EXHIBIT 10.4
THIRD AMENDED AND RESTATED LOAN AGREEMENT
BETWEEN
NATIONSBANK, N.A. (SOUTH)
AND
CRYOLIFE, INC.
DATED AS OF AUGUST 30, 1996
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS AND RULES OF CONSTRUCTION.............................1
SECTION 101. Specific Definitions.............................1
SECTION 102. Accounting Terms.................................8
SECTION 103. Titles...........................................8
SECTION 104. Number and Gender................................8
ARTICLE II - THE LOANS........................................................8
SECTION 201. The Loans........................................8
SECTION 202. Collateral and Guaranties........................9
SECTION 203. Agreements Regarding Interest and Other
Charges..........................................10
SECTION 204. Indemnity........................................11
SECTION 205. Capital Adequacy.................................11
ARTICLE III - REPRESENTATIONS AND WARRANTIES..................................12
SECTION 301. Organization and Existence; Subsidiaries.........12
SECTION 302. Financial Statements.............................12
SECTION 303. Borrower Authority and Power.....................12
SECTION 304. No Defaults......................................12
SECTION 305. No Pending Claims................................13
SECTION 306. No Outstanding Judgments.........................13
SECTION 307. Outstanding Securities...........................13
SECTION 308. Tax Returns......................................13
SECTION 309. Franchises, Licenses, Permits, Etc...............13
SECTION 310. No Governmental Consents Required................13
SECTION 311. ERISA Matters....................................14
SECTION 312. Regulation U and Other Securities Law Matters....14
SECTION 313. Environmental Representations....................14
SECTION 314. Reaffirmation....................................14
ARTICLE IV - AFFIRMATIVE COVENANTS............................................15
SECTION 401. Inspection and Examination.......................15
SECTION 402. Books and Records................................15
SECTION 403. Financial Statements and Other Information.......15
SECTION 404. Maintenance of Assets............................16
SECTION 405. Maintenance of Insurance.........................16
SECTION 406. Payment of Taxes.................................16
SECTION 407. Environmental Matters............................17
SECTION 408. Primary Depository Relationships.................17
ARTICLE V - NEGATIVE COVENANTS................................................17
SECTION 501. Type of Business.................................18
SECTION 502. Transactions with Affiliates.....................18
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SECTION 503. Merger, Consolidation, Acquisitions, Etc.........18
SECTION 504. ERISA Matters....................................18
SECTION 506. Guaranties.......................................19
SECTION 507. Financial Covenants..............................19
SECTION 508. Funded Debt......................................20
ARTICLE VI - CONDITIONS TO LENDING............................................20
SECTION 601. Representations and Warranties...................20
SECTION 602. Performance of Covenants.........................20
SECTION 603. No Violation of Negative Covenants...............20
SECTION 604. No Material Adverse Changes......................20
SECTION 605. Delivery of Loan Documents.......................20
SECTION 606. No Default or Event of Default...................21
SECTION 607. Incidental Matters...............................21
ARTICLE VII - EVENTS OF DEFAULT...............................................22
SECTION 701. Failure to Pay Liabilities.......................22
SECTION 702. Representations and Warranties...................22
SECTION 703. Negative Covenant Breach.........................22
SECTION 704. Other Covenant Breach............................22
SECTION 705. Other Agreements with Lender.....................22
SECTION 706. Voluntary Bankruptcy.............................22
SECTION 707. Involuntary Bankruptcy...........................23
SECTION 708. Other Indebtedness...............................23
SECTION 709. Material Adverse Change..........................23
SECTION 710. Change in Control................................23
ARTICLE VIII - REMEDIES UPON DEFAULT..........................................24
SECTION 801. Acceleration and Other Remedies..................24
SECTION 802. Application of Proceeds; Collection Costs........24
ARTICLE IX - MISCELLANEOUS....................................................25
SECTION 901. Time of Essence..................................25
SECTION 902. Entire Agreement.................................25
SECTION 903. Several Counterparts.............................25
SECTION 904. Survival of Warranties...........................25
SECTION 905. Rights Cumulative................................25
SECTION 906. No Release; Term of Agreement....................25
SECTION 907. Waivers and Modifications........................26
SECTION 908. Waiver of Presentment, Etc.......................26
SECTION 909. Notices..........................................26
SECTION 910. No Assignment by Borrower........................26
SECTION 911. Lender's Expenses................................26
SECTION 912. Payment of Taxes.................................27
SECTION 913. Demand Liabilities...............................27
SECTION 914. Set-Offs Against Deposits........................27
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SECTION 915. Participant Set-Off..............................27
SECTION 916. Confidentiality..................................27
SECTION 917. Governing Law; Severability......................28
SECTION 918. Successors and Assigns...........................28
SECTION 919. Jury Trial Waiver and Consent to Jurisdiction
and Venue........................................28
Exhibit A - Promissory Note Form
Exhibit B - Security Agreement Form
Exhibit C-1 - Stock Pledge Agreement Form
Exhibit C-2 - Stock Power Form
Exhibit D - Subsidiary Guaranty Agreement Form
Exhibit E - Subsidiary Security Agreement Form
Exhibit F - Borrower's Closing Certificate Form
Exhibit G - Guarantor's Closing Certificate Form
Exhibit H - Opinion Letter Form
Exhibit I - Waiver and Consent Form
Exhibit J - Compliance Certificate Form
Schedule 301 - Subsidiaries
Schedule 304 - Existing Defaults
Schedule 305 - Pending Claims
Schedule 505 - Permitted Liens
Schedule 508 - Permitted Funded Debt
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THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS AGREEMENT made and entered into as of the 30th day of August,
1996, by and between NATIONSBANK, N.A. (SOUTH) ("Lender"), a national banking
association which is the successor by merger to Bank South, a Georgia banking
corporation formerly known as Bank South, N.A., and CRYOLIFE, INC. ("Borrower"),
a Florida corporation.
W I T N E S S E T H:
Pursuant to a Loan Agreement, dated as of July 12, 1989, between Lender
and Borrower, as amended and restated by an Amended and Restated Loan Agreement,
dated as of February 20, 1992, between Lender and Borrower, and as further
amended and restated by a Second Amended and Restated Loan Agreement, dated as
of August 4, 1994, between Lender and Borrower (collectively, the "Prior Loan
Agreements"), Lender has agreed to make certain loans available to Borrower.
Borrower and Lender desire to again amend and restate the Prior Loan Agreements
and are entering into this Agreement for such purpose.
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreements, warranties and representations herein made, Lender and Borrower
agree to amend and restate the Prior Loan Agreements as follows:
ARTICLE I - DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 101. SPECIFIC DEFINITIONS. As used herein, the following terms
shall have the following meanings:
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with Borrower. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"This Agreement" means this agreement as originally executed or as it
may from time to time be amended by one or more written amendments or
modification agreements entered into pursuant to the applicable provisions
hereof.
"Borrower" shall have the meaning given that term in the preamble to
this Agreement, and such term also shall include Borrower's successors and
assigns.
"Capital Expenditures" shall mean expenditures of over $10,000 each
made or
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liabilities incurred by Borrower for the acquisition of any fixed assets or
improvements (and any replacements, substitutions or additions thereto) which
have a useful life of more than one (1) year, including the direct or indirect
acquisition of such assets by way of increased product or service changes,
off-set items or otherwise, and payments made during the relevant fiscal period
with respect to Capitalized Lease Obligations, all as determined on a
consolidated basis; provided, however, that for purposes of determining
compliance with Section 507(b), capital expenditures for leasehold improvements
and equipment made by Borrower for its new corporate headquarters building shall
be excluded.
"Capitalized Lease Obligations" shall mean any indebtedness of Borrower
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with generally accepted accounting
principles in effect from time to time, and the amount of such indebtedness
shall be the capitalized amount of such obligations determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied.
"Collateral" means and includes all property assigned or pledged to
Lender or in which Lender has been granted a security interest or to which
Lender has been granted security title under this Agreement or the other
Financing Documents and the proceeds thereof.
"Contractual Obligation" of any Person shall mean any provision of any
agreement, instrument, security, or undertaking to which such Person is a party
or by which it or any of the property owned by it is bound.
"Credit Expiration Date" shall mean September 1, 1998, as such date may
be extended, accelerated or amended pursuant to this Agreement.
"Credit Parties" shall mean, collectively, Borrower and its
Subsidiaries.
"CryoLife International" shall mean CryoLife International, Inc., a
Florida corporation which is a Subsidiary of Borrower, and its successors and
assigns.
"Current Assets" shall mean, at any date, the amount which all of the
current assets of Borrower would be shown on a consolidated balance sheet of
Borrower at such date prepared in accordance with generally accepted accounting
principles consistently applied.
"Current Liabilities" shall mean, at any date, the amount at which all
of the current liabilities of Borrower would be shown on a consolidated balance
sheet of Borrower at such date prepared in accordance with generally accepted
accounting principles consistently applied.
"Current Maturities of Funded Debt" shall mean, with respect to any
particular period, the sum of all principal payments scheduled to be made during
such period in respect of the Funded Debt of Borrower (which for purposes hereof
shall include the
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allocated principal portion of payments due on Capitalized Lease Obligations,
and also shall include the current portion of any other Funded Debt).
"Current Ratio" shall mean, at any date, the ratio of Borrower's
Current Assets to its Current Liabilities at such time.
"Debt Coverage Ratio" shall mean, with respect to any particular fiscal
period of Borrower, the ratio of (a) Borrower's EBITDAR for the consecutive
4-quarter period ending therewith to (b) the sum (without duplication) of (i)
Borrower's Current Maturities of Funded Debt for the immediately succeeding
consecutive 4-quarter period plus (ii) Borrower's Interest Expense for the
consecutive 4-quarter period ending therewith plus (iii) Borrower's Rental
Expense for the immediately succeeding consecutive 4-quarter period, all as
determined on a consolidated basis.
"Default" shall mean any event which, with the giving of notice or
lapse of time (or both), would become an Event of Default.
"EBIT" shall mean, for any fiscal period of Borrower, an amount equal
to the sum of Borrower's Net Income (Loss) for such period plus, to the extent
subtracted in determining such Net Income (Loss), (i) Borrower's taxes based on
income and (ii) Borrower's Interest Expense, all as determined on a consolidated
basis.
"EBITDAR" shall mean, for any fiscal period of Borrower, an amount
equal to Borrower's EBIT for such period plus, to the extent deducted in
determining such EBIT, Borrower's depreciation and amortization expenses and
Rental Expense, all as determined on a consolidated basis.
"Environmental Laws" shall mean all federal, state, local and foreign
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including without limitation ambient
air, surface water, ground water, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
P.L. 93-406, as amended.
"Event of Default" shall mean any of the events specified in Article
VII of this Agreement, provided that any express requirement therein for notice
or lapse of time shall have been satisfied.
"Final Maturity Date" shall mean September 1, 2003, as such date may be
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extended, accelerated or amended pursuant to this Agreement.
"Financing Documents" means and includes this Agreement, the Note, the
Security Agreement, each Stock Pledge Agreement, each Subsidiary Guaranty, each
Subsidiary Security Agreement, and any extensions, renewals, modifications or
substitutions thereof or therefor, and all other associated loan and collateral
documents including, without limitation, all guaranties, suretyship agreements,
security agreements, pledge agreements, security deeds, subordination
agreements, exhibits, schedules, attachments, financing statements, notices,
consents, waivers, opinions, letters, reports, records, title certificates and
applications therefor, assignments, stock powers or transfers, documents,
instruments, information and other writings related thereto, or furnished by any
Credit Party to Lender in connection therewith or in connection with any of the
Collateral, including without limitation any such documents executed and
delivered pursuant to Section 202 hereof; provided, however, that this term
shall not include the Prior Loan Agreements or the Prior Security Agreements.
"Funded Debt" shall mean, for any particular Person, all Indebtedness
for money borrowed, Indebtedness secured by purchase money liens, Capitalized
Lease Obligations, conditional sales contracts and similar title retention debt
instruments, all as determined for such Person on a consolidated basis. The
calculation of Funded Debt for any particular Person shall include all Funded
Debt of such Person plus all Funded Debt of other Persons to the extent
guaranteed by such Person, to the extent secured by any assets of such Person,
or to the extent supported by a letter of credit issued for the account of such
Person.
"Governmental Authority" means any applicable nation or government, any
state, local or other political subdivision thereof, any court, and any other
entity exercising executive, legislative, judicial, regulatory, or
administrative functions of or pertaining to government.
"Guaranty" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received.
"Herein", "hereof", and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular article, paragraph,
section or other subdivision.
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"Indebtedness" of any Person shall mean, without duplication: (i) all
obligations of such Person which in accordance with generally accepted
accounting principles consistently applied would be shown on a consolidated
balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments); (ii) all rental obligations under leases required to be
capitalized under generally accepted accounting principles consistently applied;
(iii) all Guaranties of such Person (including contingent reimbursement
obligations under undrawn letters of credit); and (iv) Indebtedness of others
secured by any Lien upon property owned by such Person, whether or not assumed.
"Intellectual Property Rights" shall mean, with respect to any
particular Person, all patents, patent applications, continuation, refile and
reissue patent applications, trademarks, service marks, trademark and service
▇▇▇▇ applications, trade names, copyrights, copyright registrations, copyright
applications, trade secrets and other similar proprietary information
(including, but not by way of limitation, inventions, technical information,
processes, algorithms, procedures, specifications, designs, knowledge, know-how,
data and databases) now owned or hereafter acquired by such Person.
"Interest Expense" shall mean, for any fiscal period of Borrower, the
total interest expense of Borrower, as determined on a consolidated basis in
accordance with generally accepted accounting principles consistently applied.
"Lender" shall have the meaning given that term in the preamble to this
Agreement, and such term also shall include Lender's successors and assigns.
"Leverage Ratio" shall mean, at any date, the ratio of Borrower's Total
Liabilities to its Net Worth at such time.
"Liabilities" means all indebtedness, liabilities, and obligations of
Borrower of any nature whatsoever which Lender may now or hereafter have, own or
hold, and which now or hereafter arise under or on account of this Agreement,
the Note or any of the other Financing Documents and any extensions, renewals,
modifications or substitutions thereof or therefor.
"Lien" shall mean any mortgage, pledge, collateral assignment, security
interest, security deposit, encumbrance, lien or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction, but excluding licenses granted in the ordinary course of the
grantor's business).
"Loans" shall mean any and all Loans made by Lender to Borrower
pursuant to Section 201 hereof.
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"Maximum Availability" shall mean $10,000,000, as such amount may be
reduced or amended pursuant to this Agreement.
"Net Income (Loss)" shall mean, for any fiscal period of Borrower, the
net income (or loss) of Borrower on a consolidated basis for such period (taken
as a single accounting period) determined in conformity with generally accepted
accounting principles consistently applied, but excluding therefrom (to the
extent otherwise included therein and without duplication) (i) any gains or
losses, together with any related provisions for taxes, realized by Borrower
upon any sale of its assets other than in the ordinary course of business, (ii)
any other non-recurring gains or losses, and (iii) any income or loss of any
other Person acquired prior to the date such other Person becomes a Subsidiary
of Borrower or is merged into or consolidated with Borrower or all or
substantially all of such other Person's assets are acquired by Borrower.
"Net Worth" shall mean, as of any particular date, Borrower's total
shareholder's equity (including capital stock, additional paid-in capital, and
retained earnings after deducting treasury stock) which would appear as such on
a consolidated balance sheet of Borrower prepared in accordance with generally
accepted accounting principles as then in effect.
"Note" shall mean the Promissory Note substantially in the form of
Exhibit A attached hereto to be executed by Borrower in favor of Lender to
evidence the Loans, and all renewals, extensions, modifications or replacements
thereof.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Prior Loan Agreements" shall have the meaning given such term in the
preamble to this Agreement.
"Prior Security Agreements" shall mean the Security Agreement
(Equipment) and the Security Agreement (Receivables/Inventory), both dated
December 31, 1986, executed by Borrower in favor of Lender, as amended, and the
Equipment Security Agreement, dated as of August 4, 1994, executed by Borrower
in favor of Lender.
"Purchase Money Indebtedness" shall mean (i) Indebtedness for the
payment of all or any part of the purchase price of any fixed assets, (ii) any
Indebtedness incurred for the sole purpose of financing or refinancing all or
any part of the purchase price of any fixed assets, (iii) Capitalized Lease
Obligations, and (iv) any renewals, extensions or refinancings thereof (but not
any increases in the principal amounts thereof outstanding at that time).
"Purchase Money Lien" shall mean a Lien upon fixed assets which secures
the Purchase Money Indebtedness relating thereto but only if such Lien shall at
all times be confined solely to the fixed assets the purchase price of which was
financed or refinanced
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through the incurrence of the Purchase Money Indebtedness secured by such Lien
and only if such Lien secures solely such Purchase Money Indebtedness.
"Rental Expense" shall mean, for any fiscal period of Borrower, the
total rental expense of Borrower for such period, as determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied, and which shall include without limitation rental expense
under operating leases.
"Revolving Loan Period" shall mean the period which runs from the date
of this Agreement until the Credit Expiration Date.
"Security Agreement" shall mean the Amended and Restated Security
Agreement, substantially in the form of Exhibit B attached hereto, executed or
to be executed by Borrower in favor of Lender pursuant to this Agreement and any
modification or replacement thereof or therefor.
"Stock Pledge Agreement" shall mean any and all Stock Pledge and
Security Agreements, substantially in the form of Exhibit C-1 attached hereto,
executed or to be executed by Borrower in favor of Lender pursuant to this
Agreement and any modification or replacement thereof or therefor.
"Subsidiary" means, as applied to Borrower, (i) any corporation of
which 50% or more of the outstanding stock (other than directors' qualifying
shares) having ordinary voting power to elect a majority of its board of
directors (or other governing body), regardless of the existence at the time of
a right of the holders of any class or classes (however designated) of
securities of such corporation to exercise such voting power by reason of the
happening of any contingency, or any partnership of which 50% or more of the
outstanding partnership interests is, at the time, directly or indirectly owned
by Borrower or by one or more Subsidiaries of Borrower, and (ii) any other
entity which is directly or indirectly controlled or capable of being controlled
by Borrower or by one or more Subsidiaries of Borrower.
"Subsidiary Guaranty" shall mean any and all Guaranty Agreements,
substantially in the form of Exhibit D attached hereto, executed or to be
executed by a Subsidiary of Borrower in favor of Lender and any modifications or
replacements thereof or therefor.
