
7.13 LEASE TRANSACTIONS. Enter into any sale and leaseback
arrangement, except in the ordinary course of business.
7.14 AMENDMENTS. Amend any instrument evidencing a Lien listed
on EXHIBIT "7.2.5" hereto.
7.15 DEPOSIT OF FUNDS. Deposit proceeds of the Collateral into
any account other than the Special Collection Accounts.
7.16 SUBORDINATED DEBT. Make any cash payment (principal or
interest) with respect to Subordinated Debt, or with respect to any Debt that
would be Subordinated Debt but for the absence of a subordination agreement in
effect with respect thereto, except that Borrower shall be entitled to make
payments with respect to such Debt to the extent expressly permitted in any
subordination agreement in effect with respect thereto, but only during such
time as no default or Event of Default exists hereunder.
7.17 CHANGE IN BUSINESS. Enter into any business which is
substantially different from the business or businesses in which it is presently
engaged, if the business in which the Remaining Businesses are presently engaged
fails to account for at least fifty percent (50%) of the Remaining Businesses'
annual revenues on an ongoing basis.
44
7.18 ACCOUNTS. Sell, assign, or discount any of its Accounts,
Instruments. Chattel Paper, or any promissory notes held by it other than
discount of such Accounts, Chattel Paper, or notes in the ordinary course of
business for collection. The Remaining Businesses shall notify Bank promptly in
writing of any discount, offset, or other deductions not shown on the face of an
Account invoice and any dispute over an Account, and any information relating to
an adverse change in any Account Debtor's financial condition or ability to pay
its obligations.
7.19 MARGIN STOCK. Use any proceeds of the Loans to purchase
or carry any margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or extend credit to others for the
purpose of purchasing or carrying any margin stock.
7.20 SUBSIDIARIES. Dispose of any Subsidiaries other than
AmeriVision, Ad Art, La-Man, and Xxxxxxxx (subject, in each case, to the consent
of the Bank to such sale), or permit any Subsidiary to issue capital stock,
except to its Parent. Parent shall maintain at least the percentage ownership of
each Subsidiary shown on the attached EXHIBIT "5.19". Newly formed or acquired
Subsidiaries with tangible assets of more than $100,000 will join this Agreement
and each Note and become a Borrower within sixty (60) days after the acquisition
or formation of the Subsidiary. Borrower will not be required to cause the
acquired or formed Subsidiary to join this Agreement and each Note as a Borrower
if the joinder would cause an Event of Default because of a resulting breach of
a representation or warranty unless Bank waives compliance with the
representation or warranty with respect to that breach. Borrower shall not sell,
transfer or lease any property to E.S.C. of Nevada, Inc., Xxx Xxxx Industries of
Nevada, Inc., Nevada Services, Inc., or any newly formed or acquired Subsidiary.
8. GRANT OF SECURITY INTEREST.
8.1 SECURITY INTEREST. As security for the payment of the
Loans and all other Obligations, now existing or in the future incurred, and
including any extensions or renewals or changes in form of the Loans, any
over-advances, and any other Obligations, and all costs and expenses of
collection thereof, including, without limitation, attorneys' fees, Borrower
hereby assigns to Bank and grants to Bank a security interest in and Lien upon
the following:
(a) All of Borrower's Accounts;
(b) All of Borrower's Documents;
(c) All of Borrower's Instruments;
(d) All of Borrower's General Intangibles;
(e) All of Borrower's Chattel Paper;
45
(f) All of Borrower's Inventory;
(g) All of Borrower's Equipment;
(h) All of the proceeds, products, and profits,
as the case may be, of Borrower's Accounts, Documents, Instruments, Chattel
Paper, General Intangibles, Equipment, and Inventory;
(i) All monies and other property of any kind,
real, personal, or mixed, and tangible or intangible, now or at any time or
times hereafter, in the possession or under the control of Bank or a bailee of
Bank;
(j) All accessions to, substitutions for and all
replacements, products, profits, income, and cash and non-cash proceeds of (a)
through (g) above, including, without limitation, proceeds of any unearned
premiums with respect to insurance policies insuring any of the Collateral; and
(k) All books and records (including, without
limitation, customer lists, credit files, magnetic, digital and laser tapes and
disks, electronic and computer storage media, computer programs, print-outs, and
other computer materials and records) of Borrower pertaining to any of (a)
through (h) above.
In addition, the Loans and Obligations shall be secured by the
Mortgages; provided, however, the Display Mortgage will secure only the Term
Loan and recovery under the Display Mortgage will be limited to $568,026.78. As
Borrower obtains more trademarks or patents, Borrower shall execute appropriate
instruments granting to Bank a security interest in those assets.
8.2 SALE OF INVENTORY. Until the occurrence of an Event of
Default, Borrower may use and dispose of the Inventory in the ordinary course of
business where such is not inconsistent with this Agreement, provided that the
ordinary course of business does not include a transfer in partial or total
satisfaction of Debt nor a transfer (other than a sale on terms and conditions
which would apply if disinterested parties were involved) to an Affiliate of
Borrower.
