EXHIBIT 10.24 TERM LOAN AND SECURITY AGREEMENT
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BETWEEN
ABLE TELCOM HOLDING CORP.
"BORROWER"
GEORGIA ELECTRIC COMPANY, INC.
TRAFFIC MANAGEMENT GROUP, INC.
TRANSPORTATION SAFETY CONTRACTORS OF VIRGINIA, INC.
TRANSPORTATION SAFETY CONTRACTORS, INC.
"GUARANTORS"
AND
SUNTRUST BANK, SOUTH FLORIDA, NATIONAL ASSOCIATION
"BANK"
DATED AS OF DECEMBER 2, 1996
TABLE OF CONTENTS
PAGE
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1. Definitions............................................................ 1
Defined Terms...................................................... 1
Financial Terms.................................................... 6
2. Representations and Warranties......................................... 6
Valid Existence and Power.......................................... 6
Authority.......................................................... 6
Financial Condition................................................ 6
Litigation......................................................... 7
Agreements, Etc.................................................... 7
Authorizations..................................................... 7
Title.............................................................. 7
Collateral......................................................... 7
Location........................................................... 7
Taxes.............................................................. 8
Withholding Taxes.................................................. 8
Labor Law Matters.................................................. 8
Accounts........................................................... 8
Use and Location of Collateral..................................... 8
Judgment Liens..................................................... 8
Intent and Effect of Transactions.................................. 8
Subsidiaries....................................................... 8
Hazardous Materials................................................ 9
ERISA.............................................................. 9
Guarantors......................................................... 9
3. The Loan............................................................... 9
Loan............................................................... 9
Interest Rate...................................................... 9
Net Payments....................................................... 9
Calculation of Interest............................................ 10
Special Loan Account............................................... 10
Prepayment......................................................... 10
Overdue Amounts.................................................... 10
Sales Tax.......................................................... 10
Cross Collateralization............................................ 11
5. Conditions Precedent to Borrowing...................................... 11
6. Covenants of the Borrower.............................................. 12
Use of Loan Proceeds............................................... 12
Maintenance of Business and Properties............................. 12
Insurance.......................................................... 13
Notice of Default.................................................. 13
Inspections........................................................ 13
Financial Information.............................................. 13
Debt............................................................... 14
Liens.............................................................. 14
Merger, Sale, Etc.................................................. 14
Loans and Other Investments........................................ 15
Change in Business................................................. 15
Accounts........................................................... 15
Transactions with Affiliates....................................... 15
No Change in Name, Offices; Removal of Collateral.................. 15
No Sale, Leaseback................................................. 15
Margin Stock....................................................... 15
Payment of Taxes, Etc.............................................. 16
Subordination...................................................... 16
Compliance; Hazardous Materials.................................... 16
Subsidiaries....................................................... 16
Net Worth.......................................................... 17
Working Capital.................................................... 17
Debt Service....................................................... 17
Further Assurances................................................. 17
Withholding Taxes.................................................. 17
Depository Accounts................................................ 17
Confirmation of Collateral......................................... 17
7. Default................................................................ 17
Events of Default.................................................. 17
Remedies........................................................... 19
Receiver........................................................... 19
8. Security Agreement..................................................... 20
Security Interest.................................................. 20
Remedies........................................................... 20
Entry.............................................................. 21
Deposits; Insurance................................................ 21
Other Rights....................................................... 21
Accounts........................................................... 21
Tangible Collateral................................................ 22
Waiver of Marshalling.............................................. 22
9. Miscellaneous.......................................................... 22
No Waiver, Remedies Cumulative..................................... 22
Survival of Representations........................................ 22
Expenses........................................................... 22
Notices............................................................ 23
Governing Law...................................................... 23
Successors and Assigns............................................. 23
Counterparts....................................................... 24
No Usury........................................................... 24
Powers............................................................. 24
Approvals.......................................................... 24
Jurisdiction, Service of Process................................... 24
Multiple Borrowers................................................. 25
Waiver of Jury Trial............................................... 25
WPALM/48480_1.DOC
TERM LOAN AND SECURITY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of December __, 1996 between ABLE
TELCOM HOLDING CORP., a Florida corporation (the "Borrower"), GEORGIA ELECTRIC
COMPANY, a Georgia corporation, TRAFFIC MANAGEMENT GROUP, INC., a Florida
corporation, TRANSPORTATION SAFETY CONTRACTORS OF VIRGINIA, INC., a Virginia
corporation, TRANSPORTATION SAFETY CONTRACTORS, INC., a Florida corporation,
(singularly a "Guarantor" and collectively the "Guarantors") and SUNTRUST BANK,
SOUTH FLORIDA, NATIONAL ASSOCIATION, (the "Bank");
W I T N E S S E T H
In consideration of the premises and of the mutual covenants herein contained
and to induce the Bank to extend credit to the Borrower, the parties agree as
follows:
1. DEFINITIONS. In addition to terms defined elsewhere in this Agreement,
the following terms have the meanings indicated:
1.1 DEFINED TERMS.
"ACCOUNT" shall mean any account receivable, including any rights
of payment for goods sold or leased or for services rendered, which is not
evidenced by an Instrument or Chattel Paper, whether or not it has been earned
by performance, and in addition includes all property included in the definition
of "accounts" as used in the Code, together with any guaranties, letters of
credit and other security therefor.
"ACCOUNT DEBTOR" shall mean a Person who is obligated under any
Account, Chattel Paper, General Intangible or Instrument.
"AFFILIATE" of a named Person shall mean (a) any Person owning 5%
or more of the voting stock or rights of such named Person or of which the named
Person owns 5% or more of such voting stock or rights; (b) any Person
controlling, controlled by or under common control with such named Person; (c)
any officer or director of such named Person or any Affiliates of the named
Person; and (d) any family member of the named Person or any Affiliate of such
named Person.
"BUSINESS DAY" shall mean a weekday on which commercial banks are
open for business in Palm Beach County, Florida.
"CHATTEL PAPER" shall mean all writing or writings which evidence
both a monetary obligation and a security interest in or the lease of specific
goods and in addition includes all property included in the definition of
"chattel paper" as used in the Code, together with any guaranties, letters of
credit and other security therefor.
"CODE" shall mean the Uniform Commercial Code, as in effect in
Florida from time to time.
"COLLATERAL" means the property described in the Loan Documents,
and, if not described in the Loan Documents, the following property of any
Obligors, wherever located and whether now owned by an Obligor or hereafter
acquired: (a) all real property owned by any Obligor, including, without
limitation, any interest an Obligor may have in any real property including,
without limitation, any leasehold or easement interests; (b) all Inventory; (c)
all General Intangibles; (d) all Accounts and Chattel Paper and any other
instrument or intangible representing payment for goods or services; (e) all
Equipment; (f) all Instruments (g) any other collateral in which the Bank may be
hereafter granted a security interest or Lien; (h) all funds on deposit with or
under the control of the Bank or its agents or correspondents; and (i) all
parts, replacements, substitutions, profits, products and cash and non-cash
proceeds of any of the foregoing (including insurance proceeds payable by reason
of loss or damage thereto) in any form and wherever located. Collateral shall
include all written or electronically recorded records relating to any such
Collateral and other rights relating thereto.
"DEBT" shall mean all liabilities of a Person as determined under
generally accepted accounting principles and all obligations which such Person
has guaranteed or endorsed or is otherwise secondarily or jointly liable, and
shall include, without limitation (a) all obligations for borrowed money or
purchased assets, (b) obligations secured by assets whether or not any personal
liability exists, (c) the capitalized amount of any capital or finance lease
obligations, (d) the unfunded portion of pension or benefit plans or other
similar liabilities, (e) obligations as a general partner, (f) contingent
obligations pursuant to guaranties, endorsements, letters of credit and other
secondary liabilities, and (g) obligations for deposits.
"DEBT SERVICE" means all scheduled principal and interest
payments under the Loan and all other loans now or hereafter outstanding to
Georgia Electric Company from any lender during the period in question.
