LOAN AND SECURITY AGREEMENT
by and
between
AUTOINFO, INC.
SUNTECK TRANSPORT CO.,
INC.
ELEETS LOGISTICS,
INC.
SUNTECK TRANSPORT CARRIERS,
INC.,
SUNTECK GOVERNMENT LOGISTICS,
INC.,
SUNTECK TRANSPORT GROUP,
INC.
RAILPORT SERVICES,
INC.,
and
AMERICAN SHIPPERS DISPATCH,
INC.
as the “Borrowers”
and
REGIONS BANK
as the “Lender”
February 17, 2009
TABLE OF CONTENTS
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Page
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1.
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DEFINITIONS; RELATED TERMS
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1
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1.1
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Certain UCC
Terms
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1
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1.2
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Defined
Terms
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1
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1.3
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Financial
Terms
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10
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2.
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THE
CREDIT FACILITY
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10
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2.1
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The
Commitments
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10
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2.2
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The
Notes
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10
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2.3
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Interest
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10
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2.4
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Requesting New
Loans
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11
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2.5
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Requests for
Borrowings
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12
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2.6
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Excess
Outstandings
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12
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2.7
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Repayment of
Loans
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12
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2.8
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Additional
Payment Provisions
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13
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2.9
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Lockboxes;
Collections Accounts
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13
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2.10
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Letters of
Credit
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14
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2.11
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Fees
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14
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2.12
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Statement of
Account
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15
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2.13
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Termination
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15
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2.14
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USA Patriot Act
Notice
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15
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3.
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SECURITYAGREEMENT
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15
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3.1
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Security
Interest
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15
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3.2
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Financing
Statements; Fixture Filings; Power of Attorney
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16
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3.3
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Entry
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16
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3.4
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Other
Rights
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16
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3.5
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Accounts
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16
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3.6
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Waiver of
Marshaling
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17
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3.7
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Control;
Further Assurances
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17
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3.8
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Pledge of
Equity Interests
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17
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4.
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CONDITIONS PRECEDENT TO EXTENSIONS OF CREDIT
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17
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4.1
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Conditions
Precedent to each Initial Loan
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17
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4.2
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Conditions
Precedent to Each Loan
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18
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5.
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REPRESENTATIONS AND WARRANTIES
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19
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5.1
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Valid Existence
and Power
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19
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5.2
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Authority
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19
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5.3
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Financial
Condition
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19
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5.4
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Litigation
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19
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5.5
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Agreements,
Etc
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20
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5.6
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Authorizations
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20
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5.7
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Title
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20
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5.8
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Collateral
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20
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5.9
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Jurisdiction of
Organization; Location
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20
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5.10
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Taxes
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20
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5.11
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Labor Law
Matters
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21
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5.12
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Accounts
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21
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5.13
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Judgment
Liens
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21
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5.14
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Structure
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21
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5.15
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Deposit
Accounts
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21
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5.16
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Environmental
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21
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i
TABLE OF CONTENTS
(continued)
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5.17
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ERISA
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22
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5.18
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Investment
Company Act
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22
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5.19
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Insider
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22
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5.20
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Sanctioned
Persons; Sanctioned Countries
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22
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5.21
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Compliance with
Covenants; No Default
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22
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5.22
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Full
Disclosure
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22
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5.23
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Collateral
Disclosure Certificates
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22
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5.24
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Operating and
Capital Leases
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22
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6.
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AFFIRMATIVE COVENANTS
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22
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6.1
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Use of Loan
Proceeds
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22
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6.2
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Maintenance of
Business and Properties
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22
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6.3
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Insurance
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23
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6.4
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Certain
Notices
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23
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6.5
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Inspections of
Books and Records and Field Examinations; Appraisals;
Physical Inventories
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23
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6.6
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Financial
Information
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24
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6.7
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Maintenance of
Existence and Rights
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25
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6.8
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Payment of
Taxes, Etc
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25
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6.9
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Subordination
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25
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6.10
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Compliance;
Hazardous Materials
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25
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6.11
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Further
Assurances
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26
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6.12
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Covenants
Regarding Collateral
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26
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7.
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NEGATIVE
COVENANTS
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26
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7.1
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Debt
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26
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7.2
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Liens
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27
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7.3
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Restricted
Payments
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27
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7.4
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Loans and Other
Investments
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27
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7.5
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Change in
Business; Activities Covered by Insurance, Etc
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28
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7.6
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Accounts
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28
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7.7
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Transactions
with Affiliates
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28
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7.8
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No Change in
Name, Offices, or Jurisdiction of Organization; Removal of
Collateral
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28
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7.9
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No Sale,
Leaseback
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28
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7.10
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Margin
Stock
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29
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7.11
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Tangible
Collateral
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29
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7.12
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Subsidiaries
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29
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7.13
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Liquidation,
Mergers, Consolidations, and Dispositions of Assets;
Name and Good Standing
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29
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7.14
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Change of
Fiscal Year or Accounting Methods
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29
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7.15
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Deposit
Accounts; Exclusive Control
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29
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8.
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FINANCIAL COVENANTS
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29
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8.1
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Definitions
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29
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8.2
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Financial
Covenants
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30
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9.
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DEFAULT
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30
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9.1
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Events of
Default
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30
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9.2
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Remedies
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32
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9.3
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Receiver
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32
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9.4
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Deposits;
Insurance
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32
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ii
TABLE OF CONTENTS
(continued)
Page
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10.
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MISCELLANEOUS
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32
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10.1
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No Waiver,
Remedies Cumulative
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32
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10.2
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Survival of
Representations
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32
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10.3
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Indemnity By
Borrowers; Expenses
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33
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10.4
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Notices
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33
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10.5
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GOVERNING
LAW
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34
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10.6
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Successors and
Assigns
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34
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10.7
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Counterparts;
Telecopied Signatures
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34
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10.8
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No
Usury
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34
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10.9
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Powers
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34
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10.10
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Approvals;
Amendments
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34
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10.11
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Participations
and Assignments
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34
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10.12
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Dealings with
Multiple Borrowers
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34
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10.14
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Additional
Provisions
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35
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10.15
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Integration;
Final Agreement
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35
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10.16
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LIMITATION ON
LIABILITY; WAIVER OF PUNITIVE DAMAGES
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35
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10.17
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WAIVER OF JURY
TRIAL
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35
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10.18
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Submission to
Jurisdiction; Venue
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36
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10.19
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Credit
Inquiries
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36
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10.20
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Information
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36
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10.21
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No Tax
Advice
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36
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iii
EXHIBITS AND
SCHEDULES
EXHIBITS:
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Exhibit A
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-
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Form of Revolving Note
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Exhibit B
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-
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Form of Notice of Borrowing
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Exhibit C
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-
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Form of Collateral Disclosure
Certificate
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Exhibit T
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-
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Form of Telephone Instruction Letter
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Exhibit 4.1
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-
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Form of Borrower’s Counsel’s
Opinion
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Exhibit 6.6(a)
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Form of Borrowing Base Certificate
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Exhibit 6.6(d)
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Form of Compliance and No Default
Certificate
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SCHEDULES:
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Schedule 5.3
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-
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Direct or Contingent Obligations and
Liabilities
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Schedule 5.4
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-
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Pending or Threatened Litigation
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Schedule 5.8(b)
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Insurance Policies
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Schedule 5.9
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Locations of Collateral
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Schedule 5.14
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-
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Corporate Structure
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Schedule 5.15
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-
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Deposit Accounts
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Schedule 5.16
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-
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Environmental
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Schedule 5.24
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-
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Operating and Capital Leases
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Schedule 7.1
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Scheduled Permitted Debt
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Schedule 7.2
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-
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Scheduled Permitted Liens
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Schedule 7.7
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-
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Transactions with Affiliates
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LOAN AND SECURITY
AGREEMENT
THIS LOAN AND SECURITY AGREEMENT
(the “ Agreement ”), dated as of February 17,
2009, by and between AUTOINFO, INC., a Delaware corporation
(“ Parent Company ”) and its direct and indirect
Subsidiaries, namely, SUNTECK TRANSPORT CO., INC., (“
Sunteck ”), ELEETS LOGISTICS, INC. (“
ELEETS ”), SUNTECK TRANSPORT CARRIERS, INC. (“
STC ”), SUNTECK GOVERNMENT LOGISTICS, INC. (“
SGL ”), SUNTECK TRANSPORT GROUP, INC., a Florida
corporation (“ STG ”), RAILPORT SERVICES, INC.,
a Florida corporation (“ RSI ”) and AMERICAN
SHIPPERS DISPATCH, INC. (“ ASD ”), all of which
are Florida corporations (Parent Company, together with Sunteck,
ELEETS, STC, SGL, RSI and ASD, herein called, collectively, the
“ Borrowers ” and, individually, a “
Borrower ”), and REGIONS BANK, an Alabama bank
(together with its successors and assigns, “ Lender
”).