8.3 NOTICE TO ACCOUNT DEBTORS. If an Event of Default exists
hereunder, Bank may notify the Account Debtors obligated on any or all of the
Accounts to make payment thereof directly to Bank and to take control of all
proceeds of any such Accounts. Any such notice by Bank to such Account Debtors
shall be given by an officer of Bank. Borrower, if requested by Bank, shall
stamp or cause to be stamped on each Account item in legible letters "Pledged to
SouthTrust Bank," and shall turn over physical possession of the Accounts to
Bank. Borrower authorizes Bank to sign and endorse Borrower's name upon any
check, draft, money order, or other form of payment of any Account item and to
sign and endorse satisfactions and releases of
46
Account items in Borrower's name. Until such time as Bank elects to exercise
such right by mailing to Borrower written notice thereof, Borrower is
authorized, as agent of Bank, to collect and enforce said Accounts in Borrower's
name. The costs of such collection and enforcement, including attorneys' fees
and out-of-pocket expenses and all other expenses and liabilities resulting
therefrom, shall be borne solely by Borrower whether the same are incurred by
Bank or Borrower. At the request of Bank, Borrower shall upon receipt of all
checks, drafts, cash, and other remittances in payment or on account of the
Accounts deposit the same in the Special Collection Accounts referred to in
Section 4.2 ("Special Collection Accounts"). The funds in the Special Collection
Accounts shall be held by Bank as security for all obligations secured hereby.
Said proceeds shall be deposited in precisely the form received, except for the
endorsement of Borrower where necessary to permit collection of items, which
endorsement Borrower agrees to make, and which Bank is also hereby authorized to
make on Borrower's behalf. Pending such deposit, Borrower agrees that it will
not commingle any such checks, drafts, cash, and other remittances with any of
Borrower's funds or property, but will hold them separate and apart therefrom
and upon an express trust for Bank until deposit thereof made in the Special
Collection Accounts. Bank may, in accordance with the provisions of this
Agreement, apply the whole or any part of the collected funds on deposit in the
Special Collection Accounts against the principal and/or interest of the Loans
or other Obligations secured hereby, the order and method of such application to
be at the discretion of Bank. Any portion of said funds on deposit in the
Special Collection Accounts which Bank elects not to so apply may, at Bank's
election, be paid over by Bank to Borrower; provided, however, that if at any
time Bank grants to Borrower the right to retain the proceeds of the Accounts
for Borrower's use, or if at any time Bank elects to pay funds on deposit in the
Special Collection Accounts to Borrower, such right to retain and use proceeds
or payment from the Special Collection Accounts shall be deemed to be continuing
new value for the security interest attaching hereunder on all after-acquired
property.
8.4 VERIFICATION OF ACCOUNTS. Whether or not an Event of
Default has occurred, any of Bank's officers, employees, or agents shall have
the right, at any time or times hereafter, in the name of Bank, or any designee
of Bank or Borrower, to verify the validity, amount, or any other matter
relating to any Accounts by mail, telephone, telegraph, or otherwise. Borrower
shall cooperate fully with Bank in an effort to facilitate and promptly conclude
any such verification process.
8.5 POST OFFICE BOX. If an Event of Default has occurred or is
continuing, Borrower agrees to acquire at its expense a post office box in the
place designated by Bank, to which Bank and its designees alone shall have
access. (Borrower acknowledges that Ad Art will be subject to a lockbox
arrangement, even in the absence of an Event of Default.) Borrower agrees to
give notice to all of its Account Debtors to mail payments due to Borrower to
such post
47
office box. Borrower agrees that Bank, or its designees, may open such post
office box, may receive, open, and dispose of all mail addressed to Borrower at
such post office box, and may deposit any payments contained in such mail in a
Special Collection Account referred to in Section 4.2 ("Special Collection
Accounts"). Borrower agrees to give all required instructions to the U.S. Postal
Service authorities to enable Bank or its designees to attain access to such
post office box of Borrower, agrees that it will not attempt to remove any mail
from such post office box, and agrees to execute such additional agreements as
Bank may reasonably require in connection with such post office box.
8.6 GOVERNMENTAL ACCOUNTS. If any of Borrower's Accounts in
excess of $10,000 arise out of contracts with the United States or any
department, agency, or instrumentality thereof, Borrower will immediately notify
Bank thereof in writing and execute any instruments and take any steps required
by Bank in order that all monies due and to become due under such Account shall
be assigned to Bank and notice thereof given to the Government under the Federal
Assignment of Claims Act.
8.7 ACCOUNTS EVIDENCED BY INSTRUMENTS. If any of Borrower's
Accounts are or should become evidenced by promissory notes, trade acceptances,
chattel paper, chattel mortgages, conditional sales contracts, or other
instruments, Borrower will immediately deliver same to Bank, endorsed or
assigned with recourse to Bank's order and, regardless of the form of such
endorsement or assignment, Borrower hereby waives presentment. demand, notice of
dishonor, protest and notice of protest, and all other notices with respect
thereto.