"Subsidiary Security Agreement" shall mean any and all Security
Agreements, substantially in the form of Exhibit E attached hereto, executed or
to be executed by a Subsidiary of Borrower in favor of Lender and any
modifications or replacements thereof or therefor.
"Term Loan Period" shall mean the period which runs from the Credit
Expiration Date through the Final Maturity Date.
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"Tissue Freezers" shall mean, collectively, the tissue freezers leased
or loaned by Borrower to third parties in the ordinary course of Borrower's
business.
"Total Liabilities" shall mean, as of any particular date, the amount
which all liabilities of Borrower would be shown on a consolidated balance sheet
of Borrower at such date prepared in accordance with generally accepted
accounting principles consistently applied.
"Voting Stock" shall mean the securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors of such
corporation (or Persons performing similar functions).
SECTION 102. ACCOUNTING TERMS. All accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with generally
accepted accounting principles consistently applied.
SECTION 103. TITLES. The titles of the Articles and Sections herein
appear as a matter of convenience only and shall not affect the interpretation
hereof.
SECTION 104. NUMBER AND GENDER. Words importing the singular number
hereunder shall include the plural number and vice versa, and any pronoun used
herein shall be deemed to cover all genders.
ARTICLE II - THE LOANS
SECTION 201. THE LOANS. (a) From time to time upon Borrower's request,
and subject to the terms and conditions of this Agreement, Lender agrees to
advance to Borrower prior to the Credit Expiration Date amounts which do not
exceed the Maximum Availability in aggregate outstanding principal amount at any
one time. Advances made by Lender to Borrower under this Section 201 are
hereinafter collectively called the "Loans". Notwithstanding anything in this
Agreement to the contrary, the Lender shall not be obligated hereunder to make
any Loans on or after the earlier of (i) the Credit Expiration Date or such
later date to which such expiration date may be extended by Lender in its
discretion or (ii) the date Lender pursuant to Section 801(a) hereof terminates
its obligation to make any further Loans to Borrower hereunder. Subject to the
terms and conditions hereof, prior to the Credit Expiration Date, Borrower, at
its option, from time to time may borrow, repay and reborrow all or any portion
of the Loans, except that Borrower's right to prepay Loans bearing interest
based on the Adjusted LIBOR (as such term is defined in the Note) shall be
subject to the breakage provisions of the Note and any such prepayment shall be
applied as provided in the Note.
(b) The proceeds of the Loans may be used by Borrower only to finance
acquisitions by the Borrower and to finance Borrower's and its Subsidiaries'
working capital
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and other general corporate needs (including without limitation to finance the
cost of the leasehold improvements and equipment purchases made or to be made by
Borrower for its new corporate headquarters building in Marietta, Georgia).
(c) The Loans are to be evidenced by the Note. Interest on the Loans
will accrue at the rate or rates per annum set forth in the Note, and principal
and interest on the Loans will be payable in the manner prescribed in the Note.
(d) Borrower shall pay to Lender an origination fee for the Loan
facility provided by Lender to Borrower under this Section 201, which fee shall
be in the amount of $5,000 (and Lender shall credit against such sum the $5,000
commitment letter fee previously paid by Borrower to Lender in connection with
such facility) and such fee shall be deemed fully earned by Lender upon the
parties' execution and delivery of this Agreement from the Borrower and shall be
non-refundable.
(e) Borrower shall pay to Lender unused facility fees for Borrower's
Loan facility hereunder during the Revolving Loan Period computed on the daily
average unused portion of the Maximum Availability at a rate per annum of
three-eighths of one percent (.375%). Such unused facility fees shall be payable
by Borrower to Lender quarterly in arrears, commencing on November 30, 1996, and
continuing to be due on the last day of each February, May, August and November
thereafter during the Revolving Loan Period as well as on the Credit Expiration
Date. Notwithstanding anything in this Section to the contrary, however, the
total unused facility fees payable by Borrower to Lender under clauses (x) and
(y) above shall not exceed the sum of $6,250 and $25,000, respectively, during
each of the following two periods: the period from the date of this Agreement
though August 31, 1997, and the period from September 1, 1997 through the Credit
Expiration Date.
(f) All of the Loans shall constitute one loan by Lender to Borrower.
Lender shall maintain a loan account on its books in which shall be recorded all
Loans, all payments made by Borrower on the Loans and all other appropriate
debits and credits as provided in this Agreement and the Note with respect
thereto, including without limitation all charges, expenses and interests. All
entries in such account shall be made in accordance with the Lender's customary
accounting practices as in effect from time to time. Lender shall render to
Borrower a monthly statement setting forth the balance of such account,
including principal, interest, expenses and fees, and each such statement shall,
absence manifest error or omissions, be presumed correct and binding upon
Borrower and shall constitute an account stated unless, within thirty (30) days
after receipt of any such statement from Lender, Borrower shall deliver to
Lender a written objection thereto specifying the error or errors or omission or
omissions, if any, contained in such statement.
(g) All interest and fees owing by Borrower to Lender hereunder or
under the other Financing Documents shall be computed on the basis of a 360-day
year and the actual days elapsed
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SECTION 202. COLLATERAL AND GUARANTIES. (a) All of the Loans and the
other Liabilities shall be secured pursuant to the Security Agreement which
shall be duly executed and delivered by Borrower to Lender in connection with
this Agreement and pursuant to which Lender shall be granted a first-priority
security interest in all of Borrower's present or future accounts, contract
rights, chattel paper, general intangibles (excluding its Intellectual Property
Rights but including the proceeds thereof), instruments, documents, inventory,
equipment, fixtures, leasehold improvements, and other assets and all proceeds
thereof (excluding its Intellectual Property Rights but including the proceeds
thereof). In addition, all of the Loans and the other Liabilities shall also be
secured pursuant to a Stock Pledge Agreement which (together with an irrevocable
stock power in the form of Exhibit C-2 attached hereto) shall be duly executed
and delivered by Borrower to Lender in connection with this Agreement and
pursuant to which Lender shall be granted a first-priority security interest in
all of the capital stock of CryoLife International and all proceeds thereof.
(b) All of the Loans and the other Liabilities shall be fully
guaranteed by CryoLife International pursuant to a Subsidiary Guaranty which
shall be duly executed and delivered by CryoLife International to Lender in
connection with this Agreement. In addition, the obligations of CryoLife
International under such Subsidiary Guaranty shall be secured pursuant to a
Subsidiary Security Agreement which shall be duly executed and delivered by
CryoLife International to Lender in connection with this Agreement, and pursuant
to which Lender shall be granted a first-priority security interest in all of
CryoLife International's present or future accounts, contract rights, chattel
paper, general intangibles (excluding its Intellectual Property Rights but
including the proceeds thereof), instruments, documents, inventory, equipment,
fixtures, leasehold improvements, and other assets and all proceed thereof.
(c) Within ten (10) days after Borrower's creation or acquisition of
any Subsidiary, Borrower shall pledge all of the capital stock of such
Subsidiary to the Lender as additional collateral for the Liabilities, Borrower
shall cause such Subsidiary to guaranty the repayment of the Liabilities to
Lender, and Borrower shall cause such Subsidiary to grant to the Lender a
first-priority perfected security interest in and lien on all of its assets
(excluding its Intellectual Property Rights, but including the proceeds thereof)
as additional collateral for the Liabilities, all pursuant to such Subsidiary
Guaranties, Subsidiary Security Agreements, Stock Pledge Agreements and other
collateral documents as are acceptable in all respects to the Lender. Borrower
also shall provide Lender with any and all closing certificates, financing
statement filings, opinions of counsel and other closing documents of the types
described in Section 605 hereof as the Lender may request with respect to such
pledge, guaranty and collateral documents.
(d) Borrower shall execute (or cause to be executed) any and all
financing statements, fixture filings, certificate of title applications,
collateral assignments, stock powers or transfers, or other documents as Lender
may reasonably request from time to time in order to perfect or maintain the
perfection and priority of Lender's security interest in the Collateral now or
hereafter covered by the Security Agreement, any Stock Pledge Agreement or any
Subsidiary Security Agreement or any additional collateral documents executed by
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Borrower or any Subsidiary pursuant to this Section 202.
(e) If any of the Collateral will be located on any premises which are
leased by Borrower or any of its Subsidiaries from a third party or, if such
premises are owned by Borrower or one of its Subsidiaries, on which any creditor
(other than Lender) holds a security deed, mortgage, or deed of trust granted by
Borrower or one of its Subsidiaries, Borrower shall cause each such third party
lessor or creditor to execute in favor of Lender a Waiver and Consent in
substantially the form of Exhibit I attached hereto (or in such other form as
may be acceptable to Lender).
SECTION 203. AGREEMENTS REGARDING INTEREST AND OTHER CHARGES. Pursuant
to the Official Code of Georgia Annotated Section 7-4-2, Lender and Borrower
hereby agree that the only charge imposed or to be imposed by Lender upon
Borrower for the use of money in connection with the Loans is and will be the
interest required under the Note, which interest will be at the rates which are
or will be expressed in simple interest terms in the Note as of the date of such
Note. Borrower hereby acknowledges and agrees that Lender has not imposed on it
any minimum borrowing requirements, reserve or escrow balances, or compensating
balances related in any way to this Agreement. In no event shall the amount of
interest due and payable under this Agreement, the Note or any of the other
Financing Documents exceed the maximum rate of interest allowed by applicable
law (including, without limitation, Official Code of Georgia Annotated Section
7-4-18) and, in the event any such payment is inadvertently made by Borrower or
inadvertently received by Lender, such excess sum shall be credited as a payment
of principal. It is the express intent hereof that Borrower not pay and Lender
not receive, directly or indirectly or in any manner, interest in excess of that
which may be lawfully paid under applicable law.
SECTION 204. INDEMNITY. Borrower agrees to indemnify and hold harmless
the Lender from and against any and all claims, liabilities, losses, damages,
actions and demands by any party against the Lender arising out of the making,
holding or administration of the Loans or the Collateral, allegations of any
participation by the Lender in the affairs of any or all of the Credit Parties
or allegations that the Lender has any joint liability with any or all of the
Credit Parties for any reason, or any claims against the Lender by any
shareholder of the Borrower, unless, with respect to the above, the Lender is
finally and judicially determined to have acted or failed to act with gross
negligence or to have engaged in willful misconduct.
SECTION 205. CAPITAL ADEQUACY. Without limiting any other provisions of
this Agreement, in the event that the Lender determines after the date hereof
that the introduction or change after the date of this Agreement of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, or any change therein or in the interpretation
or application thereof after the date of this Agreement, or compliance by the
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from a central bank or governmental authority or body having
jurisdiction which is introduced or changed after the date of this Agreement,
does or shall
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have the effect of reducing the rate of return on the Lender's capital as a
consequence of its obligations hereunder to a level below that which the Lender
could have achieved but for such law, treaty, rule, regulation, guideline or
order or such change or compliance (taking into consideration the Lender's
policies with respect to capital adequacy and assuming the full utilization of
the Lender's capital immediately before such adoption, change or compliance) by
an amount reasonably deemed by the Lender to be material, then the Lender shall
promptly after its determination of such occurrence notify the Borrower thereof.
The Borrower agrees to pay to the Lender as an additional fee from time to time,
within ten (10) days after written notice and demand by the Lender, such amount
as the Lender certifies to be the amount that will compensate it for such
reduction in connection with its obligations hereunder. A certificate of the
Lender claiming compensation under this Section shall be conclusive in the
absence of manifest error or fraud and shall set forth the nature of the
occurrence giving rise to such compensation, the additional amount or amounts to
be paid to it hereunder and the method by which such amounts were determined. In
determining such amount, the Lender may use reasonable averaging and attribution
methods.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that each of the following
is true, correct, complete and accurate in all respects:
SECTION 301. ORGANIZATION AND EXISTENCE; SUBSIDIARIES. (a) Borrower is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida, and is qualified to do business as a foreign
corporation in the State of Georgia. CryoLife International is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida, and is qualified to do business as a foreign corporation in
the State of Georgia.
(b) Borrower has no Subsidiaries as of the date of this Agreement,
except for the Subsidiaries identified on Schedule 301 attached hereto, and
Borrower agrees that it will not hereafter acquire or form any Subsidiaries
without giving Lender at least thirty (30) days' prior written notice thereof
and complying with any applicable requirements of Sections 202 and 503 hereof.
In the event Borrower so acquires or forms any Subsidiaries, each Subsidiary of
Borrower will be a corporation duly organized, validly existing and in good
standing with the laws of the state of its incorporation.
SECTION 302. FINANCIAL STATEMENTS. Each financial statement of any
Credit Party which has been delivered to Lender presents fairly the financial
condition of such Credit Party as of the date indicated therein and the results
of its operations for the period(s) shown therein. There has been no material
adverse change in the financial condition or operations of the Credit Parties
taken as a whole since the date of said financial statement, nor has any Credit
Party mortgaged, pledged or granted a security interest in or encumbered any of
its assets since such date.
SECTION 303. BORROWER AUTHORITY AND POWER. Each Credit Party has full
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power and authority to make, execute and perform in accordance with the
respective terms thereof each of the Financing Documents executed by it. The
execution and performance by each Credit Party of each and every of the
Financing Documents executed by it have been duly authorized by all requisite
action, and each and every one of them constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its respective
terms.
SECTION 304. NO DEFAULTS. Except as set forth on Schedule 304 attached
hereto, none of the Credit Parties is in default under any contracts,
agreements, licenses, franchises, leases, security agreements, deeds, mortgages,
promissory notes, documents, instruments or chattel paper to which it is a party
or by which it or any of its properties or assets is bound or affected.
Execution, delivery and performance by any Credit Party of each and every of the
Financing Documents executed by it do not violate any provision of law or
regulations and does not result in a breach of or constitute a default under any
agreement, indenture or other instrument to which any Credit Party is a party or
by which any Credit Party is bound.
SECTION 305. NO PENDING CLAIMS. Except as disclosed on Schedule 305
attached hereto, there is no claim, action, suit, arbitration, investigation,
condemnation or other proceeding at law or in equity, or by or before any
federal, state, local or other governmental agency, or by or before any other
agency or arbitrator, nor is there any judgment, order, writ, injunction or
decree of any court pending, anticipated or (to Borrower's knowledge) threatened
against any Credit Party or against any of its properties or assets which might
have a material adverse effect on the Credit Parties taken as a whole or their
respective properties or assets, or which might call into question the validity
or enforceability of any of the Financing Documents, or which might involve the
alleged violation by any Credit Party of any federal, state, local or other law,
rule or regulation; provided, however, that no representation is made in this
Section 305 with respect to Environmental Laws.
SECTION 306. NO OUTSTANDING JUDGMENTS. There are no outstanding or
unpaid judgments against any Credit Party.
SECTION 307. OUTSTANDING SECURITIES. All of Borrower's and each
Subsidiary's outstanding capital stock has been validly issued, fully paid and
is non-assessable. Borrower is not in violation of any applicable federal,
state, local, or other securities laws and regulations with respect to the
issuance of any of its capital stock or any other of its securities.
SECTION 308. TAX RETURNS. Each Credit Party has filed or caused to be
filed all required federal, state, local, or other tax returns when due and has
paid (except as otherwise permitted by Section 406 hereof) all governmental
taxes and other charges imposed upon it or on any of its properties or assets.
Borrower does not know of any proposed additional tax assessment against any
Credit Party.
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SECTION 309. FRANCHISES, LICENSES, PERMITS, ETC. Each Credit Party has
all material franchises, licenses, permits, patents, copyrights, trademarks,
trade names, and other authority necessary to enable it to conduct its business
as presently conducted; provided, however, that no representation is made in
this Section 309 with respect to Environmental Laws.
SECTION 310. NO GOVERNMENTAL CONSENTS REQUIRED. No consent, approval,
order, authorization, designation, registration, declaration, or filing (except
the filing of financing statements or notations of liens on certificates of
title) with or of any federal, state, local, or other governmental authority or
public body on the part of any Credit Party is required in connection with any
Credit Party's execution, delivery or performance of any of the Financing
Documents; or if required, all such prerequisites have been fully satisfied.
SECTION 311. ERISA MATTERS. None of the Credit Parties has incurred any
material accumulated funding deficiency within the meaning of the ERISA, and
none of the Credit Parties has incurred any material liability to the Pension
Benefit Guaranty Corporation established under ERISA (or any successor thereto
under such Act) in connection with any employee benefit plan established or
maintained by any of the Credit Parties.
SECTION 312. REGULATION U AND OTHER SECURITIES LAW MATTERS. None of the
transactions contemplated in this Agreement (including, without limitation, the
use of the proceeds from the Loans) will violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including, without limitation, Regulations U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.
Borrower does not own or intend to carry or purchase any "margin stock" within
the meaning of said Regulation U, including margin stock originally issued by
it. None of the proceeds of the Loans will be used to purchase or carry (or
refinance any borrowing the proceeds of which were used to purchase or carry)
any "security" within the meaning of the Securities Exchange Act of 1934, as
amended.
SECTION 313. ENVIRONMENTAL REPRESENTATIONS. (a) Each Credit Party has
obtained all permits, licenses and other authorizations which are required under
Environmental Laws, and each Credit Party is in compliance in all material
respects with all terms and conditions of the required permits, licenses and
authorizations and is also in compliance in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Laws;
(b) Borrower is not aware of, and has not received notice of, any past,
present or future events, conditions, circumstances, activities, practices,
incidents, actions or plans which, with respect to any Credit Party, may
interfere with or prevent such Credit Party's compliance or continued compliance
in any material respect with Environmental Laws, or may give rise to any
material common law or legal liability, or otherwise form the
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basis of any material claim, action, demand, suit, proceeding, hearing, study or
investigation against such Credit Party, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, chemical, or industrial, toxic or
hazardous substance or waste; and
(c) There is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice or demand letter, notice of violation, investigation or
proceeding pending or threatened against any Credit Party relating in any way to
Environmental Laws.
SECTION 314. REAFFIRMATION. Each request for a Loan made by Borrower
pursuant to this Agreement shall constitute an automatic representation and
warranty by Borrower to Lender that there does not then exist any Default or
Event of Default as well as a reaffirmation as of the date of such request of
all of the representations and warranties of the Credit Parties contained in
this Agreement and the other Financing Documents (except as to those changes
otherwise consented to by Lender or contemplated herein).
