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EXHIBIT (B)(1)
$20,000,000.00
CREDIT AGREEMENT
DATED JANUARY 20, 1995
BETWEEN
ALATENN CREDIT CORP.
AND
COMPASS BANK
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TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS............................................ 1
ARTICLE Il
THE CREDITS............................................. 9
2.1. Commitment........................................................................... 9
2.2. Extensions........................................................................... 13
2.3. Facility 1........................................................................... 14
2.4. Facility 2........................................................................... 14
2.5. Term Option.......................................................................... 15
2.6. Non-use Fee.......................................................................... 17
2.7. Applicable Interest Rate............................................................. 17
2.8. Record of Advances, Payments, Etc.................................................... 17
2.9. Procedure for Re-Advances, Payments, Etc............................................. 17
2.10. Assignment of Group Member Notes..................................................... 17
2.11. Letters of Credit.................................................................... 17
2.12. Partial Release of Negative Pledge................................................... 18
ARTICLE III
CONDITIONS PRECEDENT....................................... 18
3.1. Initial Advance...................................................................... 18
3.2. Each Advance......................................................................... 19
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES................................... 19
4.1. Corporate Existence and Standing..................................................... 19
4.2. Authorization and Validity........................................................... 20
4.3. No Conflict; Government Consent...................................................... 20
4.4. Financial Statements................................................................. 20
4.5. Material Adverse Change.............................................................. 20
4.6. Taxes................................................................................ 20
4.7. Litigation and Guaranteed Obligations................................................ 21
4.8. Group................................................................................ 21
4.9. ERISA................................................................................ 21
4.10. Accuracy of Information.............................................................. 21
4.11. Regulation U......................................................................... 21
4.12. Material Agreements.................................................................. 21
4.13. Compliance With Laws................................................................. 21
4.14. Investment Company Act............................................................... 22
4.15. Public Utility Holding Company Act................................................... 22
4.16. Licenses............................................................................. 22
4.17. Solvency............................................................................. 22
ARTICLE V
COVENANTS 22
5.1. Financial Reporting.................................................................. 22
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5.2. Use of Proceeds...................................................................... 23
5.3. Notice of Certain Events............................................................. 24
5.4. Conduct of Business.................................................................. 24
5.5. Taxes................................................................................ 24
5.6. Insurance............................................................................ 24
5.7. Compliance with Laws................................................................. 24
5.8. Maintenance of Properties............................................................ 24
5.9. Inspection........................................................................... 25
5.10. Merger............................................................................... 25
5.11. Sale of Assets....................................................................... 25
5.12. Sale and Leaseback................................................................... 25
5.13. Liens (Negative Pledge).............................................................. 25
5.14. Consolidated Tangible Net Worth...................................................... 25
5.15. Ratio of Consolidated Indebtedness to Consolidated Tangible Net Worth................ 25
5.16. Interest Coverage Ratio.............................................................. 25
5.17. Ratio of Cash Flow to Current Maturities............................................. 25
5.18. Earnings............................................................................. 26
5.19. Affiliates........................................................................... 26
5.20. Compliance with ERISA................................................................ 26
ARTICLE VI
DEFAULTS........................................................ 26
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6.1................................................................................................. 26
6.2................................................................................................. 26
6.3................................................................................................. 27
6.4................................................................................................. 27
6.5................................................................................................. 27
6.6................................................................................................. 27
6.7................................................................................................. 27
6.8................................................................................................. 28
6.9................................................................................................. 28
6.10................................................................................................ 28
6.11................................................................................................ 28
6.12................................................................................................ 28
6.13................................................................................................ 28
ARTICLE VII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.......................... 28
7.1. Acceleration............................................................................... 28
7.2. Preservation of Rights..................................................................... 29
ARTICLE VIII
GENERAL PROVISIONS........................................ 29
8.1. Survival of Representations................................................................ 29
8.2. Governmental Regulation.................................................................... 29
8.3. Headings................................................................................... 29
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8.4. Entire Agreement............................................................................ 29
8.5. Benefits of this Agreement.................................................................. 29
8.6. Expenses; Indemnification................................................................... 29
8.7. Accounting.................................................................................. 30
8.8. Severability of Provisions.................................................................. 30
8.9. Nonliability of Lender...................................................................... 30
8.10. Choice of Law............................................................................... 30
8.11. Setoff...................................................................................... 30
ARTICLE IX
NOTICES............................................... 30
9.1. Giving Notice............................................................................... 30
9.2. Change of Address........................................................................... 30
Testimonium......................................................................................... 31
Signatures.......................................................................................... 31
Exhibit "A-I" - Form of Facility I Note
Exhibit "A-2" - Form of Facility 2 Note
Exhibit "B" - Form of Group Member Notes
Exhibit "C" - Form of Collateral Assignment and
Pledge of Master Promissory Notes
Exhibit "D" - Form of Opinion
Exhibit "E" - Form of Compliance Certificate
Schedule "1" - Subsidiaries
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of January 20, 1995 ("this Agreement")
is entered into by ALATENN CREDIT CORP., an Alabama corporation (the
"Borrower"), and COMPASS BANK, an Alabama banking corporation (the "Lender").
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Advance" means a borrowing hereunder pursuant to Facility 1 or
Facility 2 and shall include the face amount of all Letters of Credit issued by
Lender for Borrower's account.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or
otherwise.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Article" means an article of this Agreement.
"Authorized Officer" means any of the President, Secretary, Treasurer,
Assistant Secretary or Assistant Treasurer, acting singly.
"Borrower" means AlaTenn Credit Corp., an Alabama corporation, and its
successors and assigns.
"Borrower's Loan Accounts" shall mean the accounts on the books of
Lender in which Lender will record Advances to or on behalf of Borrower
pursuant to the Facility 2 and the Facility 1, payments received on such
Advances, and other appropriate debits and credits as provided by this
Agreement or any of the other Loan Documents. Separate Borrower's Loan Accounts
shall be maintained for the Facility 2 and the Facility 1.
"Borrowing Date" means a date on which an Advance is made hereunder.
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"Business Day" means a day (other than a Saturday or Sunday) on which
banks generally are open in Birmingham, Alabama for the conduct of
substantially all of their commercial lending activities and on which Federal
Reserve Banks are open.
"Capitalized Lease" of a member of the Group means any lease of
Property by such Group Member as lessee that would be capitalized on the
consolidated balance sheet of the Group prepared in accordance with GAAP.
"Capitalized Lease Obligations" of the Group means the amount of the
obligations of the Group under Capitalized Leases that would be shown as the
liability on a balance sheet of the Group prepared in accordance with GAAP
(exclusive of any Capitalized Lease Obligation of a project financed through
Project Financing).
"Change Date" shall mean a date ninety (90) days after the date
hereof, and successive dates, each ninety (90) days after the other, provided,
however, that in the event that the applicable rate under the Facility I Note
or the Facility 2 Note is based on "Compass Bank Prime Rate," the applicable
interest rate thereunder shall change as Compass Bank Prime Rate changes.
"Change in Control" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
of the Borrower.
"Closing Date" means January 20, 1995.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Collateral Assignment" means the Collateral Assignment and Pledge of
Master Promissory Notes from Borrower to Lender dated as of the date hereof, in
substantially the form of Exhibit C hereto, pursuant to which the Group Member
Notes are being assigned and pledged to Lender.
"Compass Bank Prime Rate", as used herein, is a reference rate
established by Lender for use in computing and adjusting interest, is subject
to increase, decrease or change at Lender's discretion, and is only one of the
reference rates or indices that Lender uses. Lender may lend to others at rates
of interest at, or greater or less than, Compass Bank Prime Rate or the rate(s)
provided herein. Any change in said rate due to a change in Compass Bank Prime
Rate shall take effect on the day of such change.
"Compliance Certificate" shall mean a certificate in the form of
Exhibit E attached hereto, signed by an Authorized Officer of Borrower.
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"Concentration Account" means the checking account of Borrower with
Lender into which shall be deposited Advances under the Facility I and the
Facility 2 and payments under the Group Member Notes and from which shall be
disbursed advances from Borrower to Group Members under the Group Member Notes.
The day-to-day administration of the Concentration Account shall be governed by
Section 2.10 hereof and by Lender's standard forms of cash management account
agreements to be executed by Borrower and Lender.
"Consolidated Cash Flow" means net profit plus depreciation and
amortization of the Group as determined on a consolidated basis in accordance
with GAAP (exclusive of any cash flow generated from a project financed through
Project Financing other than cash distributions to the Group on account of the
applicable Group member's equity interest in the project so financed).
"Consolidated Current Maturities" means that portion of long-term debt
of Group which is due within twelve months of the statement date as determined
on a consolidated basis in accordance with GAAP (exclusive of any Project
Financing).
"Consolidated Indebtedness" means the Indebtedness of the Group as
shown on the Group's financial statements on a consolidated basis in accordance
with GAAP (exclusive of any Project Financing).
"Consolidated Interest Expense" means, for any period of calculation,
interest expense, whether paid or accrued, of the Group calculated on a
consolidated basis in accordance with GAAP (exclusive of any such expense
related to Project Financing).
"Consolidated Net Income" means, for any period of calculation, the
net income of the Group as shown on the Group's consolidated financial
statement calculated on a consolidated basis in accordance with GAAP (exclusive
of any income from any project financed through Project Financing other than
income to the Group from distributions on account of the applicable Group
member's equity interest in the project so financed).
"Consolidated Retained Earnings" means the amount of consolidated
retained earnings of the Group as shown on the Group's consolidated financial
statements determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means the amount of consolidated
tangible net worth of the Group as shown on the Group's consolidated financial
statements, determined in accordance with GAAP (excluding patents and
goodwill).
"Default" means an event described in Article VI.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"ERISA Affiliate" means any Person that is a member of the Group, or
under common control with the Borrower, within the meaning of Section 414 of
the Code.
"ERISA Event" means (i) the occurrence with respect to a Plan of a
reportable event, within the meaning of Section 4034 of ERISA, unless the
30-day notice requirement with respect thereto has been waived by the PBGC;
(ii) the provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA), (iii) the cessation of operations at a facility of the Borrower or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA;
(iv) the withdrawal by the Borrower or an ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (v) the conditions set forth in Section
302(f)(1)(A) and (B) of ERISA upon the creation of a lien upon property or
rights to property of the Borrower or any ERISA Affiliate for failure to make a
required payment to a Plan are satisfied; (vi) the adoption of an amendment to
a Plan requiring the provision of security to such Plan, pursuant to Section
307 of ERISA; or (vii) the institution by the PBGC of proceedings to terminate
a Plan, pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, a Plan.
"Facility 1" means the $10,000,000.00 line of credit described in
Section 2.3 hereof.
"Facility 1 Note" means the $10,000,000.00 Master Revolving Promissory
Note (Facility 1) executed by Borrower and delivered to Lender to evidence sums
advanced and repayable under Facility 1 in substantially the form of Exhibit
A-1 hereto.
"Facility 2" means the $10,000,000.00 line of credit described in
Section 2.4 hereof.
"Facility 2 Collateral" means collateral now or hereafter securing
Advances under Facility 2.
"Facility 2 Note" means the $10,000,000.00 Master Revolving Promissory
Note (Facility 2) executed by Borrower and delivered to Lender to evidence
advances made and repayable under Facility 2 in substantially the form of
Exhibit A-2 hereto.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession. Unless otherwise specified herein, all accounting terms used herein
or in any other Loan Document shall be interpreted, and all accounting
determinations and computations hereunder or thereunder shall be made in
accordance with GAAP as in effect on the Closing Date and all financial
statements required to be delivered hereunder or thereunder shall be prepared
in accordance with GAAP as in effect on the date of, or for the period covered
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by, such financial statements, provided, however, that interim financial
statements shall be unaudited and subject to normal year end adjustments.
"Governmental Authority" means the federal government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government including, without limitation, the Federal Energy Regulatory
Commission or its successor in function.
"Group" means the Borrower, the Guarantor and the Subsidiaries listed
on Schedule I attached hereto and any Subsidiary subsequently formed or
acquired.
"Group Member Notes" means the promissory notes of the Group Members
payable to the order of Borrower which shall be in substantially the form of
Exhibit B hereto, shall evidence advances from Borrower to such Group Members
of funds advanced to Borrower hereunder and shall be pledged to Lender to
secure advances under Facility I and Facility 2 pursuant to the Collateral
Assignment in substantially the form of Exhibit C hereto.
