EXHIBIT 3.4
LOAN AGREEMENT
BETWEEN
▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇,
AS BORROWER,
AND
SOUTHTRUST BANK, N.A.,
AS LENDER
CLOSING DATE:
AUGUST 19, 1997
TABLE OF CONTENTS
1. DEFINITIONS, TERMS AND REFERENCES..................... 1
1.1 CERTAIN DEFINITIONS.............................. l
1.2 USE OF DEFINED TERMS............................. 6
1.3 ACCOUNTING TERMS................................. 6
1.4 TERMINOLOGY...................................... 6
1.5 EXHIBITS......................................... 6
2. TERM LOAN............................................. 6
2.1 GENERAL TERMS AND CONDITIONS..................... 6
2.2 INTEREST......................................... 7
2.3 METHOD OF MAKING PAYMENTS........................ 8
2.4 PREPAYMENTS...................................... 8
2.5 USE OF PROCEEDS.................................. 9
2.6 INCREASED COSTS OR REDUCED RETURN................ 9
2.7 INDEMNIFICATION OF LENDER........................ 10
3. REPRESENTATIONS AND WARRANTIES........................ 10
3.1 RESIDENCE........................................ 10
3.2 CAPACITY; VALIDITY AND BINDING EFFECT............ 10
3.3 NO MATERIAL LITIGATION........................... 11
3.4 TAXES............................................ 11
3.5 INSOLVENCY....................................... 11
3.6 MARGIN STOCK..................................... 11
3.7 NO VIOLATIONS.................................... 12
3.8 FINANCIAL STATEMENTS............................. 12
3.9 DISCLOSURE....................................... 12
4. COVENANTS............................................. 12
4.1 FURTHER ASSURANCES............................... 13
4.2 PERSONAL FINANCIAL STATEMENTS AND OTHER REPORTS.. 13
4.3 PAYMENT OF TAXES................................. 13
4.4 NOTICE OF DEFAULT................................ 13
4.5 COMPLIANCE WITH LAWS............................. 13
4.6 LITIGATION....................................... 13
5. EVENTS OF DEFAULT..................................... 14
5.1 TERM NOTE........................................ 14
5.2 OBLIGATIONS...................................... 14
5.3 MISREPRESENTATIONS............................... 14
5.4 COVENANTS........................................ 14
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5.5 OTHER DEBTS.................................... 14
5.6 VOLUNTARY BANKRUPTCY........................... 15
5.7 INVOLUNTARY BANKRUPTCY......................... 15
5.8 ORGANIZATIONAL DOCUMENTS; DISSOLUTION.......... 15
5.9 JUDGMENTS AND SETTLEMENTS...................... 15
5.10 CHANGE OF CONTROL.............................. 16
5.11 MATERIAL ADVERSE CHANCE........................ 16
5.12 GUARANTIES..................................... 16
5.13 AHP US LOAN AGREEMENT.......................... 16
5.14 DEATH OR DISABILITY OF BORROWER................ 16
5.15 MATERIAL CHANGES IN CERTAIN ASSETS............. 16
6. REMEDIES............................................. 16
6.1 ACCELERATION OF THE OBLIGATIONS................ 17
6.2 SET OFF........................................ 17
6.3 OTHER REMEDIES................................. 17
7. MISCELLANEOUS........................................ 17
7.1 WAIVER......................................... 17
7.2 SURVIVAL....................................... 18
7.3 NO ASSIGNMENT BY BORROWER...................... 18
7.4 COUNTERPARTS................................... 18
7.5 REIMBURSEMENT.................................. 18
7.6 SUCCESSORS AND ASSIGNS......................... 19
7.7 SEVERABILITY................................... 19
7.8 NOTICES........................................ 19
7.9 ENTIRE AGREEMENT; AMENDMENTS................... 20
7.10 TIME OF THE ESSENCE............................ 20
7.11 INTERPRETATION................................. 20
7.12 LENDER NOT JOINT VENTURER...................... 20
7.13 GOVERNING LAW; JURISDICTION.................... 21
7.14 ACCEPTANCE..................................... 21
7.15 PAYMENT ON NON-BUSINESS DAYS................... 21
7.16 CURE OF DEFAULT BY LENDER...................... 21
7.17 RECITALS....................................... 22
7.18 ATTORNEY-IN-FACT............................... 22
7.19 SOLE BENEFIT................................... 22
8. CONDITIONS PRECEDENT................................. 22
8.1 LOAN DOCUMENTS................................. 22
8.2 GUARANTIES..................................... 22
8.3 AHP US LOAN AGREEMENT AND LOAN DOCUMENTS....... 23
8.4 OPINIONS OF COUNSEL............................ 23
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8.5 MISCELLANEOUS.................................. 23
8.6 NO DEFAULT..................................... 23
8.7 REPRESENTATIONS TRUE........................... 23
8.8 LEVERAGE RATIO................................. 23
8.9 FINANCIAL STATEMENTS........................... 23
8.10 CERTAIN AGREEMENTS............................. 24
8.11 COMPLIANCE WITH CONDITIONS..................... 24
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LOAN AGREEMENT
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THIS LOAN AGREEMENT (hereinafter, as it may be modified, amended or
supplemented from time to time, and together with all Exhibits attached hereto,
called this "AGREEMENT"), made, entered into and effective as of the 19th day of
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August, 1997, by and between ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇, an individual resident of London,
England ("BORROWER"), and SOUTHTRUST BANK, N.A., a national banking association
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("LENDER");
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WITNESSETH:
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WHEREAS, Borrower has applied to Lender for a term loan, as more
particularly described hereinbelow; and
WHEREAS, Lender is willing to extend such term loan to Borrower in
accordance with the terms hereof upon the execution of this Agreement by
Borrower, compliance by Borrower with all of the terms and provisions of this
Agreement and fulfillment of all conditions precedent to Lender's obligations
herein contained;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained, to induce Lender to extend the financial
accommodations provided for herein, and for other good and valuable
consideration, the sufficiency and receipt of all of which are acknowledged,
Borrower and Lender agree as follows:
1. DEFINITIONS; TERMS AND REFERENCES.
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1.1 CERTAIN DEFINITIONS.
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In addition to such other terms as elsewhere defined herein, as used
in this Agreement and in any Exhibits, the following terms shall have the
following meanings, unless the context requires otherwise:
"AFFILIATE" shall mean, with respect to any Person, any other Person
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Controlling, Controlled by or under common Control with such Person.
"AGREEMENT" shall have the meaning given to such term in the foregoing
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recitals to this Agreement.
"AHP CANADA" shall mean Associated Hygienic Products (Canada), an
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Ontario corporation.
"AHP CANADA PLEDGE AGREEMENT" shall mean, that certain Stock Pledge
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Agreement, to be dated as of even date herewith, to be executed and delivered by
AHP Holdings in favor of Lender, pursuant to which AHP Holdings will pledge to
Lender all of the issued and outstanding
stock of AHP Canada as security for its obligations under its Guaranty and
the Obligations, as such Stock Pledge Agreement may be amended or modified from
time to time hereafter.