8.8 LEASE OF RECORDS. Borrower hereby leases to Bank, and Bank
hires from Borrower, for a term which shall be effective so long as the Loans or
other Obligations secured hereby are owing to Bank by Borrower and until Bank
has no further obligation under the Agreement, all of Borrower's present and
future books of Accounts, computer printouts, magnetic, digital and laser tapes
and disks, computer and electronic storage media, computer software programs,
trial balance records, ledgers and cabinets in which they are located, reflected
or maintained, in any way relating to the Collateral, and all present and future
supporting evidence and documents relating thereto in the form of written
applications, credit information, account cards, payment records, trial
balances, correspondence, delivery receipts, certificates and the like, as well
as the past and current information stored in computer software programs for and
on Borrower's behalf by third parties. Borrower, if requested by Bank, agrees to
legend all of the foregoing to indicate the lease thereof to Bank. If an Event
of Default occurs, then, in addition to all of the other rights and remedies of
Bank herein, Bank will have the right forthwith or at any time thereafter to
remove from Borrower's premises all of the foregoing and keep and retain the
same in Bank's possession until the Loans and other Obligations secured hereby
shall have been fully paid and discharged and Bank has no further obligation
under the Agreement. The provisions of this section shall not be deemed to
diminish or contravene the security interest of Bank in Borrower's General
Intangibles or in the property, materials, and interests described in this
section, but shall be deemed to be in addition to any rights Bank may have with
respect to Borrower's grant of a security interest in its General Intangibles to
Bank.
8.9 LICENSE OF RIGHTS. Bank is hereby granted a license or
other right to use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks, and
advertising matter or any property of a similar nature as it pertains
48
to the Collateral, in advertising for sale and in selling any Collateral. and
Borrower's rights under all licenses and all franchise agreements shall inure to
Bank's benefit.
8.10 ATTORNEY-IN-FACT. Borrower hereby irrevocably designates,
makes, constitutes, and appoints Bank (and all Persons designated by Bank) as
Borrower's true and lawful attorney (and agent-in-fact) and Bank, or Bank's
agent, may, without notice to Borrower and in either Borrower's or Bank's name,
but at the cost and expense of Borrower:
8.10.1 At such time or times hereafter as Bank or said
agent, in its sole discretion, - may determine, endorse Borrower's name on any
checks, notes, acceptances, drafts, money orders, or any other evidence of
payment or proceeds of the Collateral which come into the possession of Bank or
under Bank's control; and
8.10.2 If an Event of Default exists, Bank may: (i)
demand payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge, or release any of the Accounts or
other Collateral; (iii) sell or collect any of the Accounts or other Collateral
upon such terms, and for such amounts and at such time or times as Bank deems
advisable; (iv) take possession, in any manner, of any item of payment or
proceeds relating to any Collateral and apply the same to the Obligations; (v)
prepare, file, and sign Borrower's name to a proof of claim in bankruptcy or
similar document against any Account Debtor or to any notice of lien,
assignment, or satisfaction of lien or similar document in connection with any
of the Collateral; (vi) receive, open, and dispose of all mail addressed to
Borrower and to notify postal authorities to change the address for delivery
thereof to such address as Bank may designate; (vii) endorse the name of
Borrower upon any of the items of payment or proceeds relating to any Collateral
and deposit the same to the account of Bank or any other bank on account of the
Obligations; (viii) endorse the name of Borrower upon any Chattel Paper,
document, instrument, invoice, freight xxxx, xxxx of lading, or similar document
or agreement relating to the Accounts, Inventory, and any other Collateral; (ix)
use Borrower's stationery and sign the name of Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the information
verifications if recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts, Inventory, and any
other Collateral and to which Borrower has access; (xi) make and adjust claims
under policies of insurance; (xii) for and in the name of Borrower to give
instructions and direct any bank or financial institution in which proceeds of
the Collateral are deposited to turn over said proceeds to Bank; and (xiii) do
all other acts and things necessary, in Bank's determination, to fulfill
Borrower's obligations under this Agreement.
9. ADDITIONAL REPRESENTATIONS, COVENANTS, AND AGREEMENTS RELATING
TO COLLATERAL.
9.1 RELIANCE ON STATEMENTS PERTAINING TO ACCOUNTS. With
respect to all Accounts, Borrower represents and warrants to Bank that Bank may
rely, in determining which
49
Accounts are Eligible Accounts, on all statements and representations made by
Borrower with respect to any Account or Accounts, and unless otherwise indicated
in writing to Bank, that with respect to each Account:
9.1.1 It is genuine and in all respects what it purports
to be, and it is not evidenced by a judgment;
9.1.2 It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by Borrower in the ordinary course of
its business and in accordance with the terms and conditions of all purchase
orders, contracts, or other documents relating thereto and forming a part of the
contract between Borrower and the Account Debtor;
9.1.3 It is for a liquidated amount maturing as stated
in the duplicate invoice covering such sale or rendition of services, a copy of
which has been furnished or is available to Bank;
9.1.4 Such Account, and Bank's security interest
therein, is not, and will not be in the future, subject to any offset, Lien,
deduction, defense, dispute, counterclaim, or any other adverse condition,
except for disputes resulting in returned goods where the amount in controversy
is deemed by Bank to be immaterial, and each such Account is absolutely owing to
Borrower and the obligation to pay is not contingent in any respect or for any
reason;
9.1.5 Borrower has made no agreement with any Account
Debtor thereunder for any deduction therefrom, except discounts or allowances
which are granted by Borrower in the ordinary course of its business for prompt
payment and which are reflected in the calculation of the net amount of each
respective invoice related thereto;
9.1.6 There are no facts, events, or occurrences which
in any way impair the validity or enforceability thereof or tend to reduce the
amount payable thereunder from the face amount of the invoice and statements
delivered to Bank with respect thereto;
9.1.7 To the best of Borrower's knowledge, the Account
Debtor thereunder (i) has the capacity to contract at the time any contract or
other document giving right to the Account was executed and (ii) such Account
Debtor is Solvent;
9.1.8 Borrower has no knowledge of any fact or
circumstance which would impair the validity or collectability of the Account,
and to the best of Borrower's knowledge there are no proceedings or actions
which are threatened or pending against any Account Debtor thereunder which
might result in any Material Adverse Change in such Account Debtor's financial
condition or the collectability of such Account.