"Guaranteed Obligations" of a Person means all guaranties,
endorsements, assumptions and other contingent obligations with respect to, or
to purchase or to otherwise pay or acquire, Indebtedness of others.
"Guarantor" means AlaTenn Resources, Inc., an Alabama corporation.
"Guaranty" means the Guaranty of even date herewith executed by the
Guarantor in favor of the Lender.
"Highest Lawful Rate" means the maximum non-usurious interest rate
that at any time may be contracted for, taken, reserved, charged or received on
amounts due Lender, under laws applicable to Lender presently in effect or, to
the extent allowed by law, under such applicable laws that shall allow a higher
maximum non-usurious rate than applicable laws now allow.
"Indebtedness" of the Group means, without duplication, (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising in
the ordinary course of the Group's business payable on terms customary in the
trade), (iii) obligations, whether or not assumed, secured by Liens or payable
out of the proceeds or production from Property now or hereafter owned or
acquired by a member of the Group, (iv) obligations evidenced by notes,
acceptances or other instruments, including guaranties and other contingent
obligations (v) Capitalized Lease Obligations, and (vi) obligations for
reimbursement of amounts drawn or available to be drawn under Letters of
Credit, as reflected on the consolidated financial statements of the Group
determined in accordance with GAAP, but exclusive of Project Financing.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities as defined in Section 4001(a)(18) of ERISA.
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"Lender" means Compass Bank, its successors and assigns.
"Letter of Credit" of a Group member means a letter of credit or
similar instrument issued upon the application of such Group member or upon
which such member is an account party or for which it is in any way liable.
"License" means any license, certificate of authority, permit or other
authorization required to be obtained from a Governmental Authority in
connection with the operation, ownership or transaction of the business of any
member of the Group.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan Documents" means this Agreement, the Notes, the Collateral
Assignment and the Guaranty.
"Material Adverse Effect" means with respect to the Group an effect,
resulting from any occurrence of whatever nature (including any adverse
determination in any litigation, arbitration or governmental investigation or
proceeding), which: (a) is materially adverse to the consolidated financial
condition of the Group; or (b) materially impairs the ability of the Borrower
to make any payment or perform any other material obligation required under
this Credit Agreement or any other Loan Document; provided that unless
otherwise specified, references to any Material Adverse Effect shall mean any
effect with respect to the Group taken as a whole; it being understood that for
all purposes of the Loan Documents, the consummation of the transactions
contemplated in the Loan Documents shall not constitute a Material Adverse
Effect.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 3(37) of ERISA.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the Group
or an ERISA Affiliate and at least one Person other than the Borrower and its
ERISA Affiliates or (ii) was so maintained and with respect to which the
Borrower or an ERISA Affiliate could have liability under Section 4064 or 4049
of ERISA in the event such plan has been or were to be terminated.
"Ninety-Day LIBOR Rate" means, at the time of any computation required
under the Facility I Note or the Facility 2 Note, the interest rate offered on
the London interbank market for deposits of ninety days' maturity, as reported
by an on-line financial reporting service such as Reuters or TeleRate on each
Change Date or, if the London interbank market is not open for
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trading on any Change Date, then on the next day on which the London interbank
market is open for trading. In the event quotations become unavailable on such
an on-line reporting service, Lender may obtain quotations from such other
sources as may be available at its discretion. In the event funds of ninety
days' maturity are no longer offered on the London interbank market, Lender
shall so advise Borrower promptly and shall offer to Borrower an alternative
index (to which one percentage point per annum (1%) shall be added to
calculate the applicable rate under the Note on each Change Date) which is
reasonably equivalent to the Ninety-Day LIBOR Rate and the Borrower shall have
the option, within 5 business days of receiving such advice from Lender, to
elect such alternative index (to which one percentage point per annum (1%)
shall be added to calculate the applicable rate under the Note on each Change
Date) or an applicable rate for the Facility 1 Note and the Facility 2 Note
equal to Compass Bank Prime Rate, and unless and until Borrower makes such
election, Compass Bank Prime Rate shall be the applicable rate on the Facility
1 Note and the Facility 2 Note.
"Notes" mean the promissory notes duly executed by the Borrower and
payable to the order of Lender consisting of the Facility 1 Note and the
Facility 2 Notes, including any amendment, modification, renewal or replacement
of each such promissory note evidencing the Facility 1 and the Facility 2
hereunder.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lender
or any indemnified party hereunder arising under the Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto. "Permitted Liens" means:
(a) Liens to secure the cost of acquisition or rental by
any member of the Group of additional assets, or the
refinancing thereof, provided, however, that any
such Lien shall be confined solely to the Property
acquired or refinanced and shall not exceed the cost
thereof;
(b) Liens for taxes, assessments, or other governmental
charges not yet due or which are being contested in
good faith by appropriate action promptly initiated
and diligently conducted, if the Group shall have
made any reserve therefor required by GAAP;
(c) Liens of landlords, vendors, carriers, warehousemen,
mechanics, contractors, laborers, and materialmen
arising by law in the ordinary course of business
for sums not yet due or being contested in good
faith by appropriate action promptly initiated and
diligently conducted, if Group shall have made any
reserve therefor required by GAAP;
(d) Pledges or deposits made in the ordinary course of
business in connection
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with worker's compensation, unemployment insurance,
and other similar laws;
(e) Inchoate Liens arising under ERISA to secure the
contingent liability of any member of the Group;
(f) Liens referred to or reflected in the Group's June
30, 1994 consolidated financial statements, which
statements have been certified by an Authorized
Officer of Borrower;
(g) Liens securing debt of Subsidiaries of any member of
the Group provided that such Subsidiary, or
substantially all of its assets, are acquired
subsequent to the date hereof and such debt exists
as of the date of the acquisition;
(h) Liens respecting Project Financing provided that
such liens are limited to the assets of the subject
project; and
(i) Liens created after the date hereof which cover
assets expressly released by Lender pursuant to
Section 2.5(e) or 2.12 hereof.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any Governmental Authority.
"Plan" means a Single Employer Pension Plan or a Multiple Employer
Pension Plan.
"Project Financing" means any financing obtained by any member of the
Group which is non-recourse as to all members of the Group, which financing
does not include any Group members' equity interest in the project so financed.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of the
Borrower or an ERISA Affiliate and no
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Person other than the Borrower and its ERISA Affiliates or (ii) was so
maintained and with respect to which the Borrower or an ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Subsidiary" means (1) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by the Borrower or the
Guarantor or by one or more of their Subsidiaries or by the Borrower and one or
more of its Subsidiaries, or (ii) any partnership, association, joint venture
or similar business organization more than 50% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.
"Substantial Portion" means, with respect to the Property of the
Group, Property that represents more than 20% of the consolidated assets of the
Group as would be shown in the consolidated financial statements of the Group
as at the beginning of the twelve-month period ending with the month in which
such determination is made or (ii) is responsible for more than 20% of the
Consolidated Net Income of the Group as reflected in the Group's most recent
financial statements delivered to Lender.
"Term Loans" means Advances which are converted to term obligations
pursuant to Section 2.5 hereof.
"Termination Date" means January 20, 1996, or such earlier date on
which the obligations of the Lender to make Loans hereunder are terminated
pursuant to the terms of this Agreement or such subsequent date or dates to
which the availability of advances hereunder is extended pursuant to the
express terms of this Agreement.
"Unmatured Default" means an event that, but for the lapse of any
applicable cure period or the giving of notice, or both, would constitute a
Default. The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE Il
THE CREDITS
2.1. Commitment. (a) From and including the date of this Agreement
and prior to the Termination Date, Lender agrees, on the terms and
conditions set forth in this Agreement, to make Advances to the
Borrower from time to time in amounts not to exceed in the aggregate
at any one time outstanding the amount of $20,000,000.00. Subject to
the terms and conditions set forth below, such Advances may be
obtained under either the Facility 2 or the Facility 1; provided,
however, that at no time shall the aggregate Advances outstanding
under the Facility 2 and the Facility I exceed $10,000,000.00 each;
provided, further, that such maximum limitations may be adjusted
pursuant to the provisions of Section 2.2 below. Facility 1 and
Facility 2 shall be secured
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by a pledge of the Group Member Notes and Facility 2 shall be further
secured by the additional collateral provided pursuant to Section 2.4
hereof. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow and prepay without penalty at any time
prior to the Termination Date.
(b)(i) The Facility I Note and the Facility 2 Note shall
bear interest at the Ninety Day LIBOR Rate plus one percentage point
per annum (1 %), adjusted on each Change Date on the basis of the
then-effective Ninety-Day LIBOR Rate, determined in accordance with
the foregoing definition of Ninety-Day LIBOR Rate. All references to
the London interbank market notwithstanding, Borrower agrees the
Lender shall not be required actually to obtain funds from such source
at any time. Any sums outstanding after maturity (whether due to
acceleration or otherwise) shall bear interest at the Compass Bank
Prime Rate.
(ii) Irrespective of whether the applicable interest rate
is Compass Bank Prime Rate, the applicable increment over the
Ninety-Day LIBOR Rate or some other rate, interest from date on the
outstanding unpaid principal balance shall be calculated by
multiplying the product of the relevant principal amount and the
applicable rate set forth herein by the actual number of days elapsed,
and dividing by 360.
(iii) It is the intention of Lender and Borrower to
conform strictly to any applicable usury laws. Accordingly, if the
transactions contemplated hereby would be usurious under any
applicable law, then, in that event, notwithstanding anything to the
contrary in either the Facility Note or the Facility 2 Note, or any
other. agreement entered into in connection with or as security for or
guaranteeing either the Facility 1 Note or the Facility 2 Note, it is
agreed as follows: (1) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for,
taken, reserved, charged, or received by Lender under the respective
Note or under any other agreement entered into in connection with or
as security for or guaranteeing Facility 1 or Facility 2 shall under
no circumstances exceed the Highest Lawful Rate, and any excess shall
be canceled automatically and, if theretofore paid, shall, at the
option of Lender, be credited by Lender on the principal amount of any
indebtedness owed to Lender by Borrower or refunded by Lender to
Borrower, and (II) in the event that the payment of Facility I or
Facility 2 is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under
law applicable to Lender may never include more than the Highest
Lawful Rate and excess interest, if any, to Lender provided for in
this Note or otherwise shall be canceled automatically as of the date
of such acceleration or prepayment and, if theretofore paid, shall, at
the option of Lender, be credited by Lender on the principal amount of
any indebtedness owed to Lender by Borrower or refunded by Lender to
Borrower.
(iv) Notwithstanding anything herein to the contrary, in no event
will interest payable to Lender exceed the maximum amount permitted by the law
applicable to Lender (after taking into account all charges payable to Lender
that constitute interest under such applicable law),
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but if any amount referred to in the respective Note that would be payable to
Lender but for the applicability of usury or other laws limiting the
consideration payable to Under is not paid to Lender as a result of the
applicability of such laws, then interest on the outstanding principal balance
of this Note payable to Lender shall, to the extent permitted by the law,
accrue at the maximum rate of interest permitted by applicable law (after
taking into account all charges payable to Lender that constitute interest
under applicable law) until the total amount received by Lender equals the
amount it would have received had no such laws been applicable.
(v) With respect to Advances bearing interest calculated
with reference to the Ninety-Day LIBOR Rate, if any future law, rule,
regulation or directive, or any future judicial or administrative
interpretation of any existing law, rule, regulation or directive
(a) subjects Under to any tax, duty, charge or
withholding on or from payments due from Borrower
(excluding taxation of the overall net income of
Lender or taxation which may be treated as an offset
against such taxation of overall net income), or
(b) imposes or increases any reserve, assessment,
special deposit or similar requirement against
Lender, or
(c) imposes any other condition, the result of which is
to increase the cost to Lender of making, funding or
maintaining loans or reduces any amount receivable
by Lender in connection with loans, or to require
Under to make any payment calculated by reference to
the amount of loans held or interest received by it,
then, in accordance with the following paragraph, Borrower shall pay
to Lender that portion of such increased expense incurred or reduced
amount received which is attributable to making, funding and
maintaining such advances hereunder. Lender promptly shall notify
Borrower upon its becoming aware of any such increased expense or
reduced amount received.
A certificate as to the amount due under clause (v) above,
together with reasonable substantiation of such increase, shall be
submitted by the Lender to Borrower. Determination of amounts payable
under clause (v) above shall be calculated as though Lender funded the
Ninety-Day LIBOR Rate Advances through the purchase of a deposit of
the type, amount and maturity corresponding to the deposit used as a
reference in determining the applicable rate for such advance. The
amount specified in the certificate shall be payable on the interest
payment date next following receipt by Borrower of the certificate.