"AHP HOLDINGS" shall mean AHP Holdings, L.P., a Georgia limited
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partnership.
"AHP US" shall mean Associated Hygienic Products LLC, a Wyoming
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limited liability company.
"AHP US LOAN AGREEMENT" shall mean that certain Loan and Security
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Agreement, dated as of December 16, 1996, between AHP US, as borrower, and
Lender, as successor by merger to SouthTrust Bank of Georgia, N.A., as lender,
as amended or modified concurrently herewith and from time to time hereafter.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code, as
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amended from time to time.
"BASE RATE" shall mean that interest rate per annum so denominated and
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set by Lender from time to time as an interest rate basis for borrowings from
Lender. Base Rate is one of several interest rate bases which may be used by
Lender. Lender lends at interest rates above and below Base Rate. Any change in
any rate of interest charged hereunder as a result of any change in Base Rate
shall become effective as of the opening of business on each date on which such
change in Base Rate occurs.
"BASE RATE BORROWING" shall mean and refer to that portion of
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outstanding borrowings evidenced by the Term Note as to which, pursuant to
Section 2.2, Borrower has elected to be charged interest at a rate computed by
reference to the Base Rate.
"BORROWER" shall have the meaning given to such term in the foregoing
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recitals to this Agreement.
"BUSINESS DAY" shall mean any day on which Lender is open for the
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conduct of banking business at its offices in the States of Alabama and Georgia.
"CHANGE OF CONTROL" shall mean: (a) the Controlling Shareholders,
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individually or in the aggregate, shall cease to Control Parent, (b) Parent
shall cease to directly or indirectly own and Control, with power to vote
(either itself or through one or more of its Subsidiaries), one hundred percent
(100%) of the issued and outstanding shares of each of the Members or (c) either
Member shall transfer any or all of its ownership units in AHP US or AHP Canada
to any other Person or shall otherwise cease to own and Control such ownership
units.
"CLOSING DATE" shall mean that date on which all conditions precedent
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to the making of the Term Loan specified in Article 8 hereof are satisfied and
the Term Loan is made to Borrower.
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"CONTROL", "CONTROLLED", or "CONTROLLING" shall mean, with respect to
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any Person the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or
otherwise; provided, however, that in any event, any Person who owns directly or
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indirectly twenty percent (20%) or more of the securities having ordinary
voting power for the election of directors or other governing body of a
corporation or other entity shall be deemed to "Control" such corporation or
other entity for purposes of this Agreement. Without limitation of the
foregoing, the Members shall be deemed to "Control" AHP US and AHP Canada, and
Parent shall be deemed to "Control" the Members, AHP US and AHP Canada.
"CONTROLLING SHAREHOLDERS" shall mean those shareholders of Parent
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Controlling Parent on the Closing Date.
"DEBT" means all liabilities, obligations and indebtedness of a
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Person to any other Person of, any kind or nature, now or hereafter owing,
arising, due or payable, howsoever evidenced, created, incurred, acquired Or
owing, whether primary, secondary, direct, contingent, fixed or otherwise, and
including, without in any way limiting the generality of the foregoing: (i) all
liabilities and obligations to trade creditors; (ii) in the case of Borrower,
all of the Obligations; (iii) all obligations and liabilities of any other
Person secured by any lien on a Person's property, even though such Person shall
not have assumed or become liable for the payment thereof; (iv) all accrued
pension fund and other employee benefit plan obligations and liabilities; (v)
all Guaranteed Obligations; (vi) deferred taxes; and (vii) all obligations under
capitalized leases.
"DEFAULT CONDITION" shall mean the occurrence of any event which,
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after satisfaction of any requirement for the giving of notice or the lapse of
time, or both, would become an Event of Default.
"DEFAULT RATE" shall mean that interest rate per annum equal to two
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percent (2%) plus the stated interest rate effective under the Term Note from
time to time.
"EVENT OF DEFAULT" shall mean any of the events or conditions
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described in Article 5, provided that any requirement for the giving of notice
or the lapse of time, or both, has been satisfied.
"GAAP" shall mean generally accepted accounting principles,
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consistently applied.
"GUARANTEED OBLIGATIONS" shall mean, with respect to any Person, all
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obligations of such Person which in any manner directly or indirectly guarantee
or assure, or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligation of any other Person or assure or in
effect assure the holder of any such obligations against loss in respect
thereof, including, without limitation, any such obligations incurred through an
agreement, contingent or otherwise: (a) to purchase such obligations or any
property constituting security therefor; (b) to advance or supply funds for the
purchase or payment of such obligations or to maintain a working
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capital or other balance sheet condition; or (c) to lease property or to
purchase any debt or equity securities or other property or services.
"GUARANTIES" shall mean, collectively; these certain Guaranties, each
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to be dated as of even date herewith, to be executed and delivered by Guarantors
in favor of Lender, pursuant to which Guarantors will guarantee the payment and
performance by Borrower of his Obligations to Lender, as such Guaranties may be
amended or modified from time to time hereafter. "GUARANTY," shall mean,
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individually, any of the Guaranties.
"GUARANTORS" shall mean, collectively, AHP Holdings, AHP US, and each
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of the Trusts. "GUARANTOR" shall mean, individually, any of the Guarantors.
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"INTEREST PERIOD" shall mean with respect to any LIBOR Rate Borrowing,
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a period of thirty (30), sixty (60) or ninety (90) days, as Borrower may elect
as provided in this Agreement; provided, that (a) the first day of an Interest
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Period must be a Business Day, (b) any Interest Period that would otherwise end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day, unless such Business Day falls in the next calendar month, in
which case the Interest Period shall end on the next preceding Business Day, and
(c) Borrower may not elect an Interest Period which would extend beyond the
final maturity date of the Term Loan.
"LENDER" shall have the meaning given to such term in the initial
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recitals to this Agreement.
"LIBOR RATE" shall mean, with respect to any Interest Period for any
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LIBOR Rate Borrowing, the rate determined by Lender to be the rate at which
deposits in United States Dollars are offered to prime banks in the London
interbank market in an amount substantially equal to such LIBOR Rate Borrowing
for a period equal to such Interest Period.
"LIBOR RATE BORROWING" shall mean and refer to that portion of
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outstanding borrowings evidenced by the Term Note, as to which, pursuant to
Section 2.2, Borrower has elected to be charged interest at a rate computed by
reference to the LIBOR Rate.
"LOAN DOCUMENTS" shall mean this Agreement, the Term Note, the Pledge
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Agreement, the Guaranties, the AHP Canada Pledge Agreement and any and all other
documents, instruments, certificates and agreements executed and/or delivered by
Borrower or any Guarantor in connection herewith, or any one, more, or all of
the foregoing, as the context shall require.