9.2 AFFIRMATION OF REPRESENTATIONS. Each request for a loan or
advance made by Borrower pursuant to this Agreement or any of the other Loan
Documents shall constitute (i)
50
an automatic representation and warranty by Borrower to Bank that there does not
then exist any default or Event of Default and (ii) a reaffirmation as of the
date of said request that all of the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents are true in all
material respects, except for any changes in the nature of Borrower's business
or operations that would render the information contained in any exhibit
attached hereto either inaccurate or incomplete, so long as Bank has consented
to such changes or such changes are expressly permitted by this Agreement.
9.3 WAIVERS. Borrower hereby releases and waives any and all
actions, causes of action, demands and suits which it may ever have against Bank
as a result of any possession, collection, settlement, compromise, or sale by
Bank of any of the Accounts upon the occurrence of an Event of Default
hereunder, notwithstanding the effect of such possession, collection,
settlement, compromise, or sale upon the business of Borrower. Said waiver shall
include all causes of action and claims which may result from the exercise of
the power of attorney conferred upon Bank in Section 8.10 ("Attorney-in-Fact")
hereof.
9.4 DISCHARGE OF TAXES AND LIENS. At its option, Bank may
discharge taxes, Liens, security interests, or other encumbrances at any time
levied or placed on the Collateral and may pay for the maintenance and
preservation of the Collateral. Borrower agrees to reimburse Bank, on demand,
for any payment made or expense incurred by Bank pursuant to the foregoing
authorization, including, without limitation, attorneys' fees.
9.5 INSURANCE. Without limiting any other provision hereof,
Borrower shall keep the Collateral insured in amounts equal to its full
insurable value, with companies, and against such risks as may be satisfactory
to Bank. Borrower will pay the costs of all such insurance and deliver policies
evidencing such insurance to Bank with mortgagee loss payable clauses in favor
of Bank. Borrower hereby assigns to Bank all right to receive proceeds, directs
any insurer to pay all proceeds directly to Bank, and authorizes Bank to endorse
any check or draft for such proceeds and apply the same toward satisfaction of
the Loans and other Obligations secured hereby.
9.6 COMPLETE RECORDS. Borrower will at all times keep accurate
and complete records of the Collateral, and Bank or its agents shall have the
right to call at Borrower's place or places of business at intervals to be
determined by Bank, upon reasonable notice and during Borrower's regular
business hours, and without hindrance or delay, to inspect and examine the
Inventory and to inspect, audit, check, and make abstracts from the books,
records, journals, orders, receipts, computer printouts, correspondence, and
other data relating to the Collateral or to any other transactions between the
parties hereto. If requested by Bank. Borrower agrees to make its books,
records, journals, orders, receipts, computer printouts, correspondence, and
other data relating to the Collateral available for inspection, audit, and
checking by Bank or its agents.
9.7 UNIFORM COMMERCIAL CODE FINANCING STATEMENT. Borrower
agrees that a carbon, photographic, or other reproduction of this Agreement or
of a signed financing
51
statement with respect to the Collateral shall be sufficient as a financing
statement and may be filed as such by Bank.
10. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event of Default (unless and except to the
extent that the same is cured to the satisfaction of Bank within the applicable
cure period, if any, or, at the sole discretion of Bank, at any time
thereafter):
10.1 PAYMENT DEFAULT. If Borrower shall fail to make any
payment of any installment of principal or interest on any Note within ten (10)
days after the same becomes due and payable, whether at stated maturity, by
declaration, upon acceleration, or otherwise; or
10.2 FEES AND EXPENSES. If Borrower shall fail to pay when
due any expense, fee or charge provided for in this Agreement within ten (10)
days after the same becomes due and payable; or
10.3 CERTAIN AGREEMENT. If Borrower defaults in the observance
or performance of any agreement contained in Article 7 of this Agreement
("Negative Covenants") or in the observance or performance of the agreements set
forth in Section 4.2 ("Special Collection Accounts"), 6.1 ("Insurance"), 6.2
("Corporate Existence; Qualification") (with respect to existence only), 6.10
("Visits and Inspections"), 6.15 ("Additional Documents"), 6.16 ("Notice to
Bank") (with respect to parts (a) and (b) only), 6.17 ("Subordination of Debt"),
6.18 ("Collection of Accounts"), or 6.25 ("Cash Flow Forecasts") hereof; or
10.4 OTHER DEFAULTS. If Borrower or any other party (except
Bank) shall fail to perform, keep or observe any covenant, agreement or
provision of the Note(s) or of this Agreement (other than those set forth in
Sections 10.1 through 10.3 and Sections 10.5 through 10.18) or of any other Loan
Documents and such failure shall continue uncured for a period of thirty (30)
days after the Bank gives Borrower written notice of such failure; or
10.5 REPRESENTATIONS FALSE. If any warranty, representation,
or other statement made or furnished to Bank by or on behalf of Borrower or in
any of the Loan Documents proves to be false or misleading in any respect when
made or furnished if not cured within thirty (30) days after the Bank gives
Borrower written notice of such failure from the time Borrower has notice of the
breach (but the foregoing cure will not apply unless Borrower is reasonably
capable of curing the breach within the 30-day cure period); or
10.6 FINANCIAL DIFFICULTIES. If Borrower, excluding
AmeriVision, shall be involved in financial difficulties as evidenced:
(a) by its admission in writing of its inability to
pay its debts generally as they become due or of its ceasing to be Solvent;
52
(b) by its commencing a voluntary case under the
United States Bankruptcy Code or any similar law regarding debtor's rights and
remedies or an admission seeking the relief therein provided;
(c) by its making a general assignment for the benefit
of its creditors; or
(d) by its voluntarily liquidating or terminating
operations or applying for or consenting to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of such Person or of
all or of a substantial part of its assets; or
10.7 INVOLUNTARY PROCEEDINGS. If without its application,
approval, or consent, a proceeding shall be commenced, in any court of competent
jurisdiction, seeking in respect of Borrower (but excluding AmeriVision) any
remedy under the federal Bankruptcy Code, the liquidation, reorganization,
dissolution, winding-up, or composition or readjustment of debt, the appointment
of a trustee, receiver, liquidator or the like of such Person, or of all or any
substantial part of the assets of such Person, or other like relief under any
law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, which results in the entry of an order for
relief or such adjudication or appointment remains undismissed or undischarged
for a period of sixty (60) days; or
10.8 ERISA. If a Reportable Event shall occur which Bank, in
its sole discretion, shall determine in good faith 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 if Borrower is in "default" (as defined in Section 4219(c)(5)
of ERISA) with respect to payments to a Multiemployer Plan resulting from
Borrower's complete or partial withdrawal from such Plan; or
10.9 DEFAULT ON REIMBURSEMENT OBLIGATION. If the Borrower
fails to reimburse the Bank, in accordance with the terms of Section 2A.3
hereof, for the amount of any draw or drawing on the Letter of Credit; or
10.10 PUT OPTION EVENT. An event occurs that would entitle a
Subordinated Lender to exercise a put option under any of the Subordinated Debt;
or
10.11 JUDGMENTS. If a final judgment for the payment of money
in excess of $100,000 shall be rendered against Borrower, excluding any
judgments against Parent or AmeriVision for primary obligations of AmeriVision,
and the same shall remain undischarged for a period of thirty (30) days during
which execution shall not be effectively stayed, unless such judgment is fully
covered by collectible insurance; or
53
10.12 ACTIONS. If Borrower shall be criminally indicted or
convicted under any law; or
10.13 COLLATERAL. If a creditor of Borrower shall obtain
possession of any of the Collateral by any legal means; or
10.14 CHANGE IN CONTROL. If there occurs a Change in Control
of Parent (as that term is defined in Section 7.8); or
10.15 SUBORDINATION AGREEMENTS. If a breach or default shall
occur with respect to any subordination agreement executed by any creditor of
Borrower (including any Affiliate), or if any said agreement shall otherwise
terminate or cease to have legal effect; or
10.16 PRIORITY OF SECURITY INTEREST. If any security interest
or Lien of Bank hereunder or under any other Security Agreement shall not
constitute a perfected security interest of first priority in the Collateral
thereby encumbered, subject only to Permitted Liens; or
10.17 LOSS OF COLLATERAL. If there shall occur any material
loss, theft, damage or destruction of any of the Collateral, which loss is not
fully insured; or
10.18 MATERIAL ADVERSE CHANGE. If Borrower suffers any change
that has a Material Adverse Effect on its business, assets, properties,
prospects, results of operation, or condition (financial or other), measured on
a consolidated basis.
On the occurrence of any Event of Default, Bank or the holder of the
Notes may at its option proceed to protect and enforce its rights by suit in
equity, action at law and/or the appropriate proceeding either for specific
performance of any covenant or condition contained in the Notes or in any Loan
Document, and/or declare the unpaid balance of the Loans and Note together with
all accrued interest to be forthwith due and payable, and thereupon such balance
shall become so due and payable without presentation, protest or further demand
or notice of any kind, all of which are hereby expressly waived.
Borrower agrees that default under any Loan Document shall constitute
default with respect to all Loan Documents.
Without limiting the foregoing, upon the occurrence of any Event of
Default, and at any time thereafter, Bank shall have the rights and remedies of
a secured party under the Code (and the Uniform Commercial Code of any other
applicable jurisdiction) in addition to the rights and remedies provided herein
or in any other instrument or paper executed by Borrower. Bank may require
Borrower to assemble the Inventory and make the same available to Bank at a
place to be designated by Bank which is reasonably convenient to both parties.