W I T N E S S E T H
:
The Borrowers are engaged in a
common business enterprise and, in connection therewith, have
applied jointly to Lender for credit pursuant hereto. In
consideration of the premises and of the mutual covenants herein
contained and to induce Lender to extend credit to Borrowers, the
parties agree as follows:
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1.
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DEFINITIONS; RELATED TERMS
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1.1
Certain UCC Terms . Any term used in this Agreement or in
any financing statement filed in connection herewith which is
defined in the UCC and not otherwise defined in this Agreement or
in any other Loan Document shall have the meaning given to the term
in the UCC, including, without limitation, Accession, Account
Debtor, Chattel Paper, Account, Commercial Tort Claim, Deposit
Account, Document, Electronic Chattel Paper, Equipment, Fixture,
Instrument, Inventory, Investment Property, Letter-of-Credit Right,
Proceeds, Supporting Obligation, and Tangible Chattel
Paper.
1.2
Defined Terms . Capitalized terms that are not otherwise
defined herein shall have the meanings set forth in this
Section 1.2
. Certain terms relating to
financial covenants are set forth in Section 8 .
“ Accounts Payable
Report ” has the meaning given such term in
Section 6.6(a)
.
“ Accounts Receivable
Report ” has the meaning given such term in
Section 6.6(a)
.
“ Affiliate ”
means, with respect to any Person, (a) any other Person directly or
indirectly owning five percent (5%) or more of the Equity Interests
of such Person or of which such Person owns five percent (5%) or
more of such Equity Interests; (b) any other Person controlling,
controlled by, or under common control with such Person; (c) any
officer, director, or employee of such Person or any Affiliate of
such Person; and (d) any family member or Affiliate of such Person.
Without limitation of the foregoing, each Borrower is an Affiliate
of each other Borrower.
“ Applicable Margin
” means, as to any Revolving Loan, one and 50/100ths of one
percent (1.50%) per annum, so long as such Loan is a LIR Loan, and
one and 50/100ths of one percent (1.50%) per annum if, pursuant
to Section
2.3(f) , such Loan is
made as, or converted to, a Base Rate Loan.
“ Base Rate ”
means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the greatest of (a) the Federal Funds Rate in effect on such
day plus
½ of 1% or (b) the Prime Rate
in effect on such day. If for any reason Lender shall have
determined (which determination shall be conclusive absent manifest
error) that it is unable, after due inquiry, to ascertain the
Federal Funds Rate for any reason, including the inability or
failure of Lender to obtain sufficient quotations in accordance
with the terms hereof, the Base Rate shall be determined without
regard to clause (a) of the first sentence of this definition until
the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Rate,
respectively.
“ Base Rate Loan
” means a Loan, or portion thereof, during any period in
which it bears interest at a rate based on the Base Rate pursuant
to Section
2.3(f) .
“ Borrower ” or
“ Borrowers ” shall have the meanings given to
such terms in the preamble to this Agreement.
“ Borrower Agent
” shall have the meaning set forth in Section 10.12 .
“ Borrowing Base
” means, on any date of determination, an amount equal
to:
(a) up
to eighty-five percent (85%) (or such lesser percentage as Lender
may determine from time to time in its Permitted Discretion) of the
total amount of Eligible Billed Accounts, plus
(b) the
lesser of (i) up to seventy-five percent (75%) (or
such lesser percentage as Lender may determine from time to time in
its Permitted Discretion) of the total amount of Eligible Unbilled
Accounts or (ii) Twelve Million Dollars ($12,000,000),
less
“ Borrowing Base
Certificate ” has the meaning set forth in
Section 6.6(a)
.
“ Business Day ”
means (a) any week day on which Lender is open for business in
Birmingham, Alabama, and Atlanta, Georgia, and (b) with respect to
all matters relating to the determination of the LIBOR Index Rate,
any day that is also a day for trading by and between banks in U.S.
dollar deposits in the London interbank market.
“ Capital Expenditures
” means, for any period, the aggregate cost of all capital
assets acquired by a Borrower and its Subsidiaries during such
period (including gross leases to be capitalized under GAAP and
leasehold improvements), as determined in accordance with
GAAP.
“ Closing Date ”
means the earliest date on which all of the conditions precedent
in Section 4
of this Agreement are satisfied and
the initial extensions of credit are made under this
Agreement.
“ Collateral ”
means all property of each Borrower, wherever located and whether
now owned by each Borrower or hereafter acquired, including but not
limited to, for each Borrower, (a) all Inventory; (b) all General
Intangibles; (c) all Accounts; (d) all Chattel Paper; (e) all
Instruments and Documents and any other instrument or intangible
representing payment for goods or services; (f) all Equipment; (g)
all Investment Property; (h) all Commercial Tort Claims; (i)
all Letter-of-Credit Rights; (j) all Deposit Accounts and funds on
deposit therein, including but not limited to any Funding Account,
Collections Account, and funds otherwise on deposit with or under
the Control of Lender or its agents or correspondents; (k) all
Fixtures and (l) all parts, replacements, substitutions, profits,
products, Accessions, cash and non-cash Proceeds, and Supporting
Obligations of any of the foregoing (including, but not limited to,
insurance proceeds) in any form and wherever located. Collateral
also includes, for each Borrower, (i) all written or electronically
recorded books and records relating to any such Collateral and
other rights relating thereto and (ii) any other real or personal
property as to which Lender, at any time of determination, has a
Lien to secure the Obligations. The term “ Collateral
” expressly includes all issued and outstanding Equity
Interests of each Borrower which is a Subsidiary of Parent Company
or another Borrower now or hereafter owned by the Parent Company or
such Borrower, including all such Equity Interests so listed and
described on Schedule
5.14 .
“ Collateral Disclosure
Certificate ” means each certificate, to be substantially
in the form of Exhibit
C attached hereto and
made a part hereof, executed and delivered by a Credit Party to
Lender on or before the Closing Date.
“ Collections Account
” means any Deposit Account maintained by a Borrower with
Lender to which collections, deposits, and other payments on or
with respect to Collateral may be made pursuant to the terms hereof
and to which only Lender shall have access to withdraw or otherwise
direct the disposition of funds on deposit therein.
“ Commitment(s) ”
shall mean the Revolving Loan Commitment.