"MARGIN STOCK" shall have the meaning ascribed to such term in Section
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221.2(h) (or any successor provision) of Regulation U of the Board of Governors
of the Federal Reserve System.
"MEMBERS" shall mean, collectively, Elmbay Limited, an English
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company, and AHP Holdings.
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"OBLIGATIONS" shall mean any and all Debts, liabilities and
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obligations of Borrower to Lender, including, without limiting the generality of
the foregoing, any indebtedness, liability or obligation of Borrower to Lender
under any loan made to Borrower by Lender prior to the date hereof and any and
all extensions or renewals thereof in whole or in part; and Debt, liability or
obligation of Borrower to Lender arising hereunder or as a result hereof,
whether evidenced by the Term Note, the other Loan Documents or otherwise, and
any and all extensions or renewals thereof in whole or in part; any Debt,
liability or obligation of Borrower to Lender under any later or future advances
or loans made by Lender to Borrower, and any and all extensions or renewals
thereof in whole or in part; any and all present and future Debt of Borrower to
other creditors which is purchased by Lender from such other creditors; and any
and all future or additional Debts, liabilities or obligations of Borrower to
Lender whatsoever and in any event, whether existing as of the date hereof or
hereafter arising, whether arising under a loan, lease, line of credit, letter
of credit or other type of financing, and whether direct, indirect, absolute or
contingent, as maker, endorser, guarantor, surety or otherwise, and whether
evidenced by, arising out of, or relating to, a promissory note, ▇▇▇▇ of
exchange, check, draft, bond, letter of credit, guaranty agreement, bankers'
acceptance, foreign exchange contract, commitment fee, service charge or
otherwise.
"PARENT" shall mean DSG International Limited, a British Virgin
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Islands corporation.
"PERSON" shall mean any individual, sole proprietorship, partnership,
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joint venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (whether territorial, national,
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof).
"PLEDGE AGREEMENT" shall mean that certain Stock Pledge Agreement, to
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be dated as of even date herewith, to be executed and delivered by the Trust
which is denominated "▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇'▇ Cayman Interest in Possession
Settlement" in favor of Lender, pursuant to which such Trust will pledge to
Lender at least 2,317,100 shares of the issued and outstanding stock of Paint
owned by it, as security for payment and performance of its obligations under
its Guaranty and the Obligations, as such Stock Pledge Agreement may be amended
or modified from time to time hereafter.
"SUBSIDIARY" shall mean any corporation, partnership, business
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association or other entity (including any Subsidiary of any of the foregoing)
of which and Person owns, directly or indirectly, fifty percent (50%) or more of
the capital stock or equity interest having ordinary power for the election of
directors or others performing similar functions. Any representation, warranty
or covenant contained in this Agreement which includes the term "Subsidiaries"
shall mean and refer to any Subsidiary which was such as of the date of
determination for purposes of such representation, warranty or covenant.
"TERM LOAN" shall mean, subject to the terms and conditions set forth
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herein, the term loan to be made by Lender to Borrower on the Closing Date
pursuant to Section 2.1 hereof.
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"TERM NOTE" shall mean the Term Promissory Note, dated as of the
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Closing Date, as it may be amended or supplemented from time to time, in the
principal amount of the Term Loan, together with any renewals or extensions
thereof, in whole or in part.
"TRUSTS" shall mean, collectively, "The Cavalino Trust" and "Mr.
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▇▇▇▇▇▇▇ ▇▇▇▇'▇ Cayman Interest in Possession Settlement". "Trust" shall mean,
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individually, either of the Trusts.
1.2 USE OF DEFINED TERMS.
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All terms defined in this Agreement and the Exhibits shall have the
same defined meanings when used in any other Loan Documents, unless the context
shall require otherwise.
1.3 ACCOUNTING TERMS.
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All accounting terms not specifically defined herein shall have the
meanings generally attributed to such terms under GAAP.
1.4 TERMINOLOGY.
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All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement, and all references
in this Agreement to Articles, Sections, Subsections, paragraphs, clauses,
subclauses or Exhibits shall refer to the corresponding Article, Section,
Subsection, paragraph, clause, subclause of, or Exhibit attached to, this
Agreement, unless specific reference is made to the articles, sections or other
subdivisions divisions of, or Exhibit to, another document or instrument.
1.5 EXHIBITS.
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Any Exhibits attached hereto are by reference made a part hereof.
2. TERM LOAN.
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2.1. GENERAL TERMS AND CONDITIONS.
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(a) Upon execution of this Agreement and compliance with its terms,
including, without limitation, the conditions precedent set forth in Article 8
hereof, Lender agrees to make the Term Loan to Borrower in an amount not in
excess of Fifteen Million Dollars ($15,000,000).
(b) The Term Loan shall be evidenced by the Term Note. The principal
amount of the Term Note (or so much thereof as shall be disbursed to or on
behalf of Borrower) shall be payable in equal, consecutive, quarterly
installments (based on an assumed ten-year principal
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amortization schedule) on the first day of each calendar quarter, commencing on
October 1, 1997, with each installment to be in the amount of Three Hundred
Seventy-Five Thousand Dollars ($375,000), followed by one (1) final
installment, constituting a balloon payment, in an amount equal to the then
unpaid principal balance of the Term Note, which shall be due and payable on
August 1, 2000.
2.2 INTEREST.
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Borrower agrees to pay to Lender interest on the Term Loan (computed
based on a 360-day year and the actual number of days elapsed) in accordance
with the following provisions:
(a) Interest Rate.
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(i) Except as set forth in clause (ii) below concerning the
availability of a fixed interest rate option, interest on the outstanding
principal balance of the Term Loan shall be payable at Borrower's option, either
at (A) a fluctuating rate per annum equal to the Base Rate, or (B) a fluctuating
rate per annum equal to the LIBOR Rate plus 2.25% per annum, for Interest
Periods of thirty (30), sixty (60) or ninety (90) days, as selected by Borrower,
as hereinafter set forth; provided, however, that if, at his election, Borrower
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pays to Lender a fee of Forty-Five Thousand Dollars ($45,000) prior to the date
of disbursement of the Term Loan, then the margin added to the LIBOR Rate
pursuant to the preceding clause (B) shall be reduced from 2.25% to 2.00%.
Borrower shall have the right to elect at any time to have up to four (4)
Interest Periods in effect with respect to the Term Loan provided that the
minimum amount of the Term Loan to which each Interest Period shall apply shall
be One Million Dollars ($1,000,000) or an integral multiple thereof. On the
Closing Date, Borrower shall notify Lender in writing as to the applicable
interest rate or rates selected by Borrower with respect to the Term Loan and,
for any LIBOR Rate Borrowings, if more than one Interest Period is selected, as
to the amount of the Term Loan attributable to each such Interest Period.