"DEFAULT RATE" shall mean the highest lawful rate of interest per
annum specified in any Note to apply after a default under such Note or, if no
such rate is specified, the highest rate of interest allowed by law.
"EQUIPMENT" shall mean all furniture, fixtures, equipment, motor
vehicles, rolling stock and other tangible property of a Person of every
description, except Inventory and in addition includes all property included in
the definition of "equipment" as used in the Code.
"EXCESS CASH FLOW" shall mean fifty percent (50%) of the net
income of Georgia Electric Company in the fiscal year of Georgia Electric
Company in question plus depreciation for such year and less Funded Debt due and
payable in such fiscal year and all computed in accordance with generally
accepted accounting principals consistently applied.
"EXISTING LOAN AGREEMENT" means the Term Loan, Revolving Credit
and Security Agreement dated as of November 29, 1995 by and between the Bank,
Borrower, Transportation Safety Contractors of Virginia, Inc., Transportation
Safety Contractors, Inc., BCD Communications, Inc., n/k/a Able Communications
Services, Inc., Tipco, Inc., Telecommunications Services Group, Inc., Traffic
Management Group, Inc., and Georgia Electric Company, as amended by Modification
of Term Loan Revolving Credit and Security Agreement dated as of May 30, 1996
and Second Modification of Term Loan, Revolving Credit and Security Agreement
dated as of October 30, 1996.
"EXISTING LOAN DOCUMENTS" means the Existing Loan Agreement
and the Loan Documents as defined in the Existing Loan Agreement.
"EVENT OF DEFAULT" shall mean any event specified as such in
Section 7.1 hereof ("EVENTS OF DEFAULT"), provided that there shall have been
satisfied any requirement in connection with such event for the giving of notice
or the lapse of time, or both; "DEFAULT" or "default" shall mean any of such
events, whether or not any such requirement for the giving of notice or the
lapse of time or the happening of any further condition, event or act shall have
been satisfied.
"FUNDED DEBT" means all indebtedness for money borrowed, purchase
money mortgages, capitalized leases, conditional sales contracts and similar
title retention debt instruments, including any current maturities of such
indebtedness, which by its terms matures more than one year from the date of any
calculation thereof and/or which is renewable or extendible at the option of the
obligor to a date beyond one year from such date. The calculation of Funded Debt
shall include all Funded Debt of Georgia Electric Company, plus all Funded Debt
of other entities or persons, other than subsidiaries, which has been guaranteed
by Georgia Electric Company. Funded Debt shall also include the redemption
amount with respect to any stock of Georgia Electric Company required to be
redeemed within the next twelve months.
"GENERAL INTANGIBLES" shall mean all intangible personal property
(including things in action) except Accounts, Chattel Paper and Instruments,
including all contract rights, copyrights, trademarks, trade names, service
marks, patents, patent drawings, designs, formulas, rights to a Person's name
itself, customer lists, rights to all prepaid expenses, marketing expenses,
rights to receive future contracts, fees, commissions and orders relating in any
respect to any business of a Person, all licenses and permits, all computer
programs and other software owned by a Person, or which a Person has the right
to use, and all rights for breach of warranty or other claims for funds to which
a Person may be entitled, and in addition includes all property included in the
definition of "general intangibles" as used in the Code.
"GUARANTOR" shall mean Georgia Electric Company, Inc.,
Traffic Management Group, Inc., Transportation Safety Contractors of
Virginia, Inc., Transportation Safety Contractors, Inc. and any other person
now or hereafter guaranteeing the Loan.
"GUARANTY AGREEMENT" shall mean any guaranty instrument now or
hereafter executed and delivered by any Guarantor to the Bank, as it may be
modified.
"INDEBTEDNESS" shall mean all obligations now or hereafter owed
to the Bank by an Obligor, including, without limitation, amounts owed or to be
owed under the terms of the Loan Documents, or arising out of the transactions
described therein, including, without limitation, the Loan, sums advanced to pay
overdrafts on any account maintained by an Obligor with the Bank, reimbursement
obligations for outstanding letters of credit or banker's acceptances issued to
the account of an Obligor, amounts paid by the Bank under letters of credit or
drafts accepted by the Bank for the account of an Obligor, together with all
interest accruing thereon, all fees, all costs of collection, attorneys' fees
and expenses of or advances by the Bank which the Bank pays or incurs in
discharge of obligations of an Obligor or to repossess, protect, preserve, store
or dispose of any Collateral, whether such amounts are now due or hereafter
become due, direct or indirect and whether such amounts due are from time to
time reduced or entirely extinguished and thereafter re-incurred.
"INSTRUMENTS" means all promissory notes, letters of credit,
guarantees, securities, and other items constituting "instruments" (as defined
in the Code) owned or held by an Obligor, whether or not in negotiable form, and
all collateral and other security therefor, whether now or hereafter existing or
acquired, and all proceeds thereof and all substitutions and replacements
therefor.
"INVENTORY" means all goods, merchandise and other personal
property of a Person which is held for sale or lease or furnished or to be
furnished under a contract for services or raw materials, and all work in
process and materials used or consumed or to be used or consumed in a Person's
business, and in addition, includes all property included in the definition of
"inventory" as used in the Code.
"LIEN" (collectively "LIENS") shall mean any mortgage, pledge,
statutory lien or other lien arising by operation of law, security interest,
trust arrangement, financing lease, collateral assignment or other encumbrance,
or any segregation of assets or revenues (whether or not constituting a security
interest) with respect to any present or future assets, revenues or rights to
the receipt of income of the Person referred to in the context in which the term
is used.
"LOAN" means the loan from Bank to Borrower evidenced by the Term
Note and all renewals, modifications, amendments and extensions thereof.
"LOAN DOCUMENTS" shall mean the Existing Loan Documents, this
Agreement, any other Security Agreement, the Note, the Guaranty Agreements, and
all other documents and instruments now or hereafter evidencing, describing,
guaranteeing or securing the Indebtedness or delivered in connection therewith,
as they may be modified.
"MATURITY DATE" means December 2, 2001.
"OBLIGORS" means the Borrower and the Guarantors.
"PERMITTED DEBT" shall mean (a) the Indebtedness; and (b) any
other Debt listed on Exhibit 1.1D hereto (if any) and any extensions, renewals,
replacements, modifications and refundings of any such Debt if, and to the
extent, permitted by Exhibit 1.1D; provided, however, that the principal amount
of such Debt may not be increased from the amount shown as outstanding on such
exhibit; and (c) such other Debt as the Bank may consent to in writing from time
to time.
"PERMITTED LIENS" shall mean (a) Liens securing the Indebtedness;
(b) Liens for taxes and other statutory Liens, landlord's Liens and similar
Liens arising out of operation of law (provided they are subordinate to the
Bank's Liens on Collateral) so long as the obligations secured thereby are not
past due or are being contested as permitted herein; (c) Liens described on
Exhibit 1.1E hereto (if any), provided, however, that no debt not now secured by
such Liens shall become secured by such Liens hereafter; and (d) such other
Liens as the Bank may consent to in writing from time to time.
"PERSON" shall mean any natural person, corporation,
unincorporated organization, trust, joint-stock company, joint venture,
association, company, limited or general partnership, any government, or any
agency or political subdivision of any government.
"PRIME RATE" shall mean the annual interest rate announced by
SunTrust Banks, Inc., from time to time, as its Prime Rate (which interest rate
is only a bench ▇▇▇▇, is purely discretionary and is not necessarily the best or
lowest rate charged borrowing customers of any subsidiary bank of SunTrust
Banks, Inc.). A change in the Prime Rate shall become effective from the
beginning of the day on which such change is determined by the Bank.
"SECURITY AGREEMENT" shall mean this Agreement as it relates to a
security interest in the Collateral, and any other mortgage, security agreement
or similar instrument now or hereafter executed by an Obligor or other Person
granting the Bank a security interest in any Collateral to secure the
Indebtedness.
"SPECIAL LOAN ACCOUNT" shall mean the demand deposit account
established pursuant to Section 3.8 hereof ("SPECIAL LOAN ACCOUNT").