“ Control ”
means, with respect to any asset, right, or property with respect
to which a security interest therein is perfected by a secured
party’s having “control” thereof (whether
pursuant to the terms of an agreement or through the existence of
certain facts and circumstances), that Lender has
“control” of such asset, right, or property in
accordance with the terms of Article 9 of the UCC.
“ Credit Party ”
means each Borrower, each Guarantor (other than an individual
Guarantor), and each other Person obligated to Lender under any
Loan Document.
“ Debt ” means
all liabilities of a Person as determined under GAAP and all
obligations which such Person has guaranteed or endorsed or is
otherwise secondarily or jointly liable for, and shall include,
without limitation, (a) all obligations for borrowed money or
purchased assets; (b) obligations secured by assets whether or not
any personal liability exists; (c) the capitalized amount of any
capital or finance lease obligations; (d) the unfunded portion of
pension or benefit plans or other similar liabilities; (e)
obligations as a general partner; (f) contingent obligations
pursuant to guaranties, endorsements, letters of credit and other
secondary liabilities; (g) obligations for deposits; and (h)
obligations under Hedge Agreements.
“ Default ” means
any event or circumstance which, upon satisfaction of any
requirement for the giving of notice or the lapse of time, or the
happening of any further condition, event, or act, would constitute
an Event of Default.
“ Default Rate ”
means, as of any date, a rate per annum that is equal to (a) in the
case of each Loan outstanding on such date, two percent (2.00%) in
excess of the rate otherwise applicable to such Loan on such date;
(b) in the case of fees payable with respect to Letters of Credit,
two percent (2.00%) in excess of the fees otherwise applicable to
Letters of Credit; and (c) in the case of any other Obligations
outstanding on such date, two percent (2.00%) in excess of the
LIBOR Index Rate in effect on such date; provided , however , that Obligations arising under any Hedge
Agreement shall bear interest at the rate and, if applicable, the
default rate set forth in such Hedge Agreement.
“ EBITDA ” has
the meaning given such term in Section 8.1 .
“ Eligible Accounts
” means all of each Borrower’s Accounts (valued at the
face amount of such invoice, minus the maximum discounts, credits, and allowances
which may be taken by Account Debtors on such Accounts, and net of
any sales tax, finance charges, or late payment charges included in
the amount invoiced) created or acquired by such Borrower and
arising from the rendering of services in such Borrower’s
ordinary course of business, but excluding (without duplication), Accounts:
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(a)
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which are not denominated in U.S.
dollars;
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(b) over
which Lender does not have a duly perfected, first-priority (and
only) Lien or which, by contract, subrogation, mechanics’
lien laws, or otherwise, are subject to claims by a
Borrower’s creditors or other third parties or which are owed
by Account Debtors as to whom any creditor of Borrower (including
any bonding company) has lien or retainage rights;
(c) as
to which any representation, warranty, or covenant herein relating
thereto shall be untrue, misleading, or in default in any material
respect;
(d) outstanding
for longer than (i) ninety (90) days from original invoice date or
sixty (60) days from the original due date, whichever is the
shorter time, in the case of Eligible Billed Accounts, and (ii)
thirty (30) days from delivery date in the case of Eligible
Unbilled Accounts;
(e) owed
by any Account Debtor if more than twenty-five (25%) of the
Accounts owed by such Account Debtor to a Borrower, or to Borrowers
generally, are deemed ineligible pursuant to clause (d) above;
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(f)
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owed by any of such Borrower’s
Affiliates;
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(g) owed
by any of such Borrower’s creditors, but only to the extent
of Borrower’s Debt to such creditors;
(h) as
to which the Account Debtor disputes liability or are otherwise in
dispute or are subject to any counterclaim, contra-account, volume
rebate, cooperative advertising accrual, deposit, or offset, but
only to the extent thereof;
(i) owing
by any Account Debtor (and such Account Debtor’s Affiliates)
whose aggregate Accounts exceed ten percent (10%) of the total of
Borrowers’ total Eligible Accounts, but only in each case to
the extent of such excess;
(j) owing
by any Account Debtor which is not Solvent or which is subject to
any proceeding of the types described in Section 9.1(g) or Section 9.1(h) ;
(k) arising
from a sale on a bill-and-hold, progress billing, guaranteed sale,
sale-or-return, sale-on-approval, consignment, or similar
basis;
(l) owed
by an Account Debtor which (i) is a Sanctioned Person or (ii) is
located outside of the United States of America or Canada (subject,
in the case of Canada, to an aggregate dollar limit determined from
time to time by Lender, in its Permitted Discretion) unless Lender,
in its Permitted Discretion, agrees to allow such Account to be an
Eligible Account on terms and conditions satisfactory to Lender in
its Permitted Discretion;
(m) owed
by the United States of America or any other governmental or
quasi-governmental unit, agency, or subdivision unless such
Borrower shall have complied with all applicable Federal and state
assignment of claims laws as required by;
(n) (i)
as to which the goods or services giving rise to such Account (A)
have not been delivered or provided to, and accepted by, the
Account Debtor, (B) are subject to repurchase, return, rejection,
repossession, loss, or damage, or (C) have not been completely
performed, as applicable, or (ii) which do not represent a
final sale;
(o) evidenced
by a note or other Instrument or Chattel Paper or which have been
reduced to judgment;
(p) as
to which such Borrower or Lender, in its Permitted Discretion,
shall have determined the validity, collectibility, or amount
thereof to be doubtful;
(q) owed
by an Account Debtor which is located in a jurisdiction where such
Borrower is required to qualify to transact business or to file
reports, unless such Borrower has so qualified or filed;
and
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(r)
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which Lender otherwise determines,
in its Permitted Discretion, to be ineligible.
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To the extent applicable,
“Eligible Accounts” shall not include aged credit
balances outstanding for longer than ninety (90) days.
“ Eligible Billed
Accounts ” shall mean Eligible Accounts as to which the
service corresponding thereto has been completed and a paper
invoice or an electronic equivalent acceptable to Lender has been
issued to the applicable Account Debtors.
“ Eligible Unbilled
Accounts ” shall mean Eligible Accounts as to which the
service corresponding thereto has been completed but no paper
invoice or electronic equivalent acceptable to Lender has been
issued to the applicable Account Debtors but which will be issued
as soon as practicable in the ordinary course of a Borrower’s
business.
“ Environmental Laws
” means, collectively, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980; the Superfund
Amendments and Reauthorization Act of 1986; the Resource
Conservation and Recovery Act; the Toxic Substances Act; the Clean
Water Act; the Clean Air Act; the Oil Pollution and Hazardous
Substances Control Act of 1978; and any other
“Superfund” or “Superlien” law or any other
Federal, state, or local statute, law, ordinance, code, rule,
regulation, order, or decree relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous
waste, substance, or material, as now or at any time hereafter in
effect, in each case, as the same may be amended from time to
time.
“ Equity Interest
” means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or
other equivalents of or interest in (however designated) equity of
such Person, including, without limitation, any common stock,
preferred stock, limited or general partnership interests, and
limited liability company membership interests, whether voting or
non-voting.
“ ERISA ” means
the Employee Retirement Income Security Act of 1974, as
amended.
“ Event of Default
” has the meaning given such term in Section 9.1 .
“ Excess Availability
” means, at any time of determination, the amount by which
(a) the lesser
of (i) the Borrowing Base and (ii)
the Revolving Loan Commitment, exceeds (b) the Working Capital
Obligations.
“ Federal Funds Rate
” means, for any period, a fluctuating interest rate per
annum equal, for each day during such period, to the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average of the quotations at
approximately 10:00 a.m. (Birmingham, Alabama, time) for such day
on such transactions received by Lender from 3 Federal Funds
brokers of recognized standing selected by it in its
discretion.