ARTICLE IV - AFFIRMATIVE COVENANTS
For so long as this Agreement is in effect, and unless Lender expressly
consents in writing otherwise or to the contrary (which consent shall not be
unreasonably withheld), Borrower hereby expressly covenants and agrees as
follows:
SECTION 401. INSPECTION AND EXAMINATION. Upon reasonable request of
Lender, each Credit Party shall permit during regular business hours any person
designated by Lender to inspect and examine such Credit Party's financial books
and records, its minute books and other business memoranda and writings;
provided, however, that so long as no Event of Default has occurred and is then
continuing Borrower may condition Lender's (or its designee's) access to any
Credit Party's business memoranda and writings (other than its financial books
and records) on Lender's (or such designee's) entering into a suitable written
confidentiality agreement. Each Credit Party shall make available its officers
and employees to Lender to discuss the financial affairs of such Credit Party at
such reasonable times and intervals as Lender may request, and each Credit Party
shall promptly confirm or furnish in reasonable detail whatever information
relative to such Credit Party as Lender's authorized representative, auditor or
counsel may reasonably request.
SECTION 402. BOOKS AND RECORDS. Each Credit Party shall keep its books,
records and accounts in accordance with generally accepted accounting principles
and practices applied on a basis consistent with preceding years.
SECTION 403. FINANCIAL STATEMENTS AND OTHER INFORMATION. Borrower shall
promptly furnish to Lender: (1) Not later than 120 days after the end of each
subsequent fiscal year, consolidated and consolidating financial statements of
the Borrower, to include balance sheets and statements of income and
stockholders' equity, all in reasonable detail, prepared in accordance with
generally accepted accounting principles and
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certified by an independent accounting firm acceptable to Lender and accompanied
by a duly completed Compliance Certificate in the form of Exhibit J attached
hereto executed on behalf of Borrower by its chief financial officer; (2) Not
later than 30 days after and as of the end of each month (other than the final
month of each fiscal year), consolidated financial statements of Borrower, to
include balance sheets and statements of income and stockholders' equity, all in
reasonable detail, prepared in accordance with generally accepted accounting
principles (subject to changes resulting from year-end adjustments), and
certified by the chief financial officer of Borrower and accompanied by a duly
completed Compliance Certificate in the form of Exhibit J attached hereto
executed on behalf of Borrower by its chief financial officer; (3) Promptly upon
becoming aware of the existence of any Default or Event of Default, a written
notice specifying the nature and period of existence thereof and what action
Borrower is taking or proposes to take with respect thereto; (4) Promptly upon
becoming aware that the holder of any other evidence of indebtedness or security
of any Credit Party has given notice or taken any other action with respect to a
claimed default or event of default or event which, with the giving of notice or
passage of time, or both, would constitute a default, a written notice
specifying the notice given or action taken by such holder and the nature of the
claimed default or event and what action Borrower is taking or proposes to take
with respect thereto; (5) Promptly upon transmission thereof, copies of all
financial statements, proxy statements, notices and reports as Borrower shall
send to its public shareholders, if any, and copies of all registration
statements and all other reports which Borrower may file from time to time with
the Securities and Exchange Commission or any comparable state securities
regulatory agency; and (6) From time to time upon request of Lender, such other
information relating to the operations, business, and financial condition of any
Credit Party as Lender may reasonably request.
SECTION 404. MAINTENANCE OF ASSETS. Each Credit Party shall maintain
and keep all of its property and assets (other than Tissue Freezers) in good
repair, working order and condition and shall from time to time make all needful
and proper repairs, renewals and replacements thereto subject to reasonable wear
and tear.
SECTION 405. MAINTENANCE OF INSURANCE. Each Credit Party shall maintain
with financially sound and reputable insurers acceptable to Lender (i) with
reference to its property other than the Collateral, insurance against such
risks and in such amounts as is customary in the case of Persons of established
reputations engaged in the same or similar business and similarly situated, and
(ii) liability and worker's compensation insurance in such amounts as is
customary in the case of Persons of established reputations engaged in the same
or similar business and similarly situated (except that the dollar amount of
each Credit Party's liability insurance coverage must be acceptable to Lender),
and, upon request by Lender, shall furnish Lender copies of the policies under
which such insurance is carried. The Credit Parties' obligations concerning
insurance of the Collateral are governed by the applicable Financing Documents.
The Credit Parties shall not be required to maintain property insurance on
Tissue Freezers.
SECTION 406. PAYMENT OF TAXES. Each Credit Party shall punctually pay
and discharge all taxes, assessments and governmental charges or levies imposed
upon it or
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upon its income or upon any of its property, as well as all claims of any kind
which, if unpaid, might by law become a Lien upon its property, except taxes,
assessments, charges, levies or claims which are in good faith being timely
litigated or otherwise properly contested by such Credit Party and which cannot
become a Lien upon any of the Collateral with priority over the security
interest of Lender or as to which such Credit Party has established reserves
satisfactory to Lender. Upon any Credit Party's failure to make prompt payment
of any such obligation of such Credit Party not excepted above, Lender may, but
is under no obligation to, pay all or any part of the same or effect a
settlement or compromise thereof in the name of such Credit Party; and all
amounts so paid by Lender as well as the expenses incurred in negotiating or
attempting to negotiate a compromise or settlement will automatically become a
part of the Liabilities of Borrower under this Agreement and will bear interest
from the date of such payment at the lower of (i) the highest rate of interest
which Borrower has contracted to pay on any of the Liabilities or (ii) the
highest rate permissible under applicable law.
SECTION 407. ENVIRONMENTAL MATTERS. Borrower shall notify Lender in
writing, promptly upon learning thereof, of:
(i) any notice that any Credit Party is not in compliance in any
material respect with all terms and conditions of all permits, licenses and
authorizations which are required under Environmental Laws, or that any Credit
Party is not in compliance in any material respect with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Laws;
(ii) any notice of any past, present or future events, conditions,
circumstances, activities, practices, incidents, actions or plans which, with
respect to any Credit Party, may interfere with or prevent its compliance or
continued compliance in any material respect with Environmental Laws, or may
give rise to any material common law or legal liability on its part, or
otherwise form the basis of any material claim, action, demand, suit,
proceeding, hearing, study or investigation against it, based on or related to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste; and
(iii) any notice or claim of any civil, criminal or administrative
action, suit, demand, claim, hearing, notice or demand letter, notice of
violation, investigation, or proceeding pending or threatened against any Credit
Party relating in any way to Environmental Laws.
SECTION 408. PRIMARY DEPOSITORY RELATIONSHIPS. To the maximum extent
permitted by applicable law, the Credit Parties shall maintain their primary
depository relationships with Lender.
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ARTICLE V - NEGATIVE COVENANTS
For so long as this Agreement is in effect, and unless Lender expressly
consents in writing otherwise or to the contrary (which consent shall not be
unreasonably withheld), Borrower hereby expressly covenants and agrees to the
following negative covenants:
SECTION 501. TYPE OF BUSINESS. Borrower and its Subsidiaries shall not
engage in any type of business other than the development, sale, licensing or
use of medical products, bio-technology or tissue engineering or any activity
reasonably incidental thereto.
SECTION 502. TRANSACTIONS WITH AFFILIATES. None of the Credit Parties
shall engage in any transactions with an Affiliate, except on terms no less
favorable to such Credit Party than could be obtained in arms-length
transactions with others.
SECTION 503. MERGER, CONSOLIDATION, ACQUISITIONS, ETC. None of the
Credit Parties shall: (i) transfer all or substantially all of its assets to,
consolidate with or merge with any other Person; (ii) acquire all or
substantially all of the properties or capital stock of any other Person; or
(iii) create or acquire any Subsidiary or enter into any partnership or joint
venture; provided, however, that (a) any Subsidiary of Borrower may merge or
consolidate with, or convey all or substantially all of its assets to, Borrower
or another Subsidiary of Borrower (but Borrower must be the surviving
corporation for any such merger or consolidation involving Borrower), (b)
Borrower may acquire all or substantially all of the properties or capital stock
of another Person (or Borrower may form a Subsidiary to make such acquisition)
so long as such transaction does not cause a violation of Section 501 above or
503(iii)(e) below, Borrower complies with any and all requirements of Section
202(c) applicable thereto and no other Default or Event of Default would be
caused thereby, (c) Borrower may form a new Subsidiary so long as such
transaction does not cause a violation of Section 501 above or Section
503(iii)(e) below and Borrower complies with any and all requirements of Section
202(c) applicable thereto and no other Default or Event of Default would be
caused thereby, (d) any Credit Party may enter into a merger or consolidation in
connection with any acquisition transaction permitted under clause (b) above so
long as such Credit Party is the surviving corporation therefrom and no other
Default or Event of Default would be caused thereby, and (e) Borrower may
acquire all or substantially all of the properties or capital stock of another
Person or create or acquire Subsidiaries or enter into partnerships or joint
ventures so long as Borrower's total investment in all such acquisitions,
Subsidiaries, partnerships or joint ventures (whether in the form of cash, loans
or other property but exclusive of contributions or transfers of Intellectual
Property Rights) does not exceed $7,000,000 in the aggregate and no other
Default or Event of Default would be caused thereby. Lender agrees that, upon
request of Borrower from time to time (but not more frequently than once per
fiscal year), Lender may in its sole discretion increase the aforesaid
limitation on investment set forth in clause (e) above, which increase shall
become effective upon Lender's written notice to Borrower thereof.
SECTION 504. ERISA MATTERS. None of the Credit Parties shall incur or
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suffer to exist any material accumulated funding deficiency within the meaning
of ERISA or incur any material liability to the Pension Benefit Guaranty
Corporation established under ERISA (or any successor thereto under ERISA).
SECTION 505. LIENS. None of the Credit Parties shall create, incur,
assume or suffer to exist any Lien of any kind upon any of its property or
assets now owned or hereafter acquired, excluding, however, from the operation
of this covenant: (1) liens in connection with worker's compensation; (2)
deposits or pledges to secure the performance of bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds, and other obligations of a like nature arising in the normal
and ordinary course of business; (3) mechanics', workmen's, materialmen's, and
other like liens arising in the normal and ordinary course of business in
respect of obligations which are not overdue or which are being contested in
good faith by such Credit Party and as to which such Credit Party has
established reserves satisfactory to the Lender; (4) tax or other nonconsensual
liens, encumbrances or charges which are being litigated or otherwise properly
contested in good faith by such Credit Party and as to which such Credit Party
has established reserves satisfactory to the Lender; (5) the security interests,
security titles and liens conveyed to Lender under any of the Financing
Documents; (6) Purchase Money Liens securing Purchase Money Indebtedness to the
extent permitted under Section 508; and (7) any other Liens disclosed on
Schedule 505 attached hereto.
SECTION 506. GUARANTIES. None of the Credit Parties shall in any
manner, directly or indirectly, become a guarantor of any obligation of, or an
endorser of, or otherwise assume or become liable upon any obligations or other
indebtedness of any other Person except (i) pursuant to the Financing Documents
or (ii) in connection with the depositing of checks in the normal and ordinary
course of business.
SECTION 507. FINANCIAL COVENANTS. Borrower shall not violate any of the
following financial covenants.
(a) Borrower shall not change its fiscal year without Lender's consent;
(b) Borrower shall not make Capital Expenditures in any one fiscal year
ending on or after December 31, 1996, which exceed $2,000,000 in total amount
for such fiscal year;
(c) Borrower shall not permit its Current Ratio at any time on or after
the date of this Agreement to be less than 2.0 to 1.0;
(d) Borrower shall not permit its Leverage Ratio to exceed 1.0 to 1.0
at any time on or after the date of this Agreement;
(e) Borrower shall not permit its Net Worth to be less than $18,000,000
at any time during the period from the date of this Agreement through December
31, 1996, and Borrower shall not permit its Net Worth at any time during each
fiscal year of Borrower
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ending thereafter to be less than its minimum required Net Worth hereunder for
its immediately preceding fiscal year plus $500,000; and
(f) Borrower shall not permit its Debt Coverage Ratio for any fiscal
quarter or year to be less than 1.3 to 1.0.
SECTION 508. FUNDED DEBT. None of the Credit Parties shall incur,
assume, or suffer to exist any Funded Debt of such Credit Party, except (i)
Funded Debt arising under this Agreement or any of the other Financing
Documents, (ii) Purchase Money Indebtedness not to exceed $250,000 in total
amount for all the Credit Parties incurred in any fiscal year, and (iii) any
other Funded Debt described on Schedule 508 attached hereto.
ARTICLE VI - CONDITIONS TO LENDING
All of Lender's obligations under this Agreement, including without
limitation any obligation to lend or advance moneys to Borrower, are subject to
the fulfillment of each of the following conditions at or before the date hereof
as well as at the time each Loan is requested or made hereunder:
SECTION 601. REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Credit Parties contained in this Agreement and in each and
every of the other Financing Documents are true, correct, complete and accurate
in all material respects.
SECTION 602. PERFORMANCE OF COVENANTS. The Credit Parties shall have
duly and properly performed in all respects all covenants, agreements, and
obligations required by the terms of this Agreement or any of the other
Financing Documents to be performed by them.
SECTION 603. NO VIOLATION OF NEGATIVE COVENANTS. None of the Credit
Parties has taken or permitted to be taken any actions which would conflict with
any of the provisions of Article V of this Agreement.
SECTION 604. NO MATERIAL ADVERSE CHANGES. Since the date of this
Agreement, no material adverse change shall have occurred in the business,
operations, financial condition or assets of the Credit Parties taken as a
whole.
SECTION 605. DELIVERY OF LOAN DOCUMENTS. Borrower has delivered to
Lender, or caused to be delivered to the Lender, duly executed counterparts of
this Agreement, the Note, and the other Financing Documents required under
Sections 202(a) and 202(b), together with the following described additional
documents:
(a) Certificates from the Secretaries of State of Florida and Georgia
issued as of the date of this Agreement (or within 45 days thereof) stating that
each of the Borrower and CryoLife International is a corporation duly organized
(or, in the case of Georgia, is a
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foreign corporation qualified to do business) and is in good standing under
the laws of such states;
(b) A copy (certified by the Secretary of State of Florida within 45
days of the date of this Agreement) of each of Borrower's and CryoLife
International's certificate of incorporation;
(c) A Certificate of the Borrower in the form of Exhibit F attached
hereto, duly completed and executed;
(d) A Certificate of CryoLife International in the form of Exhibit G
attached hereto;
(e) An opinion of counsel for Borrower in the form of Exhibit H
attached hereto;
(f) Satisfactory evidence of the recording of such Uniform Commercial
Code financing statements and other documents in such filing offices as Lender
may deem necessary or appropriate to perfect or maintain the perfection of the
Lender's security interests under the Security Agreement and the Subsidiary
Security Agreement, as well as written reports of examinations of the public
records of such filing office as the Lender may deem necessary or appropriate
indicating that there are no other Liens of record covering any of the
Collateral covered by the Security Agreement or the Subsidiary Security
Agreement (except Liens permitted under Section 505 hereof);
(g) Any Waivers and Consents required from any landlord or creditor
under Section 202 hereof.
(g) Such other documents, instruments and agreements as may be
reasonably required by Lender or Lender's counsel in connection with any loan or
advance hereunder.
SECTION 606. NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred.
SECTION 607. INCIDENTAL MATTERS. All matters incidental to each advance
hereunder shall be reasonably satisfactory to Lender.
ARTICLE VII - EVENTS OF DEFAULT
The occurrence of any one or more of the following events will
constitute an event of default (herein called an "Event of Default") by Borrower
under this Agreement.
SECTION 701. FAILURE TO PAY LIABILITIES. Failure of Borrower punctually
379000.1
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to make payment of any amount payable to Lender, whether principal or interest,
on any of the Liabilities within five (5) days of the date the same becomes due
and payable, whether at maturity, or at a date fixed for any prepayment or
partial prepayment, or by acceleration or otherwise.
SECTION 702. REPRESENTATIONS AND WARRANTIES. If any statement,
representation, or warranty of any Credit Party made in this Agreement or in any
of the other Financing Documents at any time furnished by or on behalf of any
Credit Party to Lender proves to have been untrue, incorrect, misleading, or
incomplete in any material respect as of the date made.
SECTION 703. NEGATIVE COVENANT BREACH. Failure of any Credit Party
punctually and fully to perform, observe, discharge or comply with any of the
covenants set forth in Article V of this Agreement.
SECTION 704. OTHER COVENANT BREACH. Failure of any Credit Party
punctually and fully to perform, observe, discharge or comply with any of the
covenants set forth in this Agreement (other than Article V), which failure is
not cured within thirty (30) days after notice from Lender to Borrower.
SECTION 705. OTHER AGREEMENTS WITH LENDER. The occurrence of a default,
an event of default or an Event of Default under any of the other Financing
Documents or under any other agreement to which any Credit Party and Lender are
parties or under any other instrument executed by any Credit Party in favor of
Lender, including any loan agreements, notes, leases, deeds or other documents.
SECTION 706. VOLUNTARY BANKRUPTCY. If any Credit Party becomes
insolvent as defined in the Georgia Uniform Commercial Code or makes an
assignment for the benefit of creditors; or if any action is brought by any
Credit Party seeking dissolution of such Credit Party or liquidation of its
assets or seeking the appointment of a trustee, interim trustee, receiver, or
other custodian for any of its property; or if any Credit Party commences a
voluntary case under the Federal Bankruptcy Code; or if any reorganization or
arrangement proceeding is instituted by any Credit Party for the settlement,
readjustment, composition or extension of any of its debts upon any terms; or if
any action or petition is otherwise brought by any Credit Party seeking similar
relief or alleging that it is insolvent or unable to pay its debts as they
mature.
SECTION 707. INVOLUNTARY BANKRUPTCY. If any action is brought against
any Credit Party seeking dissolution of such Credit Party or liquidation of any
of its assets or seeking the appointment of a trustee, interim trustee, receiver
or other custodian for any of its property, and such action is consented to or
acquiesced in by such Credit Party or is not dismissed within sixty (60) days of
the date upon which it was instituted; or if any proceeding under the Federal
Bankruptcy Code is instituted against such Credit Party and (i) an order for
relief is entered in such proceeding or (ii) such proceeding is consented to or
acquiesced in by such Credit Party or is not dismissed within sixty (60) days of
the date upon
379000.1
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which it was instituted; or if any reorganization or arrangement proceeding is
instituted against any Credit Party for the settlement, readjustment,
composition, or extension of any of its debts upon any terms, and such
proceeding is consented to or acquiesced in by such Credit Party or is not
dismissed within sixty (60) days of the date upon which it was instituted; or if
any action or petition is otherwise brought against any Credit Party seeking
similar relief or alleging that it is insolvent, unable to pay its debts as they
mature, or generally not paying its debts as they become due, and such action or
petition is consented to or acquiesced in by such Credit Party or is not
dismissed within sixty (60) days of the date upon which it was brought.