"SUBSIDIARY" shall mean any corporation, partnership or other
Person in which the Borrower, now or hereafter, directly or indirectly, owns
more than fifty percent (50%) of the stock, capital or income interests, or
other beneficial interests, or which is effectively controlled by the Borrower.
"TANGIBLE NET WORTH" means the stockholders equity of
Borrower in Georgia Electric Company as reported in Borrowers financial
statements less any intangible assets all computed in accordance with generally
accepted accounting principles consistently applied.
1.2. FINANCIAL TERMS. All financial terms used herein
shall have the meanings assigned to them under generally accepted
accounting principles unless another meanings shall be specified.
2. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to enter
into this Agreement and to make the Loan provided for herein, Obligors make the
following representations and warranties, all of which shall survive the
execution and delivery of the Loan Documents.
2.1. VALID EXISTENCE AND POWER. The Borrower is a corporation and
each Subsidiary is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and is duly qualified or licensed to transact business in all
places where the failure to be so qualified would have a material adverse effect
on it. Each of the Obligors and each other Person which is a party to any Loan
Documents (other than the Bank) has the power to make and perform the Loan
Documents executed by it and all such instruments will constitute the legal,
valid and binding obligations of such Person, enforceable in accordance with
their respective terms, subject only to bankruptcy and similar laws affecting
creditors' rights generally.
2.2. AUTHORITY. The execution, delivery and performance thereof
by Obligors and each other Person (other than the Bank) executing any Loan
Document have been duly authorized by all necessary action of each Obligor and
its shareholders and by such other Person, and do not and will not violate any
provision of law or regulation, or any writ, order or decree of any court or
governmental or regulatory authority or agency or any provision of the governing
instruments of such Person, and do not and will not, with the passage of time or
the giving of notice, result in a breach of, or constitute a default or require
any consent under, or result in the creation of any Lien upon any property or
assets of such Person pursuant to, any law, regulation, instrument or agreement
to which any such Person is a party or by which any such Person or its
respective properties may be subject, bound or affected other than the Loan
Documents.
2.3. FINANCIAL CONDITION. Other than as disclosed in the
projected consolidated financial results for the Obligors' fiscal year ending
October 31, 1996 delivered to the Bank on or prior to the date hereof, the
Obligors have no direct or contingent obligations or liabilities (including any
guarantees or leases) or any material unrealized or anticipated losses from any
commitments except as described on Exhibit 2.3 (if any). Obligors are not aware
of any material adverse fact (other than facts which are generally available to
the public and not particular to the Obligors, such as general economic or
industry trends) concerning the conditions or future prospects of the Obligors
which has not been fully disclosed to the Bank, including any material adverse
change in the operations or financial condition of Obligors since the date of
the most recent financial statements delivered to the Bank.
2.4. LITIGATION. Except as disclosed on Exhibit 2.4 (if any),
there are no suits or proceedings pending, or to the knowledge of the Obligors
threatened, before any court or by or before any governmental or regulatory
authority, commission, bureau of agency or public regulatory body against or
affecting the Obligors or their assets, which if adversely determined would have
a material adverse effect on the financial condition or business of the
Obligors.
2.5. AGREEMENTS, ETC. None of Obligors is a party to any
agreement or instrument or subject to any court order, governmental decree or
any charter or other corporate restriction, adversely affecting its business,
properties or assets, operations or condition (financial or otherwise) nor is
any Obligor in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party, or any law, regulation, decree, order or the
like.
2.6. AUTHORIZATIONS. All authorizations, consents, approvals and
licenses required under applicable law or regulation for the ownership or
operation of the property owned or operated by any Obligor or for the conduct of
any business in which it is engaged have been duly issued and are in full force
and effect, and it is not in default, nor has any event occurred which with the
passage of time or the giving of notice, or both, would constitute a default,
under any of the terms or provisions of any part thereof, or under any order,
decree, ruling, regulation, closing agreement or other decision or instrument of
any governmental commission, bureau or other administrative agency or public
regulatory body having jurisdiction over such person, which default would have a
material adverse effect on such Person. Except as noted herein, no approval,
consent or authorization of, or filing or registration with, any governmental
commission, bureau or other regulatory authority or agency is required with
respect to the execution, delivery or performance of any Loan Document.
2.7. TITLE. One of the Obligors has good title to all of the
assets shown in the consolidated financial statements of Obligors free and
clear of all Liens, except Permitted Liens. One of the Obligor's alone has
full ownership rights in all Collateral.
2.8. COLLATERAL. The security interests granted to the Bank
herein and pursuant to any other Loan Document (a) constitute and, as to
subsequently acquired property included in the Collateral will constitute,
security interests under Florida law (including the Code) entitled to all of the
rights, benefits and priorities provided by Florida law (including the Code) and
the Loan Documents, and (b) are, and as to subsequently acquired Collateral will
be fully perfected, superior and prior to the rights of all third persons, now
existing or hereafter arising, subject only to Permitted Liens.
2.9. LOCATION. The chief executive office of the Obligors where the
Obligors' business records are located is the address designated for notices in
Section 9.4 ("NOTICES") and the Obligors' other places of business are listed on
Exhibit 2.9 attached hereto.
2.10. TAXES. Obligors have filed all federal and state income and
other tax returns which, to the best knowledge of the Obligors, are required to
be filed, and have paid all taxes as shown on said returns and all taxes,
including AD VALOREM taxes, shown on all assessments received by it to the
extent that such taxes have become due. Obligors are not subject to any federal,
state or local tax Liens nor has such Person received any notice of deficiency
or other official notice to pay any taxes. Each of Obligors have paid all sales
and excise taxes payable by it.
2.11. WITHHOLDING TAXES. Each of the Obligors has paid all withholding,
FICA and other payments required by federal, state or local governments with
respect to any wages paid to employees.
2.12. LABOR LAW MATTERS. No goods or services have been or will
be produced by the Obligors in violation of any applicable labor laws or
regulations or any collective bargaining agreement or other labor agreements or
in violation of any minimum wage, wage-and-hour or other similar laws or
regulations.
2.13. ACCOUNTS. Each Account, Instrument, Chattel Paper and other
writing constituting any portion of the Collateral is (a) genuine and
enforceable in accordance with its terms except for such limits thereon arising
from bankruptcy and similar laws relating to creditors' rights; (b) to the best
of the Obligor's knowledge are not subject to any defense, setoff, claim or
counterclaim of a material nature against the Obligors except as to which the
Obligors have notified the Bank in writing; and (c) not subject to any other
circumstances that would impair the validity, enforceability or amount of such
Collateral except as to which the Obligors have notified the Bank in writing.
2.14. USE AND LOCATION OF COLLATERAL. The Collateral is located only, and
shall at all times be kept and maintained only, at the Obligors' location or
locations as described herein.
2.15. JUDGMENT LIENS. Neither Obligors, nor any of their assets, are
subject to any unpaid judgments (whether or not stayed) or any judgment liens in
any jurisdiction.
2.16. INTENT AND EFFECT OF TRANSACTIONS. This Agreement and
the transactions contemplated herein (a) are not made or incurred with intent to
hinder, delay or defraud any person to whom the Obligors have been, are now, or
may hereafter become indebted; (b) do not render any Obligor insolvent nor is
the Obligor insolvent on the date of this Agreement; (c) do not leave the
Obligor with an unreasonably small capital with which to engage in its business
or in any business or transaction in which it intends to engage; and (d) are not
entered into with the intent to incur, or with the belief that any Obligor would
incur, debts that would be beyond its ability to pay as such debts mature.
2.17. SUBSIDIARIES. All of the Subsidiaries are listed on Exhibit 2.17
attached hereto.
2.18. HAZARDOUS MATERIALS. The Obligors' and Subsidiaries'
property and improvements thereon have not in the past been used, are not
presently being used, and will not in the future be used for, nor do any of such
persons engage in, the handling, storage, manufacture, disposition, processing,
transportation, use or disposal of hazardous or toxic materials other than
vehicle fuel and lubricants used in the ordinary course of the operation of such
person's business, all of which are stored, applied, disposed of and otherwise
handled in accordance with applicable laws, rules and regulations.