The indemnity obligations of Borrower under this Agreement shall
survive payment of the Facility 1 Note and the Facility 2 Note.
(vi) If Lender, in its reasonable discretion, determines
that maintenance of any rate based upon the Ninety-Day LIBOR Rate
would violate any applicable law, rule,
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regulation, or directive applicable to Lender, then Lender may suspend
the availability of such a rate and shall so advise Borrower promptly
and shall offer to Borrower an alternative index (to which one
percentage point per annum (1 %) shall be added to calculate the
applicable rate under the Facility 1 Note and the Facility 2 Note on
each Change Date) and Borrower shall have the option, within 5
business days of receiving such advice from Lender, to elect such
alternative index (to which one percentage point per annum (1%) shall
be added to calculate the applicable rate under the Facility 1 Note
and the Facility 2 Note on each Change Date) or an applicable rate for
the Facility 1 Note and Facility 2 Note equal to Compass Bank Prime
Rate, and unless and until Borrower makes such election, the Compass
Bank Prime Rate will be the applicable rate under the Facility 1 Note
and the Facility 2 Note.
(vii) Notwithstanding anything to the contrary contained
or implied herein, the applicable rate on Advances which are converted
to a Term Loan pursuant to Section 2.5 hereof shall be determined
pursuant to Section 2.5 hereof.
(c) The Commitment to lend hereunder shall expire on the
Termination Date, or if the Termination Date is extended pursuant to
the terms hereof, on the date to which the Termination Date is
extended (each such extended date being referred to herein as the
("Extended Termination Date"). Any outstanding Advances and all other
unpaid Obligations (other than those outstanding under Term Loans)
shall be paid in full by the Borrower on the Termination Date or any
Extended Termination Date.
(d) If at any time prior to the Termination Date, as it
may be extended from time to time, all amounts payable by Borrower
hereunder have been paid in full (including, without limitation, fees
payable under Section 2.6 below) and all other obligations under the
Loan Documents have been satisfied, the Borrower may terminate this
Credit Agreement, and its obligations hereunder, by delivering to
Lender a written release of its commitment to lend and of any other
Lender obligations hereunder, which release shall be in form and
substance satisfactory to the Lender and its counsel.
(e) If at any time prior to the Termination Date, as it
may be extended from time to time, all amounts payable by Borrower
hereunder have been paid in full with the exception of amounts
outstanding under the Tenn Loans, and all other obligations under the
Loan Documents have been satisfied (including, without limitation,
payment of fees under Section 2.6 below), the Lender, upon receipt
from Borrower of a release in the form described in Section 2. 1 (d)
above, (1) shall have no continuing commitment to lend hereunder and
(11) shall release the Borrower from the provisions of this Agreement
except to the extent that any of the terms hereof are contained or
incorporated by reference in the documents and instruments relating to
the Term Loans executed pursuant to Section 2.5(b) hereof, and the
Term Loans shall be governed by the provisions of such Term Loan
documents and instruments executed pursuant to Section 2.5(b) hereof.
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2.2. Extensions.
(a) Initial Extension. The Termination Date shall be
extended 364 days (the "Initial Extension") subject to the following
conditions:
(i) Between 30 and 60 days prior to the
Termination Date, Borrower shall submit to Lender a written notice to
extend and, in the event Borrower wishes to lower the amount of credit
available hereunder, Borrower shall specify such lower amount, (the
"Initial Extension Notice");
(ii) The Initial Extension Notice shall be
accompanied by a Compliance Certificate, together with a copy of the
most recent unaudited consolidated and consolidating financial
statements of the Group ; and
(iii) As disclosed by such Compliance
Certificate, the financial information which accompanies same, and
such other information as may be available to lender, there shall
exist no Default or Unmatured Default.
(b) Additional Extension Options.
Borrower may request, at the same time that an Extension
Request is made pursuant to clauses 2.2(a)(i) or 2.2(c)(i) hereof, an
option to extend the Extended Termination Date for additional periods
of 364 days beyond the Initial Extension or any Subsequent Extension,
as hereinafter defined, subject to the following conditions:
(i) Contemporaneously with the submission of
the Initial Extension Notice pursuant to Subsection 2.2(a) above or
any submission of any Subsequent Extension Notice pursuant to
Subsection 2.2(c) below, Borrower may submit to Lender a written
request (the "Additional Extension Option Request"), which shall make
specific reference to this Subsection 2.2(b) and which shall specify
the amount of credit requested.
(ii) Within 60 days following receipt of the
Additional Extension Option Request, Lender shall notify Borrower in
writing whether or not Lender is willing, based on its normal credit
underwriting procedures, to offer the Additional Extension Option on
terms substantially similar to the terms hereof, subject to adjustment
of financial covenants as stated in such writing.
(iii) It is acknowledged and agreed that Lender
has no obligation to grant any Additional Extension Option Request.
(c) Exercise of Additional Extension Option.
If the Lender grants any Additional Extension Option Request
pursuant to 2.2(b) above, the Borrower may exercise such option to
extend ("Subsequent Extension") by satisfaction of the following
conditions:
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(i) Between 30 and 60 days prior to the Extended
Termination Date, Borrower shall submit to Lender a written notice of
its intent to exercise the Additional Extension option ("Subsequent
Extension Notice").
(ii) The Subsequent Extension Notice shall be accompanied
by a Compliance Certificate, together with the most recent unaudited
consolidated and consolidating financial statements of the Group.
(iii) Any amendments or modifications of this Agreement,
as appropriate to place in effect the conditions imposed by Lender
pursuant to Subsection 2.2(b)(ii), shall have been executed by
Borrower.
(iv) As disclosed by the subject Compliance Certificate
and the accompanying financial statements and other information as may
be available to Under, there shall exist no Default or Unmatured
Default under this Agreement, as modified pursuant to Subsection
2.2(b)(ii), above.
2.3. Facility 1. On any Business Day prior to the Termination Date
or any Extended Termination Date, so long as there exists no Default or
Unmatured Default hereunder, Borrower may automatically obtain Advances under
the Facility 1 to the extent of shortages in the Concentration Account and upon
verbal or written request of the Borrower. All Advances shall be recorded in
the Borrower's Loan Account for Facility 1 and deposited in the Concentration
Account.
2.4. Facility 2. (a) From the date hereof until the Termination
Date or any Extended Termination Date, so long as there exists no Default or
Unmatured Default hereunder, Advances shall be available under the Facility 2.
Advances may be obtained upon the submission of a written request specifying
the amount of such requested Advance. In addition to such written request,
Borrower shall furnish the Lender all information regarding the collateral
which Borrower proposes to serve as security for the Advance as may be
necessary for the Lender to obtain a security interest therein and to assess
the value thereof. If, in the exclusive and absolute judgment of the Lender,
the value of such proposed collateral is unacceptable to Lender to secure the
subject Advance, whether in terms of amount, type or otherwise, Lender may
require such additional collateral as it considers necessary to adequately
secure each such Advance. In order to allow Lender to assess the value of the
proposed collateral prior to each Advance and to allow time to prepare all
documentation necessary to create and perfect the Lender's security interest,
Borrower shall submit any request for an Advance under Facility 2 at least 30
days prior to the date on which such Advance is to be made. The collateral for
each Advance under Facility 2 shall secure all other Advances evidenced by the
Facility 2 Note. Borrower shall execute and deliver all documentation
reasonably required by Lender and its counsel to create and perfect the
required security interest in the collateral to secure such Advance. Any
out-of-pocket expenses incurred in connection with such documentation,
including, without limitation, reasonable fees and expenses of Lender's legal
counsel, recording taxes, filing fees, title insurance premiums, surveys, and
environmental reports shall be born by the Borrower.
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(b) Notwithstanding the fact that all Facility 2 Collateral
secures all Facility 2 Advances, the Lender acknowledges that to the extent
that each Facility 2 Advance relates to a specific project (the "Project
Advance"), the principal collateral to be offered as security for such Advance
will relate to such project (the "Project Collateral"); provided, however, that
such acknowledgement by Lender is made solely for convenience of reference to
and to describe a relationship between a particular Project Advance and the
principal collateral therefor and that nothing contained or implied in this
paragraph shall constitute an acceptance by lender, or create any obligation of
Lender to accept or release any collateral, the acceptance or release of
collateral by lender being subject to Lender's absolute and exclusive
determination of the acceptability thereof as expressly provided elsewhere in
this Agreement. Upon Borrower's written request and payment in full of the
applicable Project Advance, provided that no Event of Default or Unmatured
Default exists at such time and Lender determines in its exclusive and absolute
judgment that the value of all other Facility 2 Collateral is acceptable to
Lender in terms of amount, type and in all other respects to secure Facility 2,
Lender agrees to consider releasing the Project Collateral applicable to the
paid Project Advance from any and all mortgages, security agreements, pledge
agreements or other security documents.
2.5. Term Option. (a) From time to time, Borrower may convert any
portion of Facility 1 or Facility 2 to a Term Loan provided that (i) conversion
of Advances under Facility 1 to Term Loans shall be conditioned upon the
Borrower's granting to Lender a security interest in collateral acceptable to
Lender in its exclusive and absolute judgment in terms of amount, type and
otherwise to secure such Term Loans and (ii) all Advances under Facility 2
converted to Term Loans shall be secured by that portion of the Facility 2
Collateral given in connection with all such Facility 2 Advances being
converted.
(b) Each Term Loan shall be evidenced by a promissory note with
an adjustable interest rate equal to (i) fifty (50) basis points in excess of
the rate of interest applicable under the Facility I Note and the Facility 2
Note, as applicable, subject to periodic adjustments as provided therein, or
(ii) alternatively, at the Borrower's option, to be exercised at the time of
conversion, a fixed interest rate equivalent to such adjusted rate, determined
with reference to the "interest rate swap" market at such time. The maturity
and repayment terms of each Term Loan shall be subject to the mutual agreement
of Lender and Borrower, provided that each Term Loan (i) shall have a term of
two (2) years or such longer term as the parties may agree or such shorter term
as Borrower shall elect commencing on the Termination Date as it may be
extended from time to time, (ii) shall provide for equal payments of principal
plus interest based on an amortization schedule of no fewer than 120 months
with a balloon payment upon maturity, and (iii) if the applicable note provides
for an adjustable interest rate, shall provide for prepayment without premium
or penalty. Borrower and Lender shall, in connection with the conversion of any
Advance to a Term Loan, execute and deliver documents and instruments relating
thereto and the collateral therefor containing or incorporating such of the
covenants, events of default, representations and warranties of this Agreement
as may be applicable thereto, as well as such other terms, conditions and
assurances relating to the priority, preservation and perfection of Lender's
interest in the collateral for such Tenn Loan as Lender may require in
connection therewith.
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(c) Unless Lender and Borrower agree otherwise in writing, the
maximum amount of credit available under Facility I shall be reduced by the
amount of Facility 1 Advances converted to Term Loans, and the maximum amount
of credit available under Facility 2 shall be reduced by the amount of Facility
2 Advances converted to Tenn Loans. Subject to Section 2.5(d) below, as the
principal balance of any Term Loan is reduced, the maximum amount of credit
availability under Facility 1 or Facility 2, as applicable, shall be increased
by the amount of such reduction.
(d) A reduction of the principal balance of any Term Loan shall
not result in a corresponding increase in credit available under Facility 1 and
Facility 2 in the event that (i) the Borrower has paid a Term Loan in full and
has requested a corresponding reduction in credit availability under Facility 1
or Facility 2, as applicable and (ii) in accordance with Section 2.5(e) below,
the Lender has granted to Borrower a written release of the covenant set forth
in Section 5.13 hereof as it relates to the assets that were held by the Lender
as collateral with respect to any such Term Loan.
(e) Provided that no Default or Unmatured Event of Default then
exists, upon payment in full of any Term Loan and upon Borrower's request for a
corresponding reduction in the amount of credit available under Facility 1 or
Facility 2, as applicable, Lender agrees to release the collateral specifically
granted to secure such Tenn Loan (i) from any mortgage, security agreement or
other applicable collateral documents and (ii) from the covenant set forth in
Section 5.13 hereof. Thereafter, any liens created by the Borrower with respect
to such released assets shall be considered Permitted Liens for purposes of
this Credit Agreement.