“ Fiscal Month ,”
“ Fiscal Quarter ,” and “ Fiscal
Year ” means each of Borrower’s fiscal months,
quarters, or years, as applicable.
“ Fixed Charge Coverage
Ratio ” has the meaning given such term in
Section 8.1
.
“ Flat Rate ”
shall mean a simple interest rate of three percent (3.0%) per
annum.
“ Funded Debt ”
has the meaning given such term in Section 8.1 .
“ Funding Account
” means any Deposit Account maintained by a Borrower or
Borrower Agent with Lender for the purpose of depositing the
proceeds of Loans.
“ GAAP ” means
generally accepted accounting principles as in effect in the United
States from time to time.
“ General Intangibles
” has the meaning set forth in the UCC, and includes, without
limitation, general intangibles of each Borrower, whether now owned
or hereafter created or acquired by each Borrower, including all
choses in action, causes of action, company or other business
records, inventions, blueprints, designs, patents, patent
applications, trademarks, trademark applications, trade names,
trade secrets, service marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists, permits, tax
refund claims, computer programs, operational manuals, internet
addresses and domain names, insurance refunds and premium rebates,
all claims under guaranties, security interests or other security
held by or granted to such Borrower to secure payment of any of any
of such Borrower’s Accounts by an Account Debtor, all rights
to indemnification and all other intangible property of such
Borrower of every kind and nature (other than Accounts).
“ Governmental Entity
” means any (a) court (whether in law or at equity or trial
or appellate), tribunal, or arbitrator or arbitration proceeding
and (b) any local, city, state, Federal, municipal or
quasi-municipal, foreign, or international government or any
subdivision, agency, authority, commission, bureau, branch,
regulatory body, or other body thereof.
“ Guarantor ”
means any Person now or hereafter guaranteeing, endorsing, acting
as surety of, or otherwise becoming liable for any
Obligations.
“ Guaranty ”
means any guaranty of all or any Obligations now or hereafter
executed and delivered by any Guarantor to Lender, as the same may
be amended, restated, supplemented, or otherwise modified from time
to time.
“ Hedge Agreement
” has the meaning for swap agreement as defined in 11 U.S.C.
§ 101, as in effect from time to time, or any successor
statute, and includes, without limitation, any rate swap agreement,
forward rate agreement, commodity swap, commodity option, interest
rate option, forward foreign exchange agreement, spot foreign
exchange agreement, rate cap agreement, rate floor agreement, rate
collar agreement, currency swap agreement, cross-currency rate swap
agreement, currency option and any other similar
agreement.
“ Item ” means
any “item” as defined in Section 4-104 of the UCC, and
shall also mean and include checks, drafts, money orders or other
media of payment.
“ Jurisdiction ”
means the State of Georgia.
“ LC Obligations
” means, at any time of determination, the aggregate undrawn
and unreimbursed amounts under all Letters of Credit.
“ Letter of Credit
” means a letter of credit issued by Lender for the account
of a Borrower, or Borrowers jointly, as provided in
Section 2.1(a)
and Section 2.10 .
“ Lien ” means
any lien (statutory or otherwise), mortgage, deed of trust, deed to
secure debt, pledge, hypothecation, security interest, trust
arrangement, security deed, financing lease, collateral assignment,
encumbrance, conditional sale or title retention agreement, or any
other interest in property designed to secure the repayment or
performance of any obligation, whether arising by agreement or
under any statute or law or otherwise.
“ LIBOR ” means a
per annum rate equal to the rate per annum offered by prime banks
in the London interbank eurodollar market for deposits in United
States dollars in an amount comparable to the Loan for which such
rate is being determined and for a period equal to the interest
period applicable thereto, all as determined by Lender with
reference to the financial information reporting service used by
Lender at the time of such determination. Each calculation by
Lender of LIBOR shall be conclusive and binding for all purposes,
absent manifest error.
“ LIBOR Index Rate
” means, for any LIR Loan and at any time of determination, a
per annum rate equal to LIBOR determined with respect to an
interest period of one (1) month. At Borrowers’ election (or,
if Borrowers make no election or while any Event of Default exists,
then, at Lender’s election): (i) the LIBOR Index Rate shall
be determined daily on each Business Day and shall be increased or
decreased, as applicable, automatically and without notice to any
Person on the date of each such determination, or (ii) the LIBOR
Index Rate shall be determined monthly on the first Business Day of
each calendar month and shall be increased or decreased, as
applicable, automatically and without notice to any Person on the
date of each such determination. Upon Borrowers’ request from
time to time, Lender will quote the then current LIBOR Index Rate
to Borrowers.
“ LIBOR Reserve
Requirements ” means the maximum reserves (whether basic,
supplemental, marginal, emergency, or otherwise) prescribed from
time to time by the Board of Governors of the Federal Reserve
System (or any successor) with respect to liabilities or assets
consisting of or including “Eurocurrency liabilities”
(as defined in Regulation D of the Board of Governors of the
Federal Reserve System).
“ LIR Loan ”
means a Loan, or portion thereof, during any period in which it
bears interest at a rate based on the LIBOR Index Rate.
“ Loans ” means
the Revolving Loans .
“ Loan Documents
” means this Agreement and each other now existing or
hereafter arising document, agreement, or instrument evidencing,
describing, guaranteeing, or securing the Obligations or delivered
in connection with this Agreement (but excluding any Hedge
Agreement), including, without limitation, each Security Agreement,
Note, Guaranty, Notice of Borrowing, Collateral Disclosure
Certificate, Borrowing Base Certificate, and UCC financing
statement, as the same may be amended, restated, supplemented, or
otherwise modified from time to time.
“ Loss ” has the
meaning given such term in Section 6.3 .
“ Material Adverse
Effect ” means any (a) material adverse effect upon the
validity, performance, or enforceability of any of the Loan
Documents or any of the transactions contemplated hereby or
thereby; (b) material adverse effect upon the properties, business,
prospects, or condition (financial or otherwise) of any Credit
Party; (c)
material adverse effect upon the
ability of any Credit Party to fulfill any obligation under any of
the Loan Documents; or (d) material adverse effect on the
Collateral.
“ Material Agreement
” means an agreement to which any Credit Party is a party
(other than the Loan Documents) evidencing or pertaining to (A) any
Funded Debt, (B) capitalized leases or (C) operating leases with
aggregate annual rentals exceeding One Hundred Thousand Dollars
($100,000) or, if otherwise, for which breach, termination,
cancellation, nonperformance, or failure to renew could reasonably
be expected to have a Material Adverse Effect.
“ Net Proceeds ”
means, with respect to the disposition of any property, (a) the
proceeds (including cash receivable (when received) by way of
deferred payment) received by a Borrower in cash from the sale,
lease, transfer, or other disposition of such property, including
insurance proceeds and awards of compensation received with respect
to any Loss affecting all or part of such property,
minus (b) (i) the reasonable and customary costs and
expenses of such sale, lease, transfer, or other disposition
(including legal fees and sales commissions) and (ii) amounts
applied to repayment of Debt for borrowed money (other than the
Obligations) secured by a Permitted Lien on such property which is
senior to Lender’s Liens; and (iii) in connection with any
sale of such property, a reasonable reserve (not to exceed five
percent (5%) of the total purchase price) for post-closing
adjustments to the purchase price ( provided
that upon the expiration of ninety
(90) days after the sale, any remaining reserve balance shall
constitute Net Proceeds).
“ Notes ” shall
mean the Revolving Note and any other promissory note now or
hereafter evidencing any Obligations, as the same may be amended,
restated, supplemented, or otherwise modified from time to
time.