2.19. ERISA. Obligors have no pension, profit-sharing or other
benefit plan subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or the Obligors have furnished to the Bank true and complete
copies of the latest annual report required to be filed pursuant to Section 104
of ERISA, with respect to each employee benefit plan or other plan maintained
for employees of the Obligors and covered by Title IV of ERISA (a "PLAN"), and
no Termination Event (as hereinafter defined) with respect to any Plan has
occurred and is continuing. For the purposes of this Agreement, a "TERMINATION
EVENT" shall mean a "reportable event" as defined in Section 4043(b) of ERISA
("REPORTABLE EVENT"), or the filing of a notice of intent to terminate under
Section 4041 of ERISA. Obligors have no unfunded liability with respect to any
such plan.
2.20. GUARANTORS. Each of the Guarantors will derive substantial financial
benefit from the making of the Loan to Borrower by reason of the interrelation
of businesses of the Obligors.
3. THE LOAN
3.1. LOAN. On satisfaction of the terms and conditions of this
Agreement, the Bank shall lend to the Borrower the principal amount of the Loan
for the purpose of refinancing the purchase price for the capital stock of
Georgia Electric Company. The Term Note shall evidence the outstanding principal
balance of the Loan.
3.2. INTEREST RATE. The outstanding principal balance of the
Loan outstanding from time to time shall accrue interest at the Prime Rate.
3.3. NET PAYMENTS. All payments by the Borrower under this
Agreement and the Note shall be made without setoff or counterclaim and in such
amounts as may be necessary in order that all payments, after deduction or
withholding for or on account of any present or future taxes, levies, imposts,
duties or other charges of whatsoever nature imposed by any government or any
political subdivision or taxing authority thereof (collectively the "Taxes"),
shall not be less than the amounts otherwise specified to be paid under this
Agreement and the Note. Notwithstanding anything to the contrary contained in
this Section, the Borrower shall not be liable for the payment of any tax on or
measured by net income or portion thereof of the Bank pursuant to the income tax
laws of the United States, the State of Florida or the jurisdiction where the
office making or carrying the Loan is located. The Borrower shall pay all Taxes
when due (and indemnify the Bank against any liability therefor) and shall
promptly (and in any event not later than 30 days thereafter) furnish to the
Bank any certificates, receipts and other documents which may be required (in
the judgment of the Bank) to establish any tax credit to which Bank may be
entitled. The obligations of the Borrower under this Section shall survive the
termination of this Agreement and the repayment of the Loan, but such
obligations shall terminate as to any claim or liability for which the Borrower
is responsible pursuant to this Section on the same date that any such claim or
liability is barred by any applicable statute of limitations.
3.4. CALCULATION OF INTEREST. All interest under the Note or
hereunder shall be calculated on the basis of a 360-day year for the actual
number of days elapsed in an interest period (actual/360 method), unless the
Bank shall otherwise elect.
3.5. SPECIAL LOAN ACCOUNT. Upon the occurrence of an Event of
Default and demand by Bank, the Borrower shall establish and maintain with the
Bank, during the term of the Loan, a demand deposit account (the "Special Loan
Account"). From and after occurrence of an Event of Default, the Borrower shall
deposit in the Special Loan Account, as received, all proceeds from the sale of
Inventory and collection of Accounts and other Collateral in the form of checks,
drafts, cash or the like, and all such proceeds shall constitute Collateral.
Upon receipt of written instructions from the Bank after an Event of Default,
the Borrower shall direct (by instruction on invoices and otherwise) all Account
Debtors to make payments to a designated post office box under the control of
the Bank, which payments shall be deposited directly into the Special Loan
Account. The Borrower shall pay the Bank's reasonable fees and charges in
connection with such lock-box arrangement.
3.6. PREPAYMENT. Borrower shall have the right to prepay the
Loan, in whole or in part, at any time and from time to time. Within thirty (30)
days after the delivery of fiscal year end financial statements of Georgia
Electric Company during the term of the Loan, Borrower shall prepay that portion
of the principal balance of the Loan equal to the Excess Cash Flow for the
fiscal year of Georgia Electric Company most recently ended. In no event shall
the required prepayment by reason of the Excess Cash Flow in any fiscal year of
Georgia Electric Company exceed One Million Nine Hundred Thirty Thousand and
no/100s Dollars (1,930,000.00). Each notice of prepayment shall specify the
prepayment date and the principal amount to be prepaid. All prepayments of a
Loan shall include accrued interest upon the principal amount being prepaid to
the date of the payment.
3.7. OVERDUE AMOUNTS. Any payments not made as and when due
shall bear interest from the date due until paid at the Default Rate.
3.8. SALES TAX. The Borrower shall notify the Bank if any Account
includes any sales or other similar tax and the Bank may at Bank's option either
disburse amounts to Borrower from the Special Loan Accounts for payment to the
taxing authority if the Special Loan Account contains sufficient amounts to pay
or remit any such taxes directly to the taxing authority and make Advances or
charge the Special Loan Account therefor. In no event shall the Bank be liable
for any such taxes.
3.9. CROSS COLLATERALIZATION. Obligors agree that,
notwithstanding the provisions of any of the Loan Documents and further
notwithstanding the existence of separate notes or any other separate expression
of or security for the Indebtedness, all of the Collateral is encumbered as
security for all of the Indebtedness by this Agreement or by other Loan
Documents. It is the intention of Obligors and Bank that the liens and security
interests created by the Loan Documents encumber all of the Collateral to secure
all of the Indebtedness. Bank shall have the right to proceed against any of the
Collateral to collect any or all of the Indebtedness in such order as Bank shall
deem proper. Bank shall not be obligated to proceed against or to release any
particular portion of the Collateral because the Collateral is described in one
of the Loan Documents creating a lien or security interest but not in others.
4. CONDITIONS PRECEDENT TO BORROWING. Prior to any disbursement
of the proceeds of the Loan, the following conditions shall have been
satisfied, in the sole opinion of the Bank and its counsel:
(a) LOAN DOCUMENTS. The Borrower and each other party to any Loan
Documents, as applicable, shall have executed and delivered this Agreement, the
Note, and other Loan Documents required by Bank, all in form and substance
reasonably satisfactory to the Bank.
(b) SUPPORTING DOCUMENTS. The Borrower shall cause to be
delivered to the Bank the following documents:
(i) A copy of the governing instruments of the Borrower
and each Guarantor and a good standing certificate
of the Borrower and each Guarantor certified by the
appropriate official of the State in which the
Obligor is incorporated; and
(ii) Incumbency certificates and certified resolutions
of the boards of directors (or other appropriate
Persons) of the Borrower and each other Person
executing any Loan Documents authorizing the
execution, delivery and performance of the Loan
Documents.
(c) UCC SEARCHES. UCC-11 searches and other Lien searches showing
no existing security interests in or Liens on the Collateral which is personal
property other than the security interests of the Bank.
(d) OPINION OF OBLIGORS' COUNSEL: Obligors shall cause to be
addressed and delivered to Bank an opinion of counsel for Obligors, in
form and content reasonably satisfactory to Bank.
(e) INSURANCE. The Borrower shall have delivered to the Bank
satisfactory evidence of insurance meeting the requirements of Section 5.3
("INSURANCE").
(f) PERFECTION OF LIENS. The UCC-1 financing statements and, if
applicable, certificates of title covering the Collateral executed by the
Obligors shall duly have been recorded or filed in the manner and places
required by law to establish, preserve, protect and perfect the interests and
rights created or intended to be created by this Agreement and any other Loan
Document; and all taxes, fees and other charges in connection with the
execution, delivery and filing of this Agreement, the Note and the other Loan
Documents shall have been paid.
(g) ADDITIONAL DOCUMENTS. The Obligors shall have
delivered to the Bank all additional opinions, documents, certificates and
other assurances that the Bank or its counsel may reasonably require.