Thereafter, at least two (2) Business Days prior to the last day of each
Interest Period, Borrower shall notify Lender in writing of his intent to
continue the portion of the Term Loan attributable to such Interest Period at
the LIBOR Rate for an Interest Period or Periods, as applicable, of either
thirty (30), sixty (60) or ninety (90) days. If Borrower fails to do so on a
timely basis, then each such LIBOR Rate Borrowing shall be converted to a Base
Rate Borrowing at the end of such Interest Period.
(ii) At any time after the Closing Date, so long as no Default
Condition or Event of Default then exists, Borrower shall have the right to
request that Lender offer a fixed interest rate in respect of all (but not a
portion) of the then unpaid principal balance of the Term Loan if Lender is then
offering fixed rates for loans of the size, type and tenor of the principal
balance of the Term Loan outstanding at such time. Any such offer, by Lender, to
be valid, must be contained in a writing signed by an authorized officer of
Lender making specific reference to this provision. If Lender's offer of a fixed
rate in respect of the Term Loan is accepted by Borrower (as evidenced by its
written, acceptance thereof on the Business Day on which the offer is made),
then, such fixed interest rate shall become the applicable interest rate as of
the first day of the succeeding calendar
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quarter for all of the outstanding principal balance of the Term Loan and
remain effective thereafter until the Term Loan is paid in full.
(b) Payment. Interest on any Base Rate Loan shall be payable monthly
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in arrears on the first day of each calendar month hereafter (for the preceding
calendar month), commencing on the first day of the first month occurring after
the disbursement of the Term Loan. Interest on any LIBOR Rate Loan shall be
payable at the end of the Interest Period corresponding thereto.
(c) Limitations on LIBOR Rate Borrowings. Notwithstanding any other
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term of this Agreement, Borrower shall not be able to obtain or continue LIBOR
Rate Borrowings or convert Base Rate Borrowings into LIBOR Rate Borrowings if:
(i) a Default Condition or Event of Default has occurred and during its
continuance; or (ii) Borrower has received notice from Lender that it has become
illegal or commercially impracticable for Lender to make or maintain any
borrowings hereunder as LIBOR Rate Borrowings, so long as such notice remains
effective; in either such case, then and thereafter all such borrowings shall be
made, or continued as, or converted into, Base Rate Borrowings.
2.3 METHOD OF MAKING, PAYMENTS.
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All payments owing under or pursuant to this Agreement, whether of
principal, interest, fees or otherwise, shall be made without defense, set-off
or counterclaim to Lender not later than 1:00 p.m. Atlanta, Georgia time on the
date when due and shall be made in lawful money of the United States of America
in immediately available funds at the office of Lender in Atlanta, Georgia.
Whenever any payment to be made hereunder or pursuant hereto shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall be payable at the applicable rate during such
extension.
2.4 PREPAYMENTS.
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(a) Voluntary Prepayments.
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The principal amount of the Term Loan may be prepaid in full or in
part at any time or from time to time after the first anniversary of the Closing
Date, without penalty or premium; provided, however, that (i) any such
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prepayment must be preceded by at least ten (10) days prior written notice
thereof to the Lender, (ii) any such prepayment must be accompanied by the
payment of all then accrued interest on the principal amount to be prepaid
together with all accrued fees and expenses, (iii) any such prepayment (other
than a prepayment in full) must be in the amount of at least One Hundred
Thousand Dollars ($100,000) or an integral multiple thereof, (iv) no portion of
the Term Loan then constituting a LIBOR Rate Borrowing shall be prepaid on any
day other than the last day of the Interest Period then applicable thereto or
the maturity date of the Term Loan, as applicable and (v) in connection with any
prepayment of the Term Loan after a fixed rate election is made pursuant to
Section 2.2(a)(ii) hereof, Borrower shall pay to Lender a "▇▇▇▇ to market"
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charge in such amount as Lender shall determine in connection with such
prepayment. Each partial prepayment of the Term Loan shall be applied to the
unpaid principal installments thereof in the inverse order of their respective
maturities.
(b) Mandatory Prepayments.
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In the event that at any time the outstanding principal balance of the
Term Loan shall exceed seventy-five percent (75%) of the fair market value of
the stock of Parent pledged to Lender pursuant to the Pledge Agreement, as
determined by Lender, in its sole discretion, then within three (3) Business
Days after Lender notifies Borrower of such excess, Borrower shall make such
prepayments of the Term Loan as are necessary in Lender's determination, in its
sole discretion, to restore the outstanding principal balance of the Term Loan
to not more than seventy-five percent (75%) of the fair market value of such
pledged stock. In connection with any prepayment made pursuant to this Section
2.4(b), Borrower shall (i) if any portion of the Term Loan so prepaid is a LIBOR
Rate Borrowing, reimburse Lender for any costs incurred by Lender resulting from
the repayment of such LIBOR Rate Borrowing prior to the end of an Interest
Period and (ii) if Borrower has elected to have the Term Loan bear interest at a
fixed rate pursuant to Section 2.2(a)(ii), pay to Lender a "▇▇▇▇ to market"
charge in such amount as Lender shall determine in connection with such
prepayment. Each partial prepayment of the Term Loan shall be applied to the
unpaid principal installments thereof in the inverse order of their respective
maturities.
2.5 USE OF PROCEEDS.
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The proceeds of the Term Loan shall be used by Borrower to pay in full
the loan in the outstanding principal amount of Fifteen Million Dollars
($15,000,000) previously made by Parent to Borrower; and, simultaneously
therewith, Parent shall use the proceeds of such loan repayment to pay in full
the loan in the outstanding principal amount of Fifteen Million Dollars
($15,000,000) previously made by AHP US to Parent.
2.6 INCREASED COSTS OR REDUCED RETURN.
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If, due to either (a) the introduction of or any change in or in the
interpretation of any U.S. or foreign law or regulation, or (b) the compliance
with any guideline or request from any governmental authority, there shall be
any increase in the cost to Lender of maintaining its commitments hereunder or
agreeing to make or making, funding or maintaining the Term Loan or any
reduction in the rate of return on Lender's capital as a consequence of its
obligations hereunder to a level below that which Lender would have achieved but
for such events described in clauses (a) and (b) above (taking into
consideration Lender's policies to comply with statutorily required levels with
respect to capital adequacy), then Borrower agrees from time to time, upon
demand by Lender to pay to Lender additional amounts sufficient to compensate
Lender for such increased costs or reduced return. A certificate identifying
with reasonable specificity the basis for and the amount of such increased costs
or reduced return shall be submitted to Borrower by Lender and shall be
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conclusive and binding for all purposes, absent manifest error. In determining
such amount, Lender may use reasonable averaging and attribution methods.