SECTION 708. OTHER INDEBTEDNESS. If any Credit Party is in default on
indebtedness to another Person having any outstanding balance of $100,000 or
more or an event has occurred which, with the giving of notice or passage of
time, or both, will cause such Credit Party to be in default on any such
indebtedness to another Person.
SECTION 709. MATERIAL ADVERSE CHANGE. Any material adverse change in
the Credit Parties' financial condition or means or ability to pay the
Liabilities.
SECTION 710. CHANGE IN CONTROL. The acquisition after the date of this
Agreement by any Person (or by any two or more Persons acting in concert) except
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission) of either (i) a sufficient number of the
Voting Stock of Borrower so that the total number of such shares beneficially
owned by such Person (or group of Persons acting in concert) equals or exceeds
twenty-five percent (25%) of the outstanding Voting Stock of Borrower or (ii)
the power to direct or cause the direction of the management and policies of
Borrower (whether through ownership of voting securities, by contract or
otherwise).
ARTICLE VIII - REMEDIES UPON DEFAULT
SECTION 801. ACCELERATION AND OTHER REMEDIES. Upon the occurrence of an
Event of Default:
(a) Lender may, at its option and without prior notice to Borrower,
terminate its remaining obligations hereunder to make any further Loans to
Borrower;
(b) Any of the Liabilities may (notwithstanding any provisions
contained therein or herein to the contrary), at the option of Lender and
without presentment, demand, notice or protest of any kind (all of which are
expressly waived by Borrower in this Agreement), be declared due and payable,
whereupon they immediately will become due and payable;
(c) Lender may also, at its option, and without notice or demand of any
kind, exercise from time to time any and all rights and remedies available to it
under this
379000.1
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Agreement or under any of the other Financing Documents, as well as exercise
from time to time any and all rights and remedies available to a secured party
when a debtor is in default under a security agreement as provided in the
Uniform Commercial Code of Georgia, or available to Lender under any other
applicable law or in equity, including without limitation the right to any
deficiency remaining after disposition of the Collateral; and
(d) Borrower shall pay all of the reasonable costs and expenses
actually incurred by Lender in enforcing its rights under this Agreement and the
other Financing Documents. In the event any claim under this Agreement or under
any of the other Financing Documents is referred to an attorney for collection,
or collected by or through an attorney at law, Borrower will be liable to Lender
for all reasonable expenses actually incurred by it in seeking to collect the
Liabilities or to enforce its rights hereunder, in the other Financing Documents
or in the Collateral, including without limitation actual and reasonable
attorneys' fees.
SECTION 802. APPLICATION OF PROCEEDS; COLLECTION COSTS. Any proceeds
from disposition of any of the Collateral may be applied by Lender first to the
payment of all reasonable expenses and costs actually incurred by Lender in
collecting such Liabilities, in enforcing the rights of Lender under each and
every of the Financing Documents and in collecting, retaking, holding and
preparing the Collateral for and advertising the sale or other disposition of
and realizing upon the Collateral, including without limitation the reasonable
expenses of liquidating any liens or claims upon the Collateral and reasonable
attorneys' fees (but not to exceed actual fees incurred) as well as all other
legal expenses and court costs. Any balance of such proceeds may be applied by
Lender toward the payment of such of the Liabilities and in such order of
application as the Lender may from time to time elect. Lender shall pay the
surplus, if any, to Borrower. Borrower shall pay the deficiency, if any, to
Lender.
ARTICLE IX - MISCELLANEOUS
SECTION 901. TIME OF ESSENCE. Time is of the essence of this Agreement.
SECTION 902. ENTIRE AGREEMENT. This Agreement, together with the Note
and all of the other Financing Documents, supersedes and replaces the Prior Loan
Agreements, the Prior Security Agreements, and all other prior discussions and
agreements by and between any of the Credit Parties and Lender with respect to
the Loans or the Collateral, and together they constitute the sole and entire
agreement between the parties with respect thereto. No promises, covenants,
representations, or agreements other than as expressly set forth in the
Financing Documents have been made to or with any Credit Party, and Borrower
represents and warrants that it is not relying on any promises, covenants,
representations or agreements, other than as expressly set forth in such
documents in entering into this Agreement.
SECTION 903. SEVERAL COUNTERPARTS. This Agreement may be executed in
any number of counterparts each of which shall be deemed an original, and all of
such
379000.1
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counterparts together shall constitute one and the same instrument.
SECTION 904. SURVIVAL OF WARRANTIES. All representations, covenants,
and warranties made in this Agreement, or in any of the other Financing
Documents are cumulative and in addition to those imposed by law or equity, and
are to survive the execution hereof, the making of the Loans, and the delivery
hereof and of all the other Financing Documents.
SECTION 905. RIGHTS CUMULATIVE. All rights and remedies of Lender,
whether provided for herein or in any of the other Financing Documents or
conferred by law or in equity or by statute or otherwise, are cumulative and not
alternative, and may be enforced successively or concurrently. The collection,
repossession, sale or retention of any of the Collateral by Lender will not bar
an action by Lender for the recovery of any of the Liabilities of Borrower to
Lender (Borrower having expressly agreed herein to remain fully liable for any
deficiency), nor will Lender's bringing of an action against Borrower to recover
moneys owing under any of the Liabilities bar Lender's right to collect or
repossess any of the Collateral.
SECTION 906. NO RELEASE; TERM OF AGREEMENT. No sale, assignment,
transfer, renewal, addition, extension, consolidation, subdivision,
modification, or substitution of any of the Liabilities, or of any of the
Financing Documents, or of any interest thereunder, nor any loss, damage,
injury, theft, or destruction of any of the Collateral will release Borrower
from its obligations hereunder. The Liabilities may from time to time be paid
and Liabilities thereafter incurred, and neither this Agreement nor the security
interests and security titles conveyed under the Financing Documents shall lapse
or terminate because no Liabilities are outstanding. This Agreement shall remain
in full force and effect until such time as (i) no Liabilities are outstanding
and (ii) Lender is under no obligation to make any Loans hereunder to Borrower.
SECTION 907. WAIVERS AND MODIFICATIONS. Lender will not be deemed as a
consequence of any act, delay, failure, omission, or forbearance (including
without limitation failure to exercise its right of accelerating the maturity of
any of the Liabilities or other indulgences granted from time to time by Lender)
or for any other reason: (1) to have waived, or to be estopped from exercising,
any of its rights or remedies under this Agreement or under any of the other
Financing Documents, or (2) to have modified, changed, amended, terminated,
rescinded, or superseded any of the terms of this Agreement or of any of the
other Financing Documents, unless such waiver, modification, amendment, change,
termination, rescission, or supersession is express, in writing and signed by a
duly authorized officer of Lender. No single or partial exercise by Lender of
any right or remedy will preclude other or further exercise thereof or preclude
the exercise of any other right or remedy, and a waiver expressly made in
writing on one occasion will be effective only in that specific instance and
only for the precise purpose for which given, and will not be construed as a
consent to or a waiver of any right or remedy on any future occasion. No notice
to or demand on Borrower in any instance will entitle Borrower to any other or
future notice or demand in similar or other circumstances.
379000.1
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SECTION 908. WAIVER OF PRESENTMENT, ETC. Borrower hereby expressly
waives presentment, demand, dishonor, protest, notice for payment, notice of
non-payment, notice of dishonor, notice of default, notice of compromises or
surrender and any other demand or notice whatsoever in connection with the
Financing Documents.
SECTION 909. NOTICES. Except as provided otherwise in this Agreement,
all notices and other communications under this Agreement are to be in writing
and are to be deemed to have been duly given and to be effective upon delivery
to the party to whom they are directed. If sent by U.S. mail, first class,
certified, return receipt requested, postage prepaid, and addressed to Lender or
to Borrower at their respective addresses set forth beneath their respective
signatures below, such notices, demands and other communications are to be
deemed to have been delivered on the second business day after being so posted.
Either Lender or Borrower may by written notice to the other designate a
different address for receiving notices under this Agreement; provided, however,
that no such change of address will be effective until written notice thereof is
actually received by the party to whom such change of address is sent.
SECTION 910. NO ASSIGNMENT BY BORROWER. Borrower may not, without the
consent of Lender, assign any of its rights or duties hereunder or under any of
the other Financing Documents.
SECTION 911. LENDER'S EXPENSES. All statements, reports, certificates,
opinions, and other documents or information furnished to Lender under the
Financing Documents shall be supplied by Borrower without cost to Lender.
Further, Borrower shall reimburse Lender on demand for all reasonable
out-of-pocket costs and expenses (including actual and reasonable legal fees)
incurred by the Lender or its participants in connection with the preparation,
establishment, operation, enforcement, and termination of the Financing
Documents or the protection or preservation of any right or claim of the Lender
with respect to the Financing Documents; provided, however, that Borrower's
obligation to reimburse Lender for its attorney's fees and expenses relating to
the initial preparation and establishment of this Agreement and the other
Financing Documents shall not exceed $10,000.
SECTION 912. PAYMENT OF TAXES. Borrower will pay all taxes (if any) in
connection with this Agreement, any of the other Financing Documents, any loans
made in connection with this Agreement, or the issuance or ownership of any of
the Financing Documents and in connection with any modification of said loans,
this Agreement, or any of the other Financing Documents (excluding, however, any
taxes imposed upon or measured by the net income of the Lender), and will save
the Lender harmless without limitation as to time against any and all
liabilities with respect to all such taxes. The obligations of Borrower under
this section shall survive the payment of the Liabilities and the termination of
this Agreement.
SECTION 913. DEMAND LIABILITIES. If any of the Liabilities are by their
terms demand obligations, nothing contained herein shall affect, impair or
modify the
379000.1
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demand nature of such obligations, and the occurrence of a Default or an Event
of Default shall not be a prerequisite for Lender's requiring payment of such
obligations.
SECTION 914. SET-OFFS AGAINST DEPOSITS. Upon the occurrence of an Event
of Default hereunder, Lender, without notice or demand of any kind, may hold and
set off against such of the Liabilities (whether matured or unmatured) as Lender
may elect, any balance or amount to the credit of Borrower in any deposit,
agency, reserve, holdback or other account of any nature whatsoever maintained
by or on behalf of Borrower with Lender at any of its offices, regardless of
whether such accounts are general or special and regardless of whether such
accounts are individual or joint.
SECTION 915. PARTICIPANT SET-OFF. Any Person purchasing an interest in
debt obligations under this Agreement held by Lender may exercise all rights of
offset with respect to such interest as fully as if such Person were a holder of
debt obligations hereunder in the amount of such interest.
SECTION 916. CONFIDENTIALITY. Each of the parties to this Agreement
shall use reasonable, good faith efforts to maintain as confidential, in
accordance with such Person's normal practices and policies for protecting its
own confidential information, this Agreement and the other Financing Documents
and the terms and conditions thereof, and all other information delivered to
such party in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise identified as being confidential information;
provided, however, that each such Person may disclose information concerning the
aforesaid Financing Documents or their terms and conditions or such other
confidential information described above (i) as required in its counsel's
opinion pursuant to the lawful requirements or requests of any Governmental
Authority, (ii) as required in its counsel's opinion by any governmental or
administrative rule, judicial process or subpoena, (iii) to their respective
attorneys, accountants, advisers or consultants (but only on a confidential
basis as provided below), (iv) to the extent necessary in its counsel's opinion
to enforce such Person's rights or remedies or perform such Person's obligations
under any of the Financing Documents or applicable law, (v) to the extent
necessary or appropriate in the opinion of its counsel in connection with any
litigation or other proceeding having it or any of its Affiliates as a party
thereto, and (vi) Lender may disclose such information to any actual or
prospective assignee or participant of Lender. If Lender or any Credit Party
discloses any information covered by this subsection to any of its attorneys,
accountants, advisers or consultants, such Person shall advise such attorneys,
accountants, advisers or consultants of the provisions of this Section but such
Person shall not be liable for any misappropriation or misuse of such
information by such attorneys, accountants, consultants or advisers other than
occasioned by such Person's own gross negligence or willful misconduct. The
obligations of the parties under this Section 916 shall survive until one year
after the date of any termination of this Agreement. Lender agrees, upon request
of Borrower following any termination of this Agreement, to use reasonable
efforts to return to Borrower any confidential or proprietary information of
Borrower delivered to Lender pursuant to this Agreement and in Lender's
possession.
379000.1
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SECTION 917. GOVERNING LAW; SEVERABILITY. This Agreement and all of the
other Financing Documents have been made and delivered in the State of Georgia,
and the terms, provisions and performance thereof are in all respects, including
without limitation all matters of construction, interpretation, validity,
enforcement, and performance, to be construed in accordance with and governed by
the internal laws of that State, including without limitation the Uniform
Commercial Code of Georgia, as amended and in effect on the date of this
Agreement. Wherever possible, each provision of this Agreement and of each and
every of the other Financing Documents is to be interpreted in such manner as to
be effective and valid under applicable law, but if any provision thereof is
prohibited or invalid under such law, such provision is to be ineffective only
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement or of
any of the other Financing Documents.
SECTION 918. SUCCESSORS AND ASSIGNS. All rights of Lender under the
Financing Documents shall inure to the benefit of its successors and assigns.
All obligations of Borrower under the Financing Documents shall bind its
successors and permitted assigns.
SECTION 919. JURY TRIAL WAIVER AND CONSENT TO JURISDICTION AND VENUE.
EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT SUCH PARTY MAY HAVE UNDER
ANY APPLICABLE LAW TO A TRIAL BY JURY WITH RESPECT TO ANY SUIT OR LEGAL ACTION
WHICH MAY BE COMMENCED BY OR AGAINST SUCH PERSON OR THE OTHER PARTIES CONCERNING
THE INTERPRETATION, CONSTRUCTION, VALIDITY, ENFORCEMENT OR PERFORMANCE OF THIS
AGREEMENT OR ANY OF THE OTHER FINANCING DOCUMENTS. EACH PARTY TO THIS AGREEMENT
FURTHER AGREES AND CONSENTS TO THE JURISDICTION OF ANY FEDERAL COURT SITTING IN
▇▇▇▇▇▇ COUNTY, GEORGIA WITH RESPECT TO ANY SUCH SUIT OR LEGAL ACTION, AND EACH
PARTY TO THIS AGREEMENT FURTHER AGREES AND CONSENTS TO VENUE OF ANY FEDERAL
COURT SITTING IN ▇▇▇▇▇▇ COUNTY, GEORGIA WITH REGARD TO ANY SUCH SUIT OR LEGAL
ACTION.
379000.1
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IN WITNESS WHEREOF, Lender has executed this Agreement, and Borrower
has executed this Agreement and placed its seal hereon, all as of the day and
year first above written.
BORROWER:
CRYOLIFE, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
President
Address: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(CORPORATE SEAL)
LENDER:
NATIONSBANK, N.A. (SOUTH)
By:/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Senior Vice President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
379000.1
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EXHIBIT A
PROMISSORY NOTE
AUGUST 30, 1996 $10,000,000
FOR VALUE RECEIVED, the undersigned (hereinafter referred to as "Borrower")
promises to pay to the order of NATIONSBANK, N.A. (SOUTH) (hereinafter referred
to as "Lender") at Lender's office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the holder hereof may
designate, the principal sum of TEN MILLION DOLLARS ($10,000,000), or so much
thereof as shall have been advanced hereagainst and shall be outstanding,
together with interest on so much of the principal balance of this Note as may
be outstanding and unpaid from time to time, calculated on the basis of a
360-day year and actual days elapsed, at the rate or rates per annum provided
below.
The unpaid principal balance of this Note shall bear interest at a rate per
annum equal to the Prime Rate (as defined below) plus (i) zero basis points (0%)
during the period from the date of this Note through August 31, 2001, and (ii)
twenty-five basis points (0.25%) from and after September 1, 2001; provided,
however, that Borrower may, by a written notice (or by telephonic notice
promptly confirmed in writing) delivered to the Lender not later than 10:00 a.m.
(Atlanta time) on the second Business Day prior to any Interest Period (as
defined below) designated by the Borrower in such notice, direct that interest
accrue on the unpaid principal balance of this Note (or any portion thereof
which is in an amount of not less than $100,000 or any greater integral multiple
thereof) outstanding from time to time during such Interest Period at a rate per
annum equal to the sum of the Adjusted LIBOR (as defined below) for such
Interest Period plus the Applicable LIBOR Margin (as defined below); provided,
further, however, that upon the occurrence and during the continuation of any
Event of Default (as defined below), the Lender may, upon notice to the
Borrower, suspend Borrower's right to use the aforesaid Adjusted LIBOR option.
Each such designation by the Borrower of an interest rate for this Note based on
the Adjusted LIBOR and of an Interest Period applicable thereto shall be
irrevocable and shall remain in effect throughout such Interest Period. Upon
determining any interest rate based on the Adjusted LIBOR for an Interest Period
requested by the Borrower, the Lender shall promptly notify the Borrower by
telephone (which shall be promptly confirmed in writing by the Lender) of such
determination, and such determination shall, in the absence of manifest error,
be final, conclusive and binding for all purposes. Notwithstanding anything in
this Note to the contrary, a prepayment of any portion of the principal balance
of this Note which is then bearing interest based on the Adjusted LIBOR may be
made without penalty by the Borrower only on the last day of the Interest Period
applicable thereto and, if any such prepayment is made on a day that is not the
last day of the applicable Interest Period, the Borrower shall pay to the
Lender, upon the Lender's written request to the Borrower therefor (which
request shall set forth the basis for the request of such payment in reasonable
detail and, in the absence of manifest error, shall be final, conclusive and
binding on the Lender and the Borrower), an amount equal to any and all losses,
expenses and liabilities (including, without limitation, any interest paid by
the Lender to the extent not recovered by the Lender in connection with its
re-employment of the prepaid funds and including any loss of anticipated
profits) which the Lender may sustain as a result of such prepayment. The
calculation of any and all amounts payable to the Lender with respect to any
portion of the principal balance of this Note bearing interest based on the
Adjusted LIBOR shall be made as though the Lender had actually funded such
portion through the purchase of deposits in the London interbank market;
provided, however, that the Lender may fund such portion of this Note in any
manner it sees fit and the foregoing assumptions shall be used only for
calculation of amounts which may be payable under this Note.