(h) FURTHER ASSURANCES. The Obligors shall have delivered
such further documentation or assurances as the Bank may reasonably require.
5. COVENANTS OF THE BORROWER. Obligors covenant and agree that from the
date hereof and until payment in full of the Indebtedness and the formal
termination of this Agreement, unless the Bank shall otherwise consent in
writing, the Obligors:
5.1. USE OF LOAN PROCEEDS. Shall use the proceeds of the
Loan only for the commercial purposes permitted herein or otherwise permitted
by the Bank and furnish the Bank all evidence that it may reasonably require
with respect to such use.
5.2. MAINTENANCE OF BUSINESS AND PROPERTIES. Shall at all times
maintain, preserve and protect all of its property used or useful in the conduct
of its business, including, without limitation, the Collateral, and keep the
same in good repair, working order and condition, and from time to time make, or
cause to be made, all material, needful and proper repairs, renewals,
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be conducted properly and in accordance with
standards generally accepted in businesses of a similar type and size at all
times, and maintain and keep in full force and effect all licenses and permits
necessary to the proper conduct of its business.
5.3. INSURANCE. Shall maintain such liability insurance, workers'
compensation insurance, business interruption insurance and casualty insurance
as may be required by law or customary and usual for prudent businesses in its
industry or as may be reasonably required by the Bank and shall insure and keep
insured all Collateral and other properties in good and responsible insurance
companies satisfactory to the Bank. All liability policies shall name Bank as an
additional named insured, as its interests may appear. The hazard insurance
covering Collateral shall be in amounts and shall contain co-insurance and
deductible provisions approved by the Bank; and shall name and directly insure
the Bank its successors and assigns as secured party and loss payee under an
endorsement acceptable to Bank. Each policy must contain a provision that Bank
will receive 30 days' prior written notice of expiration, cancellation,
termination or modification of such policy.
5.4. NOTICE OF DEFAULT. Shall provide to the Bank immediate
notice of (a) the occurrence of a Default, (b) any material litigation or
material changes in existing litigation or any judgment against it or its
assets, (c) any material damage or loss to property, (d) any notice from taxing
authorities as to claimed deficiencies or any tax lien or any notice relating to
alleged ERISA violations, (e) any Reportable Event, as defined in ERISA, (f) any
rejection, return, offset, dispute, loss or other circumstance having a material
adverse effect on any Collateral, and (g) any loss or threatened loss of
material licenses or permits.
5.5. INSPECTIONS. Shall permit inspections of the Collateral and
the records of such Person pertaining thereto, at such times and in such manner
as may be reasonably required by the Bank and shall further permit such
inspection, review and audits of its other records and its properties (with such
reasonable frequency and at such reasonable times as the Bank may desire) by the
Bank as the Bank may deem necessary or desirable from time to time. The cost of
such audits, reviews and inspections shall be borne by the Bank.
5.6. FINANCIAL INFORMATION. Shall maintain books and records
in accordance with generally accepted accounting principles and shall
furnish to the Bank the following periodic financial information:
(a) MONTHLY REPORTS. Within 20 days after the end of each month
reports of the results of Borrower's domestic operations for such month and
within 30 days after the end of each month a consolidated income statement and a
consolidated balance sheet for the operation of Borrower and the Subsidiaries
prepared in accordance with generally accepted accounting principles, as at the
end of such month and year to date, each certified by the Chief Executive
Officer or the Chief Financial Officer of Borrower as being accurate and
complete.
(b) QUARTERLY REPORTS. Within 60 days after the end of each
calendar quarter, a consolidated income statement and a balance sheet for the
operation of Borrower and the Subsidiaries prepared in accordance with generally
accepted accounting principles, as at the end of such quarter and year-to-date,
each certified by the Chief Executive Officer or the Chief Financial Officer of
the Borrower as being accurate and complete;
(c) ANNUAL REPORTS. Within 120 days after the end of each fiscal
year, a consolidated income statement and a reconciliation of capital accounts
of the Borrower and its Subsidiaries for such year, a statement of sources and
application of funds of Borrower for such year and a consolidated balance sheet
of Borrower and its Subsidiaries as of the end of such year, prepared in
accordance with generally accepted accounting principles and audited by
independent certified public accountants of recognized standing selected by the
Borrower and reasonably satisfactory to the Bank; and
(d) INCOME STATEMENTS. Within 120 days after the end of each
fiscal year of Georgia Electric Company, an income statement for Georgia
Electric Company for such fiscal year prepared by Borrower in accordance with
generally accepted principles and certified by the Chief Executive Officer or
the Chief Financial Officer of Borrower as being accurate and complete.
(e) NO DEFAULT CERTIFICATES. Together with each report required
by Subsection (b) and (c), shall submit a certificate of its Chief Executive
Officer or Chief Financial Officer that no Default or Event of Default then
exists or if a Default or Event of Default exists, the nature and duration
thereof and the Borrower's intention with respect thereto, and in addition,
shall cause the Borrower's independent auditors to submit to the Bank, together
with its audit report, a statement that, in the course of such audit, it
discovered no circumstances which it believes would result in a Default or Event
of Default or if it discovered any such circumstances, the nature and duration
thereof; and shall also cause each Guarantor to submit a financial statement not
less frequently than annually, in a form reasonably satisfactory to the Bank. In
addition to the financial statements required herein, the Bank reserves the
right to require other or additional financial or other information concerning
the Borrower, the Guarantors and/or the Collateral as Bank may reasonably
require.
(f) SECURITIES FILINGS. Shall provide Bank with copies of all
form 10-K, 10-Q or other filings or information relating to the Obligors
immediately after filing with the SEC or any state securities regulator.
5.7. DEBT. Shall not create or permit to exist any Debt of
any Obligor, including any guaranties or other contingent obligations, except
Permitted Debt.
5.8. LIENS. Shall not create or permit to exist any Liens
on any of its property except Permitted Liens.
5.9. MERGER, SALE, ETC. Shall maintain its corporate
existence, good standing and necessary qualifications to do business and, except
as provided in Section 5.20, shall not merge or consolidate with any Person or
acquire all or substantially all of the assets of, or 50% or more of any class
of equity interest of, any Person or sell, lease, assign or otherwise dispose of
any Collateral or substantial portion of its other assets (other than sales of
obsolete or worn-out equipment and sales of Inventory in the ordinary course of
business).
5.10. LOANS AND OTHER INVESTMENTS. Shall not make or permit to
exist any advances or loans to, or guarantee or become contingently liable,
directly or indirectly, in connection with the obligations, leases, stock or
dividends of, or own, purchase or make any commitment to purchase any stock,
bonds, notes, debentures or other securities of, or any interest in, or make any
capital contributions to (all of which are sometimes collectively referred to
herein as "Investments") any Person except for (a) purchases of direct
obligations of the federal government, (b) deposits in commercial banks, (c)
commercial paper of any U.S. corporation having the highest ratings then given
by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation, (d)
investments in Subsidiaries existing on the date hereof, and (e) endorsement of
negotiable instruments for collection in the ordinary course of business.
5.11. CHANGE IN BUSINESS. Shall not enter into any
business which is substantially different from the business or businesses in
which it is presently engaged.
5.12. ACCOUNTS. (a) shall not sell, assign or discount any of its
Accounts, Chattel Paper or any promissory notes held by it other than the
discount of such notes in the ordinary course of business for collection; and
(b) shall notify the Bank promptly in writing with any discount, offset or other
deductions not shown on the face of an Account invoice and any dispute over an
Account, and any information relating to an adverse change in any Account
Debtor's financial condition or ability to pay its obligations.
5.13. TRANSACTIONS WITH AFFILIATES. Shall not directly
or indirectly purchase, acquire or lease any property from, or sell, transfer
or lease any property to, or otherwise deal with, except in the ordinary course
of business, any Affiliate.
5.14. NO CHANGE IN NAME, OFFICES; REMOVAL OF COLLATERAL.Shall not,
unless it shall have given 60 days' advance written notice thereof to the
Bank, (a) change its name or the location of its chief executive office or
other office where books or records are kept or (b) permit any Inventory or
other tangible Collateral to be located at any location other than as specified
in Section 2.9. ("LOCATION").