(f) Provided that no Default or Unmatured Event of Default then
exists, upon payment in full of any Term Loan and a corresponding increase in
the amount of credit available under Facility 1 or Facility 2, as applicable,
Lender agrees to release the collateral specifically granted to secure such
Term Loan from any mortgage, security agreement or other applicable collateral
documents; provided that any assets so released will remain subject to the
covenants set forth in Section 5.13 hereof.
2.6. Non-use Fee. The Borrower agrees to pay to the Lender upon
submission of an invoice, a non-use fee of .25% (25 basis points) per annum on
the daily unborrowed portion of the Facility 2 and the Facility 1 from the
Closing Date to and including the Termination Date, payable in arrears on the
first day of each January, April, July and October hereafter and on the
Termination Date. All accrued non-use fees shall be payable on the effective
date of any termination of the obligations of the Lender to make Loans
hereunder.
2.7. Applicable Interest Rate. All Advances shall bear interest at
the rate set forth in the Notes, payable as provided therein.
2.8. Record of Advances, Payments, Etc. All Advances and payments
shall be debited or credited, as the case may be, to the appropriate Borrower's
Loan Account. Lender shall also record in the appropriate Borrower's account
all other charges, expenses, fees and other items
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properly chargeable to Borrower hereunder. The debit balance of each Borrower's
Loan Account shall reflect the amount of Borrower's indebtedness under the
Facility 2 and the Facility 1, as applicable, from time to time outstanding.
Not less than monthly, Lender shall furnish Borrower with statements of
Borrower's Loan Account with respect to the Facility 2 and the Facility 1
provided that such information will be available to Borrower daily by
telephone. Unless Borrower objects to the information contained in any such
statement within 30 days after the date thereof, such statement shall be
conclusive as to the information therein contained absent manifest error.
2.9. Procedure for Re-Advances, Payments, Etc. Proceeds of
Advances shall be readvanced to Group Members under the Group Member Notes.
Such re-advances shall be disbursed from the Concentration Account, and all
payments under the Group Member Notes shall be deposited in the Concentration
Account. At the close of each business day, any funds remaining in the
Concentration Account will be applied to Advances outstanding under Facility 1
or the Facility 2 in the following order, unless otherwise directed in writing
by the Borrower: first, to Advances outstanding under the Facility I and,
second, to Advances outstanding under the Facility 2. At the end of each
business day, any shortages in the Concentration Account will be covered by
Advances under the Facility 1. If at the end of any business day the funds in
the Concentration Account exceed sums outstanding under the Facility 1 and the
Facility 2, such excess amount shall be invested overnight in accordance with
instructions from Borrower.
2.10. Assignment of Group Member Notes. Each of the Group Member
Notes shall be assigned and pledged to Lender as collateral for the Facility I
or the Facility 2, as appropriate, pursuant to the Collateral Assignment pledge
agreements in substantially the form of Exhibit C hereto.
2.11. Letters of Credit. Provided that all conditions for Advances
shall have been and remain fully satisfied and Borrower otherwise would at such
time be eligible for an Advance, Lender shall issue upon Borrower's request and
for Borrower's account Letters of Credit, in form and substance acceptable to
Lender, with the aggregate face amount of Letters of Credit issued reducing the
credit availability under Facility 1 or Facility 2, as applicable. Lender's
obligation to issue any such Letter of Credit shall be conditioned upon (i)
Borrower's payment of a one percent (1%) Letter of Credit issuance fee and
Lender's other customary Letter of Credit charges and (ii) Borrower's execution
of such promissory notes, letter of credit applications, reimbursement
agreements, collateral documents and other documents as Lender shall request in
connection therewith, all in form and substance acceptable to Lender.
2.12. Partial Release of Negative Pledge. In the event that
Borrower receives a bona fide irrevocable commitment from a financial
institution other than Lender (the "Other Lender") for a secured loan with a
term longer than two (2) years or an amortization longer than 120 months,
provided that Borrower shall have first requested that Lender make such
financing available to Borrower on substantially the same terms and Lender
shall have declined to make such financing available to Borrower, Borrower
shall promptly present such commitment of Other Lender to Lender within three
(3) days of receipt thereof by Borrower, and Lender shall
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have the option in its sole discretion to: (1) provide financing to Borrower
under Facility 2 on substantially the same terms as the commitment of the Other
Lender, with a corresponding reduction in availability under Facility 2, (2)
consider reducing the credit available under Facility 2 by an amount equal to
the Other Lender's committed amount and releasing from the negative pledge
under Section 5.13 hereof the assets required as collateral under the Other
Lender's commitment to the extent required by such Other Lender in order to
receive a first priority security interest or mortgage, or (3) advise Borrower
that Lender will neither release such assets from Section 5.13 nor make such
financing available. Lender shall advise Borrower within 10 business days of
its receipt of the Other Lender's commitment whether Lender has elected option
(1), (2) or (3). In the event that Lender chooses option (2) above, the
mortgage or security interest of the other Lender on the assets released by
Lender will constitute a Permitted Lien.
ARTICLE III
CONDITIONS PRECEDENT
3.1. Initial Advance. The Lender shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Lender:
(i) A certificate of corporate existence and
qualification from the Secretary of State of Alabama
and a certificate of good standing from the
Department of Revenue of the State of Alabama.
(ii) Copies, certified by the Secretary or an Assistant
Secretary of the Borrower, of its certificate of
incorporation, together with all amendments thereto,
and by-laws and Board of Directors' resolutions (and
resolutions of other bodies, if any are deemed
necessary by counsel for Lender) authorizing the
execution of the Loan Documents.
(iii) An incumbency certificate, executed by the Secretary
or any Assistant Secretary of the Borrower, which
shall identify by name and title and bear the
signature of the officers of the Borrower authorized
to sign the Loan Documents and to make borrowings
hereunder, upon which certificate the Lender shall
be entitled to rely until informed in writing by the
Borrower of any change.
(iv) A certificate, signed by an Authorized Officer of
the Borrower, stating that on the initial Borrowing
Date no Default or Unmatured Default has occurred
and is continuing.
(v) A written opinion of the Borrower's counsel,
addressed to the Under in substantially the form of
Exhibit "D" hereto.
(vi) The Notes.
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(vii) A duly completed Compliance Certificate as of the
Closing Date.
(viii) Such other documents as Lender or its counsel may
have reasonably requested.
3.2. Each Advance. The Lender shall not be required to make any
Advance, unless on the applicable Borrowing Date.
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in
Article IV (other than Section 4.5) are true and
correct as of the date of such Advance.
Each request for an Advance shall constitute a representation
and warranty by the Borrower that the conditions contained in Section 3.2(i)
and (ii) have been satisfied. Lender may require a duly completed Compliance
Certificate as a condition to making an Advance.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
4.1. Corporate Existence and Standing. Each of the Borrower and
the Guarantor is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
4.2. Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan Documents
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally. The Guarantor has the
corporate power and authority and legal right to execute and deliver the
Guaranty and to perform its obligations thereunder. The execution and delivery
by the Guarantor of the Guaranty and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Guaranty constitutes legal, valid and binding obligations of the Guarantor,
enforceable against the Guarantor in accordance with its terms, except its
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
4.3. No Conflict, Government Consent. Neither the execution and
delivery by the
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Borrower of the Loan Documents, nor the consummation of the transactions
provided for therein, nor compliance with the provisions thereof, will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any Group Member or the Borrower's or any Group
Member's certificate or articles of incorporation or by-laws or the provisions
of any indenture, instrument or agreement to which the Borrower or any member
of the Group is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of the Borrower or
any member of the Group pursuant to the terms of any such indenture, instrument
or agreement, other than such violations, conflicts or defaults which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any Governmental Authority is required to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
4.4. Financial Statements. The December 31, 1993 consolidated
financial statements of the Group heretofore delivered to the Lender were
prepared in accordance with GAAP in effect on the date such statements were
prepared and present fairly the consolidated financial condition and operations
of the Group at such date.
4.5. Material Adverse Change. Since December 31, 1993, there has
been no change in the business, Property, financial condition or results of
operations of the Group which would have a Material Adverse Effect.
4.6. Taxes. The Group has filed all United States federal tax
returns and all other tax returns required to be filed and have paid all taxes
due pursuant to said returns or pursuant to any assessment received by the
Group or any , member of the Group except such taxes, if any, as are being
contested in good faith and as to which, in the good faith judgment of the
Borrower, adequate reserves have been provided and except for those returns
with respect to which the failure to file would have no material adverse
effect. The charges, accruals and reserves on the books of any member of the
Group with respect to any taxes or other governmental charges are adequate in
the good faith judgment of the Borrower.
4.7. Litigation and Guaranteed Obligations. There is no
litigation, arbitration, governmental investigation, pending or inquiry pending
or, to the knowledge of any of their officers, threatened against or affecting
any member of the Group which could reasonably be expected to have a Material
Adverse Effect. The Borrower has no material Guaranteed Obligations not
provided for or disclosed in the financial statements referred to in Section
4.4.
4.8. Group. Schedule "1" hereto contains an accurate list of all
of the now existing members of the Group, setting forth their respective
jurisdictions of incorporation and the percentage of their respective capital
stock owned by the Borrower or the Guarantor. All the issued and outstanding
shares of capital stock of such Subsidiaries have been duly authorized and
issued and are fully paid and non-assessable.
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4.9. ERISA. Each Plan complies in all material respects with all
applicable requirements of law and regulations, and no ERISA Event has occurred
or is reasonably expected to occur with respect to any Plan. No Insufficiency
exists with respect to any Plan. Neither the Borrower nor any ERISA Affiliate
is required to contribute to or has ever had a liability to a Multiemployer
Plan.
4.10. Accuracy of Information. Neither any verbal statements made
by Borrower's President or Secretary/Treasurer nor any written information,
exhibit or report furnished by or on behalf of the Borrower or any member of
the Group to the Lender in connection with the negotiation of, or compliance
with, the Loan Documents contained any material misstatement of fact or
purposely omitted to state a material fact.
4.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Group that are subject to any
limitation on sale, pledge or other restriction hereunder.
4.12. Material Agreements. No member of the Group is a party to any
agreement or instrument or subject to any charter or other corporate
restriction that could reasonably be expected to have a Material Adverse
Effect. No member of the Group is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement to which it is a party, which default could reasonably be expected to
have a Material Adverse Effect. No member of the Group is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument evidencing or governing
Indebtedness.
4.13. Compliance With Laws. Each member of the Group has complied
with all applicable statutes, rules, regulations, orders and restrictions of
any Governmental Authority having jurisdiction over the conduct of their
respective businesses or the ownership of its respective Property, except where
the failure so to comply could not reasonably be expected to have a Material
Adverse Effect. No member of the Group has received any notice to the effect
that its operations are not in compliance with any of the requirements of
applicable federal, state and local environmental, health and safety statutes
and regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which noncompliance or
remedial action could reasonably be expected to have a Material Adverse Effect.
4.14. Investment Company Act. No member of the Group is an
"investment company" nor a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.15. Public Utility Holding Company Act. The Group is exempt from
the requirements of the Public Utility Holding Company Act of 1935, as amended.
4.16. Licenses. Each member of the Group holds all necessary
Licenses, and is
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authorized to transact business, in each jurisdiction wherein it transacts any
business. No such License is the subject of a proceeding for suspension or
revocation, there is no sustainable basis for such suspension or revocation,
and to the Borrower's knowledge no such suspension or revocation has been
threatened by any Governmental Authority.
4.17. Solvency. The total assets of the Group exceed its total
liabilities, and the Group is capable of paying its debts as and when they
become due.
ARTICLE V
COVENANTS
During the term of this Agreement, unless the Lender shall otherwise
consent in writing:
5.1. Financial Reporting. The Group will maintain a system of
accounting established and administered in accordance with GAAP and furnish to
the Lender:
(a) Annual Reports. Within one hundred twenty (120) days
after the close of each fiscal year, the audited consolidated financial
statements of the Group as at the end of such year, setting forth the audited
consolidated balance sheet, as at the end of such year, and the audited
consolidated statement of income, statement of cash flows and statement of
retained earnings for such year, setting forth in each case in comparative form
the corresponding figures for the preceding fiscal year, accompanied by the
report of the Group's independent certified public accountants and by an
unaudited consolidating balance sheet and unaudited consolidating statement of'
income of the Group duly certified by the Guarantor's chief financial officer
as being correct reflections of the information used for the audited
consolidated financial statements. The report pertaining to the financial
statements required by this Section shall be the unqualified opinion of a firm
of independent certified public accountants of national standing or of a firm
of independent certified public accountants otherwise acceptable to the Lender
(provided that the unqualified status of such opinion may be waived at the
Under's discretion upon written request of Borrower); and
(b) Quarterly and Year to Date Reports. Within sixty
(60) days after the end of each calendar quarter and fiscal Year, the unaudited
consolidated and consolidating balance sheets of the Group as of the end of
such quarter or fiscal year and the related unaudited consolidated and
consolidating statements of income and the consolidated statement of cash flows
for such quarter and fiscal year to date, all certified by an Authorized
Officer.