2.7 INDEMNIFICATION OF LENDER.
-------------------------
At all times prior to and after the consummation of the transactions
contemplated by this Agreement, Borrower agrees to hold Lender, its respective
directors, officers, employees, agents, Affiliates, successors and assigns
harmless from and to indemnify Lender and its respective directors, officers,
employees, agents, Affiliates, successors and assigns against, all loss,
damages, costs and expenses (including, without limitation, reasonable
attorney's fees, costs and expenses) actually incurred by any of the foregoing,
whether direct, indirect or consequential, as a result of or arising from or
relating to any "Proceedings" (as defined below) by any Person, whether
threatened or initiated, asserting a claim for any legal or equitable remedy
against any Person under any statute, case or regulation, including, without
limitation, any federal or state securities laws or under any common law or
equitable case or otherwise, arising from or in connection with this Agreement,
and any other of the transactions contemplated by this Agreement except to the
extent such losses, damages, costs or expenses are due to the willful misconduct
or gross negligence of Lender. As used herein, "PROCEEDINGS" shall mean actions,
-----------
suits or proceedings before any court, governmental or regulatory authority. At
the request of Lender, Borrower agrees to indemnify any Person to whom Lender
transfers or sells all or any portion of its interest in the Obligations or
participations therein on terms substantially similar to the terms set forth
above. Lender shall not be responsible or liable to any Person for consequential
damages which may be alleged as a result of this Agreement or any of the
transactions contemplated hereby. The obligations of Borrower under this Section
2.7 shall survive the termination of this Agreement and payment of the
Obligations.
3. REPRESENTATIONS AND WARRANTIES.
------------------------------
In order to induce Lender to enter into this Agreement, Borrower
hereby represents and warrants to Lender as set forth below.
3.1 RESIDENCE.
---------
Borrower is an individual resident of London, England.
3.2 CAPACITY; VALIDITY AND BINDING EFFECT.
-------------------------------------
Borrower has the capacity to make, deliver and perform under the Loan
Documents. This Agreement constitutes, and the remainder of the Loan Documents
to which Borrower is a party, when executed and delivered for value received,
will constitute, the valid obligations of Borrower, legally binding upon him and
enforceable against him in accordance with their respective terms.
-10-
3.3 NO MATERIAL LITIGATION.
----------------------
There are no proceedings pending or, so far as Borrower knows,
threatened, before any court or administrative agency which might materially
adversely affect the financial condition of Borrower.
3.4 TAXES.
-----
Borrower has flied or caused to be flied any tax returns required to
be filed by him and has paid all taxes shown to be due and payable by him on
said returns or on any assessments made against him, the nonpayment of which
could reasonably be expected to have a material adverse effect on the Borrower's
financial condition, unless and to the extent only that (x) such taxes are being
contested in good faith and by appropriate proceedings by Borrower.
3.5 INSOLVENCY.
----------
After giving effect to the funding of the Term Loan and the uses by
Borrower of the proceeds of such loan as provided hereunder, (a) the fair value
and present fair saleable value of Borrower's assets are in excess of the total
amount of Borrower's liabilities, including known contingent liabilities; (b)
Borrower will not have incurred debts, nor will he intend to incur debts, beyond
his ability to pay such debts as they mature; and (c) Borrower will not have
unreasonably small capital to carry on Borrower's businesses as theretofore
operated and all businesses in which the Borrower is about to engage. As used in
this Section 3.5, "debt" means any liability on a claim, and "claim" means (i)
the right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured, or (ii) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
3.6 MARGIN STOCK.
------------
Borrower is not engaged principally, or as one of his important
activities, in the business of purchasing or carrying any Margin Stock and no
part of the proceeds of any borrowing made pursuant hereto will be used to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation X of the
Board of Governors of the Federal Reserve System. In connection herewith, if
requested by Lender, Borrower will furnish to Lender a statement in conformity
with the requirements of Federal Reserve Form F.R. U-1 referred to in Regulation
U of said Board to the foregoing effect.
-11-
3.7 NO VIOLATIONS.
-------------
The execution, delivery and performance by Borrower of this Agreement
and the Loan Documents to which he is party do not violate any provision of any
law, rule, regulation (including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to
Borrower, or result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or instrument to which
Borrower is a party or by which he or his properties may be bound or affected;
and Borrower is not in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument.
3.8 FINANCIAL STATEMENTS.
--------------------
The personal financial statements of Borrower for the most recently
completed calendar year, copies of which have heretofore been furnished to
Lender, are complete and accurately and fairly represent the financial condition
of Borrower, as of the date thereof and for the period referred to therein.
There is no material Debt of Borrower as of the date of such financial
statements which is not reflected therein or in the notes thereto. There has
been no material adverse change in the financial condition of Borrower since the
date of the balance sheets contained in such financial statements.
3.9 DISCLOSURE.
----------
Neither this Agreement nor any other document, certificate or
statement furnished to Lender by or on behalf of Borrower in connection herewith
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. To the best of Borrower's knowledge, there is no fact peculiar to
Borrower which materially adversely affects or in the future may (so far as
Borrower can now reasonably foresee) materially adversely affect the business,
property or assets, or financial condition of Borrower which has not been set
forth in this Agreement or in the other documents, certificates and statements
furnished to Lender by or on behalf of Borrower prior to the date hereof in
connection with the transactions contemplated hereby, when taken as a whole.
4. COVENANTS.
---------
Borrower covenants to Lender that from and after the date hereof, and
until such time as the Obligations have been paid in full and Lender shall have
terminated this Agreement in writing, Borrower will comply with the covenants
set forth below.
-12-
4.1 FURTHER ASSURANCES.
------------------
Borrower shall duly execute and/or deliver (or cause to be duly
executed and/or delivered) to Lender any instrument, waiver, consent or other
writing which may be reasonably necessary to Lender to carry out the terms of
this Agreement and any of the other Loan Documents.
4.2 PERSONAL FINANCIAL STATEMENTS AND OTHER REPORTS.
-----------------------------------------------
Borrower shall, as soon as practicable, and, in any event, within
one hundred twenty (120) days after the end of each calendar year, furnish to
Lender his personal financial statements for such calendar year, prepared in a
form satisfactory to Lender, and certified by Borrower to be true, correct and
complete and shall deliver to Lender such reports regarding the Trusts as it
may request from time to time.
4.3 PAYMENT OF TAXES.
----------------
Borrower shall pay and discharge all taxes, assessments and
governmental charges upon him, his income and his property, the non-payment of
which could reasonably be expected to have a material adverse effect on the
Borrower's financial condition, prior to the date on which penalties attach
thereto, unless and to the extent only that such taxes, assessments and
governmental charges are being contested in good faith and by appropriate
proceedings by Borrower and (y) Borrower maintains reasonable reserves therefor.
4.4 NOTICE OF DEFAULT.
-----------------
Promptly upon his becoming aware of the occurrence of any Default
Condition or Event of Default, Borrower will notify Lender thereof in writing,
specifying the nature and period of existence thereof and the action which
Borrower proposes to take with respect thereto.
4.5 COMPLIANCE WITH LAWS.
--------------------
Borrower Shall comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, noncompliance with
which would materially adversely affect his financial condition or credit.