As used in this Note, the following terms shall have the following
meanings: (a) "Adjusted LIBOR" shall mean, for any Interest Period, the rate per
annum (rounded upwards to the nearest 1/16th of one percentage point (if
necessary)) equal to the quotient obtained by dividing (x) the offered rate for
United States dollar deposits for a period comparable to such Interest Period
appearing on the Telerate Screen Page 3750 (or as quoted or published by such
other recognized independent quote service as may be selected by the Lender from
time to time) as of 11:00 a.m. (Atlanta time) on the date that is two (2)
Business Days prior to the beginning of such Interest Period (but if at least
two such rates appear on such screen or are so quoted at such time, the offered
rate for such Interest Period shall be the arithmetic mean of such rates) by (y)
a percentage equal to one (1) minus the then average stated maximum amount
(stated as a decimal) of all reserve requirements applicable to any member of
the Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor categories for such liabilities under such Regulation D); (b)
"Applicable LIBOR Margin" shall mean (i) one hundred seventy-five basis points
(1.75%) during the period from the date of this Note through August 31, 2000,
(ii) two hundred basis points (2.0%) during the period from September 1, 2000
through August 31, 2001, and (iii) two hundred twenty-five basis points (2.25%)
during the period from and after September 1, 2001; (c) "Business Day" shall
mean any day excluding a Saturday, Sunday, any other day on which banks are
required or permitted to be closed in the city in which Lender's address shown
in this Note is located, and any other day on which trading is not carried on by
and between banks in United States dollars in the London interbank market; (d)
"Interest Period" shall mean, in the case of the determination of any Adjusted
LIBOR, a one, two, three, four, six or twelve month period as selected by the
Borrower but (i) in the event any Interest Period would end on a day which is
not a Business Day, such Interest Period shall be deemed to end on the
immediately succeeding Business Day unless such extension would cause such
Interest Period to end on the next calendar month in which case such Interest
Period shall be deemed to end on the immediately preceding Business Day, (ii)
any Interest Period which begins on a day for which there is no numerically
corresponding day in the calendar month in which such Interest Period ends shall
expire on the immediately preceding Business Day, and (iii) the Borrower shall
not be entitled to select any Interest Period which extends beyond the final
maturity date of this Note; (e) "LIBOR Advance" means any portion of the
principal balance of this Note which bears interest based on Adjusted LIBOR for
a particular Interest Period; (f) "Prime Rate" shall mean the rate of interest
announced by Lender from time to time as its "prime rate," "prime lending rate,"
"base rate" or similar reference rate (any such rate announced by Lender is a
reference rate only and does not necessarily represent the best or lowest rate
actually charged by it to any customer and the Lender may make loans at rates of
interest which are at, above or below such reference rate) and the Prime Rate in
effect at the close of business on each business day of Lender shall for the
purposes of this Note be the Prime Rate for that day and any immediately
succeeding non-business day or days of Lender, and in the event the Prime Rate
is discontinued as a standard, the holder hereof shall designate a comparable
reference rate as a substitute therefor; and (g) "Prime Rate Advances" means any
and all portions of the principal balance of this Note which bear interest based
on the Prime Rate.
This Note shall be payable as follows:
(a) Accrued interest on this Note shall be payable as follows:
(i) during the period from the date of this Note through August 31,
1998, accrued interest shall be payable quarterly in arrears on so much
of the principal balance of this Note as then consists of Prime Rate
Advances, which payments shall be due commencing on November 30, 1996,
and shall continue to be on the last day of each February, May, August
and November thereafter up to and through August 31, 1998, and accrued
interest shall be payable in arrears on so much of the principal
balance of this Note as then consists of LIBOR Advances at the end of
each Interest Period applicable thereto (and, in the case of any LIBOR
Advance having an Interest Period in excess of three months, accrued
interest thereon shall be due on each day which occurs every three
months after the initial date of such Interest Period), and (ii) during
the period from and after September 1, 1998, accrued interest shall be
payable in arrears on each date on which a payment of principal is due
on this Note pursuant to paragraph (b) below; and
(b) The principal balance of this Note shall be repayable in
sixty (60) consecutive monthly installments each in an amount equal to
one-sixtieth (1/60th) of the outstanding principal balance of this Note
as of the opening of the Lender's business on September 1, 1998, which
installments shall be due commencing on October 1, 1998, and shall
continue to be due on the same day of each succeeding month thereafter
up to and through September 1, 2003, except that in all cases the final
installment of principal due hereunder on such final maturity date
shall be in an amount equal to the entire remaining unpaid principal
balance of this Note.
This Note is the "Note" referred to in the Third Amended and Restated Loan
Agreement of even date between Borrower and Lender (said agreement, as the same
may be hereafter amended, supplemented, or restated, being herein called the
"Loan Agreement") and this Note evidences any and all Loans now or hereafter
made by Lender to Borrower thereunder.
Borrower shall pay a late charge of five percent (5%) of any installment
payment hereunder which is not paid within ten (10) days after such payment is
due. During the existence of any Event of Default under this Note, the unpaid
principal and accrued interest balance of this Note shall bear interest on each
day until paid at the Prime Rate (as defined above) plus, in Lender's
discretion, up to an additional (i) two percentage points (2.0%) during the
period from the date of this Note through August 31, 2001 or (ii) two and
one-quarter percentage points (2.25%) from and after September 1, 2001, but in
each such period only to the extent that payment of such interest on such
principal or interest is enforceable under applicable law. All payments or
prepayments on this Note shall be applied, first, to interest accrued on this
Note through the date of such payment or prepayment and then to principal (and
any partial principal prepayments on this Note made prior to the date shown
above on which the initial principal installment is due hereunder shall be
applied to such installments in the inverse order of their maturity).
Borrower may, upon thirty (30) days' prior written notice to Lender, prepay
the principal balance of this Note in whole or in part without premium or
penalty but any prepayment of any portion of this Note then bearing interest
based on Adjusted LIBOR will be subject to certain additional provisions set
forth above and any partial prepayment of this Note shall be applied as also
provided above. In addition, in the event Borrower sells, transfers, assigns or
otherwise conveys any of its property to another person, Borrower shall make a
mandatory principal prepayment on this Note, without premium or penalty, within
five (5) business days after the closing of such transaction, which prepayment
shall be in an amount equal to one hundred percent (100%) of the proceeds of
such transaction (net of the cost of such transaction, including any reasonable
sales commissions paid to persons who are not affiliated with the Borrower and
also net of any taxes payable by the Borrower on account of such transaction),
except that this principal prepayment requirement shall not apply to (i) any
sale by Borrower of its inventory in the ordinary course of its business, (ii)
any sale or other disposition by Borrower of any of its obsolete or unnecessary
equipment so long as the net proceeds of each such disposition are used by
Borrower to replace such equipment or purchase other equipment, or (iii) any
other sale or disposition of any property by Borrower which the Lender has
expressly agreed in writing will be exempt from this prepayment requirement.
Notwithstanding the foregoing, however, no prepayment pursuant to this paragraph
shall be due in any particular fiscal year of Borrower unless and until the
total amount of such net proceeds for all such sales or other conveyances made
during such fiscal year exceeds $500,000.
Upon the occurrence of an Event of Default under (and as such term is
defined in) the Loan Agreement, Lender, at its option, without demand or notice
of any kind, may declare this Note immediately due and payable. In case this
Note is collected by or through an attorney-at-law, all costs of such collection
incurred by the Lender, including reasonable attorney's fees, shall be paid by
Borrower (but not to exceed actual fees and expenses incurred).
Time is of the essence of this Note. Demand, presentment, notice, notice of
demand, notice for payment, protest and notice of dishonor are hereby waived by
each and every maker, guarantor, surety and other person or entity primarily or
secondarily liable on this Note. Lender shall not be deemed to waive any of its
rights under this Note unless such waiver be in writing and signed by Lender. No
delay or omission by Lender in exercising any of its rights under this Note
shall operate as a waiver of such rights and a waiver in writing on one occasion
shall not be construed as a consent to or a waiver of any right or remedy on any
future occasion.
This Note shall be governed by and construed and enforced in accordance
with the laws of the State of Georgia (without giving effect to its conflicts of
law rules). Whenever possible, each provision of this Note shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note.
Words importing the singular number hereunder shall include the plural
number and vice versa, and any pronoun used herein shall be deemed to cover all
genders. "Person" as used herein means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
association or government or any agency or political subdivision thereof. The
word "Lender" as used herein shall include transferees, successors and assigns
of Lender, and all rights of Lender hereunder shall inure to the benefit of its
transferees, successors and assigns. All obligations of Borrower hereunder shall
bind such Person's successors and assigns.
SIGNED, SEALED AND DELIVERED by the undersigned Borrower as of the day and
year first above set forth.
CRYOLIFE, INC.
By:__________________________
Title:____________________
(CORPORATE SEAL)
EXHIBIT B
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AGREEMENT is made and entered into as of August 30, 1996, between
NATIONSBANK, N.A. (SOUTH), a national banking association which is the successor
by merger to Bank South, a Georgia banking corporation formerly known as Bank
South, N.A., having its main office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Secured Party"), and CRYOLIFE, INC., a Florida corporation
having its chief executive office and principal place of business at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Debtor").
STATEMENT OF FACTS
Secured Party holds certain liens on certain of Debtor's equipment pursuant
to an Equipment Security Agreement, dated as of August 4, 1994, executed by
Debtor in favor of Secured Party (the "Prior Security Agreement"), which liens
secured certain of the loans made by Secured Party to Debtor under the Second
Amended and Restated Loan Agreement, also dated as of August 4, 1994, between
Secured Party and Debtor (the "Prior Loan Agreement").
Secured Party and Debtor have agreed to amend and restate the Prior Loan
Agreement by entering into a Third Amended and Restated Loan Agreement, dated as
of the date hereof, between Secured Party and the Debtor (said agreement, as the
same may be amended, supplemented or restated, is herein called the "Third
Restated Loan Agreement"). It is a condition precedent to Secured Party's
obligation to make loans to Debtor under the Third Restated Loan Agreement that
the Prior Security Agreement be amended and restated as provided in this
Agreement, and that parties are entering into this Agreement for such purpose.
In consideration of any and all loans or other extensions of credit which
may be now or hereafter made from time to time by Secured Party to Debtor under
the Third Restated Loan Agreement, as well as for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Debtor
and Secured Party do hereby agree to amend and restate the Prior Security
Agreement as follows:
STATEMENT OF FACTS
1. SECURITY INTEREST. (a) Debtor hereby grants to Secured Party a present
and continuing security interest in and lien on all of the Collateral described
in Sections l(b) and l(c) below to secure the payment and performance of all of
the Obligations described in Section 2 below.
(b) The term "Collateral" as used herein shall mean and include all now
existing or hereafter arising rights, titles and interests of Debtor in, to or
under the following types or items of property of Debtor, whether now owned or
hereafter existing or hereafter created, acquired or arising and wheresoever
located, and all cash and non-cash proceeds thereof:
(i) ALL ACCOUNTS RECEIVABLE, ETC. - All accounts, contract rights,
chattel paper, instruments, documents and general intangibles
of Debtor, including without limitation all causes of action,
corporate or other records, deposit accounts, patents,
trademarks, service marks, trade names, copyrights, good will,
customer lists, tax refund claims, computer programs, and
software, and all claims under guaranties, letters of credit,
security interests or other security held by or granted to
Debtor to secure payment of any of its accounts, contract
rights, chattel paper, instruments or general intangibles, and
all rights to indemnification and all other intangible
property of any kind and nature of Debtor (collectively, the
"Accounts Receivable");
(ii) ALL INVENTORY, ETC. - All of Debtor's inventory, including
without limitation all goods intended for sale or lease by
Debtor or for display or demonstration, all work in process,
all raw materials, all finished goods, and all other materials
and supplies of every nature and description used or intended
for use in connection with the manufacture, printing, packing,
shipping, advertising, selling, leasing or furnishing of such
goods or otherwise used or consumed in Debtor's business and
all documents evidencing and all warranty rights and other
general intangibles relating to any of the foregoing
(collectively, the "Inventory"); provided, however, that the
inventory shall not include any human tissue; and
(iii) ALL EQUIPMENT, ETC. - All machinery, apparatus, equipment,
furniture, fixtures, leasehold improvements, motor vehicles
and other tangible personal property (other than Inventory as
defined above) of Debtor of every kind and description used in
Debtor's operations or business or owned by Debtor or in which
Debtor has an interest, and all parts, accessories and
accessions thereto and substitutions and replacements
therefor, and all documents evidencing and all warranty rights
and other general intangibles of Debtor relating to any of the
foregoing (collectively, the "Equipment").
Notwithstanding anything herein to the contrary, the Collateral shall
not include any of Debtor's Intellectual Property Rights (as defined in the
Third Restated Loan Agreement) but the Collateral shall include the proceeds
thereof.
(c) Unless otherwise defined herein, all terms contained in this
Agreement shall have the meanings provided for by the Uniform Commercial Code as
in effect in the State of Georgia to the extent the same are used or defined
therein. In addition, the term "proceeds" as used herein includes whatever is
receivable or received when any Collateral or any proceeds thereof is sold,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and also includes without limitation all rights to
payment (including returned premiums) with respect to any insurance relating to
such Collateral. In addition, all references herein to a particular type or item
of Collateral shall be deemed to include all now existing or hereafter acquired
books and records of Debtor relating to such Collateral (including, without
limitation, all computer materials and records). The Collateral also includes in
all cases all monies and other property of Debtor of any other kind which may be
now or hereafter in the possession of or under the control of Secured Party and
all deposit or other accounts of Debtor with Secured Party and all balances or
other property now or hereafter held or on deposit therein.
2. OBLIGATIONS SECURED. This Agreement and the security interest and
lien granted hereunder to Secured Party secures all obligations which may be now
or hereafter owing by Debtor to Secured Party under this Agreement as well as
any and all indebtedness, obligations or other liabilities which may be now or
hereafter owing by the Debtor to Secured Party under or on account of the Third
Restated Loan Agreement or any of the other Financing Documents as defined
therein, and including without limitation any interest which, but for the filing
by or against Debtor of a petition in bankruptcy, would accrue on any of the
foregoing indebtedness, obligations or liabilities. All of the foregoing
indebtedness, obligations or other liabilities are herein collectively called
the "Obligations".
3. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and
warrants to Secured Party that:
(a) Debtor has full power and authority, and has completed all
proceedings and obtained all approvals and consents necessary, to execute,
deliver and perform this Agreement and the transactions contemplated hereby.
(b) Such execution, delivery, and performance will not violate, or
cause a default under or result in a lien (other than Secured Party's security
interest and lien hereunder) upon any property of Debtor pursuant to, any
applicable law, rule or regulation or any agreement, indenture, judgment, order,
decree, or instrument binding upon or affecting Debtor or any of the Collateral.
(c) This Agreement constitutes the legal, valid, and binding obligation
of Debtor, enforceable against Debtor in accordance with its terms (except as
such enforceability may be limited by bankruptcy, insolvency, or other similar
laws affecting the enforcement of creditor's rights or by general equitable
principles), and this Agreement grants to Secured Party a valid and enforceable
security interest in or other lien on the Collateral.
(d) Debtor's chief executive office and principal place of business are
located at Debtor's address shown above.
(e) Debtor has good and marketable title to the Collateral (or, in the
case of any after-acquired Collateral, Debtor will have good and marketable
title to the Collateral at the time Debtor acquires rights in such Collateral).
(f) Except for the security interest and lien granted hereunder in
favor of Secured Party, no person has (or, in the case of any after-acquired
Collateral, at the time Debtor acquires rights therein, will have) any right,
title, claim, or other interest (whether in the nature of a security interest,
other lien or charge, or otherwise) in, against or to any Collateral or any
interest therein.
(g) All information heretofore, herein or hereafter supplied to Secured
Party by or on behalf of Debtor with respect to any of the Collateral is or will
be true and correct in all material respects at the time so supplied.
(h) Debtor has delivered to Secured Party all instruments, documents,
chattel paper, and other items of Collateral in which Secured Party's security
interest or lien hereunder must be perfected by possession and the certificate
of title with respect to each motor vehicle, if any, included in the Collateral,
together with such additional writings, including, without limitation, duly
executed blank and undated assignments and stock powers, with respect thereto as
Secured Party shall request.
All of the foregoing representations and warranties shall survive the
execution, delivery and acceptance of this Agreement by Secured Party and Debtor
and the closing of the transactions contemplated hereby.
4. COVENANTS AND AGREEMENTS OF DEBTOR. Debtor hereby covenants and
agrees with Lender as follows:
(a) Debtor shall do all acts that may be necessary to maintain,
preserve, and protect the Collateral.
(b) Debtor shall not use or permit any Collateral to be used in
violation of any applicable law, rule or regulation, or any provision of this
Agreement or any other agreement with Secured Party related thereto, or any
policy of insurance covering such Collateral.
(c) Debtor shall pay promptly when due all taxes, assessments, charges,
encumbrances and liens now or hereafter imposed upon or affecting any Collateral
or Secured Party's security interest or other lien hereunder (including all
property, excise, intangible, use, sales, stamp and other such taxes), except to
the extent expressly permitted in the Third Restated Loan Agreement.
(d) Debtor shall appear in and defend any action or proceeding that may
adversely affect its title to or Secured Party's interests in the Collateral.
(e) Except to the extent permitted in the Third Restated Loan
Agreement, Debtor shall not sell, encumber, lease, rent or otherwise dispose of
or transfer any Collateral or any right or interest therein and Debtor shall
keep the Collateral free of all levies, security interests or other liens,
charges or encumbrances.
(f) Debtor shall comply in all material respects with all laws, rules
and regulations (including those governing environmental matters) relating to
the possession, operation, storage, maintenance, disposal, and control of the
Collateral.
(g) Debtor agrees that such care as Secured Party gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
such Collateral when it may be in Secured Party's possession.
(h) If and to the extent requested by Secured Party, Debtor shall
account fully for and promptly deliver to Secured Party, in the form received,
all documents, chattel paper, instruments, and agreements constituting
Collateral hereunder and all proceeds of the Collateral received, all endorsed
to Secured Party or in blank.
(i) Debtor shall keep accurate, and complete records of the Collateral
and shall provide Secured Party with such records and such other reports and
information relating to the Collateral as Secured Party may request from time to
time.