“ Notice of Borrowing
” means each written request for a Revolving Loan
substantially in the form of Exhibit B , attached hereto and made a part
hereof.
“ OFAC ” means
the United States Department of the Treasury’s Office of
Foreign Assets Control or any successor thereto.
“ Obligations ”
means all obligations and covenants now or hereafter owed to Lender
or any Affiliate of Lender by each Borrower, or Borrowers jointly,
whether related or unrelated to the Loans, this Agreement, or the
Loan Documents, including, without limitation or duplication, (a)
amounts owed or to be owed under the terms of this Agreement and
the other Loan Documents, or arising out of the transactions
described herein or therein, (b) the Loans, (c) amounts paid by
Lender under, and other obligations of each Borrower or Borrowers
jointly arising under, Letters of Credit, letters of credit,
bankers acceptances, or drafts accepted or issued by Lender for the
account of a Borrower or Borrowers jointly, the LC Obligations, and
commissions and fees incurred by a Borrower in connection with
Lender’s issuance, amendment, renewal or extension of Letters
of Credit, letters of credit, bankers acceptances, or Items, (d)
any Debt arising out of or relating to any Deposit Accounts of a
Borrower, or Borrowers jointly, with Lender or any Affiliate of
Lender or any cash management services or other products or
services, including merchant card and ACH transfer services, (e)
all existing and future obligations under any Hedge Agreements
between Lender or any Affiliate of Lender and a Borrower, or
Borrowers jointly, whenever executed (including obligations under
Hedge Agreements entered into prior to any transfer or sale of
Lender’s interests hereunder if Lender ceases to be a party
hereto), and (f) all fees, all costs of collection,
attorneys’ fees and expenses of, or advances by, Lender which
Lender pays or incurs (i) in discharge of obligations of any Credit
Party, (ii) to inspect, repossess, remove, transport, deliver,
protect, preserve, complete, store, sell or otherwise dispose of
any Collateral, or (iii) in connection with the appointment and
administration of any receiver, together, in each of the foregoing
cases in this definition, all interest accruing thereon, including
any interest on pre-petition Debt accruing after bankruptcy
(whether or not allowable in such bankruptcy), and whether any of
the foregoing amounts are now due or hereafter become due, are
direct or indirect, or are certain or contingent, and whether such
amounts due are from time to time reduced or entirely extinguished
and thereafter re-incurred.
“ Parent Company
” shall have the meaning given to such term in the preamble
to this Agreement.
“ Permitted Debt
” has the meaning set forth in Section 7.1 hereof.
“ Permitted Discretion
” shall mean the discretion of Lender exercised by it solely
but in good faith and from the standpoint of an asset-based
lender.
“ Permitted Liens
” has the meaning set forth in Section 7.2 hereof.
“ Permitted Location
” means (a) any location of each Borrower within the
continental United States of America described in the Collateral
Disclosure Certificate and (b) any other location within the
continental United States of America as to which each Borrower
shall have provided written notice to Lender and Lender shall have
consented in writing to such location’s being a “
Permitted Location .”
“ Permitted Purposes
”, in reference to the use(s) of the proceeds of the Loans,
(i) to pay existing Debt being refinanced pursuant hereto, (ii) for
each Borrower’s working capital and (iii) for other purposes
in the ordinary course of each Borrower’s business as
conducted on the Closing Date to the extent not in contravention of
any terms or conditions of this Agreement.
“ Person ” means
any natural person, corporation, unincorporated organization,
trust, joint-stock company, joint venture, association, company,
limited or general partnership, limited liability company, any
government or any agency or political subdivision of any
government, or any other entity or organization.
“ Prime Rate ”
means that rate announced by Lender from time to time as its prime
rate and is one of several interest rate bases used by Lender.
Lender lends at rates both above and below its prime rate, and
Borrower acknowledge that Lender’s prime rate is not
represented or intended to be the lowest or most favorable rate of
interest offered by Lender.
“ Projections ”
means, for any period and as to such period, each Borrower’s,
or Borrowers’ jointly and its (or their) Subsidiaries’
forecasted consolidated and consolidating (a) balance sheets, (b)
profit and loss statements, (c) cash flow statements, and (d)
Borrowing Base availability calculations, all prepared on a
quarterly basis and on a basis consistent with each
Borrower’s, or Borrowers’ jointly, and its (or their)
Subsidiaries’ historical financial statements, together with
appropriate supporting details and a statement of underlying
assumptions.
“ Properly Contested
” means, in the case of any Debt of any Credit Party
(including any taxes) which is not paid when due or payable by
reason of such Credit Party’s bona fide dispute over its
liability therefor or the amount thereof, (a) such Debt is being
properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (b) such Credit Party
has established appropriate reserves in accordance with GAAP; (c)
the non-payment of such Debt will not have a Material Adverse
Effect and will not result in a forfeiture or sale of any of such
Credit Party’s assets; (d) no Lien is imposed upon any of
such Credit Party’s assets with respect to such Debt unless
such Lien is at all times subordinate in priority to the Liens in
favor of Lender (except only with respect to property taxes that
have priority as a matter of applicable law) and enforcement of
such Lien is stayed pending the final resolution or disposition of
such dispute; (e) if the Debt results from, or is determined by the
entry, rendition, or issuance against such Credit Party or any of
its assets of a judgment, writ, order, or decree, enforcement of
such judgment, writ, order, or decree is stayed pending a timely
appeal or other judicial review; and (f) if such contest is
abandoned, settled, or determined adversely (in whole or in part)
to such Credit Party, such Credit Party forthwith pays such Debt
and all penalties, interest, and other amounts due in connection
therewith. Only that portion of the Debt which is in dispute may be
Properly Contested.
“ Qualified Appraisal
” means an appraisal conducted in a manner and with such
scope and using such methods as are acceptable to Lender by an
appraiser selected by, or acceptable to, Lender, the results of
which are acceptable to Lender in all respects.
“ Regulated Materials
” means any hazardous, toxic, or dangerous waste, substance,
or material, the generation, handling, storage, disposal,
treatment, or emission of which is subject to any Environmental
Law.
“ Reserves ”
means the such amounts, including but not limited to reserves for
obligations under Hedge Agreements, as may be required by Lender to
be imposed against borrowing availability at any time and from time
to time in Lender’s Permitted Discretion.
“ Restricted Payment
” means (a) any cash dividend or other cash distribution,
direct or indirect, on account of any Equity Interests issued by a
Borrower or any of its Subsidiaries, as the case may be, now or
hereafter outstanding, (b) any redemption, retirement, sinking fund
or similar cash payment, purchase or other acquisition for value,
direct or indirect, of any Equity Interests issued by a Borrower or
any of its Subsidiaries now or hereafter outstanding by a Borrower
or any of its Subsidiaries, as the case may be, except for any
redemption, retirement, sinking funds or similar payment payable
solely in such other shares or units of the same class of Equity
Interests or any class of Equity Interests which are junior to that
class of Equity Interests, (c) any cash payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire any Equity
Interests issued by a Borrower or any of its Subsidiaries now or
hereafter outstanding, or (d) the payment by a Borrower or any of
its Subsidiaries of any Subordinated Debt.
“ Revolving Loan
Commitment ” means the commitment of Lender, subject to
the terms and conditions herein, to make Revolving Loans and issue
Letters of Credit in accordance with the provisions of
Section 2 in an aggregate amount not to exceed Thirty
Million Dollars ($30,000,000) at any one time.
“ Revolving Loan
” means a loan made by Lender pursuant to
Section 2.1(a)
.
“ Revolving Note
” has the meaning set forth in Section 2.2(a) .