4.6 LITIGATION.
----------
Promptly, upon his receipt of notice or knowledge thereof, Borrower
will report to Lender any lawsuit or administrative proceeding in which Borrower
is a defendant wherein the amount of damages claimed against Borrower exceeds
Fifty Thousand Dollars ($50,000).
-13-
5. EVENTS OF DEFAULT.
-----------------
The occurrence of any events or conditions described below shall
constitute an Event of Default hereunder, provided that any requirement for the
giving of notice or the lapse of time, or both, has been satisfied.
5.1 TERM NOTE.
---------
Borrower (i) shall fail to make any payment of the Term Loan required
pursuant to Section 2.4(b) hereof or (ii) shall fail to make any other payment
of principal of or interest on the Term Note within five (5) calendar days after
the date when due.
5.2 OBLIGATIONS.
-----------
Borrower shall fail to make any payments of principal of or interest
on any of the Obligations (other than the Term Note) or any other Obligations to
Lender, within five (5) calendar days after the date when due (or after
satisfaction of any shorter or longer requirement for the giving of notice or
the lapse of time, or both, contained in the applicable agreement pertaining to
such Obligations).
5.3 MISREPRESENTATIONS.
------------------
Borrower or any Guarantor shall make any representations or warranties
in any of the Loan Documents or in any certificate or statement furnished at any
time hereunder or in connection with any of the Loan Documents which, when taken
as a whole, proves to have been untrue or misleading in any material respect
when made or furnished.
5.4 COVENANTS.
---------
Borrower or any Guarantor shall default in the observance or
performance of any covenant or agreement contained herein or in any of the other
Loan Documents (other than a failure described in Sections 5.1 or 5.2), unless
such default is cured within ten (10) days after Borrower's receipt of notice
from Lender of such Default Condition.
5.5 OTHER DEBTS.
-----------
Borrower shall default in connection with any agreement evidencing,
securing or relating to any other Debt to, or under any operating lease with
Lender or with any creditor other than Lender.
-14-
5.6 VOLUNTARY BANKRUPTCY.
--------------------
Borrower (or any Guarantor or Parent) shall file a voluntary petition
in bankruptcy or a voluntary petition or answer seeking liquidation,
reorganization, arrangement, readjustment of its debts, or for any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether state, federal, or foreign, now or
hereafter existing; Borrower (or any Guarantor or Parent) shall enter into any
agreement indicating its consent to, approval of, or acquiescence in, any such
petition or proceeding; Borrower (or any Guarantor or Parent) shall apply for or
permit the appointment by consent or acquiescence of a receiver, custodian or
trustee of Borrower (or any Guarantor or Parent) for all or a substantial part
of its property; Borrower (or any Guarantor or Parent) shall make an assignment
for the benefit of creditors; or Borrower (or any Guarantor or Parent) shall be
unable or shall fail to pay its debts generally as such debts become due; or
Borrower (or any Guarantor or Parent) shall admit, in writing, its inability or
failure to pay its debts generally as such debts become due.
5.7 INVOLUNTARY BANKRUPTCY.
----------------------
There shall have been filed against Borrower (or any Guarantor or
Parent) an involuntary petition in bankruptcy or seeking liquidation,
reorganization, arrangement, readjustment of its debts or for any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether State, federal or foreign, now or hereafter
existing, which has not been dismissed within sixty (60) days of the date the
petition is flied; Borrower (or any Guarantor or Parent) shall suffer or permit
the involuntary appointment of a receiver, custodian or trustee of Borrower (or
any Guarantor or Parent) or for all or a substantial part of its property; or
Borrower (or any Guarantor or Parent) shall suffer or permit the issuance of a
warrant of attachment, execution or similar process against all or any
substantial part of the property of Borrower (or any Guarantor or Parent).
5.8 ORGANIZATIONAL DOCUMENTS DISSOLUTION.
------------------------------------
Any of the organizational documents of any Guarantor shall be amended,
amended and restated or otherwise modified (other than administrative or
ministerial amendments and modifications) or shall be canceled or terminated, in
each case without Lender's prior written consent; or any Guarantor shall be
dissolved.
5.9 JUDGMENTS AND SETTLEMENTS.
-------------------------
Final judgments or orders for the payment of money are rendered
against Borrower, Parent or any Guarantor or Borrower, Parent or any Guarantor
settles any claim or lawsuit in the aggregate amount of Fifty Thousand Dollars
($50,000) or more (exclusive of amounts covered by insurance) which are not paid
in full within ten (10) Business Days.
-15-
5.10 CHANGE OF CONTROL.
-----------------
A Change of Control shall occur.
5.11 MATERIAL ADVERSE CHANGE.
-----------------------
The occurrence of any material change in the business, financial
condition, results of operations or business prospects of Borrower or any
Guarantor which Lender reasonably determines, in good faith, materially and
adversely affects the ability of Borrower or any Guarantor to pay and perform
his or its obligations to Lender.
5.12 GUARANTIES.
----------
Any default shall occur under, or in respect of, any of the Guaranties
or any of the other Loan Documents to which Guarantors are party, or any
Guarantor thereunder shall repudiate, or seek to repudiate, its liability
thereon.
5.13. AHP US LOAN AGREEMENT.
---------------------
An "Event of Default" (as defined therein) shall occur under the AHP
US Loan Agreement.
5.14. DEATH OR DISABILITY OF BORROWER.
-------------------------------
Borrower shall die or become disabled.
5.15. MATERIAL CHANGES IN CERTAIN ASSETS.
----------------------------------
There shall occur any material adverse change under or with respect to
either of the Trusts (or in the assets contained therein).
6. REMEDIES.
--------
Upon the occurrence or existence of any Event of Default, or at any
time thereafter, without prejudice to the rights of Lender to enforce its claims
against Borrower for damages for failure by Borrower to fulfill any of its
obligations hereunder, subject only to prior receipt by Lender of payment in
full of all Obligations then outstanding in a form acceptable to Lender, Lender
shall have all of the rights and remedies described below, and Lender may
exercise any one, more, or all of such remedies, in its sole discretion, without
thereby waiving any of the others.
-16-
6.1 ACCELERATION OF THE OBLIGATIONS.
-------------------------------
Lender, at its option, may by written notice, effective upon receipt,
declare all of the Obligations (including but not limited to that portion
thereof evidenced by the Term Note) to be immediately due and payable (and in
the event a voluntary or involuntary case is commenced under the Bankruptcy
Code, or under any other act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign, now or hereafter existing, by or against
Borrower as a debtor, all Obligations automatically will be due and payable
without any notice or declaration by Lender), whereupon the same shall become
immediately due and payable without presentment, demand, protest, notice of
nonpayment or any other notice required by law relative thereto, all of which
are hereby expressly waived by Borrower, anything contained herein to the
contrary notwithstanding and, in connection therewith, Lender shall have the
right to increase the rate of interest charged on the Term Note, without
further notice, to a rate per annum equal to the Default Rate. Thereafter,
Lender, at its option, may, but shall not be obligated to, accept less than the
entire amount of Obligations due, if tendered, provided, however, that unless
then agreed to in writing by Lender, no such acceptance shall or shall be deemed
to constitute a waiver of any Event of Default or a reinstatement of any
commitments of Lender hereunder.