(j) Debtor shall keep, procure, execute, and deliver from time to time
any and all, indorsements, notifications, registrations, assignments, financing
statements, fixture filings, certificate of title applications, and other
writings deemed necessary or appropriate by Secured Party to perfect, maintain,
and protect its security interest in or other lien on the Collateral hereunder
and the priority thereof, and Debtor shall take such other actions as Secured
Party may request to protect the value of the Collateral and of Secured Party's
security interest in the Collateral, including, without limitation, obtaining
such landlord waivers, mortgagee waivers and other assurances from third parties
regarding Secured Party's access to and right to foreclose on or sell the
Collateral and right to realize the practical benefits of such foreclosure or
sale as Secured Party may request. Unless prohibited by applicable law, Debtor
hereby authorizes Secured Party to execute and file any financing statement or
fixture filing on Debtor's behalf, and the parties further agree that any
carbon, photographic, or other reproduction of this Agreement shall be
sufficient as a financing statement and may be filed in any appropriate office
in lieu thereof.
(k) Debtor shall reimburse Secured Party upon demand for all costs and
expenses, including, without limitation, actual and reasonable attorney's fees
and disbursements, Secured Party may now or hereafter incur while exercising or
enforcing any right, power, or remedy provided to Secured Party by this Security
Agreement or by law, all of which costs and expenses shall constitute part of
the Obligations secured hereunder.
(l) Debtor shall give Secured Party not less than thirty (30) days
prior written notice of any change in Debtor's chief executive office or
principal place of business or Debtor's legal name or trade name(s) or style(s)
from that set forth in this Agreement.
(m) Debtor shall keep its records concerning the Collateral at Debtor's
address set forth above or at Debtor's other location(s) (if any) set forth on
Schedule 1 attached to this Agreement and shall not remove such records from
such location(s) without the prior written consent of Secured Party.
(n) Debtor shall keep all Collateral consisting of goods (other than
Inventory in transit and mobile goods) at the address for Debtor set forth above
or at Debtor's other locations (if any) set forth on Schedule 1 attached to this
Agreement, and Debtor shall not, without the prior written approval of Secured
Party, remove any Collateral therefrom except for sales of Inventory in the
ordinary course of business and the disposition of obsolete or worn-out
Equipment in accordance with this Agreement and except for the storage of goods
at locations other than those shown above or on Schedule 1 attached hereto if
(i) Debtor gives Secured Party written notice of the new storage location at
least thirty (30) days prior to storing such Collateral at such location, (ii)
Secured Party's security interest in such Collateral hereunder is and continues
to be duly perfected, (iii) all documents and other receipts in respect of any
Collateral maintained at such premises are promptly delivered to Secured Party,
and (iv) the owner (and, if requested by Secured Party, any mortgagee) of such
premises agrees in writing with Secured Party not to assert any lien in respect
of such Collateral and to permit Secured Party to have the right to enter upon
and use such premises in order to inspect, store, process, assemble or remove
the Collateral therefrom after the occurrence of an Event of Default.
(o) Debtor shall furnish Secured Party with such information regarding
the Collateral (and any account debtors thereunder) as Secured Party from time
to time may request.
(p) Debtor shall keep the Collateral in good condition and repair and
shall not cause or permit any waste of any of the Collateral.
(q) Debtor shall insure the Collateral, with Secured Party named as
loss payee under all property coverages and as an additional insured under all
liability coverages, in form and amount, with insurers, and against risks and
liabilities which are satisfactory to Secured Party in all respects, and Debtor
hereby assigns all such policies and all proceeds thereof (including returned
premiums) to Secured Party, to secure the Obligations, agrees to deliver them to
Secured Party at its request, and agrees that Secured Party may make any claim
thereunder, cancel the insurance on default by Debtor, collect and receive
payment and indorse any instrument in payment of loss or return premium or other
refund or return, and apply such amounts received, at Secured Party's election,
to replacement of the Collateral or to the Obligations. Debtor shall not use or
permit the use of any of the Collateral in any manner which will render
inapplicable or invalid any insurance coverage therefor. Debtor shall deliver
the originals of all property insurance policies covering the Collateral to
Secured Party together with loss payable endorsements thereon in form and
substance satisfactory to Secured Party and in the name of Secured Party as loss
payee thereunder. Each policy of insurance or each such endorsement shall
contain a clause requiring the insurer to give not less than thirty (30) days
prior written notice to Secured Party in the event of cancellation of the policy
for nonpayment of premium and a clause to the effect that the interests of
Secured Party thereunder shall not be impaired or invalidated by any act or
neglect of Debtor nor by the occupation of the premises covered thereby for
purposes more hazardous than are permitted by said policy.
(r) Debtor agrees that all risk of loss of the Collateral shall at all
times be and remain upon Debtor irrespective of whether such Collateral is then
in Debtor's or Secured Party's possession.
(s) Debtor agrees that any of the Collateral consisting of Equipment
shall be and remain personal property and shall not, by reason of its attachment
or other connection to any real property, either become or be deemed to be a
fixture or appurtenance to such real property and shall at all times be deemed
severable therefrom.
(t) Debtor shall permit Secured Party (or any person designated by
Secured Party) from time to time to inspect the Collateral and to inspect, audit
and make copies of or extracts from all books and records maintained by or on
behalf of Debtor pertaining to the Collateral (including computer records), all
at such times and places as Secured Party may request from time to time.
5. POWER OF ATTORNEY. Debtor hereby agrees that from time to time,
without presentment, notice or demand, and without affecting or impairing in any
way the rights of Secured Party with respect to the Collateral, the obligations
of Debtor hereunder or the other Obligations, Secured Party may, but shall not
be obligated to and shall incur no liability to Debtor or any third party for
failing to, take any action which Debtor is obligated by this Agreement to take
but which the Debtor fails to take, and Debtor also hereby appoints (which
appointment is coupled with an interest and shall be irrevocable so long as this
Agreement is in effect) Secured Party as its attorney-in-fact with full power
and authority at any time to take any of the following actions during the
existence of any Event of Default hereunder in either Debtor's or Secured
Party's name (but Secured Party shall have no obligation to and shall incur no
liability to Debtor or any third party for failing to exercise any such power or
authority): (a) to collect by legal proceedings or otherwise and indorse,
receive and receipt for all dividends, interest, payments, proceeds, and other
sums and property now or hereafter payable on or on account of any of the
Collateral; (b) to enter into any extension, reorganization, deposit, merger,
consolidation, or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for, any of the Collateral; (c) to
insure, process, and preserve any of the Collateral or to take any other action
which Debtor is obligated by this Agreement to take; (d) to transfer any of the
Collateral to its own or its nominee's name; (e) to make any compromise or
settlement, and take any action it deems advisable, with respect to any of the
Collateral; (f) to prepare, file and sign Debtor's name to any proof of claim in
bankruptcy (or any similar document) against any account debtor on any of the
Collateral; (g) to receive, open and dispose of Debtor's mail pertaining to any
of the Collateral consisting of Accounts Receivables and notify postal
authorities to deliver such mail to such address as Secured Party may designate;
(h) to indorse Debtor's name upon any checks or other proceeds of any Collateral
and deposit same to any account of Secured Party; (i) to indorse Debtor's name
on any other document, instrument or other agreement relating to any of the
Collateral; (j) to send verifications of Accounts Receivable to account debtors
thereunder; (k) to use the information recorded on or contained in any data
processing equipment, other computer hardware or any software relating to any
Collateral; (l) to make, adjust or enforce claims under any insurance policy
relating to any Collateral; (m) to do all other acts and things necessary, in
Secured Party's judgment, to fulfill Debtor's obligations under this Agreement;
and (n) to pay any and all taxes, assessments, charges, encumbrances or liens
now or hereafter imposed upon or affecting any of the Collateral. The foregoing
power of attorney may be exercised by Secured Party in its discretion, in its
name or Debtor's name, and without prior notice to or demand upon Debtor. Debtor
agrees to reimburse Secured Party on demand for any sums advanced or expenses
incurred by Secured Party in exercising any of the foregoing rights and powers
together with interest accruing thereon daily at the highest rate Debtor has
contracted to pay on any of the Obligations. Debtor's reimbursement obligations
under this Section shall constitute part of the Obligations secured hereunder.
6. EVENTS OF DEFAULT. An event of default under this Agreement shall be
deemed to exist upon the occurrence of any of the following event (each such
event being herein called an "Event of Default"):
(a) If any representation, or warranty of Debtor made in this Agreement
proves to have been untrue, incorrect, misleading or incomplete in any material
respect as of the date made or deemed made;
(b) Failure of Debtor to perform, observe, discharge or comply with any
of the covenants set forth in Section 4 (other than subsection (e), (k) or (l)
thereof) of this Agreement, which failure is not cured within thirty (30) days
of the giving by Secured Party to Debtor of written notice of same;
(c) Failure of Debtor punctually and fully to perform, observe,
discharge or comply with any of the other covenants set forth in this Agreement;
(d) The occurrence of any other Event of Default under (and as such
term is defined in) the Third Restated Loan Agreement.
7. SECURED PARTY'S REMEDIES. Upon the occurrence and during the
continuation of any one or more of the foregoing Events of Default, Secured
Party may, at its option, and without notice to or demand on Debtor and in
addition to all rights and remedies available to Secured Party under the Third
Restated Loan Agreement or any of the other Financing Documents, or at law, in
equity, or otherwise, do any one or more of the following:
(a) Secured Party may declare any or all of the Obligations to be
immediately due and payable and foreclose or otherwise enforce Secured Party's
security interest in or other lien hereunder on any or all of the Collateral in
any manner permitted by law or provided for in this Agreement.
(b) Secured Party may recover from Debtor all costs and expenses,
including, without limitation, actual and reasonable attorney's fees, incurred
or paid by Secured Party in exercising or enforcing any right, power, or remedy
with respect to any or all of the Collateral provided to it by this Agreement or
by applicable law. Notwithstanding anything herein to the contrary, the Debtor's
liability under this Agreement for the Secured Party's attorney's fees shall not
exceed the attorney's fees actually incurred by the Secured Party.
(c) Secured Party may require Debtor to assemble any or all of the
Collateral and make it available to Secured Party at such place or places as may
be designated by Secured Party.
(d) Secured Party may enter onto any property where any Collateral is
located and take possession thereof with or without judicial process.
(e) Prior to Lender's disposition of any Collateral, Secured Party may
store, process, complete, repair or recondition it or otherwise prepare it for
disposition in any manner and to the extent Secured Party deems appropriate (but
Secured Party shall not be obligated to do so).
(f) Secured Party may transfer any of the Collateral into its name,
notify any account debtor under or other person obligated on any Collateral to
make payments thereunder directly to Secured Party, and otherwise collect or
enforce payment of any of the Collateral (but Secured Party shall have no
obligation to do any of the foregoing).
(g) Secured Party may sell or otherwise dispose of any of the
Collateral at one or more public or private sales at Debtor's or Secured Party's
place of business or any other place or places, including without limitation at
any brokers board or security exchange, in lots or in bulk, for cash or on
credit, all as Secured Party, in its discretion, may deem advisable. Debtor
agrees that seven (7) days' prior written notice from Secured Party to Debtor of
any public sale of any Collateral or the date after which any private sale of
any Collateral will be held shall constitute reasonable notice thereof and such
sale may be held at such locations as Secured Party may designate in each said
notice. Secured Party shall have the right to conduct any such sale on Debtor's
premises, without any charge therefor, and any such sales may be adjourned from
time to time in accordance with applicable law. Secured Party may purchase all
or any part of the Collateral at any public sale or, if permitted by law, any
private sale and, in lieu of actual payment of such purchase price, Secured
Party may set-off the amount of such price against the Obligations.
(h) Secured Party is hereby granted by Debtor a license or other right
to use during the term of this Agreement, without charge, any or all of Debtor's
labels, patents, software, copyrights, trade secrets, trade names, trademarks
and advertising materials, or any other property of any similar nature, as it
pertains to any of the Collateral, in advertising for sale and selling any
Collateral or in completing Debtor's performance under or collecting any sums
owing in respect of any Collateral, and Debtor's rights under all licenses and
all franchise agreements relating to any of the Collateral shall inure to
Secured Party's benefit to the extent of Secured Party's rights, titles and
interests in or to the Collateral under this Agreement.
(i) Secured Party also may, without prior notice or demand of any kind,
hold and set-off against such of the Obligations (whether matured or unmatured)
as Secured Party may elect any balance of amount to the credit of Debtor in any
deposit, agency, reserve, holdback or other account of any nature whatsoever
which may be now or hereafter maintained by or on behalf of Debtor with Secured
Party in any of its offices, regardless of whether any such account is general
or special and regardless of whether any such account is individual or joint.
8. APPLICATION OF PROCEEDS. (a) All monies and other proceeds received
by Secured Party upon any collection, sale or other disposition of any
Collateral, together with all other monies and other proceeds received by
Secured Party hereunder, shall be applied as follows:
First, to the payment of the reasonable costs and
expenses of such sale, collection or other disposition which
may have been incurred by Secured Party, including without
limitation actual and reasonable attorney's fees as provided
in Section 7(b) above and all other reasonable expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith;
Second, to the payment of all other Obligations then
due in such order as Secured Party may elect; and
Third, after payment in full of all Obligations then
due, any surplus then remaining from such proceeds shall be
paid to Debtor; and
(b) Debtor shall remain liable to Secured Party for any deficiency
owing on the Obligations after the application of the proceeds of the Collateral
as provided above.
9. INDEMNITY. Debtor hereby agrees to indemnity Secured Party and hold
Secured Party harmless from and against any claim, liability, loss, damage,
expense, suit, action or proceeding which may now or hereafter be suffered or
incurred by Secured Party as a result of Debtor's failure to observe, perform or
discharge Debtor's duties or obligations hereunder or Secured Party's holding or
administering this Agreement or any Collateral unless with respect to any of the
above Secured Party is finally determined to have acted with gross negligence or
to have engaged in willful misconduct. Without limiting the generality of the
foregoing, this indemnity shall extend to any claims asserted against Secured
Party by any person under any environmental, occupational safety and hazard, or
other similar laws, rules or regulations by reason of Debtor's or any other
person's failure to comply with any such laws, rules or regulations. The
indemnity obligations of Debtor under this Section shall constitute a part of
the Obligations secured hereunder and shall survive the termination of this
Agreement.
10. MISCELLANEOUS. (a) Any waiver, forbearance or failure or delay by
Secured Party in exercising any of its rights, powers, or remedies hereunder
shall not preclude the further exercise thereof, and every right, power, or
remedy of Secured Party hereunder shall continue in full force and effect until
such right, power or remedy is specifically waived in a writing executed by
Secured Party. Debtor waives any right to require Secured Party to proceed
against any person or to exhaust any Collateral or to pursue any remedy in
Secured Party's power.
(b) This Agreement may be executed in any number of several
counterparts, each of which when so executed shall be deemed to be an original
and all of which counterparts taken together shall constitute one and the same
instrument.
(c) This Agreement contains the entire agreement between Secured Party
and Debtor with respect to the Collateral and supersedes and replaces the Prior
Security Agreement as well as any and all other prior agreements, commitments,
understandings, negotiations or correspondence between them with respect
thereto. If any provision of this Agreement shall be held invalid or prohibited
under applicable law, this Agreement shall be invalid or ineffective only to the
extent of such invalidity or prohibition, without invalidating the remainder of
this Agreement.
(d) The rights, powers, and remedies of Secured Party under this
Agreement shall be in addition to all other rights, powers, or remedies given to
Secured Party by applicable law or by any other agreement, all of which rights,
powers and remedies shall be cumulative and may be exercise successively or
concurrently without impairing Secured Party's security interest in or other
lien on any of the Collateral.
(e) All singular terms used herein shall include the plural and vice
versa. All pronouns used herein shall be deemed to cover all genders. All
headings used herein are for convenience of reference only and shall not
constitute a substantive part of this Agreement.
(f) This Agreement may not be amended or modified except by a writing
signed by each of the parties hereto.
(g) Except as may be otherwise expressly provided herein, all notices,
requests and demands to or upon any party hereto shall be given in accordance
with the notice provisions of the Third Restated Loan Agreement.
(h) All rights of Secured Party under this Agreement shall inure to the
benefit of its successors and assigns, and all obligations of Debtor hereunder
shall bind its successors, and assigns.
(i) This Agreement and all security interests and other liens granted
or conveyed hereunder shall remain in full force and effect and shall be
irrevocable until such time as (x) no Obligations are outstanding and (y) the
Third Restated Loan Agreement is no longer in effect. Debtor hereby waives any
right Debtor may have upon payment in full of the Obligations to require Secured
Party to terminate its security interest in the Collateral or any financing
statement relating thereto until this Agreement is terminated in accordance with
the foregoing terms.
(j) This Agreement shall be construed in accordance with and governed
by the laws of the State of Georgia without giving effect to its choice of law
rules.
(k) Time is of the essence of this Agreement.
IN WITNESS WHEREOF, Debtor and Secured Party have executed and
delivered this Agreement, and Debtor has affixed its seal hereto, as of the day
and year first above set forth.
DEBTOR:
CRYOLIFE, INC.
By:______________________________
Title:___________________________
(CORPORATE SEAL)
SECURED PARTY:
NATIONSBANK, N.A. (SOUTH)
By:______________________________
Title:___________________________
SCHEDULE 1 TO
SECURITY AGREEMENT
DATED AUGUST 30, 1996
BETWEEN CRYOLIFE, INC., AS DEBTOR,
AND NATIONSBANK, N.A. (SOUTH), AS SECURED PARTY
Additional Locations for Debtor:
None.
---------------------------------
DEBTOR'S INITIALS:
---------------------------------
SECURED PARTY'S INITIALS:
---------------------------------
EXHIBIT C-1
STOCK PLEDGE AND SECURITY AGREEMENT
THIS STOCK PLEDGE AND SECURITY AGREEMENT (this "Agreement"), dated as
of August 30, 1996, made by CRYOLIFE, INC., a Florida corporation (the
"Pledgor"), to NATIONSBANK, N.A. (SOUTH), a national banking association (the
"Pledgee").