“ Sanctioned Country
” means a country subject to the sanctions program identified
on the list maintained by OFAC and available at the following
website or as otherwise published from time to time:
http://www.treas.gov/offices/enforcement/ofac/programs/
.
“ Sanctioned Person
” means (a) any Person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC
available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html
or as otherwise published from time
to time, (b) any agency, authority, or subdivision of the
government of a Sanctioned Country, (c) any Person or organization
controlled by a Sanctioned Country, or (d) any Person resident in a
Sanctioned Country, to the extent subject to a sanctions program
administered by OFAC.
“ Security Agreement
” means this Agreement as it relates to a security interest
in the Collateral, and any other mortgage instrument, deed of
trust, pledge agreement, life insurance assignment, security
agreement, or similar agreement or instrument now or hereafter
executed by any Credit Party or other Person granting Lender a Lien
in any property to secure the Obligations.
“ Senior Officer
” means, as to any Credit Party, the chairman of the board of
directors, the chief executive officer, chief operating officer,
chief financial officer, chief legal officer, manager (with respect
to any manager-managed limited liability company), or president of
such Credit Party.
“ Solvent ”
means, as to any Person, that such Person has capital sufficient to
carry on its business and transactions in which it is currently
engaged and all business and transactions in which it is about to
engage, is able to pay its Debts as they mature, and has assets
having a value greater than its liabilities, at fair
valuation.
“ Subordinated Debt
” means any Debt (other than trade Debt incurred in the
ordinary course of business) payable by a Borrower or a Subsidiary
which is subordinate in right of payment and Lien priority to the
Obligations and Lender’s Lien on the Collateral pursuant to a
subordination agreement in form and substance satisfactory to
Lender.
“ Subsidiary ”
means, as to any Person, any other Person of which more than fifty
percent (50%) of the Equity Interests issued by such other Person
are directly or indirectly owned or effectively controlled by such
Person. Any unqualified reference herein or in any Loan Document to
“Subsidiary” shall be deemed a reference to a
Borrower’s or the Borrowers’ Subsidiaries (if any),
unless the context requires otherwise.
“ Telephone Instruction
Letter ” means a telephone instruction letter
substantially in the form of Exhibit T , attached hereto and made a part
hereof.
“ Term ” means
the period from and including the Closing Date to but not including
the Termination Date.
“ Termination Date
” means the earliest to occur of (a) the third (3 rd )
anniversary of the Closing Date; (b) the date on which Borrowers
terminate this Agreement and the Commitments pursuant to
Section 2.13
; and (c) the date on which Lender
terminates the Commitments pursuant to Section 9.2(a) hereof.
“ Third Party ”
means (a) any lessor, mortgagee, mechanic or repairman, warehouse
operator, processor, packager, or other third party which may have
possession of any Collateral or lienholders’ enforcement
rights against any Collateral or (b) any licensor whose rights in
or with respect to any intellectual property or Collateral limit or
restrict or may, in Lender’s determination, limit or restrict
a Borrower’s or Lender’s right to sell or otherwise
dispose of such Collateral.
“ Third Party Agreement
” means an agreement in form and substance satisfactory to
Lender pursuant to which a Third Party, as applicable and as
required by Lender, waives or subordinates in favor of Lender such
Third Party’s lienholders’ enforcement rights against
any Collateral, grants Lender access to the Collateral for purposes
of allowing Lender to exercise its rights hereunder and under the
other Loan Documents, or authorizes Lender to dispose of Collateral
bearing or consisting of, in whole or in part, such Third
Party’s intellectual property.
“ Type ” means,
with respect to a Loan, whether such Loan is a Base Rate Loan or a
LIR Loan.
“ UCC ” means the
Uniform Commercial Code (or any successor statute), as adopted and
in force in the Jurisdiction or, when the laws of any other state
govern the method or manner of the perfection or enforcement of any
Lien in any of the Collateral, the Uniform Commercial Code (or any
successor statute) of such other state.
“ U.S. ” means
the United States of America.
“ USA Patriot Act
” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT) Act of 2001, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.
“ Working Capital
Obligations ” means the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans
plus (b) all outstanding LC Obligations.
1.3
Financial Terms . All financial terms used herein shall have
the meanings assigned to them under GAAP unless another meaning
shall be specified.
2.1
The Commitments . Subject to the terms and conditions of
this Agreement, Lender agrees to make Revolving Loans to Borrowers
and issue Letters of Credit for Borrowers’ account from time
to time during the Term. Lender shall have no obligation to make
any Revolving Loan or issue any Letter of Credit if doing so would,
after giving effect thereto, cause the Working Capital Obligations
to exceed the lesser of (i) the Revolving Loan Commitment or (ii) the
Borrowing Base. Within the foregoing limit and subject to the terms
and conditions of this Agreement, Borrowers may borrow, repay, and
reborrow the principal amount of the Revolving Loans at any time
during the Term. Borrowers shall use the proceeds of the Revolving
Loans only for Permitted Purposes.
2.2
The Notes . On the Closing Date, Borrowers shall execute and
deliver to Lender a promissory note in the form of
Exhibit A , attached hereto and made a part hereof (the
“ Revolving Note ”), which Revolving Note,
together with Lender’s records, shall evidence the Revolving
Loans and interest accruing thereon.
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(a)
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Types of Loans
. Subject to Section 2.3(f) , all Loans shall be made as LIR
Loans.
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(b)
Agreement to Pay Interest . Borrowers agree to pay interest
on all unpaid principal amounts of the Loans from the respective
date each such Loan is made until such Loan is paid (whether at
stated maturity, upon acceleration, or otherwise) at the rates of
interest and at the times set forth in this Agreement.
(c)
Interest Rate . All LIR Loans shall bear interest at a rate
per annum equal to the greater of (i) the LIBOR Index Rate
plus the Applicable Margin or (ii) the Flat Rate. Any
Base Rate Loans shall bear interest at a rate per annum equal to
the greater
of (i) the Base Rate
plus the Applicable Margin or (ii) the Flat Rate. All
interest on any Loan and on all other Obligations shall be
calculated on the presumed basis of a year of 360 days, for the
actual number of days elapsed.
(d)
Adjustment of Interest Rate . The rate of interest on any
LIR Loan shall be adjusted as provided in the definition of
“LIBOR Index Rate,” subject to Section 2.3(f) . The rate of interest on any Base Rate Loan
made pursuant to Section
2.3(f) shall be adjusted
automatically and without notice on and as of the date of any
change in the Base Rate.
(e)
Default Rate . At Lender’s option, during the
existence of any Event of Default, the principal amount of all
Obligations (other than Obligations arising under Hedge Agreements
between a Borrower, or Borrowers jointly, and Lender or its
Affiliates) shall bear interest at the Default Rate. In any event,
the Default Rate shall automatically and without notice apply from
the time Lender accelerates or is deemed to have accelerated the
Obligations pursuant to Section 9.2 until such Obligations or any judgment thereon
is paid in full.
(f)
Conversion to Base Rate . Any provision of this Agreement to
the contrary notwithstanding, if Lender should at any time, in good
faith, determine that (i) it is not reasonably possible to
determine the LIBOR Index Rate, (ii) the LIBOR Index Rate is no
longer available, (iii) it is no longer lawful for Lender to make
Loans at a rate based on the LIBOR Index Rate, or (iv) a Default or
Event of Default exists and Lender shall so elect; then, in each
case, all affected LIR Loans shall automatically and without notice
be converted into Base Rate Loans and any Loans made thereafter
shall be made as Base Rate Loans until such time as Lender shall
have determined that such illegality has been reversed, such
condition has ceased to exist, or such Event of Default shall have
been waived, as applicable.