Unless the Collateral is perishable or threatens to decline speedily in value,
or is a style customarily sold on a recognized market, Bank will give Borrower
reasonable notice of the time after which any private sale or other intended
disposition thereof is to be made. The requirement of reasonable notice shall be
met if such notice is mailed postage prepaid to Borrower at least five (5) days
before the time of such sale or disposition. Borrower shall pay Bank on demand
any and all expenses, including legal expenses and reasonable attorneys' fees,
incurred or paid by Bank in protecting or enforcing the Loans and all other
Obligations secured hereby and other rights of Bank hereunder, including its
right to take possession of the Collateral.
54
Bank shall not be liable for failure to collect the Accounts or to
enforce any contract rights or for any action or omission on the part of Bank,
its officers, agents and employees, except willful misconduct. No remedy herein
conferred upon, or reserved to, Bank is intended to be exclusive of any other
remedy or remedies, including those of any note or other evidence of Debt held
by Bank, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing in law or in
equity. Exercise or omission to exercise any right of Bank shall not affect any
subsequent right of Bank to exercise the same.
Borrower waives notice prior to Bank's taking possession or control of
any of the Collateral or any bond or security that might be required by any
court prior to allowing Bank to exercise any of Bank's remedies, including the
issuance of an immediate writ of possession.
In addition to any other remedy available to it, Bank shall have the
right to the extent provided by law, upon the occurrence of an Event of Default,
to seek and obtain the appointment of a receiver to take possession of and
operate and/or dispose of the business and assets of Borrower and any costs and
expenses incurred by Bank in connection with such receivership shall bear
interest at the Default Rate.
11. MISCELLANEOUS.
11.1 COSTS AND EXPENSES. Borrower shall bear all expenses of
Bank (including reasonable fees and expenses of its counsel) in connection with
the preparation of this Agreement and the Loan Documents, and the issuance and
delivery of the Notes to Bank and also in connection with any amendment or
modification thereto. Borrower agrees to indemnify and save Bank harmless
against all broker's and finder's fees, if any. If, at any time or times
hereafter, whether before or after the occurrence of an Event of Default, Bank
employs counsel to advise or provide other representation with respect to this
Agreement or the other Loan Documents, or to collect the balance of the Loans or
other obligations, or to take any action in or with respect to any suit or
proceeding relating to this Agreement or any of the Loan Documents, or to
protect, collect, or liquidate the Collateral or to attempt to enforce any
security interest or Lien granted to Bank by Borrower; then in any such events,
all of the reasonable attorneys' fees arising from such services and any
expenses, costs and charges relating thereto shall constitute additional
obligations of Borrower payable on demand of Bank. Without limiting the
foregoing, Borrower shall pay or reimburse Bank for all recording and filing
fees, intangibles taxes, documentary and revenue stamps, other taxes or other
expenses and charges payable in connection with this
55
Agreement, the Notes or any Loan Document, or the filing of any Loan Document,
financing statements or other instruments required by Bank in connection with
the Loans.
11.2 WAIVERS OF PROVISIONS. All amendments of this Agreement
and all waivers and suspensions by Bank of any provision of this Agreement or of
the Loan Documents and all waivers and suspensions by Bank of any default or
Event of Default hereunder shall be effective only if (i) in writing and signed
by a duly authorized representative of Bank and (ii) accompanied by such fees
and charges as may be imposed by Bank in connection with the amendment. The fees
may include out-of-pocket expenses incurred by Bank in administration of the
Loan or in evaluation of the proposed waiver, amendment or suspension, as well
as additional facility fees and administrative fees that may be required by Bank
in connection with Borrower's request. The fees may include additional
compensation to Bank for the extension of the credit facilities represented by
the Loan. Any such amendment, waiver, or suspension may be granted only in the
sole discretion of Bank.
11.3 ACTIONS NOT CONSTITUTING A WAIVER. Neither (i) the
failure at any time or times hereafter to require strict performance by Borrower
of any of its provisions, warranties, terms and conditions contained in this
Agreement or any other agreement, document or instrument now or hereafter
executed by Borrower, and delivered to Bank, nor (ii) the failure of Bank to
take action or to exercise its remedies with respect to any default or Event of
Default hereunder, nor (iii) any delay or omission of Bank to exercise any
right, remedy, power, or privilege hereunder after the occurrence of a default
or Event of Default, shall act to waive, affect, or diminish any right of Bank
to demand strict compliance with the terms of this Agreement or to exercise
remedies with respect to any default or Event of Default.
11.4 HEADINGS; EXHIBITS. Except for the definitions set forth
in Article 1, the headings of the articles, sections, paragraphs and
subdivisions of this Agreement are for convenience of reference only, are not to
be considered a part hereof, and shall not limit or otherwise affect any of the
terms hereof. Unless otherwise expressly indicated, all references in this
Agreement to a section or an exhibit are to a section or an exhibit of this
Agreement, all exhibits referred to in this Agreement are an integral part of it
and are incorporated by reference in it.