(c) Together with the financial statements required
hereunder, a compliance certificate signed by an Authorized Officer of the
Borrower showing the calculations necessary to determine compliance with the
financial covenants contained herein and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists, stating the
nature and status thereof.
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29
(d) In the event an Insufficiency exists, within 270
days after the close of each fiscal year, a statement of the Insufficiency
with respect to each Plan, certified as correct by an actuary enrolled under
ERISA.
(e) Promptly upon the request of the Lender, copies of
all the most recent material reports and notices in connection with Plans that
the Borrower or any Group member is required to file under ERISA with the
Internal Revenue Service or the PBGC or the U.S. Department of Labor, or which
the Borrower or any Subsidiary receives from such Governmental Authorities.
(f) As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of any notice alleging any violation of
any federal, state or local environmental, health or safety law or regulation
by any member of the Group, which could reasonably be expected to have a
Material Adverse Effect.
(g) Promptly upon the filing thereof, copies of all
Forms 10Q, 10K and 8K (other than earnings press releases) and any registration
statements that any member of the Group files with the Securities and Exchange
Commission.
(h) Such other information (including, without
limitation, non-financial information) as the Lender may from time to time
reasonably request.
5.2. Use of Proceeds. The Borrower will, and will cause each
member of the Group to, use the proceeds of the Advances only for corporate
purposes of the Group. The Borrower will not, nor will it permit any member of
the Group to, use any of the proceeds of the Advances to purchase or carry any
"margin stock" (as defined in Regulation U).
5.3. Notice of Certain Events. The Borrower will give prompt
notice in writing to the Lender of (i) the occurrence of any Default or
Unmatured Default and of any other development, financial or otherwise, that
could reasonably be expected to have a Material Adverse Effect, (ii) the
receipt of any notice from any Governmental Authority of the expiration without
renewal, revocation or suspension of, or the institution of any proceedings to
revoke or suspend, any License now or hereafter held by any Group member which
is required to conduct business in compliance with all applicable laws and
regulations, other than such expiration, revocation or suspension that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect, (iii) the receipt of any notice from any Governmental
Authority of the institution of any disciplinary proceedings against or with
respect to any Subsidiary, or the issuance of any order, the taking of any
action or any request for an extraordinary audit for cause by any Governmental
Authority which, if adversely determined, could reasonably be expected to have
a Material Adverse Effect or (iv) any judicial or administrative order limiting
or controlling the business of any Subsidiary which has been issued or adopted
and which could reasonably be expected to have a Material Adverse Effect.
5.4. Conduct of Business. The Borrower will do, and will cause
each member of the
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Group to do, all things necessary to remain duly incorporated, validly existing
and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all-requisite authority to conduct its business in
each jurisdiction in which its business is conducted.
5.5. Taxes. The Borrower will pay, and will cause each member of
the Group to pay, when due all taxes, assessments and governmental charges and
levies upon it or its income, profits or Property, except those that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
5.6. Insurance. The Borrower will maintain, and will cause each
member of the Group to maintain, with financially sound and reputable insurance
companies insurance on all or substantially all of its Property in such amounts
and covering such risks, and with such risk retention or self-insurance, as is
consistent with sound business practice for Persons in substantially the same
industry as the Borrower or such member of the Group, and the Borrower will
furnish to Lender upon request full information as to the insurance carried and
any applicable risk retention or self-insurance.
5.7. Compliance with Laws. The Borrower will comply, and will
cause each member of the Group to comply, with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject, except where the failure to so comply could not reasonably be expected
to have a Material Adverse Effect.
5.8. Maintenance of Properties. The Borrower will do, and will
cause each member of the Group to do, all things reasonably necessary to
maintain, preserve, protect and keep its Property in good repair, working order
and condition and make all reasonably necessary repairs, renewals and
replacements for the conduct of its business.
5.9. Inspection. The Borrower will permit, and will cause each
member of the Group to permit, the Lender to inspect any of the Property,
corporate books and financial records of the Borrower and each member of the
Group, to examine and make copies of the books or accounts and other financial
records of the Borrower and each member of the Group, and to discuss the
affairs, finances and accounts of the Borrower and each member of the Group
with, and to be advised as to the same by, their respective Presidents and
financial officers at such reasonable times and intervals as the Lender may
designate.
5.10. Merger. The Borrower will not, nor will it permit any member
of the Group to, merge or consolidate with or into any other Person, except
that (i) a member of the Group may merge with the Borrower, the Guarantor or a
Wholly-Owned Subsidiary, and (ii) the Borrower and any member of the Group may
merge with any other Person provided that (a) the Borrower or such member of
the Group shall be the continuing or surviving corporation and, after giving
effect to such merger, no Default shall exist or (b) the surviving
corporation's tangible net worth shall exceed that of the merging corporation.
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5.11. Sale of Assets. The Borrower will not, nor will it permit any
member of the Group to, lease, sell or otherwise dispose of all or a
Substantial Portion of the Property of the Group to any other Person in any
single transaction or series of transactions within any 12-month period, except
for the sale of assets in the ordinary course of business or with the prior
written consent of Lender, not to be unreasonably withheld).
5.12. Sale and Leaseback. The Borrower will not, nor will it permit
any member of the Group in any single transaction or series of transactions
within any 12 month period to, sell or transfer a Substantial Portion of its
Property in order concurrently or subsequently to lease as lessee such or
similar Property, other than in the ordinary course of business.
5.13. Liens (Negative Pledge). The Borrower will not create, incur
or suffer to exist, nor shall Borrower allow any member of the Group to create,
incur or suffer to exist, any Lien in, of or on any of their Properties except
for Permitted Liens.
5.14. Consolidated Tangible Net Worth. The Group will maintain at
all times Consolidated Tangible Net Worth equal to not less than $17,385,000.
5.15. Ratio of Consolidated Indebtedness to Consolidated Tangible
Net Worth. The Group will maintain at all times a ratio of Consolidated
Indebtedness to Consolidated Tangible Net Worth of not more than 2.9 to 1.0.
5.16. Interest Coverage Ratio. The Group shall maintain, on a
rolling four-quarter average basis, a ratio of Consolidated Cash Flow plus
Consolidated Interest Expense to Consolidated Interest Expense of not less than
2.0 to 1.0.
5.17. Ratio of Cash Flow to Current Maturities. The Group shall
maintain, on a rolling four-quarter average basis, a ratio of Consolidated Cash
Flow to Consolidated Current Maturities of not less than 1.75 to 1.0. For
purposes of the foregoing none of the Advances to be made hereunder shall be
considered "Current Maturities" (except for any principal portion of any
Advance converted to a term loan and payable during the then current Fiscal
Year).
5.18. Earnings. The Group shall have a minimum annual Consolidated
Net Income after taxes for each fiscal year, beginning with the fiscal year
ending December 31, 1995, of at least $2,500,000.
5.19. Affiliates. The Group will not enter, and will not permit any
member of the Group to enter, into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payments or transfer to, any Affiliate (other than a Wholly-Owned Subsidiary)
except for (i) the loans by the Borrower to the members of the Group (ii) any
such transactions, payments or transfers with or to such Affiliates as are made
in the ordinary course of business and pursuant to the reasonable requirements
of the Borrower's, the Guarantor's or such Subsidiary's business and upon fair
and reasonable terms no less favorable to the Borrower, the Guarantor or such
Subsidiary than the Borrower, the Guarantor or such
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32
Subsidiary would obtain in a comparable arms-length transaction and (iii) any
such other transactions, payments or transfers with or to such Affiliates as
could not reasonably be expected to have a Material Adverse Effect.
5.20. Compliance with ERISA. The Group will not (i) terminate, or
permit any ERISA Affiliate to terminate, any Plan so as to result in any
material liability of the Borrower or an ERISA Affiliate to the PBGC; (ii)
permit to exist any occurrence of any Reportable Event (as defined in Title IV
of ERISA), or any other event or condition, that presents a material risk of
such a termination by the PBGC of any Plan so as to result in any material
liability of the Borrower or any ERISA Affiliate to the PBGC; (iii) be an
"employer" (as defined in Section 3(5) of ERISA), or permit any ERISA Affiliate
to be an "employer", required to contribute to any Multiemployer Plan; or (iv)
fail to comply in any material respect with any laws or regulations applicable
to any Plan.
ARTICLE VI
DEFAULTS
The occurrence of any one or more of the following events shall constitute a
Default:
6.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any member of the Group to the Lender under or in
connection with this Agreement, any Loan or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
false on the date as of which made.
6.2. Nonpayment of principal of any Loan when due, or nonpayment
of interest upon any Loan or of any commitment fee or non-payment of any other
Obligation under any of the Loan Documents within 10 days after written notice
from Lender to Borrower that such Obligation is due.
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33
6.3. The breach of any of the terms or provisions of Section 5.2,
5.3, 5.10, 5.11, 5,12, 5.13, 5.14, 5.15, 5.16, 5.17 or 5.18 and, in the case of
a breach of the provisions of Section 5.14 or 5.15, the continuance of such
breach for a period of 15 days.
6.4. The breach (other than a breach that constitutes a Default
under any Section of this Article VI other than this Section 6.4) of any of
the terms or provisions of this Agreement, and the continuance of such breach
for a period of 30 days after written notice thereof from Lender to Borrower.
6.5. Failure of the Borrower or any member of the Group to pay
when due any Indebtedness, if the aggregate amount of all such Indebtedness
involved exceeds $1,000,000; or any Indebtedness of the Borrower or any
Subsidiary shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the stated maturity
thereof due to any failure to pay any amounts payable in respect of
Indebtedness, if the aggregate amount of all such accelerated Indebtedness
involved exceeds $1,000,000; or any Indebtedness of the Borrower or any
Subsidiary shall be declared to be due and payable or required to be pre-paid
(other than by a regularly scheduled payment) prior to the stated maturity date
thereof as a result of the occurrence of any default arising from any
circumstance or condition other than the failure to pay, if the aggregate
amount of Indebtedness involved exceeds $1,000,000, and such Indebtedness shall
not be paid in full within 3 days of such acceleration; or the Borrower or any
of its Subsidiaries shall not pay, or admit in writing its inability to pay,
its debts generally as they become due.
6.6. The Borrower or any member of the Group shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws
as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of the Property of the Group, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws as now
or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding, filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 6.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section
6.7.
6.7. Without the application, approval or consent of the Borrower
or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its Subsidiaries
or any Substantial Portion of its Property, or a proceeding described in
Section 6.6(iv) shall be instituted against the Borrower or any of its
Subsidiaries, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 consecutive days.
6.8. Any Governmental Authority shall condemn, seize or otherwise
appropriate, or
27
34
take custody or control of (each a "Condemnation"), all or any portion of the
Property of the Borrower or any of its Subsidiaries which, when taken together
with all other Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated or taken custody or control of, during the twelve-month
period ending with the month in which any such Condemnation occurs, constitutes
a Substantial Portion.
6.9. The Borrower or the Guarantor shall fail within 45 days to
pay, bond or otherwise discharge any judgment or order for the payment of money
in excess of $1,000,000, which is not covered by insurance or stayed on appeal
or otherwise being appropriately contested in good faith.
6.10. (i) Any ERISA Event shall have occurred.
6.11. Any Governmental Authority having jurisdiction shall prohibit
or limit the payment or distribution to the Borrower of dividends, principal or
interest payments or management fees, if such prohibition or limitation could
reasonably be expected to have a Material Adverse Effect.
6.12. The Borrower or any member of the Group shall be the subject
of any proceedings or governmental investigation of any toxic or hazardous
waste or substance into the environment, or any violation of any federal, state
or local environmental, health or safety law or regulation, which, in either
case, could reasonably be expected to have a Material Adverse Effect.