(g)
Opening LIBOR Index Rate . The LIBOR Index Rate on the date
hereof is _______ percent (____%) per annum and, therefore, the
rate of interest in effect hereunder on the date hereof, expressed
in simple interest terms (but on a 360-day basis), is _______
percent (____%) per annum with respect to any portion of the
Revolving Loans bearing interest as a LIR Loan.
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2.4
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Requesting New Loans
.
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(a)
Revolving Loans . Revolving Loans shall be deemed requested
pursuant to the following clauses (i) and (ii) or requested pursuant to the following
clause (iii)
.
(i) Subject
to Section
2.4(b) , the becoming due
of any Obligation (whether as principal, accrued interest, fees, or
other charges owed to Lender or any Affiliate of Lender) shall in
all respects constitute Borrowers’ irrevocable request for a
Revolving Loan in an amount equal to such Obligations, and Lender
may make such Revolving Loan and apply the proceeds thereof to the
payment of such Obligations.
(ii) Subject
to Section
2.4(b) , the presentment
for payment of any instrument drawn on, or request for any wire or
other transfer from, a Funding Account at a time when there are
insufficient funds in such account to cover such instrument shall
in all respects constitute Borrowers’ irrevocable request for
a Revolving Loan in an amount equal to the amount payable on such
instrument to be made by Lender, and Lender may make such Revolving
Loan and apply the proceeds thereof to such Funding Account for
payment of such instrument or transfer.
(iii) For
all other Revolving Loans, Borrowers shall provide Lender a request
in accordance with Section
2.5 .
(b)
Provisions Regarding Deemed Requests for Revolving Loans .
Lender shall have no obligation to honor any deemed request for a
Revolving Loan under Sections 2.4(a)(i) or (ii) ,
if (i) such request is deemed made after the Termination Date, (ii)
doing so would cause the Working Capital Obligations to exceed
the lesser
of (A) the Revolving Loan Commitment
or (B) the Borrowing Base, or (iii) Lender determines that any
condition precedent in Section 4.2 hereof or any other condition precedent to the
making of such Loan is not then satisfied or will not be satisfied
when such Loan is to be made; provided , Lender may make such Revolving Loan in its
sole and absolute discretion and without regard to the existence
of, and without being deemed to have waived, any Default or Event
of Default which may then exist or arise from the making of such
Revolving Loan. Lender may make Revolving Loans under
Sections 2.4(a)(i)
and (ii) without Borrowers’ having submitted a
request (whether telephonic or in writing) therefor.
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2.5
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Requests for
Borrowings .
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(a)
Making Requests for New Loans . Each request for the making
of a new Revolving Loan, may be made telephonically;
provided , however , that Lender, in its sole discretion, may from
time to time require each such request to be in writing. If Lender
requires Borrowers to make a request for a new Revolving Loan in
writing, Borrowers shall submit a Notice of Borrowing therefor.
Each request (whether telephonic or in writing) shall specify (i)
the date for the making of the applicable Loan, which date must be
a Business Day; (ii) the principal amount of the applicable Loan to
be made; (iii) for any new Loan, instructions for the disbursement
of the proceeds of such Loan for Permitted Purposes (
provided that, if such
instructions are not included, the proceeds will be deposited into
a Funding Account); (iv) for any new Revolving Loan, if requested
by Lender, a written calculation of the Borrowing Base and a
reconciliation of such Borrowing Base to the previous Borrowing
Base or request for a Revolving Loan; and (v) such other
information Lender may require from time to time.
(b)
Timing and Acceptance of Requests . Requests made under
this Section
2.5 (whether telephonic
or in writing) are irrevocable. Requests under this
Section 2.5
which Lender receives after 11:00
a.m. (Birmingham, Alabama, time) shall be deemed received on the
next Business Day. Lender’s acceptance of a request for the
making of a new Loan under this Section 2.5 shall be indicated by its making the Loan
requested.
2.6
Excess Outstandings . Any provision of this Agreement to the
contrary notwithstanding, Lender may, in its sole and absolute
discretion, make or permit to remain outstanding Revolving Loans
which are causing or would cause the Working Capital Obligations to
exceed the Revolving Loan Commitment or the Borrowing Base, and all
such excess amounts shall (i) be part of the Obligations evidenced
by the Revolving Note, (ii) bear interest as provided herein, (iii)
be payable on demand, (iv) be secured by the Collateral, and (v) be
entitled to all rights and security as provided under the Loan
Documents.
(a)
Repayment of Obligations Generally . Borrowers shall pay all
outstanding principal amounts and accrued interest under Note in
accordance with the terms of such Note and this
Agreement.
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(b)
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Repayment of Revolving
Loans .
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(i) Borrowers
shall immediately repay the principal amount of the Revolving Loans
with the proceeds of any Collateral of the type included in the
Borrowing Base; provided , however , that, to the extent Lender receives and
applies such proceeds in the manner described in, and in accordance
with, Section
2.9 , Borrowers’
payment obligation under this Section 2.7(b)(i) shall be satisfied with respect to such
proceeds. All payments made pursuant to this subsection shall be
applied in the manner set forth in Section 2.9 . All outstanding principal of the Revolving
Loans shall be due and payable on the Termination Date.
(ii) Interest
accrued on the Revolving Loans shall be due and payable, in
arrears, on (A) the first day of each month (for the immediately
preceding month), computed through the last calendar day of the
preceding month; and (B) on the Termination Date.
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2.8
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Additional Payment
Provisions .
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(a)
Payment of Other Obligations . Borrowers shall pay Lender
the balance of the Obligations under the Loan Documents requiring
the payment of money on the terms set forth in the Loan Documents,
or, if no date of payment is otherwise specified in the Loan
Documents, on demand.
(b)
Authorization to Debit . In addition to Lender’s right
to make a deemed Revolving Loan under Section 2.4(a) , Lender may, without notice to, or the consent
of, Borrowers, debit any Funding Account, Collections Account,
other Deposit Account, or other account over which Lender has
Control and apply such amounts to the payment of Obligations which
are then due and payable.
(c)
Time and Location of Payment . Except for payments made
pursuant to Section
2.9 and
Section 2.4(a)(i)
, Borrowers shall make each payment
of principal of and interest and other Obligations which are due
and payable not later than 12:00 noon (Birmingham, Alabama, time)
on the date due, without set-off, counterclaim, or other deduction,
in immediately available funds to Lender at its address referred to
in Section 10.4
. If any payment of any Obligations
shall be due on a day which is not a Business Day, such payment
shall be due and payable the next Business Day, and interest shall
accrue during such time.
(d)
Excess Over Borrowing Base . At any time the Working Capital
Obligations exceed the Borrowing Base, Borrowers shall immediately
pay the amount of such excess to Lender.
(e)
Hedge Agreements Are Independent . Prepayment of any Loans
shall not affect any Borrower’s obligation to continue making
payments under any Hedge Agreement, which shall remain in full
force and effect notwithstanding such prepayment, subject to the
terms of such Hedge Agreement.
(f)
Capital Requirements; Increased Costs . If (i) the
introduction of, or any change in, or in the interpretation of, any
applicable law or (ii) compliance with any guideline or request
from any central bank or comparable agency or other governmental
authority (whether or not having the force of law), has or would
have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to
be maintained by Lender or any Person controlling Lender as a
consequence of, or with reference to, the Commitments and other
commitments of this type, below the rate which Lender or such other
Person could have achieved but for such introduction, change, or
compliance, then within five (5) Business Days after Lender’s
written demand therefor, Borrowers shall pay Lender from time to
time as specified by Lender additional amounts sufficient to
compensate Lender or such other Person for such reduction.