5.15. NO SALE, LEASEBACK. Shall not enter into any sale-
and-leaseback or similar transaction.
5.16. MARGIN STOCK. Shall not use any proceeds of the Loan
to purchase or carry any margin stock (within the meaning of Regulation U
of the Board of Governors of Federal Reserve System) or extend credit to
others for the purpose of purchasing or carrying any margin stock.
5.17. PAYMENT OF TAXES, ETC. Shall pay before delinquent all of
its debts and taxes except that the Bank shall not unreasonably withhold its
consent to nonpayment of taxes being actively contested in accordance with law
(provided that the Bank may require bonding or other assurances).
5.18. SUBORDINATION. Shall cause all debt and other
obligations now or hereafter owed to any Guarantor or Affiliate to be
subordinated in right of payment and security to the Indebtedness in accordance
with subordination agreements satisfactory to the Bank.
5.19. COMPLIANCE; HAZARDOUS MATERIALS. Shall strictly comply with
all laws, regulations, ordinances and other legal requirements, specifically
including, without limitation, ERISA, all securities laws and all laws relating
to hazardous materials and the environment. Except as otherwise provided in this
Agreement, unless approved in writing by the Bank, Obligors shall not engage in
the storage, manufacture, disposition, processing, handling, use or
transportation of any hazardous or toxic materials, whether or not in compliance
with applicable laws and regulations.
5.20. SUBSIDIARIES. The Borrower and/or its Subsidiaries will not
be permitted to make acquisitions or enter into joint venture agreements without
the prior written consent of the Lender until Borrower and Guarantors achieve
compliance with the financial covenant ratio(s) required to be achieved by July
31, 1997, under Sections 6.21, 6.22 and 6.23 of the Existing Loan Agreement.
Thereafter new Subsidiaries may be acquired without the prior written consent of
the Bank provided Borrower provides prior written notice to the Bank containing
a certification that the terms of the Loan Documents and the special terms
outlined below will be complied with after said acquisition. The special terms
are:
(a). The Subsidiary to be acquired is engaged in one of the
three primary lines of business for the Borrower -- highway signage,
telecommunications or utility installation;
(b) The ratio of the combined earnings before deduction of
interest, taxes, depreciation, amortization and lease payments of Borrower and
the Subsidiary to be acquired calculated on a trailing four quarters basis for
both the Borrower and the Subsidiary to be acquired, divided by the combined
projected interest, principal and lease payments of Borrower and the Subsidiary
to be acquired, calculated for the four quarters after acquisition shall be
greater than 1.75X; and
(c) The total value of the consideration to be given, debt to be
assumed and expenses to be incurred by Borrower and the Subsidiaries in
connection with such acquisition shall not exceed $1,000,000.00.
(d) In no event shall Borrower or any Guarantor advance any funds
to any New Subsidiary, as defined in the Existing Loan Agreement, including,
without limitation, funding the operations of any New Subsidiary or directly or
indirectly guarantee any indebtedness of any New Subsidiary without the prior
written consent of Lender.
5.21. NET WORTH. Shall maintain Tangible Net Worth at the
end of each quarter beginning with the quarter ending October 31, 1996, at
not less than Two Million and no/100 Dollars ($2,000,000.00).
5.22. WORKING CAPITAL. Shall assure that the current assets less
the current liabilities of Georgia Electric Company determined in accordance
with generally accepted accounting principles consistently applied is not less
than Seven Hundred Thousand and no/100s Dollars ($700,000.00). Compliance shall
be tested on a quarterly basis beginning October 31, 1996.
5.23. DEBT SERVICE. Shall assure that Georgia Electric Company's
earnings before deduction of interest payments, taxes, depreciation and
amortization shall be greater than 1.20 x Debt Service measured quarterly
beginning October 31, 1996 for the trailing four quarters.
5.24. FURTHER ASSURANCES. Shall take such further action and
provide to the Bank such further assurances as may be reasonably requested to
ensure compliance with the intent of this Agreement and the other Loan
Documents.
5.25. WITHHOLDING TAXES. Shall pay as and when due all employee
withholding, FICA and other payments required by federal, state and local
governments with respect to wages paid to employees.
5.26. DEPOSITORY ACCOUNTS. Shall at all times when any Indebtedness is
outstanding cause the primary operating accounts of Borrower and the
Subsidiaries to be established and maintained at the Bank.
5.27. CONFIRMATION OF COLLATERAL. At any time during the term hereof, Bank
may require an audit of the Accounts and an appraisal of the Equipment and
Inventory of Georgia Electric Company by independent third parties acceptable to
Bank and at Borrower's expense which must disclose that the value and condition
of such Accounts, Equipment and Inventory are acceptable to Bank.
6. DEFAULT.
6.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default:
(a) Any material representation or warranty made by the Borrower
or any other party to any Loan Document (other than the Bank) herein or therein
or in any certificate or report furnished in connection herewith or therewith
shall prove to have been untrue or incorrect in any material and adverse respect
when made; or
(b) There shall occur any default by the Borrower in the payment,
when due, of any principal of or interest on the Note, any amounts due hereunder
or any other Loan Document or any other Indebtedness (not cured within any grace
period provided in such Note or in the document or instrument evidencing such
Indebtedness); or
(c) There shall occur any default by the Borrower or any other
party to any Loan Document (other than the Bank) in the performance of any
agreement, covenant or obligation contained in this Agreement or such Loan
Document not provided for elsewhere in this Section 7 and such default is not
cured within fifteen (15) days after Bank gives Borrower written notice of such
default unless a different grace period is provided in this Agreement or another
Loan Document; or
(d) Any other obligation now or hereafter owed by the Borrower or
any Guarantor to the Bank shall be in default and not cured within any period of
grace provided therein or any such Person shall be in default under any
obligation in excess of $50,000 owed to any other obligee, which default
entitles the obligee to accelerate any such obligations or exercise other
remedies with respect thereto; or
(e) The Borrower or any Guarantor shall (i) voluntarily liquidate
or terminate operations or apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of such
Person or of all or of a substantial part of its assets, (ii) admit in writing
its inability, or be generally unable, to pay its debts as the debts become due,
(iii) make a general assignment for the benefit of its creditors, (iv) commence
a voluntary case under the federal Bankruptcy Code (as now or hereafter in
effect), (v) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (vi) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, or (vii) take any corporate action for the purpose of
effecting any of the foregoing; or
(f) without its application, approval or consent, a proceeding
shall be commenced, in any court of competent jurisdiction, seeking in respect
of Borrower or any Guarantor any remedy under the federal Bankruptcy Code, the
liquidation, reorganization, dissolution, winding-up, or composition or
readjustment of debt, the appointment of a trustee, receiver, liquidator or the
like of Borrower or any Guarantor, or of all or any substantial part of the
assets of Borrower or any Guarantor, or other like relief under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts and such action shall not be dismissed within sixty (60)
days after filing; or
(g) Any security interest or Lien of the Bank hereunder or under
any other Loan Document shall not constitute a perfected security interest of
first priority in the Collateral thereby encumbered, subject only to Permitted
Liens; or
(h) There shall occur any material loss, theft, damage or
destruction of any of the Collateral in excess of $100,000, which loss is not
fully insured; or
(i) A judgment in excess of $50,000 shall be rendered against the
Borrower or any Guarantor and shall remain undischarged, undismissed and
unstayed for more than ten days (except judgments validly covered by insurance
with a deductible of not more than $50,000) or there shall occur any levy upon,
or attachment, garnishment or other seizure of, any material portion of the
Collateral or other assets of the Borrower, or any Guarantor by reason of the
issuance of any tax levy, judicial attachment or garnishment or levy of
execution; or
(j) Any Guarantor shall repudiate or revoke any Guaranty
Agreement.