6.2 SET OFF.
-------
In addition to such other rights and remedies with respect to deposit
accounts maintained by Borrower with Lender and cash and other property of
Borrower in the possession of Lender, as may exist from time to time hereafter
in favor of Lender, whether by way of setoff, banker's lien, consensual security
interest or otherwise, upon the occurrence of any Event of Default hereunder,
Lender may charge any part or all of the obligations of Lender to Borrower
represented by items constituting such property in the possession and control of
Lender against the Obligations, without prior notice to or demand upon Borrower.
6.3 OTHER REMEDIES.
--------------
Unless and except to the extent expressly provided for to the contrary
herein, the rights of the Lender specified herein shall be in addition to, and
not in limitation of, Lender's rights under any statute or rule of law or
equity, or under any other provision of any of the Loan Documents, or under the
provisions of any other document, instrument or other writing executed by
Borrower or any third party in favor of the Lender, all of which may be
exercised successively or concurrently.
7. MISCELLANEOUS.
-------------
7.1 WAIVER.
------
Each and every right granted to Lender under this Agreement, or any of
the other Loan Documents, or any other document delivered hereunder or in
connection herewith or allowed
-17-
it by law or in equity, shall be cumulative and may be exercised from time to
time. No failure on the part of Lender to exercise, and no delay in exercising,
any right shall operate as a waiver thereof, nor shall any single or partial
exercise by Lender of any right preclude any other or future exercise thereof or
the exercise of any other right. No waiver by Lender of any Default Condition or
Event of Default shall constitute a waiver of any subsequent Default Condition
or Event of Default.
7.2 SURVIVAL.
--------
All representations, warranties and covenants made herein shall
survive the execution and delivery of all of the Loan Documents. The terms and
provisions of this Agreement shall continue in full force and effect,
notwithstanding the payment of the Term Note until all of the Obligations have
been paid in full and Lender have terminated this Agreement in writing.
7.3 NO ASSIGNMENT BY BORROWER.
-------------------------
No assignment hereof shall be made by Borrower without the prior
written consent of Lender. Lender may assign, or sell participations and
undivided ownership interests in, its rights, title and interest herein and in
the Loan Documents at any time hereafter without notice to, or consent from,
Borrower.
7.4 COUNTERPARTS.
------------
This Agreement may be executed in two or more counterparts, each of
which when fully executed shall be an original, and all of said counterparts
taken together shall be deemed to constitute one and the same agreement.
7.5 REIMBURSEMENT.
-------------
Borrower agrees to pay to the Lender on demand all out-of-pocket
costs and expenses that Lender pays or incurs in connection with the
negotiation, preparation, consummation, enforcement and termination of this
Agreement and the other Loan Documents, including, without limitation: (a)
reasonable attorneys' fees and disbursements; (b) costs and expenses
(including reasonable attorneys' fees and disbursements) for any amendment,
supplement, waiver, consent or subsequent closing in connection with the Loan
Documents and the transactions contemplated thereby; (c) sums paid or incurred
to pay for any amount or to take any action required of Borrower under the
Loan Documents that Borrower fails to pay or take; and (d) costs and expenses
(including reasonable attorneys' and paralegals' fees and disbursements) paid
or incurred to obtain payment of the Obligations and otherwise enforce the
provisions of the Loan Documents or to defend any claims made or threatened
against Lender arising out of the transactions contemplated hereby (including,
without limitation, preparations for and consultations concerning any such
matters). The foregoing shall not be construed to limit any other provisions
of the Loan Documents regarding costs and expenses to be paid by Borrower.
Borrower will pay all expenses incurred by it in the transaction. In the event
Borrower becomes a debtor under the Bankruptcy Code, or under any other act or
law
-18-
pertaining to insolvency or debtor relief, whether state, federal or
foreign, now or hereafter existing, Lender's secured claim in such case shall
include interest on the Obligations and all fees, costs and charges provided
for herein (including, without limitation, reasonable attorneys' fees) all for
the extent allowed by the Bankruptcy Code or such other act or law.
7.6 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties hereto.
7.7 SEVERABILITY.
------------
If any provision of any of the Loan Documents or the application
thereof to any party thereto or circumstances shall be invalid or unenforceable
to any extent, the remainder of such Loan Documents and the application of such
provisions to any other party thereto or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
7.8 NOTICES.
-------
All notices, requests and demands to or upon the respective parties
hereto shall be deemed to have been properly given or made when personally
delivered or 5 calendar days after being deposited in the mail, registered or
certified mail, return receipt requested, with sufficient postage prepaid,
addressed as follows or to such other address as may be designated hereafter in
writing by the respective parties hereto:
Borrower:
See Signature Page
Lender:
South Trust Bank, N.A.
One Georgia Center, 22nd Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
-19-
With a copy to:
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
except in cases where it is expressly provided herein or by applicable law that
such notice, demand or request is not effective until received by the party to
whom it is addressed in which instance rejection or other refusal to accept or
the inability to deliver because of changed address of which no notice was given
shall be deemed to be receipt of the notice, demand or request sent. By giving
at least thirty (30) days written notice thereof, Borrower and Lender shall have
the right from time to time and at any time to change their respective addresses
and each shall have the right to specify any other address within the
continental United States of America.
7.9 ENTIRE AGREEMENT AMENDMENTS.
---------------------------
This Agreement, together with the Loan Documents executed in
connection therewith, collectively constitute the entire agreement between the
parties hereto with respect to the subject matter hereof. Neither this Agreement
or any Loan Document nor any provision hereof or thereof may be changed, waived,
discharged, modified or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement is sought.
7.10 TIME OF THE ESSENCE.
-------------------
Time is of the essence in this Agreement and the other Loan Documents.
7.11 INTERPRETATION.
--------------
No provision of this Agreement shall be construed against or
interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have structured or dictated such provision.
7.12 LENDER NOT JOINT VENTURER.
-------------------------
Neither this Agreement nor any agreements, instruments, documents or
transactions contemplated hereby (including the Loan Documents) shall in any
respect be interpreted, deemed or construed as making Lender a partner or joint
venturer with Borrower or as creating any similar relationship or entity, and
Borrower agrees that it will not make any contrary assertion, contention, claim
or counterclaim in any action, suit or other legal proceeding involving Lender
or Borrower.