Lender’s accounting of such amounts submitted in writing to
Borrower shall be presumed conclusive absent manifest error. If
there is any change in the LIBOR Reserve Requirements, then
Borrowers shall, from time to time upon demand by Lender, pay to
Lender such additional amounts as Lender may deem necessary to
compensate Lender for any increased costs resulting from such
change. Borrowers agree that Lender’s determination of such
additional amounts and increased costs will be made in
Lender’s sole discretion and shall be conclusive absent
manifest error.
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2.9
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Lockboxes; Collections
Accounts .
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(a)
Establishment of Lockboxes . Borrowers shall, on or before
the Closing Date, (i) establish and thereafter maintain one or more
lockboxes under Lender’s control and (ii) contemporaneously
therewith, direct all of its Account Debtors to make payments to
such lockboxes (or, if made by wire or other transfer, to a
Collections Account).
(b)
Collections Accounts . To the extent not delivered directly
to a lockbox, all Items or funds received by each Borrower in
respect of Accounts or the sale of Inventory or as Net Proceeds of
other Collateral shall be held by such Borrower in trust for
Lender, shall not be commingled with such Borrower’s funds,
and shall be deposited promptly by such Borrower into a Collections
Account or forwarded to Lender in the form received. All such Items
and funds shall be the exclusive property of Lender upon the
earlier of the receipt thereof by Lender or by Borrower. Subject
to Section
2.9(c) , Lender shall
apply available balances from any Item or funds deposited into a
Collections Account to the payment of Obligations in whatever order
Lender shall determine.
(c)
Chargebacks . No payment item received by Lender shall
constitute payment to Lender until such item is actually collected
by Lender and credited to the Collections Account;
provided , however , that Lender shall have the right to charge
back to the Collections Account (or any other account of Borrower
maintained with Lender) an Item which is returned for inability to
collect, plus
accrued interest during the period
of Lender’s provisional credit for such item prior to
receiving notice of dishonor.
(d)
Power of Attorney; Security Interest; Applicable Fees .
Borrowers hereby irrevocably appoint Lender (and any Person
designated by Lender) as each Borrower’s attorney-in-fact to
indorse each Borrower’s name on any Items which come into
Lender’s possession or control, this power being coupled with
an interest is irrevocable so long as any of the Obligations remain
outstanding. Such indorsement by Lender under such power of
attorney shall, for all purposes, be deemed to have been made by
the affected Borrower (prior to any subsequent indorsement by
Lender) in negotiation of the Item. In addition to the security
interest granted Lender in Section 3 , each Borrower hereby grants Lender a security
interest in and to all Items, funds, and balances held in any
lockbox, any Funding Account, and any Collections Account, in each
case as Collateral for the Obligations. Each Borrower shall pay all
of Lender’s standard fees and charges in connection with any
lockboxes, Funding Accounts, and Collections Accounts and the
processing of Items and other transactions relating thereto, as
such fees and charges may change from time to time.
(a)
Issuance of Letters of Credit . Subject to the terms and
conditions of this Agreement, Lender shall from time to time issue,
extend, or renew Letters of Credit for the account of Borrowers
jointly, provided that (i) Borrowers shall have given Lender not
less than five (5) Business Days’ written notice thereof;
(ii) Lender shall have no obligation to issue any Letter of Credit,
if (A) doing so would cause (1) the Working Capital Obligations to
exceed the lesser of (a) the Borrowing Base or (b) the Revolving
Loan Commitment or (2) the LC Obligations to exceed Three Million
Dollars ($3,000,000) or (B) the expiration date of such requested
Letter of Credit would occur after the date specified in clause (a)
of the definition of Termination Date; and (iii) all other
conditions precedent to the issuance of each such Letter or Credit
set forth in this Agreement shall have been satisfied or waived in
writing by Lender. All payments made by Lender under any Letter of
Credit (whether or not a Borrower is the account party) and all
fees, commissions, discounts, and other amounts owed or to be owed
to Lender in connection therewith, shall be paid on demand, unless
(x) Borrowers instruct Lender to make a Revolving Loan to pay such
amount, (y) Lender agrees to do so, and (z) sufficient Excess
Availability exists to make such Revolving Loan. All LC Obligations
shall be secured by the Collateral. Borrowers shall complete and
sign such applications and supplemental agreements and provide such
other documentation as Lender may require in respect to the
issuance and administration of the Letters of Credit. The form and
substance of all Letters of Credit shall be subject to
Lender’s approval. Lender may charge certain fees or
commissions for the issuance, handling, renewal or extension of a
Letter of Credit, in addition to the fees payable pursuant
to Section 2.11
. Borrowers unconditionally
guarantee the payment and performance of all obligations of any
Subsidiary with respect to Letters of Credit issued for the account
of such Subsidiary. Upon Lender’s request during the
existence of an Event of Default, Borrowers shall immediately
deliver to Lender immediately available funds in an amount equal to
one hundred five percent (105%) of the LC Obligations, which Lender
shall hold as cash collateral for the payment of Obligations
related to the Letters of Credit.
(b)
Law Governing Letter of Credit . Each Letter of Credit
issued hereunder shall be governed, as applicable, by (i) the
Uniform Customs and Practice for Documentary Credits International
Chamber of Commerce (“ICC”), Publication 500, or any
subsequent revision or restatement thereof adopted by the ICC and
in use by Lender or (ii) the International Standby Practices, ICC
Publication No. 590, or any subsequent revision or restatement
thereof adopted by the ICC and in use by Lender, except to the
extent that the terms of such publication would limit or diminish
rights granted to Lender hereunder or in any other Loan
Document.
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(a)
|
Closing Fee
. [NONE].
|
(b)
Unused Line Fee . Borrowers shall pay Lender a fee for each
day of the Term equal to (A) the Unused Line Fee Rate
divided by
(B) 360, times (C) the amount by which the Revolving Loan
Commitment
exceeded the Working Capital
Obligations on such day. Borrowers shall pay this fee on the first
day of each calendar month, for each day in the preceding calendar
month, and on the Termination Date. As used herein, “
Unused Line Fee Rate ” shall mean, (i) 25/100ths of
one percent (.25%), if Working Capital Obligations (determined on a
daily average basis for the calendar month, or portion thereof, for
which such fee is being charged) are equal to or greater than
Fifteen Million Dollars ($15,000,000), or (ii) 37.5/100
th of one percent (.375%), until May 31, 2009, and,
thereafter, 50/100 th of one percent (.50%), if Working
Capital Obligations, as so determined for the same such period, are
less than Fifteen Million Dollars ($15,000,000).
(c)
Letter of Credit Fees . Borrowers shall pay to Lender, at
such times as Lender shall require, Lender’s standard fees in
connection with Letters of Credit, as in effect from time to time,
and with respect to standby and commercial Letters of Credit, at
the time of issuance of each Letter of Credit, a fee equal to the
Applicable Margin for LIR Loans on the face amount of the Letter of
Credit for the period of time the Letter of Credit will be
outstanding.
(d)
Field Examinations . Borrowers shall pay for all field
examinations to the extent required by Section 6.5 .
(e)
Appraisals . Borrowers shall pay all costs and expenses
relating to any appraisals conducted in contemplation of this
Agreement and for any other appraisals conducted from time to time
to the extent required by this Agreement or the other Loan
Documents.
(f)
Method of Calculation . Unless otherwise expressly provided,
all fees payable hereunder or with respect to any Obligations shall
be calculated on the presumed basis of a year of 360 days, for the
actual number of days elapsed.
2