W I T N E S S E T H:
WHEREAS, the Pledgor and the Pledgee are parties to a Third Amended and
Restated Loan Agreement, dated as of August 30, 1996 (as the same may hereafter
be amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), pursuant to which the Pledgee has
committed to loan certain amounts to the Pledgor;
WHEREAS, the Pledgor owns the outstanding shares of capital stock of
the corporation identified on Schedule 1 attached hereto (the "Subsidiary");
WHEREAS, it is a condition precedent to the Pledgee's obligations to
make the Loans under the Loan Agreement that the Pledgor execute and deliver to
the Pledgee this Agreement;
WHEREAS, the Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, and in
order to induce the Pledgee to make Loans to the Pledgor under the Loan
Agreement, the Pledgor hereby makes the following representations and warranties
to the Pledgee and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS ETC. This Agreement is for the benefit of
the Pledgee to secure the prompt payment in full when due, whether at stated
maturity, by acceleration or otherwise, of (i) the Note and all other
Liabilities (whether for principal, interest, fees, expenses or otherwise) and
(ii) all costs and expenses incurred by the Pledgee in connection with the
exercise of its rights and remedies hereunder (including reasonable attorneys'
fees actually incurred) (all such obligations collectively being the "Secured
Obligations").
2. PLEDGED STOCK. As used herein, the term "Pledged Stock" shall mean
all of the shares of capital stock of the Subsidiary set forth on Schedule 1 and
all other shares of such stock which may be now or hereafter owned by the
Pledgor. The Pledgor represents and warrants that on the date hereof (a) the
Pledged Stock consists of the number and type of shares of the capital stock of
the Subsidiary as described on Schedule 1 attached hereto; (b) the Pledgor is
the holder of record and sole beneficial owner of such Pledged Stock; and (c)
the Pledged Stock constitutes the percentage of the issued and outstanding
capital stock of the Subsidiary as set forth on Schedule 1.
3. PLEDGE OF SECURITIES, ETC.
3.1 PLEDGE. To secure the Secured Obligations and for the purposes
set forth in Section 1, the Pledgor hereby pledges to the Pledgee the Pledged
Stock, together with (i) the certificates representing such Pledged Stock
accompanied by stock powers duly executed in blank by the Pledgor, and (ii) all
dividends (whether in cash, stock, warrants, options, or other securities),
cash, instruments or other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any and all of the
Pledged Stock; and hereby assigns, transfers, hypothecates and sets over to the
Pledgee all of the Pledgor's right, title and interest in and to the Pledged
Stock (and in and to the certificates or instruments evidencing the items
described in clauses (i) and (ii) above) to be held by the Pledgee, upon the
terms and conditions set forth in this Agreement. The Pledgor agrees to deliver
to the Pledgee all certificates and instruments evidencing the items described
in clause (ii) above promptly upon the Pledgor's receipt thereof.
3.2 DEFINITION OF PLEDGED SECURITIES AND COLLATERAL. The Pledged
Stock and all items described in clause (ii) of Section 3.1 are hereinafter
called the "Pledged Securities," and the Pledged Securities, together with all
other securities and moneys received and at the time held by the Pledgee
hereunder and any proceeds of any of the foregoing, are hereinafter called the
"Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have
the right to appoint one or more agents for the purpose of retaining physical
possession of the Collateral, which may be held (if applicable and in the
discretion of the Pledgee) in the name of the Pledgor, endorsed or assigned in
blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or an
agent appointed by the Pledgee.
5. VOTING, ETC. Unless and until an Event of Default (such term to mean
an Event of Default as defined herein) shall have occurred and be continuing or
would be caused thereby, the Pledgor shall be entitled to vote any and all
Pledged Stock and to give consents, waivers or ratifications in respect thereof;
provided that no vote shall be cast or any consent, waiver or ratification given
or any action taken which would violate or be inconsistent with any of the terms
of this Agreement, the Loan Agreement, or any instrument or agreement relating
to the Secured Obligations. All such rights of the Pledgor to vote and to give
consents, waivers and ratifications shall cease in case an Event of Default
shall occur and be continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of Default shall
have occurred and be continuing or would be caused thereby, all cash dividends
payable in respect of the Pledged Securities shall be paid to the Pledgor, but
only to the extent (if any) permitted by the Loan Agreement. The Pledgee shall
also be entitled to receive directly, and to retain as part of the Collateral:
(a) all other or additional stock or securities or property (other
than cash) paid or distributed by way of dividend in respect of the
Pledged Securities;
(b) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Pledged
Securities by way of stock-split, spin-off, split-up, reclassification,
combination of shares or similar rearrangement; and
(c) all other or additional stock or other securities or property
which may be paid in respect of the Pledged Securities by reason of any
consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
6.1 ADDITIONAL SHARES. The Pledgor agrees and covenants that it will
cause the Subsidiary not to issue any stock or other securities in addition to
or in substitution for the Pledged Securities except to the Pledgor, and any
such additional or substitute stock as securities shall be delivered directly to
the Pledgee by the Subsidiary and shall constitute part of the Collateral
pledged hereunder.
7. EVENTS OF DEFAULT.
7.1 DEFINITION OF EVENTS OF DEFAULT. The following specified events
shall constitute Events of Default under this Agreement:
(a) the existence or occurrence of any Event of Default under the
Loan Agreement;
(b) any representation, warranty or statement made or deemed to be
made by the Pledgor or any of its officers under or in connection with
this Agreement shall have been false or misleading in any material
respect when made or deemed to be made;
(c) the Pledgor shall fail to observe or perform any covenant or
agreement set forth in Section 5, 6 (including Section 6.1) or 15
hereof; and
(d) the Pledgor shall fail to observe or perform any covenant or
agreement set forth in this Agreement, other than those referred to in
paragraph (c) above, which failure shall continue for thirty (30) days
after the Pledgee gives the Pledgor notice of same.
7.2 REMEDIES. In case an Event of Default shall have occurred and be
continuing, the Pledgee shall be entitled to exercise all of the rights, powers
and remedies (whether vested in it by this Agreement, any other Financing
Document or by law and including, without limitation, all rights and remedies of
a secured party of a debtor in default under the Uniform Commercial Code (the
"Code") in effect in the State of Georgia at that time) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall be
entitled, without limitation, to exercise the following rights, which the
Pledgor hereby agrees to be commercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 to the Pledgor and to enforce the
payment of the Pledged Securities and to exercise all of the rights,
powers, and remedies of the Pledgor thereunder;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to vote all or any part of the Collateral (whether or not
transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof;
(iv) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral in one
or more parcels, or any interest therein, at any public or private sale
at any exchange, broker's board or at any of the Pledgee's offices or
elsewhere, without demand of performance, advertisement or notice of
intention to sell or of the time or place of sale or adjournment
thereof or to redeem or otherwise (all of which are hereby expressly
and irrevocably waived by the Pledgor), for cash, on credit or for
other property, for immediate or future delivery without any assumption
of credit risk, and for such price or prices and on such terms as the
Pledgee in its sole discretion may determine; the Pledgor agrees that
to the extent that notice of sale shall be required by law that at
least ten (10) days notice to the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made
shall constitute reasonable notification; the Pledgee shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given; the Pledgee may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor,
and any such sale may, without further notice, be made at the time and
place to which it was so adjourned; the Pledgor hereby waives and
releases to the fullest extent permitted by law any right or equity of
redemption with respect to the Collateral, whether before or after sale
hereunder, and all rights, if any, of marshalling the Collateral and
any other security for the Secured Obligations or otherwise; at any
such sale, unless prohibited by applicable law, the Pledgee may bid for
and purchase all or any part of the Collateral so sold free from any
such right or equity of redemption; and the Pledgee shall not be liable
for failure to collect or realize upon any or all of the Collateral or
for any delay in so doing nor shall any of them be under any obligation
to take any action whatsoever with regard thereto;
(v) to settle, adjust, compromise and arrange all accounts,
controversies, questions, claims and demands whatsoever in relation to
all or any part of the Collateral;
(vi) to execute all such contracts, agreements, deeds, documents and
instruments; to bring, defend and abandon all such actions, suits and
proceedings; and to take all actions in relation to all or any part of
the Collateral as the Pledgee in its sole discretion may determine;
(vii) to appoint managers, agents, officers and servants for any of
the purposes mentioned in the foregoing provisions of this Section 7
and to dismiss the same, all as the Pledgee in its sole discretion may
determine; and
(viii) generally, to take all such other action as the Pledgee in
its sole discretion may determine as incidental or conducive to any of
the matters or powers mentioned in the foregoing provisions of this
Section 7 and which the Pledgee may or can do lawfully and to use the
name of the Pledgor for the purposes aforesaid and in any proceedings
arising therefrom.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee provided for in this Agreement or any other Financing Document or now or
hereafter existing at law or in equity or by statute shall be cumulative and
concurrent and shall be in addition to every other such right, power or remedy.
The exercise or beginning of the exercise by the Pledgee of any one or more of
the rights, powers or remedies provided for in this Agreement or any other
Financing Document or now or hereafter existing at law or in equity or by
statute or otherwise shall not preclude the simultaneous or later exercise by
the Pledgee of all such other rights, powers or remedies, and no failure or
delay on the part of the Pledgee to exercise any such right, power or remedy
shall operate as a waiver thereof.
9. APPLICATION OF PROCEEDS. All moneys collected by the Pledgee upon
any sale or other disposition of the Collateral, together with all other moneys
received by the Pledgee hereunder, shall be applied as follows:
First, to the payment of the costs and expenses of such sale,
collection or other realization, including, without limitation,
reasonable attorneys' fees actually incurred and all other expenses,
liabilities and advances actually made or actually incurred by the
Pledgee in connection therewith;
Second, to the payment of the Secured Obligations then due;
and
Third, after payment in full of all Secured Obligations then
due, to the Pledgor, or its successors or assigns, or to whomsoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct any surplus then remaining from such proceeds.
10. PURCHASERS OF COLLATERAL. Upon any sale of any of the Collateral
hereunder (whether by virtue of the power of sale herein granted, pursuant to
judicial process or otherwise), the receipt of the Pledgee or the officer making
the sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to
see to the application of any part of the purchase money paid over to the
Pledgee or such officer or be answerable in any way for the misapplication or
nonapplication thereof.
11. PAYMENT OF EXPENSES; INDEMNITY. The Pledgor shall: (i) whether or
not the transactions hereby contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Pledgee actually incurred in connection
with the administration (both before and after the execution hereof and
including advice of counsel as to the rights and duties of the Pledgee with
respect thereto) of the Pledgee incurred in connection with the preservation of
rights under, and enforcement of, and, after an Event of Default, the
renegotiation or restructuring of this Agreement and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of counsel for the Pledgee, not to exceed actual fees and
disbursements); (ii) pay and hold the Pledgee harmless from and against any and
all present and future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to this Agreement and save the Pledgee harmless from and against any and
all liabilities with respect to or resulting from any delay or omission to pay
any such taxes, charges or levies; and (iii) indemnify the Pledgee, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all costs, losses, liabilities, claims, damages or
expenses actually incurred by any of them (whether or not any of them is
designated a party thereto) arising out of or by reason of any investigation,
litigation or other proceeding related to this Agreement or any transaction
contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel, not to exceed actual fees and disbursements, incurred
in connection with any such investigation, litigation or other proceeding.
Notwithstanding anything in this Agreement to the contrary, the Pledgor shall
not be responsible to the Pledgee or any officer, director, employee,
representative or agent of the foregoing (an "Indemnified Party") for any
losses, damages, liabilities or expenses which result from such Indemnified
Party's gross negligence or willful misconduct. If and to the extent that the
obligations of the Pledgor under this Section 11 are unenforceable for any
reason, the Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The Pledgor's obligations under this Section 11 shall survive
any termination of this Agreement.
12. FURTHER ASSURANCES. The Pledgor agrees that it will join with the
Pledgee in executing and, at its own expense, file and refile under the Code
such financing statements, continuation statements and other documents in such
offices as the Pledgee may deem necessary or appropriate and wherever required
or permitted by law in order to perfect and preserve the Pledgee's security
interest in the Collateral and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of the Pledgor where permitted by law, and agrees to do
such further acts and things and to promptly execute and deliver to the Pledgee
such additional conveyances, assignments, agreements and instruments as the
Pledgee may reasonably require or deem advisable to carry into effect the
purposes of this Agreement or to further assure and confirm unto the Pledgee its
rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT.
(a) The Pledgee will hold in accordance with this Agreement and the
Loan Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Pledgee as holder of the Collateral and interests therein and with respect to
the disposition thereof, and otherwise under this Agreement, are only those
expressly set forth in this Agreement and the Loan Agreement.
(b) The Pledgee shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Pledgee
accords its own property, it being understood that the Pledgee shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Pledgee has or is deemed to have knowledge of
such matters, or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Collateral.
14. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby represents and
warrants that (i) it is the legal record and beneficial owner of, and has good
and marketable title to, the Pledged Stock described in Section 2 hereof,
subject to no pledge, lien, mortgage, hypothecation, security interest, charge,
option or other encumbrance whatsoever, except the liens and security interests
created by this Agreement or expressly permitted by this Agreement or the Loan
Agreement; (ii) it has full power, authority and legal right to pledge all the
Pledged Stock pursuant to this Agreement; (iii) no consent of any other party
(including, without limitation, any stockholder or creditor of the Pledgor or
the Subsidiary) and no order, consent, license, permit, approval, validation or
authorization of, exemption by, notice to or registration, recording, filing or
declaration with, any governmental or public body or authority is required to be
obtained by the Pledgor in connection with the execution, delivery or
performance of this Agreement or consummation of the transactions contemplated
hereby, including, without limitation, the exercise by the Pledgee of the voting
or other rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of the Pledged Securities by laws affecting the offering
and sale of securities generally (or except as may already have been obtained);
(iv) all shares of Pledged Stock have been duly and validly issued, are fully
paid and nonassessable; and (v) the security interest in the Pledged Securities
created and perfected by the pledge and delivery of the Pledged Securities
pursuant to this Agreement is not subject to any prior lien or encumbrance or
any agreement purporting to grant to any third party a lien or encumbrance on
the property or assets of the Pledgor which would include the Pledged
Securities.
15. COVENANTS OF THE PLEDGOR. The Pledgor covenants and agrees that (i)
the Pledgor will defend the Pledgee's right, title and security interest in and
to the Pledged Securities and the proceeds thereof against the claims and
demands of all persons whomsoever; (ii) the Pledgor will have like title to and
right to pledge any other property at any time hereafter pledged to the Pledgee
as Collateral hereunder and will likewise defend the right thereto and security
interest therein of the Pledgee; and (iii) the Pledgor will not, with respect to
any Collateral, enter into any shareholder agreements, voting agreements, voting
trusts, trust deeds, irrevocable proxies or any other similar agreements or
instruments.
16. PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of the Pledgor
under this Agreement shall be absolute and unconditional in accordance with its
terms and shall remain in full force and effect without regard to, and shall not
be released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation: (a) any
change in the time, place or manner of payment of, or in any other term of, all
or any of the Secured Obligations, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to or deletion
from or any other action or inaction under or in respect of the Loan Agreement,
the Note, any other Financing Document, or any of the other documents,
instruments or agreements relating to the Secured Obligations or any other
instrument or agreement referred to therein or any assignment or transfer of any
thereof; (b) any lack of validity or enforceability of the Loan Agreement, any
other Financing Document, or any other documents, instruments or agreement
referred to therein or any assignment or transfer of any thereof; (c) any
furnishing of any additional security to the Pledgee, or its assignees or any
acceptance thereof or any release of any security by the Pledgee or its
assignees; (d) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; (e) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Pledgor or any of its
Subsidiaries, or any action taken with respect to this Agreement by any trustee
or receiver, or by any court, in any such proceeding, whether or not the Pledgor
shall have notice or knowledge of any of the foregoing; or (f) any exchange,
release or nonperfection of any other collateral, or any release, or amendment
or waiver of or consent to departure from any guaranty or security, for all or
any of the Secured Obligations.
17. NOTICES, ETC. All notices and other communications hereunder shall
be given in the manner specified in Section 909 of the Loan Agreement.
18. POWER OF ATTORNEY. The Pledgor hereby absolutely and irrevocably
constitutes and appoints the Pledgee the Pledgor's true and lawful agent and
attorney-in-fact, with full power of substitution, in the name of the Pledgor:
(a) to execute and do all such assurances, acts and things which the Pledgor
ought to do but has failed to do under the covenants and provisions contained in
this Agreement; (b) to take any and all such action as the Pledgee may, in its
sole discretion, determine as necessary or advisable for the purpose of
maintaining, preserving or protecting the security constituted by this Agreement
or any of the rights, remedies, powers or privileges of the Pledgee under this
Agreement; and (c) generally, in the name of the Pledgor exercise all or any of
the powers, authorities, and discretions conferred on or reserved to the Pledgee
by or pursuant to this Agreement, and (without prejudice to the generality of
any of the foregoing) to seal and deliver or otherwise perfect any instrument or
document of conveyance, agreement, or act as the Pledgee may deem proper in or
for the purpose of exercising any of such powers, authorities or discretions.
The Pledgor hereby ratifies and confirms, and hereby agrees to ratify and
confirm, whatever lawful acts the Pledgee shall do or purport to do in the
exercise of the power of attorney granted to the Pledgee pursuant to this
Section 18, which power of attorney, being given for security, is irrevocable.
19. TERMINATION, RELEASE. Upon the termination of the Loan Agreement
and the full payment and performance of all of the Secured Obligations, this
Agreement shall terminate, and the Pledgee, at the request and expense of the
Pledgor, will execute and deliver to the Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to the Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement, together with any moneys at the
time held by the Pledgee hereunder.
20. MISCELLANEOUS. The Pledgor agrees with the Pledgee that each of the
obligations and liabilities of the Pledgor to the Pledgee under this Agreement
may be enforced against the Pledgor without the necessity of joining the
Subsidiary, any other holders of pledges of or security interests in any of the
Collateral, or any other person as a party. This Agreement shall create a
continuing security interest in the Collateral and shall be binding upon the
Pledgor and its successors and assigns and shall inure to the benefit of and be
enforceable by the Pledgee, and its successors and assigns. This Agreement may
be changed, waived, discharged or terminated only in accordance with the
provisions of the Loan Agreement. Unless otherwise defined herein or in the Loan
Agreement, terms defined in Article 9 of the Code in the State of Georgia are
used herein as therein defined. The headings in this Agreement are for purposes
of reference only and shall not limit or define the meaning hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which shall constitute one instrument. In the event that
any provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto.
21. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and be governed by the
internal laws of the State of Georgia.
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized and
Pledgor has caused its corporate seal to be hereunto affixed, all as of the date
first above written.