6.13. Any Change in Control shall occur.
ARTICLE VII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
7.1. Acceleration. If any Default described in Section 6.6 or 6.7
occurs, the obligations of the Lender to make Loans hereunder shall
automatically terminate, and the Obligations shall immediately become due and
payable without any election or action on the part of the Lender. If any other
Default occurs, Lender may, without notice to the Borrower, terminate or
suspend the obligations of the Lender to make Loans hereunder, or declare all
the Obligations to be due and payable, or both, whereupon all the Obligations
shall become immediately due and payable, without presentment, demand or
protest all of which the Borrower hereby expressly waives.
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35
7.2. Preservation of Rights. No delay or omission of the Lender to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lender, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative, and all shall be available to the Lender until
the Obligations have been paid in full.
ARTICLE VIII
GENERAL PROVISIONS
8.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery
of the Notes and the making of the Loans.
8.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, Lender shall not be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulations.
8.3. Headings. Section headings in the Loan Documents are for
convenience of reference only and shall not govern the interpretation of any of
the provisions of the Loan Documents.
8.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding between the Borrower and the Lender and supersede
all prior agreements and understandings among the Borrower and the Lender
relating to the subject matter thereof.
8.5. Benefits of this Agreement. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
8.6. Expenses, Indemnification. The Borrower shall reimburse the
Lender for any costs and out-of-pocket expenses (including 90% of attorneys'
fees of attorneys for the Lender, not to exceed $15,000) paid or incurred by
the Lender in connection with the preparation, negotiation, execution, delivery
and review of the Loan Documents. The Borrower also agrees to reimburse the
Lender for any out-of-pocket expenses (including reasonable attorneys' fees of
attorneys for the Lender) paid or incurred by the Lender in connection with the
collection and enforcement of the Loan Documents. The obligations of the
Borrower under this Section 8.6 shall survive the termination of this
Agreement.
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36
8.7. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
8.8. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
8.9. Nonliability of Lender. The relationship between the Borrower
and the Lender shall be solely that of borrower and lender. Lender shall not
have any fiduciary responsibilities to the Borrower. Lender undertakes no
responsibility to the Borrower to review or inform the Borrower of any matter
in connection with any phase of the Borrower's business or operations.
8.10. Choice of Law. The Loan Documents shall be construed in
accordance with the internal laws (and not the law of conflicts) of the State
of Alabama.
8.11. Setoff. In addition to, and without limitation of, any rights
of the Lender under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by Lender to or
for the credit or account of the Borrower may be offset and applied toward the
payment of the Obligations owing to Lender.
ARTICLE IX
NOTICES
9.1. Giving Notice. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Documents shall be
in writing and shall be delivered or mailed (or in the case of electronic
communication, delivered by telecopy with copy by U.S. mail or courier)
addressed to such party at its address set forth below its signature hereto or
at such other address as may be designated by such party in a notice to the
other parties. Any notice, if personally delivered or mailed (properly
addressed with postage prepaid), shall be deemed given when received; any
notice, if transmitted by telecopy shall be deemed given when transmitted
(receipt confirmed by telephone).
9.2. Change of Address. The Borrower and the Lender may change the
address for service of notice upon it by a notice in writing to the other
parties hereto.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement on
the day and year first above written.
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BORROWER:
ALATENN CREDIT CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Print Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Secretary/Treasurer
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER:
COMPASS BANK
BY: /s/ W. ▇▇▇ ▇▇▇▇▇
----------------------------------------
Print Name: W. ▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Vice President
-------------------------------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Commercial Loan Department
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
31
38
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS
THIS LOAN MODIFICATION AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS (this
"Agreement") is being entered into as of the 26th day of January, 1996, by and
between COMPASS BANK, an Alabama state banking corporation ("Bank") and ALATENN
CREDIT CORP., a corporation (the "Borrower").
P R E A M B L E
The Borrower is the maker of a certain $10,000,000.00 Master Revolving
Promissory Note (Facility 1) dated as of January 20, 1995 (the "Facility 1
Note") and a certain $10,000,000 Master Revolving Promissory Note (Facility 2)
dated as of January 20, 1995 (the "Facility 2 Note", or together with the
Facility 1 Note, the "Notes"), which together evidence a certain $20,000,000.00
loan from the Bank to the Borrower (the "Loan"). The Loan was extended pursuant
to a certain Credit Agreement by and between the Bank and the Borrower dated as
of January 20, 1995 (the "Credit Agreement"), and is secured by, among other
things, that certain Collateral Assignment and Pledge of Master Promissory
Notes from Borrower to Bank dated as of January 20, 1995 and is guaranteed by
the Continuing Guaranty of AlaTenn Resources, Inc. (the "Guarantor"). The Bank
and the Borrower have agreed to renew and modify the Loan, and to amend the
documents and instruments evidencing, securing, relating to, guaranteeing or
executed or delivered in connection with the Loan (collectively the "Loan
Documents").
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, the mutual
agreements of the parties as set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and to induce Bank to renew and modify the Loan, the parties, intending to be
legally bound hereby, agree as follows:
39
A. Modification of Loan. The maturity date of the Loan shall be
extended to January 20, 1997.
B. Amendment of Credit Agreement. The Credit Agreement shall be
and the same hereby is amended as follows:
(i) By deleting from Section 5.14 thereof the amount
"$17,385,000" and inserting in place thereof the
amount "$10,000,000".
(ii) By adding a new Section 5.14A which shall read as
follows:
"5.14A Consolidated Net Worth. The Group will
maintain at all times a Consolidated Net Worth equal
to not less than $27,110,000, with Consolidated Net
Worth being defined as the amount of consolidated
net worth of the Group as shown on the Group's
consolidated financial statements, determined in
accordance with GAAP."
(iii) By deleting from Section 5.15 the ratio "2.9:1" and
inserting in place thereof the ratio "3.7:1".
(iv) By adding a new Section 5.15A which shall read as
follows:
"5.15A Ratio of Consolidated Indebtedness to
Consolidated Net Worth. The Group will maintain at
all times a ratio of Consolidated Indebtedness to
Consolidated Net Worth (as defined in Section 5.14A
hereof) of not more than 1.35:1."
C. Amendment of Notes. The Notes shall be and the same hereby
are amended by changing the maturity dates thereof to January 20, 1997.
D. Effect on Loan Documents. Each of the Loan Documents shall be
deemed amended as set forth hereinabove and to the extent necessary to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, each reference in the Loan Documents to the "Notes", the "Credit
Agreement", or any other "Loan Documents" shall be deemed to be references to
said documents, as amended hereby. Except as is expressly set forth herein, all
of the Loan Documents shall remain in full force and effect in accordance with
their respective terms and
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shall continue to evidence, secure, guarantee or relate to, as the case may be,
the Loan.
E. Representations and Warranties. Each representation and
warranty contained in the Loan Documents is hereby reaffirmed as of the date
hereof. The Borrower hereby represents, warrants and certifies to Bank that no
Event of Default nor any condition or event that with notice or lapse of time
or both would constitute an Event of Default, has occurred and is continuing
under any of the Loan Documents or the Loan, and that Borrower has no offsets
or claims against Bank arising under, related to, or connected with the Loan,
the Credit Agreement or any of the other Loan Documents.
F. Additional Documentation; Expenses. Borrower shall provide to
Bank a certified resolution of the Borrower properly authorizing the
transactions contemplated hereby and the execution of this Agreement and all
other documents and instruments being executed in connection herewith and all
other documents and instruments required by Bank, all in form and substance
satisfactory to Bank. Borrower shall pay any recording and all other expenses
incurred by Bank and Borrower in connection with the modification of the Loan
and any other transactions contemplated hereby, including without limitation,
title or other insurance premiums, survey costs, legal expenses, recording fees
and taxes.
G. Execution by Guarantor. Guarantor has executed this Agreement
to evidence its consent to the modification and amendments as described herein,
and to acknowledge the continuing effect of its Guaranty and the obligations
contained therein.
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IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed as of the date first set forth above.
BORROWER:
ALATENN CREDIT CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Its President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Its: Secretary
BANK:
WITNESS: COMPASS BANK
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- ---------------------------------------
Its: Officer
GUARANTOR:
ALATENN RESOURCES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
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42
STATE OF ALABAMA )
COUNTY COLBERT )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, whose name as Secretary of ALATENN
CREDIT CORP., a 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 the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 26th day of Jan., 1996.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ )
COUNTY COLBERT )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as Chairman, President
and CEO of ALATENN CREDIT CORP., a 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 the instrument, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 26th day of Jan., 1996.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: 03-08-99
5
43
STATE OF ALABAMA )
COUNTY LAUDERDALE )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇ ▇▇▇▇▇▇▇▇, whose name as Loan Officer of COMPASS
BANK, an Alabama banking 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 the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 26th day of January, 1996.
/s/ ▇▇▇▇▇ ▇. Hortre
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ )
COUNTY OF COLBERT )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as Chairman, President
and CEO of ALATENN RESOURCES, INC., a ___________ 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 the instrument, he, as such officer and
with full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 30th day of Sept., 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: 3/8/99
6
44
LOAN MODIFICATION AGREEMENT AND
AMENDMENT TO LOAN DOCUMENTS
THIS LOAN MODIFICATION AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS (this
"Agreement") is being entered into as of the 10th day of February 1997, by and
between COMPASS BANK, an Alabama state banking corporation ("Bank") and ALATENN
CREDIT CORP., a corporation (the "Borrower") and ATRION CORPORATION, a
corporation formerly known as "AlaTenn Resources, Inc." (the "Guarantor").
P R E A M B L E
The Borrower is the maker of a certain $10,000,000.00 Master Revolving
Promissory Note (Facility 1) dated as of January 20, 1995 (as amended, the
"Facility 1 Note") and a certain $10,000,000 Master Revolving Promissory Note
(Facility 2) dated as of January 20, 1995 (as amended, the "Facility 2 Note",
or together with the Facility 1 Note, the "Notes"), which together evidence a
certain $20,000,000.00 loan from the Bank to the Borrower (the "Loan"). The
Loan was extended pursuant to a certain Credit Agreement by and between the
Bank and the Borrower dated as of January 20, 1995 (as amended, the "Credit
Agreement"), and is secured by, among other things, that certain Collateral
Assignment and Pledge of Master Promissory Notes from Borrower to Bank dated as
of January 20, 1995 and is guaranteed by the Guarantor. The Bank and the
Borrower have agreed to renew and modify the Loan, and to amend the documents
and instruments evidencing, securing, relating to, guaranteeing or executed or
delivered in connection with the Loan (collectively, as heretofore amended, the
"Loan Documents").
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, the mutual
agreements of the parties as set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and to induce Bank to renew and modify the Loan, the parties, intending to be
legally bound hereby, agree as follows:
45
A. Modification of Loan. The maturity date of the Loan shall be
extended to April 20, 1997.
B. Amendment of Credit Agreement. The Credit Agreement shall be
and the same hereby is amended as follows:
(i) By revising Section 5.13 thereof to read in its
entirety as follows:
5.13 Liens (Negative Pledge). The Borrower will
not create, incur or suffer to exist, nor shall
Borrower allow any member of the Group to create,
incur or suffer to exist, any Lien in, of or upon
any of their Properties except for Permitted Liens
and except for margin stock (as defined in
Regulation U of the Federal Reserve Board) owned by
Borrower or any Group member.
(ii) By revising Section 5.2 to read in its entirety as
follows:
5.2 Use of Proceeds. The Borrower will, and
will cause each member of the Group to, use the
proceeds of the Advances only for corporate purposes
of the Group. The Borrower will not, nor will it
permit any member of the Group to, use any of the
proceeds of the Advances, except for up to
$5,000,000.00 of the proceeds of Facility 1, to
purchase or carry any "margin stock" (as defined in
Regulation U of the Federal Reserve Board).
(iii) By adding a new Section 5.2A which shall read in its
entirety as follows:
"5.2A Right of First Refusal. Lender shall have and
is hereby granted a right of first refusal on any
loan or financial arrangement contemplated by
Borrower or any Group member which would provide
financing secured by any margin stock (as defined by
the Federal Reserve Board) owned by Borrower or any
Group member or by a Permitted Lien of the type
described in Paragraph (g) of the definition thereof
set forth in Article I hereof, on the same terms and
conditions as offered by any reputable financial
institution in any bona fide written commitment
delivered to Borrower; provided, however, that
Lender shall have no obligation to make any such
financing available to Borrower or any Group member.