6.2. REMEDIES. If any Event of Default shall occur, the Bank may,
without notice to the Borrower, at its option, declare any or all Indebtedness
to be immediately due and payable (if not earlier demanded), bring suit against
the Borrower and/or any Guarantor to collect the Indebtedness, exercise any
remedy available to the Bank hereunder and take any action or exercise any
remedy provided herein or in any other Loan Document or under applicable law. No
remedy shall be exclusive of other remedies or impair the right of the Bank to
exercise any other remedies.
6.3. RECEIVER. In addition to any other remedy available to it,
the Bank shall have the absolute right, upon the occurrence of an Event of
Default, to seek and obtain the appointment of a receiver to take possession of
and operate and/or dispose of the business and assets of the Obligors and any
costs and expenses incurred by the Bank in connection with such receivership
shall bear interest at the Default Rate and shall be secured by all Collateral.
7. SECURITY AGREEMENT.
7.1. SECURITY INTEREST.
(a) As security for the payment and performance of any and all of
the Indebtedness and the performance of all other obligations and covenants of
the Obligors hereunder and under the other Loan Documents, certain or
contingent, now existing or hereafter arising, which are now, or may at any time
or times hereafter be owing by the Obligors to the Bank, the Obligors hereby
pledge to the Bank and give the Bank a continuing security interest in and
general Lien upon and right of set-off against, all right, title and interest of
the Obligors in and to the Collateral, whether now owned or hereafter acquired
by the Obligors. Obligors and Bank acknowledge that the security interest and
Lien created in the Collateral by this Agreement is of equal priority with and
shall not supersede or affect the security interests and Liens created by the
Existing Loan Documents.
(b) Except as herein or by applicable law otherwise expressly
provided, the Bank shall not be obligated to exercise any degree of care in
connection with any Collateral in its possession, to take any steps necessary to
preserve any rights in any of the Collateral or to preserve any rights therein
against prior parties, and the Obligors agree to take such steps. In any case
the Bank shall be deemed to have exercised reasonable care if it shall have
taken such steps for the care and preservation of the Collateral or rights
therein as the Borrower may have reasonably requested the Bank to take and the
Bank's omission to take any action not requested by the Borrower shall not be
deemed a failure to exercise reasonable care. No segregation or specific
allocation by the Bank of specified items of Collateral against any liability of
the Obligors shall waive or affect any security interest in or Lien against
other items of Collateral or any of the Bank's options, powers or rights under
this Agreement or otherwise arising.
(c) At any time and from time to time after an Event of Default,
Bank may, with or without notice to the Obligors, (i) transfer into the name of
the Bank or the name of the Bank's nominee any of the Collateral, (ii) notify
any Account Debtor or other obligor of any Collateral to make payment thereon
direct to the Bank of any amounts due or to become due thereon and (iii) receive
and after an Event of Default direct the disposition of any proceeds of any
Collateral.
7.2. REMEDIES.
(a) If an Event of Default shall have occurred and be continuing,
without waiving any of its other rights hereunder or under any other Loan
Documents, the Bank shall have all rights and remedies of a secured party under
the Code (and the Uniform Commercial Code of any other applicable jurisdiction)
and such other rights and remedies as may be available hereunder, under other
applicable law or pursuant to contract. If requested by the Bank, the Obligors
will promptly assemble the Collateral and make it available to the Bank at a
place to be designated by the Bank. The Obligors agree that any notice by the
Bank of the sale or disposition of the Collateral or any other intended action
hereunder, whether required by the Code or otherwise, shall constitute
reasonable notice to the Obligors if the notice is mailed to the Borrower by
regular or certified mail, postage prepaid, at least ten days before the action
to be taken. The Obligors shall be liable for any deficiencies in the event the
proceeds of the disposition of the Collateral do not satisfy the Indebtedness in
full.
(b) If an Event of Default shall have occurred and be continuing,
the Bank may demand, collect and ▇▇▇ for all amounts owed pursuant to Accounts,
General Intangibles, Chattel Paper or for proceeds of any Collateral (either in
an Obligors' name or the Bank's name at the latter's option), with the right to
enforce, compromise, settle or discharge any such amounts. The Obligors appoint
the Bank as the Obligors' attorney-in-fact to endorse any Obligors' name on all
checks, commercial paper and other instruments pertaining to Collateral or
proceeds after an Event of Default.
7.3. ENTRY. Obligors hereby irrevocably consent to any act by the
Bank or its agents in entering upon any premises for the purposes of either (i)
inspecting the Collateral or (ii) taking possession of the Collateral after an
Event of Default and each Obligor hereby waives its right to assert against the
Bank or its agents any claim based upon trespass or any similar cause of action
for entering upon any premises where the Collateral may be located.
7.4. DEPOSITS; INSURANCE. Upon the occurrence and continuance of
an Event of Default, Obligors authorize the Bank to collect and apply against
the Indebtedness when due any cash or deposit accounts in its possession, and
any refund of insurance premiums or any insurance proceeds payable on account of
the loss or damage to any of the Collateral and irrevocably appoints the Bank as
its attorney-in-fact to endorse any check or draft or take other action
necessary to obtain such funds after an Event of Default.
7.5. OTHER RIGHTS. Obligors authorize the Bank without affecting
the Obligors' obligations hereunder or under any other Loan Document from time
to time (i) to take from any party and hold additional Collateral or guaranties
for the payment of the Indebtedness or any part thereof, and to exchange,
enforce or release such collateral or guaranty of payment of the Indebtedness or
any part thereof and to release or substitute any endorser or guarantor or any
party who has given any security interest in any collateral as security for the
payment of the Indebtedness or any part thereof or any party in any way
obligated to pay the Indebtedness or any part thereof; and (ii) upon the
occurrence of any Event of Default to direct the manner of the disposition of
the Collateral and the enforcement of any endorsements, guaranties, letters of
credit or other security relating to the Indebtedness or any part thereof as the
Bank in its sole discretion may determine.
7.6. ACCOUNTS. After an Event of Default, the Bank may notify any
Account Debtor of the Bank's security interest and may direct such Account
Debtor to make payment directly to the Bank for application against the
Indebtedness. Any such payments received by or on behalf of an Obligor at any
time, after an Event of Default, shall be the property of the Bank, shall be
held in trust for the Bank and not commingled with any other assets of any
Person (except to the extent they may be commingled with other assets of an
Obligor in an account with the Bank) and shall be immediately delivered to the
Bank in the form received. The Bank shall have the right to apply any proceeds
of Collateral to such of the Indebtedness as it may determine.
7.7. TANGIBLE COLLATERAL. Except as otherwise provided herein or
agreed to in writing by the Bank, no Inventory or other tangible collateral
shall be commingled with, or become an accession to or part of, any property of
any other Person so long as such property is Collateral. Upon the occurrence of
any Event of Default, the Borrower shall, upon the request of the Bank, promptly
assemble all tangible Collateral for delivery to the Bank or its agents. No
tangible Collateral shall be allowed to become a fixture unless the Bank shall
have given its prior written authorization.
7.8. WAIVER OF MARSHALLING. Each Obligor hereby waives any
right it may have to require marshalling of its assets.
8. MISCELLANEOUS.
8.1. NO WAIVER, REMEDIES CUMULATIVE. No failure on the part of
the Bank to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and are in addition to any other remedies provided by
law, any Loan Document or otherwise.
8.2. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein shall survive the making of the Loan and the delivery of
the Note, and shall continue in full force and effect so long as any
Indebtedness is outstanding, there exists any commitment by the Bank to an
Obligor, and until this Agreement is formally terminated in writing.