-20-
7.13 GOVERNING LAW; JURISDICTION.
---------------------------
THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE AT, ATLANTA, GEORGIA
AND SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS,
OF THE STATE OF GEORGIA. AS PART OF THE CONSIDERATION FOR NEW VALUE THIS DAY
RECEIVED, BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE STATE OF GEORGIA IN ANY ACTION INSTITUTED HEREUNDER, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON BORROWER, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS SPECIFIED IN SECTION 7.8
ABOVE AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT
THEREOF. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER WAIVES TRIAL BY
JURY AND WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED
HEREUNDER OR UNDER ANY LOAN DOCUMENTS, AGREES NOT TO ASSERT ANY DEFENSE BASED ON
LACK OF JURISDICTION OR VENUE, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY ANY COURT. NOTHING CONTAINED IN
THIS SECTION, HOWEVER, SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF LENDER TO BRING ANY
ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
7.14 ACCEPTANCE.
----------
This Agreement, together with the other Loan Documents, shall not
become effective unless and until delivered to Lender at its office in Atlanta,
Georgia and accepted in writing by Lender thereafter at such office as evidenced
by its execution hereof (notice of which delivery and acceptance is hereby
waived by Borrower).
7.15 PAYMENT ON NON-BUSINESS DAYS.
----------------------------
Whenever any payment to be made hereunder or under the Term Note shall
be stated to be due on a day which is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest hereunder or
under the Notes.
7.16 CURE OF DEFAULT BY LENDER.
-------------------------
If, hereafter, Borrower defaults in the performance of any duty or
obligation to Lender hereunder or under any Loan Document or to any other Person
(including, without limitation, any lessor, licensor, vendor, processor,
shipper, carrier or warehouseman), Lender may, at its option, but without
obligation, in order to protect or preserve Lender's credit, cure such default
and any costs, fees and expenses incurred by Lender in connection therewith
payment of taxes, shall bear interest at the Default Rate and shall be payable
on demand.
-21-
7.17 RECITALS.
--------
All recitals contained herein are hereby incorporated by reference
into this Agreement and made part thereof.
7.18 ATTORNEY-IN-FACT.
----------------
Borrower hereby designates, appoints and empowers Lender irrevocably
as its attorney-in-fact, at Borrower's cost and expense, to do in the name of
Borrower any and all actions which Lender may reasonably deem necessary or
advisable to protect, preserve or enforce its rights hereunder upon the failure,
refusal or inability of Borrower to do so within ten (10) days after notice by
Lender to Borrower, and Borrower hereby agrees to indemnify and hold Lender
harmless from any costs, damages, expenses or liabilities arising against or
actually incurred by Lender in connection therewith, except those arising from
the willful misconduct or gross negligence of Lender. This power of attorney,
being coupled with an interest, shall be irrevocable, shall continue until all
Obligations have been satisfied in full and this Agreement has been terminated
by Lender in writing and shall be in addition to Lender's other rights, powers
and remedies.
7.19 SOLE BENEFIT.
------------
The rights and benefits set forth in this Agreement and in all the
other Loan Documents are for the sole and exclusive benefit of the parties
thereto and may be relied upon only by them.
8. CONDITIONS PRECEDENT.
--------------------
The conditions precedent set forth below shall constitute express
conditions precedent to any obligation of Lender to make the Term Loan.
8.1 LOAN DOCUMENTS.
--------------
Receipt by Lender of the Term Note, the Pledge Agreement (accompanied
by certificates evidencing the stock pledged thereunder and stock powers
executed in blank) and all other Loan Documents not elsewhere more particularly
described herein, duly executed in form and substance acceptable to Lender.
8.2 GUARANTIES.
----------
Receipt by Lender of the Guaranties, the AHP Canada Pledge Agreement,
all other documents necessary or desirable to perfect Lender's security interest
in the collateral described therein, and all other Loan Documents to be executed
and delivered by Guarantors, together with appropriate certifications of
organization, authorization, incumbency and good standing; each to be in form
and substance satisfactory to Lender.
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8.3 AHP US LOAN AGREEMENT AND LOAN DOCUMENTS.
----------------------------------------
Receipt by Lender of (a) amendments to the AHP US Loan Agreement and
the other "Loan Documents" (as defined therein) {including, without limitation,
the "Mortgage", as defined therein) to provide (i) for a reduction in the
amount of the "Revolving Line of Credit" (as defined therein) thereunder from
Ten Million Dollars ($10,000,000) to Five Million Dollars ($5,000,000), (ii)
that the obligations of AHP US under its Guaranty are secured by the
"Collateral" (as defined therein) and (iii) as to such other matters as Lender
shall deem necessary or appropriate in connection with the transactions
contemplated hereby; (b) reaffirmations of all guaranties of the obligations of
AHP US under the AHP US Loan Agreement; and (c) such title policy endorsements,
certifications and other documents as Lender shall deem necessary or appropriate
in connection with the foregoing.
8.4 OPINIONS OF COUNSEL.
-------------------
Receipt by Lender of opinion of Borrower's, the Trusts' and the other
Guarantors' counsel in form and substance satisfactory to Lender.
8.5 MISCELLANEOUS.
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Receipt by Lender of such other documents, certificates, instruments
and agreements as shall be required hereunder or provided for herein or as
Lender or Lender's counsel may require in connection herewith.
8.6 NO DEFAULT.
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There shall exist no Default Condition or Event of Default;
8.7 REPRESENTATIONS TRUE.
--------------------
All representations and warranties contained herein shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of the Term
Loan is made.
8.8 LEVERAGE RATIO.
--------------
After giving effect to the transactions contemplated hereby, the
"Leverage Ratio" (as defined in the AHP US Loan Agreement) shall be not more
than 2.00 to 1.00.
8.9 FINANCIAL STATEMENTS.
--------------------
Lender shall have received financial statements for Borrower, prepared
as of a current date, in form and substance satisfactory to Lender.
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8.10. CERTAIN AGREEMENTS.
------------------
Lender shall have received copies of "The Cavalino Trust" and "▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇'▇ Cayman Interest in Possession Settlement", each of which shall be
satisfactory to Lender in all respects.
8.11 COMPLIANCE WITH CONDITIONS.
--------------------------
Borrower's request for disbursement of the Term Loan, and the
acceptance by Borrower of the proceeds thereof, shall constitute a
representation and warranty by Borrower, as of the date of such disbursement of
the Term Loan, that the applicable conditions specified in Sections 8.1 through
8.10 have been fully satisfied.
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IN WITNESS WHEREOF, Borrower and Lender each have set their hands and
Borrower as affixed his seal, all as of the day and year first above written.
SOUTHTRUST BANK, N. A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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/s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
-------------------------------- (SEAL)
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
Signed, sealed and delivered by Address for Notices to Borrower:
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ in the
presence of: c/o DSG International, Ltd.
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The Old PumpHouse
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▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇, ▇▇ 5 ▇▇ ▇▇▇▇▇▇▇
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Fax ▇▇▇▇-▇▇▇-▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Witness
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Notary Public
My commission expires:
December 31, 1997
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[NOTARY SEAL]
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