11.5 RIGHT OF SETOFF. Upon and after the occurrence of any
Event of Default, Bank may, and is hereby authorized by Borrower, at any time
and from time to time, to the fullest extent permitted by applicable laws, and
without advance notice to Borrower (any such notice being expressly waived by
Borrower), setoff and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and any other indebtedness at any
time owing by Bank to, or for the credit or the account of, Borrower against any
or all of the Obligations of Borrower now or hereafter existing whether or not
such Obligations have matured and irrespective of whether Bank has exercised any
other rights that it has or may have with respect to such Obligations,
including, without limitation, any acceleration rights. The aforesaid right of
setoff may be exercised by Bank against Borrower or against any trustee in
bankruptcy,
56
debtor in possession, assignee for the benefit of the creditors, receiver, or
execution, judgment or attachment creditor of Borrower, or such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of setoff shall not have been exercised by Bank prior to
the making, filing or issuance, or service upon Bank of, or of notice of, any
such petition, assignment for the benefit of creditors, appointment or
application for the appointment of a receiver or issuance of execution,
subpoena, order or warrant. Bank agrees to notify Borrower after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of Bank under this
Section are in addition to the other rights and remedies (including, without
limitation, other rights of setoff) which Bank may have.
11.6 SURVIVAL OF COVENANTS. All covenants, agreements,
representations and warranties made herein and in certificates or reports
delivered pursuant hereto shall be deemed to have been material and relied on by
Bank, notwithstanding any investigation made by or on behalf of Bank, and shall
survive the execution and delivery to Bank of any Note or Loan Document. All
provisions in this Agreement for indemnification of Bank or payment of its costs
and expenses survive any termination of this Agreement.
11.7 ADDRESSES. Any notice or demand which by any provision
of this Agreement is required or provided to be given shall be deemed to have
been sufficiently given or served for all purposes by being delivered in person
or by facsimile to the party to whom the notice or demand is directed or by
being sent as first class mail, postage prepaid, to the following address: If to
Borrower, Display Technologies, Inc., 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx
00000, Attention: President and WITH COPIES TO: Xxxxxxx Xxxxx Capital Partners,
L.P. c/o Raymond Xxxxx Capital, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx,
Xxxxxxx 00000, Attention: Xxxx X. Xxxxxxx and Xxxxxxxxxx Xxxxxxxx LLP, 0000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxx X.
Xxxxxxxxx; or if any other address shall at any time be designated by Borrower
in writing to the holders of record of the Note at the time of such designation
to such other address; and if to Bank, P. O. Xxx 0000, Xxxxxxxxxx, Xxxxxxx
00000. Attention: Special Assets Department (telecopy no. 205-254-4852), and
WITH A COPY TO: Xxx Xxxxxx, Xxxxxxx Xxxxx Xxxx & White LLP 0000 Xxxx Xxxxx,
Xxxxx 0000, Xxxxxxxxxx, Xxxxxxx 00000, or any other address shall at any time be
designated in writing to Borrower, to such other address.
11.8 VENUE AND JURISDICTION. Borrower agrees that any legal
action brought by Bank to collect the Loans or any Obligation or to assert any
claim against Borrower under any Loan Document, or any part thereof, may be
brought in any court in the State of Alabama having subject matter jurisdiction
and that any such court will have non-exclusive jurisdiction, waives its right
to object to any such action on grounds it is brought in the improper venue. and
irrevocably consents that any legal action or proceeding against it under,
arising out of, or in any manner relating to the Loans, the Obligations, or any
Loan Document may be brought in the Circuit Court of Jefferson County, Alabama,
57
or in any other Circuit Court of the State of Alabama or in the U.S. District
Court for the Northern District of Alabama. Any judicial proceeding by Borrower
against Bank under any Loan Document shall be brought only in one of the
foregoing courts in Alabama. Borrower, by the execution of this Agreement,
expressly and irrevocably assents and submits to the non-exclusive personal
jurisdiction of any such court in any such action or proceeding. Borrower
consents to the service of process relating to any such action or proceeding by
mail to the address set forth in this Agreement.
11.9 BENEFITS. All of the terms and provisions of this
Agreement shall bind and inure to the benefit of the parties hereto and their
respective successors and assigns. Borrower may not assign any of its rights or
obligations hereunder without the prior written consent of Bank.
11.10 CONTROLLING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Alabama; provided,
however, that if any of the Collateral shall be located in any jurisdiction
other than Alabama, the laws of such jurisdiction shall govern the method,
manner and procedure for foreclosure of Bank's lien upon such Collateral and the
enforcement of Bank's other remedies in respect of such Collateral to the extent
that the laws of such jurisdiction are different from or inconsistent with the
laws of Alabama.
11.11 PARTICIPATION. Borrower acknowledges that Bank may, at
its option, sell participation interests in the Loans to participating banks.
The amounts of any such participations shall be determined solely by Bank.
Borrower agrees with each present and future participant in the Loans, the names
and addresses of which will be furnished to Borrower, that if an Event of
Default should occur, each present and future participant shall have all of the
rights and remedies of Bank with respect to any deposit due from any participant
to Borrower. The execution by a participant of a participation agreement with
Bank, and the execution by Borrower of this Agreement, regardless of the order
of execution, shall evidence an agreement between Borrower and said participant
in accordance with the terms of this Section.