8.3. EXPENSES. Whether or not the Loan herein provided for shall
be made, the Borrower shall pay all reasonable costs and expenses in connection
with the preparation, execution, delivery, amendment and enforcement of this
Agreement and any Loan Document, including the reasonable fees and disbursements
of counsel for the Bank in connection therewith, whether suit be brought or not
and whether incurred at trial or on appeal, and all costs of repossession,
storage, disposition, protection and collection of Collateral. If the Borrower
should fail to pay any tax or other amount required by this Agreement to be paid
or which may be reasonably necessary to protect or preserve any Collateral or an
Obligors' or Bank's interests therein, the Bank may make such payment and the
amount thereof shall be payable on demand, shall bear interest at the Default
Rate from the date of demand until paid and shall be deemed to be Indebtedness
entitled to the benefit and security of the Loan Documents. In addition,
Obligors agree to pay and save the Bank harmless against any liability for
payment of any state documentary stamp taxes, intangible taxes or similar taxes
(including interest or penalties, if any) which may now or hereafter be
determined to be payable in respect to the execution, delivery or recording of
any Loan Document or the making of any Advance, whether originally thought to be
due or not, and regardless of any mistake of fact or law on the part of the Bank
or the Borrower with respect to the applicability of such tax. The provisions of
this section shall survive payment in full of the Loan and termination of this
Agreement.
8.4. NOTICES. Any notice or other communication hereunder to any
party hereto shall be by hand delivery, overnight delivery, facsimile, telegram,
telex or registered or certified mail provided such delivery is evidenced by a
receipt or other written proof of delivery or refusal of delivery or inability
to deliver and unless otherwise provided herein shall be deemed to have been
given or made when delivered, telegraphed, telexed, faxed or deposited in the
mails, postage prepaid, addressed to the party at its address specified below
(or at any other address that the party may hereafter specify to the other
parties in writing):
The Bank: SUNTRUST BANK, SOUTH FLORIDA, NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: CORPORATE BANKING DEPARTMENT 7TH FLOOR
The Obligors: ABLE TELCOM HOLDING CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ESQ.
HOLLAND & KNIGHT
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
--------------------------------------
Delivery of notice to Borrower's counsel shall be a courtesy copy only and
failure to deliver to Borrower's counsel shall not affect the effectiveness of
delivery to Borrower.
8.5. GOVERNING LAW. This Agreement and the Loan Documents shall
be deemed contracts made under the laws of the State of Florida and shall be
governed by and construed in accordance with the laws of said state except
insofar as the laws of another jurisdiction may govern the perfection, priority
and enforcement of security interests in Collateral located in another
jurisdiction.
8.6. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the Obligors and the Bank, and their
respective successors and assigns; provided, that the Obligors may not assign
any of their rights hereunder without the prior written consent of the Bank, and
any such assignment made without such consent will be void.
8.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.
8.8. NO USURY. Notwithstanding anything contained in this
Agreement, the Note, or in any other Loan Document to the contrary, in no event
will interest or other charges deemed to be interest be chargeable against the
Obligors if such amount (combined with any other amounts considered to be in the
nature of interest) would exceed the maximum amount permitted by law from time
to time while any of the Indebtedness is outstanding, and in the event any
amount in excess of the lawful maximum is charged or collected by the Bank or
paid by an Obligor, the Obligor shall be entitled to the reimbursement of such
excess.
8.9. POWERS. All powers of attorney granted to the Bank are
coupled with an interest and are irrevocable.
8.10. APPROVALS. If this Agreement calls for the approval or
consent of the Bank, such approval or consent may be given or withheld in the
reasonable discretion of the Bank unless otherwise specified herein.
8.11. JURISDICTION, SERVICE OF PROCESS.
(a) Any suit, action or proceeding against the Borrower with
respect to this Agreement, the Collateral or any Loan Document or any judgment
entered by any. court in respect thereof may be brought in the courts of Palm
Beach County, Florida, and the Borrower hereby accepts the nonexclusive
jurisdiction of those courts for the purpose of any suit, action or proceeding.
Service of process in any such case may be had against the Obligors by delivery
in accordance with the notice provisions herein or as otherwise permitted by
law, and the Obligors agree that such service shall be valid in all respects for
establishing personal jurisdiction over it.
(b) In addition, the Obligors hereby irrevocably waive, to the
fullest extent permitted by law, any objection which they may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement, the Loan Documents, the Collateral or any judgment
entered by any court in respect thereof brought in Palm Beach County, Florida,
and hereby further irrevocably waives any claim that any suit, action or
proceedings brought in Palm Beach County, Florida or in such District Court has
been brought in an inconvenient forum.
8.12. MULTIPLE BORROWERS. If more than one Person is named
herein as the Borrower, all obligations, representations and covenants herein
and in other Loan Documents to which the Borrower is a party shall be joint and
several.
8.13. WAIVER OF JURY TRIAL. THE OBLIGORS AND THE BANK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED UPON THIS AGREEMENT OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OTHER LOAN
DOCUMENT AND ANY OTHER AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SUNTRUST BANK, SOUTH FLORIDA, NATIONAL ASSOCIATION
By: /S/▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: VICE PRESIDENT
ABLE TELCOM HOLDING CORP., a
Florida corporation
By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: PRESIDENT
TRANSPORTATION SAFETY CONTRACTORS
OF VIRGINIA, INC., a Virginia corporation
By:/S/▇▇▇▇▇▇▇ ▇. MERCURIO_
--------------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CHAIRMAN
TRANSPORTATION SAFETY CONTRACTORS,
INC., a Florida corporation
By: /S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CHAIRMAN
GEORGIA ELECTRIC COMPANY, INC.,
a Georgia corporation
By:/S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CHAIRMAN
TRAFFIC MANAGEMENT GROUP, INC.,
a Florida corporation
By:/S/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CHAIRMAN
EXHIBIT 1.1E
SCHEDULE OF LIENS
SunTrust Bank, South FL, NA (ATHC)
$2,750,000 five year note payable maturing on December 1,
2000
collaterized by related
equipment
$1,250,000 three year note payable maturing on December 1, 1998
collaterized by related
equipment
$148,733 note payable maturing on October 15, 2001
collaterized
by related
equipment
$287,512 note payable maturing on October 15, 1999
collaterized
by related
equipment
$3,000,000 note payable maturing on December 2, 2001 collaterized
by related
equipment
Central Fidelity Bank (TSCI-Va)
$293,500 mortgage note payable collaterized by land and
building
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
U.S. Bancorp (TSCI)
$48,810 note payable maturing on March 15, 1999 collaterized by two 1992
▇▇▇▇ Deere model 310 backhoes
The Associates (TSCI)
$86,637 note payable maturing on April 16, 1999 collaterized by 71 Motorola
Maxtrac 800 radios and 5 bases
SunBank, NA (HCC)
$195,000 note payable maturing on May 17, 1997 collaterized
by related
equipment
$300,000 note payable maturing on March 16, 1997
collaterized
by related
equipment
$301,075 note payable maturing on July 31, 2000 collaterized
by related
equipment
Citizens National Bank of Leesburg (HCC)
$74,762 note payable maturing on July 31, 2000 collaterized
by related
equipment
EXHIBIT 2.3
SCHEDULE OF MATERIAL UNREALIZED OR ANTICIPATED LOSSES
NONE
EXHIBIT 2.4
SCHEDULE OF LITIGATION
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ vs. Able Telcom Holding Corp., etc., et
al.
D & D Utilities, Inc. vs. Transportation Safety Contractors, Inc.,
etc., et al.
EXHIBIT 2.9
SCHEDULE OF LOCATIONS
TRANSPORTATION SAFETY CONTRACTORS, INC. ▇. ▇. ▇▇▇▇▇▇▇, INC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇/▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
TRANSPORTATION SAFETY CONTRACTORS OF VIRGINIA, INC. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ABLE COMMUNICATIONS
SERVICES, INC.
--------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GEORGIA ELECTRIC COMPANY
Able Telcom International,
Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Ft. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Able Telcom C.A./TTI C.A.
Caracas, Venezuela 1070
Seima Telecommunications,
Ltda.
Rio de Janiero,
Brazil
EXHIBIT 2.17
SCHEDULE OF SUBSIDIARIES
Transportation Safety Contractors, Inc.
Transportation Safety Contractors of Virginia, Inc.
TIPCO, Inc.
Able Communications Services, Inc.
▇. ▇. ▇▇▇▇▇▇▇, Inc.
Georgia Electric Company
Seima Telecommunications, Ltda.
Able Telcom/TTI C.A.
Able Telcom International,
Inc.