Borrower shall notify Lender in writing within five
(5) business days of its receipt of any such
2
46
commitment from another financial institution,
accompanied by a copy of such commitment. Lender
shall within twenty (20) business days of its
receipt of such notice and commitment, advise
Borrower whether Lender will make financing
available to Lender on the terms and conditions
contained in the commitment. In the event that
Lender fails to reply within such twenty (20)
business day period or, if before the expiration of
such period, Lender shall notify Borrower of
Lender's election not to make such financing
available, Borrower shall be entitled to proceed to
close such financing with such other financial
institution; provided, however, that Borrower's
entering into such financing with such other
financial institution does not otherwise violate any
of the other terms of this Agreement.
(iv) By adding a new Section 5.16A which shall read in
its entirety as follows:
5.16A Funded Debt. The Borrower shall not, nor will
it permit any member of the Group to, incur or be
liable in any manner for any Indebtedness,
obligation or liability in excess of an aggregate of
$1,000,000.00 to any one or more financial
institutions or other lenders other than existing
Indebtedness reflected on the financial statements
of the Group as at September 30, 1996, and the
Indebtedness to Bank under Facility 1 and Facility 2
hereunder and Indebtedness secured by Permitted
Liens of the types described in paragraphs (g) and
(h) of the definition thereof set forth in Article I
hereof.
(v) By deleting from Section 5.14A the amount
"$27,1110,000" and inserting in place thereof the
amount "$29,297,000."
(vi) By deleting from Section 5.14 thereof the amount
"$10,000,000" and inserting in place thereof the
amount "$13,1197,000."
(vii) By adding a new Section 5.16B which shall read in
its entirety as follows:
5.16B Minimum Annual Increase in Net Worth. The
Group's Consolidated Net Worth (as defined under
Section 5.14A above) in each fiscal year, beginning
with fiscal year 1997, shall increase by $1,000,000
over the Group's
3
47
Consolidated Net Worth for the immediately preceding
fiscal year.
(viii) By deleting from Section 2.12 thereof the words "10
business days" and inserting in place thereof the
words "20 business days."
C. Amendment of Notes. The Notes shall be and the same hereby
are amended by changing the maturity dates thereof to April 20, 1997.
D. Effect on Loan Documents. Each of the Loan Documents shall be
deemed amended as set forth hereinabove and to the extent necessary to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, each reference in the Loan Documents to the "Notes", the "Credit
Agreement", or any other "Loan Documents" shall be deemed to be references to
said documents, as amended hereby. Except as is expressly set forth herein, all
of the Loan Documents shall remain in full force and effect in accordance with
their respective terms and shall continue to evidence, secure, guarantee or
relate to, as the case may be, the Loan.
E. Representations and Warranties. Each representation and
warranty contained in the Loan Documents is hereby reaffirmed as of the date
hereof. The Borrower hereby represents, warrants and certifies to Bank that no
Event of Default , nor any condition or event that with notice or lapse of time
or both would constitute an Event of Default, has occurred and is continuing
under any of the Loan Documents or the Loan, and that Borrower has no offsets
or claims against Bank arising under, related to, or connected with the Loan,
the Credit Agreement or any of the other Loan Documents.
F. Additional Documentation; Expenses. Borrower shall provide to
Bank a certified resolution of the Borrower properly authorizing the
transactions contemplated hereby and the execution of this Agreement and all
other documents and instruments being executed in connection herewith and all
other documents and instruments required by Bank, all in form and substance
satisfactory to Bank. Borrower shall pay any recording and all other expenses
incurred by Bank and Borrower in connection with the modification of the Loan
and any other transactions contemplated hereby,
4
48
including without limitation, title or other insurance premiums, survey costs,
legal expenses, recording fees and taxes.
G. Execution by Guarantor. Guarantor has executed this Agreement
to evidence its consent to the modification and amendments as described herein,
and to acknowledge the continuing effect of its Guaranty and the obligations
contained therein.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed as of the date first set forth above.
BORROWER:
ALATENN CREDIT CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its: President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Its: Secretary
GUARANTOR:
ATRION CORPORATION
(f/k/a ALATENN RESOURCES, Inc.)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its: President
BANK:
WITNESS: COMPASS BANK
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------- ------------------------------------
Its: President
5
49
STATE OF ALABAMA )
COUNTY OF COLBERT )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as President of ALATENN
CREDIT CORP., a 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 the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 10th day of February, 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL) My commission expires: 3/8/99
STATE OF ALABAMA )
COUNTY OF COLBERT )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, whose name as Secretary of
ALATENN CREDIT CORP., a 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 the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 10th day of February, 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: 3/8/99
6
50
STATE OF ALABAMA )
COUNTY OF COLBERT )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as President of ATRION
CORPORATION, a ______________ 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 the instrument, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 10th day of February, 1997.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: 3/8/99
STATE OF ALABAMA )
COUNTY OF LAUDERDALE )
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇ ▇▇▇▇▇▇▇▇, whose name an Officer of COMPASS BANK,
an Alabama banking 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 the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 10th day of February, 1997.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires:
------------------
7
51
LOAN ASSUMPTION AND MODIFICATION AGREEMENT
THIS LOAN ASSUMPTION AND MODIFICATION AGREEMENT (this "Agreement") is
being entered into as of the 30th day of September, 1997, by and between
COMPASS BANK, an Alabama state banking corporation ("Bank"), and ALATENN CREDIT
CORP., a corporation ("AlaTenn Credit"), and ATRION CORPORATION, a corporation
formerly known as "AlaTenn Resources, Inc." ("Atrion").
P R E A M B L E
AlaTenn Credit is the maker of and the original borrower under a
certain $10,000,000.00 Master Revolving Promissory Note (Facility 1) dated as
of January 20, 1995 (as amended, the "Facility 1 Note") and a certain
$10,000,000 Master Revolving Promissory Note (Facility 2) dated as of January
20, 1995 (as amended, the "Facility 2 Note", or together with the Facility 1
Note, the "Notes"), which together evidence a certain $20,000,000.00 credit
facility from the Bank to AlaTenn Credit (the "Loan"). As of the date hereof,
the outstanding balance under the Loan is ZERO AND NO/100THS DOLLARS ($0.00).
The Loan was made available to AlaTenn Credit by the Bank pursuant to a certain
Credit Agreement by and between the Bank and AlaTenn Credit dated as of January
20, 1995, as the same heretofore has been amended, including without limitation
by that certain Loan Modification Agreement and Amendment to Loan Documents
dated as of January 26, 1996 and by that certain Loan Modification Agreement
and Amendment to Loan Documents dated as of February 10, 1997 (as amended, the
"Credit Agreement"). The Loan is secured by, among other things, that certain
Collateral Assignment and Pledge of Master Promissory Notes from AlaTenn Credit
to Bank dated as of January 20, 1995 (the "Collateral Assignment"), and is
guaranteed by Atrion pursuant to that certain Continuing Guaranty (Unlimited)
of Atrion dated January 29, 1995 (the "Atrion Guaranty").
52
Several of the subsidiaries of Atrion and makers of the Collateral
Notes covered by the Collateral Assignment have been, or will be in the
immediate future, sold to a third party, dissolved or merged with and into
Atrion or a subsidiary of Atrion. Atrion and AlaTenn Credit also have advised
Bank that in due course following the execution hereof, AlaTenn Credit will be
dissolved or merged with and into Atrion or a subsidiary thereof. Accordingly,
the Bank, AlaTenn Credit and Atrion have agreed that Atrion shall assume the
Loan, that AlaTenn Credit shall be released from the Loan simultaneously with
the dissolution or merger of AlaTenn Credit, that the Master Promissory Notes
of the subsidiaries which have been sold, dissolved or merged into Atrion or a
subsidiary thereof shall be released from the Collateral Assignment and that
the Loan shall be modified and the documents and instruments evidencing,
securing, relating to, guaranteeing or executed or delivered in connection with
the Loan (collectively, as heretofore amended, the "Loan Documents") be amended
as set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, the mutual
agreements of the parties as set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound hereby, agree as follows:
A. Assumption of Loan.
(1) Atrion hereby assumes and agrees to be bound by and to
perform all of the terms, covenants, conditions, obligations, liabilities and
agreements of AlaTenn Credit as Borrower under the Loan, the Notes and the
other Loan Documents.
(2) Atrion and AlaTenn hereby acknowledge and agree that Atrion
shall be entitled to all rights and benefits of the Borrower under the Loan
Documents and shall be subject to all remedies reserved to the Bank in the Loan
Documents in the event of any Event of Default thereunder.
(3) Atrion and AlaTenn Credit hereby acknowledge and agree that
except for the Master Promissory Notes of the entities listed in item D(2)(i)
below, all collateral
2
53
presently securing the Loan shall hereafter continue to secure the Loan as an
obligation of Atrion to the same extent as it presently secures the Loan as an
obligation of AlaTenn Credit and shall remain in all respects subject to the
security interest of the Bank therein. Nothing herein contained, and nothing
done pursuant hereto, shall affect or be construed to affect the priority the
Bank's security interest over any other liens, charges, encumbrances or
conveyances in respect of any collateral.
B. Release of AlaTenn Credit. AlaTenn Credit shall be released
from its obligations under the Loan Documents simultaneously with its
dissolution or merger, as applicable.
C. Extension of Availability. The date through which advances
shall be available under the Loan and the maturity date of the Loan shall be
extended to April 20, 1998, with an option to extend such availability/maturity
date to April 20, 1999, exercisable by the Borrower in accordance with Section
2.2 of the Loan Agreement.
D. Amendment to Loan Documents. The Loan Documents shall be and
are hereby amended as follows:
(1) All references to "Borrower" shall be changed to refer to
Atrion as Borrower rather than AlaTenn Credit and all references to "Guarantor"
are hereby deleted.
(2) The Credit Agreement shall be and is hereby further amended
as follows:
(a) By deleting from Section 5.14 thereof the amount
"$13,197,000" and inserting in place thereof the amount "$15,000,000."
(b) By deleting from Section 5.14A thereof the amount
"$29,297,000" and inserting in place thereof the amount "$40,000,000."
(c) By deleting from Section 5.15 thereof the ratio
"3.7:1" and inserting in place thereof the ratio "1.8:1".
(d) By deleting from Section 5.15A thereof the ratio
"1.35:1" and inserting in place thereof the ratio "1.00:1".
(e) By revising Section 5.17 thereof to read in its
entirety as follows:
5.17 Ratio of Cash Flow to Current Maturities. The
Group shall maintain a ratio of Consolidated Cash
Flow, on a rolling twelve-month basis, to
Consolidated Current Maturities of not less than
1.75 to 1.0. For purposes of the foregoing, none of
3
54
the Advances to be made hereunder shall be
considered "Current Maturities" (except for any
principal portion of any Advance converted to a term
loan and payable during the then current Fiscal
Year).
(f) By deleting from Section 5.18 thereof the amount
"$2,500,000" and inserting in place thereof the amount of $2,000,000.
(g) By revising Section 5.16B to read in its entirety as
follows:
5.16B Minimum Annual Increase in Net Worth. The
Group's Consolidated Net Worth (as defined under
Section 5.14A above) in each fiscal year ending
after December 31, 1996 shall increase by the
following minimum amounts for the fiscal years
indicated below over the Group's actual Consolidated
Net Worth for the immediately preceding fiscal year:
Minimum Increase in
Fiscal Year Consolidated Net Worth
Ending 12/31 Over Previous Year
----------------- ----------------------
1997 $1,000,000
1998 & thereafter $ 250,000
(h) By changing the date in the definition of
Termination Date in Article I to "April 20, 1998."
(i) By deleting from Schedule 1 thereto (and accordingly
from the definition of "Group") the following entities:
AlaTenn Energy Marketing Company, Inc.
Vulcan Oil and Gas Company
Tennessee River Development Company
Central Gas Company
Tennessee River Intrastate Gas Company, Inc.
North Mississippi Natural Gas Corporation
▇▇▇▇▇▇ County Gas Company
Alabama-Tennessee Natural Gas Company
HRC Acquisition Holding Corporation
4
55
Atrion Medical Products, Inc. (merged with Ryder
International Corporation which changed its name to
Atrion Medical Products, Inc.)
(3) The Collateral Assignment shall be and is hereby amended by
revising the first "WHEREAS" clause thereof to read in its entirety as follows:
WHEREAS, AlaTenn Credit Corp. ("AlaTenn Credit" or the
"Assignor") is the original borrower under a certain loan in
the maximum principal amount available of up to $20,000,000
(the "Loan") and AlaTenn Credit is, and any other party who
may hereafter assume AlaTenn Credit's liability under the
Loan will be, indebted to Bank under the Loan such
indebtedness being evidenced by two promissory notes, each in
the amount of $10,000,000 and dated as of the date hereof
from AlaTenn Credit to Bank (collectively, the "Notes") which
have been executed pursuant to a certain Credit Agreement
between AlaTenn Credit and Bank dated as of the date hereof
(the "Credit Agreement"); and
(4) The Notes shall be and are hereby amended by changing the
maturity dates thereof to "April 20, 1998."