11.12 MISCELLANEOUS. Time is of the essence with respect to
this Agreement. This Agreement and the instruments and agreements referred to
herein or called for hereby supersede and incorporate all representations,
promises, and statements, oral or written, made by Bank in connection with the
Loans. This Agreement may not be varied, altered, or amended except by a written
instrument executed by an authorized officer of Bank. In the event of a conflict
between this Agreement and any other Loan Document, the terms of this Agreement
will control. This Agreement may be executed in any number of counterparts, each
of which, when executed and delivered, shall be an original, but such
counterparts shall together constitute one and the same instrument. Any
provision in this Agreement which may be unenforceable or invalid under any law
shall be ineffective to the extent of such unenforceability or invalidity
without affecting the enforceability or validity of any other provisions hereof.
11.13 JOINT AND SEVERAL LIABILITY. All obligations of each
Person named as Borrower shall be joint and several obligations of all such
Persons.
58
11.14 LIMITATION OF GRANT. Nothing in this Agreement, whether
express or implied, is intended or should be construed to confer upon, or to
grant to, any person. except Bank and Borrower, any right, remedy, or claim
under or because of either this Agreement or any provision of it. The rights,
duties, and obligations of Borrower under this Agreement are not assignable or
delegable.
11.15 WAIVER OF RIGHT TO TRIAL BY JURY. BORROWER AND BANK
HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY PERTAINING OR
RELATING TO THIS AGREEMENT, THE NOTES, THE LOAN DOCUMENTS, OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS
AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR
INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT,
THE NOTES, THE LOAN DOCUMENTS, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR IN CONNECTION WITH THE
TRANSACTIONS RELATED THERETO OR CONTEMPLATED THEREBY OR THE EXERCISE OF EITHER
PARTY'S RIGHTS AND REMEDIES THEREUNDER, IN ALL OF THE FOREGOING CASES WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE. BORROWER AND BANK AGREE THAT EITHER OR BOTH OF THEM MAY FILE A COPY
OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY
AND BARGAINED AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE TRIAL BV JURY,
AND THAT ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN THEM SHALL INSTEAD BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
[Remaining page intentionally left blank.]
59
IN WITNESS WHEREOF, each of Borrower and Bank has caused this
instrument to be executed by its duly authorized officer.
BORROWER:
DISPLAY TECHNOLOGIES, INC.,
a Nevada corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: President
XXX XXXX INDUSTRIES, INC.,
a Florida corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: Chairman
X. X. XXXXXXX MANUFACTURING, INC.,
a Florida corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: President
LA-MAN CORPORATION,
a Nevada corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: Chairman
60
X. X. XXXXXXX CORPORATION,
a Florida corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: Vice President
X. X. XXXXXXX INDUSTRIES, INC.,
a Florida corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: Vice President
VISION TRUST MARKETING, INC.,
a Florida corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: President
XXXXXXXX SIGN GROUP, INC.
a Florida corporation
By: /s/ J. Xxxxxxx Xxxxxxxx
-----------------------------------
Name: J. Xxxxxxx Xxxxxxxx
Its: Chairman
AMERIVISION OUTDOOR, INC.,
a Florida corporation
By: //s/ Xxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxx
Its: Vice President
61
BANK:
SOUTHTRUST BANK
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Its: Vice President
62
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of DISPLAY
TECHNOLOGIES, INC. is signed to the foregoing instrument, and who is known to
me, acknowledged before me on this day that, being informed of the contents of
said instrument, he, in his capacity as such President, executed the same
voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires:_____________
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of XXX XXXX
INDUSTRIES, INC. is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said
instrument, he, in his capacity as such Chairman, executed the same voluntarily
on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of X.X.
XXXXXXX MANUFACTURING, INC. is signed to the foregoing instrument, and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he, in his capacity as such President, executed the
same voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of LA-MAN
CORPORATION is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said
instrument, he, in his capacity as such Chairman, executed the same voluntarily
on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of X.X.
XXXXXXX CORPORATION is signed to the foregoing instrument, and who is known to
me, acknowledged before me on this day that, being informed of the contents of
said instrument, he, in his capacity as such Vice President, executed the same
voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of X.X.
XXXXXXX INDUSTRIES, INC. is signed to the foregoing instrument, and who is known
to me, acknowledged before me on this day that, being informed of the contents
of said instrument, he, in his capacity as such Vice President, executed the
same voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of VISION
TRUST MARKETING, INC. is signed to the foregoing instrument, and who is known to
me, acknowledged before me on this day that, being informed of the contents of
said instrument, he, in his capacity as such Vice President, executed the same
voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that , whose name as J. Xxxxxxx Xxxxxxxx of XXXXXXXX
SIGN GROUP, INC. is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said
instrument, he, in his capacity as such Vice Chairman, executed the same
voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that Xxxx X. Xxxxxxxx, whose name as Vice President
of AMERIVISION OUTDOOR, INC. is signed to the foregoing instrument, and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he, in his capacity as such __________________,
executed the same voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
STATE OF GEORGIA )
:
XXXXXX COUNTY )
I, the undersigned, a notary public in and for said county in
said state, hereby certify that Xxxxxx Xxxxx, whose name as Vice President of
SOUTHTRUST BANK is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said
instrument, he, in his capacity as such __________________, executed the same
voluntarily on the day the same bears date.
Given under my hand and official seal this 11th day of
January, 2001.
[signed]
___________________________________
Notary Public
[NOTARIAL SEAL] My commission expires: [notary stamp appears here]