E. Effect on Loan Documents. Each of the Loan Documents shall be
deemed amended as set forth hereinabove and to the extent necessary to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, each reference in the Loan Documents to the "Notes", the "Credit
Agreement", or any other "Loan Documents" shall be deemed to be references to
said documents, as amended hereby. Except as is expressly set forth herein, all
of the Loan Documents shall remain in full force and effect in accordance with
their respective terms and shall continue to evidence, secure, guarantee or
relate to, as the case may be, the Loan.
F. Representations and Warranties. Each representation and
warranty contained in the Loan Documents is hereby reaffirmed as of the date
hereof. Atrion and AlaTenn Credit each hereby represents, warrants and
certifies to Bank that no Event of Default nor any condition or event that with
notice or lapse of time or both would constitute an Event of Default, has
occurred and is continuing under any of the Loan Documents or the Loan, and
neither of them has any offsets or claims against Bank arising under, related
to, or connected with the Loan, the Credit Agreement or any of the other Loan
Documents. Bank specifically acknowledges and consents to
5
56
the sale of any of the foregoing entities to third parties or dissolution or
merger with Atrion or a subsidiary thereof of the entities listed in Section
D(2)(i) above.
G. Additional Documentation; Expenses. Atrion and AlaTenn Credit
shall provide to Bank certified resolutions of their respective Boards of
Directors properly authorizing the transactions contemplated hereby and the
execution of this Agreement and all other documents and instruments being
executed in connection herewith and all other documents and instruments
required by Bank, all in form and substance satisfactory to Bank. Atrion shall
pay any recording and all other expenses incurred by Bank, Atrion and AlaTenn
Credit in connection with the assumption and modification of the Loan and any
other transactions contemplated hereby, including without limitation, legal
expenses, recording fees and taxes.
IN WITNESS WHEREOF, the undersigned have caused this instrument to be
duly executed as of the date first set forth above.
ORIGINAL BORROWER:
ALATENN CREDIT CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Its: Secretary
NEW BORROWER/ORIGINAL
GUARANTOR:
ATRION CORPORATION
(f/k/a ALATENN RESOURCES, Inc.)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its President
BANK:
WITNESS: COMPASS BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
Its VICE PRESIDENT
6
57
STATE OF ALABAMA
COUNTY ▇▇▇▇▇▇▇▇
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as President of ALATENN
CREDIT CORP., a 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 the instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 30th day of Sept., 1997.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: 07-11-98
STATE OF ALABAMA
COUNTY ▇▇▇▇▇▇▇▇
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, whose name as Secretary of
ALATENN CREDIT CORP., a 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 the instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 30th day of Sept., 1997.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Notary Public
[NOTARIAL SEAL] My commission expires: 07-11-98
7
58
STATE OF ALABAMA
COUNTY ▇▇▇▇▇▇▇▇
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as President of ATRION
CORPORATION, a Delaware 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 the instrument, he as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 30th day of Sept., 1997.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Notary Public
[NOTARIAL SEAL] My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇ ▇▇▇▇▇▇▇▇ (Whose name as VICE PRESIDENT of
COMPASS BANK, an Alabama banking 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 the instrument, _he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 30TH day of Sept., 1997.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Notary Public
[NOTARIAL SEAL] My commission expires: April 3, 2001
8
59
LOAN MODIFICATION AGREEMENT
AND AMENDMENT TO LOAN DOCUMENTS
THIS LOAN MODIFICATION AGREEMENT AND AMENDMENT TO LOAN DOCUMENTS (this
"Agreement") is being entered into as of the 20th day of April, 1998, by and
between COMPASS BANK, an Alabama state banking corporation ("Bank"), and ATRION
CORPORATION, a corporation formerly known as "AlaTenn Resources, Inc."
("Atrion").
P R E A M B L E
AlaTenn Credit Corp. ("AlaTenn Credit") is the maker of and the original
borrower under a certain $10,000,000.00 Master Revolving Promissory Note
(Facility 1 ) dated as of January 20, 1995 (as amended, the "Facility 1 Note")
and a certain $10,000,000 Master Revolving Promissory Note (Facility 2) dated
as of January 20, 1995 (as amended, the "Facility 2 Note", or together with the
Facility 1 Note, the "Notes"), which together evidence a certain $20,000,000.00
credit facility from the Bank to AlaTenn Credit (the "Loan"). The Loan was made
available to AlaTenn Credit by the Bank pursuant to a certain Credit Agreement
by and between the Bank and AlaTenn Credit dated as of January 20, 1995, as the
same heretofore has been amended, including without limitation by that certain
Loan Modification Agreement and Amendment to Loan Documents dated as of January
26, 1996 and by that certain Loan Modification Agreement and Amendment to Loan
Documents dated as of February 10, 1997 (as amended, the "Credit Agreement").
The Loan is secured by, among other things, that certain Collateral Assignment
and Pledge of Master Promissory Notes from AlaTenn Credit to Bank dated as of
January 20, 1995 (the "Collateral Assignment"). Pursuant to a Loan Assumption
and Modification Agreement dated September 30, 1997, Atrion assumed the Loan,
AlaTenn Credit was to be released from the Loan simultaneously with the
dissolution or merger of AlaTenn Credit, and the Master Promissory Notes of the
subsidiaries which were sold, dissolved or merged into Atrion or a subsidiary
thereof were released from the Collateral Assignment.
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The Bank and Atrion have agreed to renew and modify the Loan and to amend the
documents and instruments evidencing, securing, relating to, guaranteeing or
executed or delivered in connection with the Loan (collectively, as heretofore
amended, the "Loan Documents") as set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises, the mutual
agreements of the parties as set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound hereby, agree as follows:
A. Extension of Availability. The date through which advances
shall be available under the Loan and the maturity date of the Loan shall be
extended to May 20, 1999, with an option to extend such availability/maturity
date to May 20, 2000, exercisable by the Borrower in accordance with Section
2.2 of the Loan Agreement.
B. Amendment to Loan Documents. The Loan Documents shall be and
are hereby amended as follows:
(1) Effective on May 20, 1999, the Credit Agreement shall be and
is hereby amended as follows:
(a) By deleting from Section 5.14 thereof the amount
"$15,000,000" and inserting in place thereof the amount "$20,000,000."
(b) By deleting from Section 5.14A thereof the amount
"$40,000,000" and inserting in place thereof the amount "$48,000,000."
(c) By deleting from Section 5.15 thereof the ratio
"1.8:1" and inserting in place thereof the ratio " 1.25:1".
(d) By deleting from Section 5.1 5A thereof the ratio
"1.00:1 " and inserting in place thereof the ratio ".75:1".
(e) By deleting from Section 5.17 thereof the ratio
"1.75 to 1.0" and inserting in place thereof the ratio "2.0 to 1.0".
(f) By adding a new Section 5.1 8A to read in its
entirety as follows:
2
61
"5.18A Minimum Annual Retained Earnings. The Group shall have
minimum annual retained earnings as determined in accordance
with GAAP of at least $1,000,000."
(2) Effective as of the date hereof, the Credit Agreement shall
be and hereby is amended as follows:
(a) By changing the date in the definition of
Termination Date in Article I to "May 20, 1999"; and
(b) By adding a new Section 5.21 to read in its entirety
as follows:
"5.21 Purchase of Borrower's Stock. Notwithstanding
anything to the contrary contained in this Article
V, Borrower may purchase its outstanding shares to
be held as treasury stock, and up to $3,000,000 of
the purchase price for such treasury stock purchased
after the date hereof shall be added to the Group's
net worth in determining compliance with any
covenant contained herein which is based upon the
Group's Consolidated Net Worth or Consolidated
Tangible Net Worth."
(3) The Notes shall be and are hereby amended by changing the
maturity dates thereof to "May 20, 1999."
C. Effect on Loan Documents. Each of the Loan Documents shall be
deemed amended as set forth hereinabove and to the extent necessary to carry
out the intent of this Agreement. Without limiting the generality of the
foregoing, each reference in the Loan Documents to the "Notes", the "Credit
Agreement", or any other "Loan Documents" shall be deemed to be references to
said documents, as amended hereby. Except as is expressly set forth herein, all
of the Loan Documents shall remain in full force and effect in accordance with
their respective terms and shall continue to evidence, secure, guarantee or
relate to, as the case may be, the Loan.
3
62
D. Representations and Warranties. Each representation and
warranty contained in the Loan Documents is hereby reaffirmed as of the date
hereof. Atrion hereby represents, warrants and certifies to Bank that no Event
of Default nor any condition or event that with notice or lapse of time or both
would constitute an Event of Default, has occurred and is continuing under any
of the Loan Documents or the Loan, and Atrion has no offsets or claims against
Bank arising under, related to, or connected with the Loan, the Credit
Agreement or any of the other Loan Documents.
E. Additional Documentation; Expenses. Atrion represents that
the transactions contemplated hereby and the execution of this Agreement and
all other documents and instruments being executed in connection herewith and
all other documents and instruments required by Bank, all in form and substance
satisfactory to Bank, are properly authorized. Atrion shall pay any recording
and all other expenses incurred by Bank and Atrion in connection with the
modification of the Loan and any other transactions contemplated hereby,
including without limitation, legal expenses, recording fees and taxes.
IN WITNESS WHEREOF, the undersigned have caused this instrument
to be duly executed as of the date first set forth above.
BORROWER:
ATRION CORPORATION
(f/k/a ALATENN RESOURCES, Inc.)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its President
BANK:
WITNESS: COMPASS BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------- ------------------------------------
Its VICE PRESIDENT
4
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STATE OF TEXAS
COUNTY OF COLLIN
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whose name as President and CEO of
ATRION CORPORATION, a 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 the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 7th day of August, 1998.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Notary Public
[NOTARIAL SEAL] My commission expires: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
I, the undersigned, Notary Public in and for said County in said
State, hereby certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Whose name as VICE PRESIDENT of
COMPASS BANK, an Alabama banking 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 the instrument, _he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 19TH day of August, 1998.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Notary Public
[NOTARIAL SEAL] My commission expires: April 3, 2001
5
64
ADDENDUM ONE TO LOAN MODIFICATION AGREEMENT
This ADDENDUM ONE TO LOAN MODIFICATION AGREEMENT AND AMENDMENT TO LOAN
DOCUMENTS ("Addendum") is dated as of April 20, 1998 by and between Compass
Bank ("Bank") and Atrion Corporation, a corporation formerly known as "AlaTenn
Resources, Inc. ("Borrower").
WITNESSETH:
WHEREAS, Borrower executed that certain Loan Modification Agreement
and amendment to loan documents of even date herewith; and
WHEREAS, Bank and Borrower desire to amend the agreement as provided
in this Addendum.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties intending
to be legally bound, hereby agree as follows:
1. The following provision shall be added to the Agreement as
Section F:
F. Year 2000 Compliance
On or prior to June 30, 1999, Borrower shall have taken all actions
necessary to ensure that the automated systems used by Borrower that are
material to its operations (collectively, "Mission-Critical Systems"),
including, without limitation, software, hardware and other data processing
devices, shall not fail, malfunction or produce incorrect results with respect
to data, calculations and other processing involving dates before, as of or
after December 31, 1999, regardless of the form the date data is received or
processed (collectively "Year 2000 Compliant" or "Year 2000 Compliance") .
Without limiting the generality of the foregoing, on or prior to the Compliance
Date, Borrower shall test and certify that its Mission-Critical Systems are
Year 2000 Compliant in accordance with commercially reasonable practices and
industry standards. Borrower agrees that upon the reasonable request of Lender,
Borrower will make its employees, consultants, premises, records and
documentation available to Lender with respect to Borrower's Year 2000
Compliance efforts.
2. Except as specifically set forth herein, all terms and conditions of
the Agreement shall continue in full force and effect and all terms used herein
shall have the same meaning set forth in the Agreement.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the
day and year first above written.
COMPASS BANK ATRION CORPORATION
(f/k/a ALATENN RESOURCES, Inc.)
By: /s/ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------- ---------------------------------------
By: /s/ Its: Vice President and CFO
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