CRYOLIFE, INC.
By:_____________________________
Title:_______________________
(CORPORATE SEAL)
NATIONSBANK, N.A. (SOUTH)
By:_____________________________
Title:_______________________
SCHEDULE 1
TO
STOCK PLEDGE AND SECURITY AGREEMENT
DATED AS OF AUGUST 30, 1996
FROM
CRYOLIFE, INC.
TO
NATIONSBANK, N.A. (SOUTH)
PLEDGED STOCK
Number and Type Percentage of
Name of Corporation of Shares Total Shares
CryoLife International, Inc. 1000 100%
EXHIBIT C-2
IRREVOCABLE STOCK POWER
FOR VALUE RECEIVED, the undersigned, CRYOLIFE, INC., a Florida
corporation (hereinafter collectively referred to as the "Assignor"), has fully
and irrevocably granted, assigned and transferred and hereby does fully and
irrevocably grant, assign and transfer to
______________________________________________________________________________
and the successors, transferees, assigns and personal representatives thereof
(hereinafter collectively referred to as the "Assignee") the following property:
_________ shares of Common Stock of , a corporation, represented
by certificate number(s) _________________________________
__________________________________________________.
Assignor hereby irrevocably appoints Assignee to be Assignor's true and
lawful attorney-in-fact, with full power of substitution, and empowers Assignee,
for and in the name and stead of Assignor, to sell, transfer, hypothecate,
liquidate or otherwise dispose of all of or any portion of the above-described
securities, from time to time, and, for that purpose, to make, sign, execute and
deliver any documents or perform any other act necessary for such sale,
transfer, hypothecation, liquidation or other disposition. Assignor acknowledges
that this appointment is coupled with an interest and shall not be revocable by
Assignor's death, dissolution or any other reason. Assignor hereby ratifies and
approves all acts that Assignee or any substitute therefor shall do by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has executed and sealed this power
as of this ____ day of _________________________, ________.
CRYOLIFE, INC.
By:______________________________
President
(CORPORATE SEAL)
EXHIBIT D
GUARANTY AGREEMENT
In order to induce NATIONSBANK, N.A. (SOUTH), a national banking
association (hereinafter referred to as "Lender"), to extend credit or other
financial accommodations or grant forbearances to CRYOLIFE, INC., a Florida
corporation (hereinafter referred to as "Borrower"), and for other good and
valuable consideration, the receipt and adequacy of all of the foregoing as
legally sufficient consideration being hereby acknowledged, the undersigned , a
_________________ corporation (hereinafter referred to as "Guarantor"), hereby
agrees in favor of Lender as follows:
1. GUARANTY OF OBLIGATIONS. Subject to the terms and conditions hereof,
Guarantor hereby irrevocably guarantees to Lender the prompt payment when due,
whether at stated maturity, by acceleration or otherwise, of all of the
Obligations (as hereinafter defined) which may be now existing or may hereafter
arise and whether for principal, interest, fees or other charges and including
any and all expenses (including without limitation reasonable attorney's fees
and expenses) incurred by Lender in collecting or otherwise enforcing
performance of any of the Obligations. Any and all payments made by Guarantor
hereunder shall be made free and clear of and without deduction for any set-off,
counterclaim, or withholdings so that, in each case, Lender shall receive the
full amount that it would otherwise be entitled to receive with respect to the
Obligations. Guarantor acknowledges and agrees that this Guaranty Agreement
(this "Guaranty") is a guaranty of payment and not of collection and that the
liability of Guarantor under this Guaranty shall be immediate and primary and
shall not be contingent upon the exercise or enforcement by Lender of any
remedies Lender may have against Borrower or any other person or the enforcement
of any lien or realization upon any collateral Lender may at any time possess
for any of the Obligations.
2. OBLIGATIONS AND CREDIT DOCUMENTS DEFINED.
(a) The term "Obligations" as used herein shall mean any and all
indebtedness, liabilities or obligations of Borrower to Lender which may now or
hereafter arise from or in any way relate to the Third Amended and Restated Loan
Agreement, dated as of August 30, 1996, between Borrower and Lender, or the Note
referred to therein, or any other agreement, instrument or other document
executed by Borrower with or in favor of Lender under or in connection
therewith, or any extensions, renewals, refinancings, restructurings,
modifications or replacements, in whole or in part, of or for any of the
foregoing.
(b) The term "Obligations" as used herein also expressly includes,
without limitation, any interest which would accrue on the applicable
Obligations described above but for the filing by or against Borrower of a
proceeding under any bankruptcy, insolvency, receivership or moratorium law.
(c) The term "Credit Documents" as used herein shall mean and include
any and all present or future loan agreements, letter of credit agreements,
lease agreements, security agreements, pledge agreements, collateral
assignments, security deeds, mortgages, other security instruments, promissory
notes, guaranties, subordination agreements, and any and all other agreements,
instruments or documents which may now exist or may hereafter be executed by
Borrower as evidence of or as collateral for any or all of the Obligations or
pursuant to which any or all of the Obligations may be now or hereafter created
or secured or which now or hereafter relate in any other way to the Obligations.
3. GUARANTY ABSOLUTE. Except to the extend expressly provided herein,
this Guaranty shall in all respects be an absolute, unconditional and
irrevocable guaranty of payment of the Obligations and Guarantor guarantees that
the Obligations will be paid strictly in accordance with the terms of the Credit
Documents under which they arise, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of Lender with respect thereto. The liability of Guarantor under this
Guaranty shall remain in full force and effect without regard to, and shall not
be released, suspended, discharged, terminated, modified or otherwise affected
by any circumstance or occurrence whatsoever, including without limitation any
of the following (whether or not Guarantor consents thereto or has notice
thereof): (i) any change in or waiver of the time, place or manner of payment,
or any other term, of any of the Obligations or Credit Documents, any waiver of
or any renewal, extension, increase, amendment or modification of or addition,
consent or supplement to or deletion from, or any other action or inaction under
or in respect of, any of the Obligations or Credit Documents or any other
document, instrument or agreement referred to therein or any assignment or
transfer of any of the Obligations or Credit Documents; (ii) any lack of
validity, legality or enforceability of any of the Obligations or Credit
Documents or any other document, instrument, or agreement referred to therein or
of any assignment or transfer of any of the foregoing; (iii) any furnishing to
Lender of any additional collateral for any of the Obligations or any sale,
exchange, release or surrender of, or realization on, any collateral for any of
the Obligations; (iv) any settlement, release or compromise of any of the
Obligations or Credit Documents, any collateral therefor, or any liability of
any other party (including without limitation any other guarantor) with respect
to any of the Obligations or Credit Documents, or any subordination of payment
of any of the Obligations to the payment of any other indebtedness, liability or
obligation of Borrower; (v) any bankruptcy, insolvency, reorganization,
composition, adjustment, merger, consolidation, dissolution, liquidation or
other like proceeding or occurrence relating to Borrower or any other change in
the ownership, composition or nature of Borrower; (vi) any non-perfection,
subordination, release or voidability of any security interest, security title,
pledge, collateral assignment or other lien of Lender on any collateral for any
of the Obligations or this Guaranty; (vii) any application of sums paid by
Borrower or any other person with respect to any of the Obligations, except to
the extent actually applied against the Obligations, regardless of what other
liabilities of Borrower remain unpaid; (viii) the failure of Lender to assert
any claim or demand or to enforce any right or remedy against Borrower or any
other person (including any other guarantor of any of the Obligations) under the
provisions of any of the Credit Documents or otherwise, or any failure of Lender
to exercise any right or remedy against any other guarantor of or any collateral
for any of the Obligations; (ix) any other act or failure to act by Lender which
may adversely affect Guarantor; or (x) any other circumstance which might
otherwise constitute a defense against, or a legal or equitable discharge of,
Guarantor's liability under this Guaranty.
4. GUARANTY CONTINUING; REINSTATEMENT. This Guaranty shall in all
respects be a continuing and irrevocable guaranty of payment (and not merely of
collection) and shall remain in full force and effect until all of the
Obligations shall have been indefeasibly paid in full and Lender shall be under
no obligation to make any additional loans or extend any additional credit or
financial accommodations to Borrower which would constitute Obligations once
made or extended. If claim is ever made upon Lender for repayment or recovery of
any amount received by Lender in payment or on account of any of the
Obligations, and if Lender repays all or part of said amount by reason of (i)
any judgment, decree or order of any court or administrative body having
jurisdiction over Lender or any of its property or (ii) any settlement or
compromise of any such claim effected by Lender with any such claimant
(including without limitation Borrower or a trustee, conservator or receiver for
Borrower), then and in such event Guarantor agrees that any such judgment,
decree, order, settlement or compromise shall be binding upon Guarantor,
notwithstanding any revocation or cancellation of this Guaranty or of any of the
Credit Documents, and Guarantor shall be and remain liable to Lender hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been paid to Lender and Guarantor's obligations and liabilities
to Lender under this Guaranty shall be reinstated to such extent and this
Guaranty and any collateral for this Guaranty shall remain in full force and
effect (or shall be reinstated) to such extent. Guarantor hereby expressly
waives the benefit of any applicable statute of limitations and agrees that it
shall be liable under this Guaranty whenever Lender seeks to enforce such
liability against Guarantor or its property.
5. WAIVERS AND CONSENTS. Guarantor hereby waives: (i) notice of acceptance
of this Guaranty by Lender; (ii) notice of the creation, existence, acquisition,
extension, or renewal of any of the Obligations; (iii) notice of the amount of
the Obligations outstanding from time to time, subject, however, to Guarantor's
right to make inquiry of Lender at reasonable intervals to ascertain the amount
of Obligations then outstanding; (iv) notice of any default or event of default
under any of the Credit Documents or with respect to any of the Obligations or
notice of any other adverse change in Borrower's financial condition or means or
ability to pay any of the Obligations or perform its obligations under any of
the Credit Documents or notice of any other fact which might increase
Guarantor's risk hereunder; (v) notice of presentment, demand, protest, and
notice of dishonor or nonpayment as to any instrument; (vi) notice of any
acceleration or other demand for payment of any of the Obligations; and (vii)
all other notices and demands to which Guarantor might otherwise be entitled
with respect to any of the Obligations or the Credit Documents or with respect
to Lender's enforcement of its rights and remedies thereunder. Guarantor further
waives any right Guarantor may have, by statute (such as O.C.G.A. Section
10-7-24) or otherwise, to require Lender to seek recourse first against Borrower
or any other person, or to realize upon any collateral for any of the
Obligations, as a condition precedent to enforcing Guarantor's liability and
obligations under this Guaranty, and Guarantor further waives any defense
arising by reason of any incapacity or other disability of Borrower or by reason
of any other defense which Borrower may have on any of the Obligations or under
any of the Credit Documents. Guarantor consents and agrees that, without notice
to or consent by Guarantor and without affecting or impairing the liability of
Guarantor under this Guaranty, Lender may compromise or settle, extend the
period of duration or the time for the payment, discharge or performance of any
of the Obligations or Credit Documents, or may refuse to enforce or may release
all or any parties to any or all of the Obligations (including without
limitation any other guarantor thereof) or any collateral therefor, or may grant
other indulgences to Borrower or such other parties in respect thereof, or may
waive, amend or supplement in any manner the provisions of any of the Credit
Documents or any other document, instrument or agreement relating to or securing
any of the Obligations (other than this Guaranty), or may release, surrender,
exchange, modify, or compromise any and all collateral securing any of the
Obligations or in which Lender may at any time have a lien, or may refuse to
enforce its rights or may make any compromise or settlement or agreement
therefor, in respect of any and all of such collateral, or with any party to any
of the Obligations or Credit Documents, or with any other person, or may release
or substitute any one or more of the other endorsers or guarantors of the
Obligations whether parties to this Guaranty or not, or may exchange, enforce,
waive or release any collateral for any guaranty of any of the Obligations.
Guarantor further consents and agrees that Lender shall be under no obligation
to marshal any assets in favor of Guarantor or against or in payment of any of
the Obligations.
6. SUBROGATION AND OTHER RIGHTS. Guarantor agrees that no payment,
performance or enforcement of Guarantor's liabilities and obligations under this
Guaranty shall cause Guarantor, by subrogation or otherwise, to acquire any of
Lender's rights against Borrower or any property of Borrower (or any interest in
such rights) unless and until Lender has received full and indefeasible payment
of all of the Obligations.
7. CROSS-COLLATERALIZATION. Guarantor's obligations and liabilities to
Lender under this Guaranty shall be secured by any and all security interests,
security titles, pledges, collateral assignments or other liens which Lender may
now or hereafter have or acquire in, to or on any real or personal property
assets of Guarantor, whether such assets now exist or are hereafter acquired,
except to the extent that Guarantor's obligations and liabilities hereunder are
expressly excluded from the coverage of any such lien under the express terms of
the mortgage, security deed, security agreement, pledge agreement, collateral
assignment or other document which granted or grants such lien.
8. GUARANTOR DUE DILIGENCE AND BENEFIT. Guarantor is fully aware of the
financial condition, assets and prospects of Borrower, and Guarantor is
executing and delivering this Guaranty based solely upon Guarantor's own
independent investigation thereof and in no part upon any representation,
warranty or statement of Lender with respect to Borrower's financial condition,
assets or prospects. Guarantor is in a position to and hereby assumes full
responsibility for obtaining any and all information concerning Borrower's
financial condition, assets and prospects as Guarantor may now or hereafter deem
material to Guarantor's decision to enter into and become liable under this
Guaranty and Guarantor is not relying upon, nor does Guarantor expect Lender to
furnish Guarantor with any information which may be now or hereafter in Lender's
possession concerning Borrower's financial condition, assets or prospects.
Guarantor hereby knowingly accepts the full range of risks encompassed within a
contract of guaranty, which risks Guarantor understands may include, without
limitation, the possibility that Borrower may incur additional indebtedness to
Lender for which Guarantor may be liable hereunder after Borrower's financial
condition or means or ability to pay its lawful debts when they fall due has
deteriorated. Guarantor further acknowledges and agrees that any credit or other
financial accommodations now or hereafter extended by Lender to Borrower and any
and all forbearances with respect to Borrower or its assets which Lender may now
or hereafter grant are and will be of direct interest, benefit and advantage to
Guarantor.
9. LENDER'S ACCOUNTS AND RECORDS; APPLICATION OF PAYMENTS. Guarantor
agrees that, in the absence of manifest error, any and all books and records
relating to the Obligations which are prepared and maintained by Lender shall
constitute prima facie evidence of the existence and amount of the Obligations.
In the event that Lender sends to Borrower any periodic or other statements of
account with respect to any or all of the Obligations, each such statement
rendered by Lender shall, in the absence of manifest error, be deemed final,
binding and conclusive upon Guarantor unless Lender is notified by Borrower in
writing to the contrary within thirty (30) days after the date such statement
was sent by Lender to Borrower (and each such notice shall only be deemed an
objection to those items specifically objected to therein). Guarantor
irrevocably waives the right to direct the application of any and all payments
and collections at any time hereafter received by Lender from or on behalf of
Borrower, Guarantor or otherwise with respect to any of the Obligations and
Guarantor does hereby irrevocably agree that Lender shall have the continuing
exclusive right to apply and re-apply any and all such payments and collections
received at any time hereafter by Lender against the Obligations in such manner
and order as Lender may deem advisable, notwithstanding any contrary entry by
Lender upon any of its books and records.
10. AUTOMATIC ACCELERATION OF GUARANTY. In the event that any
proceeding is instituted by or against Borrower under the United States
Bankruptcy Code or any other bankruptcy, receivership, insolvency, or moratorium
law (and, in the case of any such involuntary proceeding which is not consented
to or acquiesced in by Borrower or Guarantor, the continuation of such
proceeding without the same being dismissed or stayed for thirty (30) days), as
between Guarantor and Lender, all of the Obligations shall be deemed immediately
due and payable, without notice or demand of any kind by Lender, and Guarantor
agrees immediately to pay the Obligations in full, irrespective of whether any
or all of the Obligations can then be accelerated against Borrower and
irrespective of any right which Borrower then may have under any bankruptcy,
receivership, insolvency or moratorium law to cure defaults and reinstate the
maturities of the Obligations.
11. GUARANTOR INFORMATION. Guarantor agrees that, so long as this
Guaranty remains in effect, Guarantor shall furnish to Lender from time to time,
at such intervals and by such dates as may be required by Lender, financial
statements for Guarantor in form and substance satisfactory to Lender together
with such other information relating to Guarantor's financial condition, assets
or prospects as Lender may request, and Guarantor shall permit Lender or its
representatives to visit and inspect Guarantor's properties and Guarantor's
books and records during reasonable business hours and to discuss Guarantor's
financial condition, assets, and prospects with Lender.
12. SET-OFF AGAINST DEPOSITS. If an event of default shall occur under
any of the Credit Documents, Lender, without notice or demand of any kind upon
Guarantor, may hold and set-off against such of the Obligations (whether then
matured or unmatured) as Lender may elect any balance or amount in any deposit
or other account of any nature whatsoever now or hereafter maintained by or on
behalf of Guarantor with Lender, regardless of whether such account is general
or special and regardless of whether such account is individual or joint.
13. NOTICES TO GUARANTOR. All notices, demands and other communications
hereunder by Lender to Guarantor shall be deemed to have been validly served,
given or delivered by Lender when hand-delivered against receipt, or one
business day after being entrusted to a reputable national overnight delivery
service, or two business days after being deposited in the United States mail,
postage prepaid, or, in the case of a telegraphic or telecopy notice, when
transmitted, and in each case directed or addressed to Guarantor at Guarantor's
address or telecopy number set forth beneath Guarantor's signature below.
Guarantor may designate a different address or telecopy number for Guarantor's
receipt of notices or other communications hereunder but no such change shall be
effective unless and until Lender actually receives written notice thereof from
Guarantor.
14. COLLECTION COSTS. Guarantor shall be liable to Lender for, and
shall pay to Lender on demand, all costs (including without limitation
reasonable attorney's fees and expenses) actually incurred by Lender in
enforcing performance of or collecting any payments due under this Guaranty.
15. ASSIGNMENT AND TRANSFER. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representatives, successors and assigns
and shall inure to the benefit of and be enforceable by Lender and its
successors, transferees and assigns. Without limiting the generality of the
preceding sentence, Lender may assign or grant participations in all or any part
of the Obligations, whereupon such assignee or participant shall become entitled
to all of the rights in respect thereof granted to Lender herein.
16. GOVERNING LAW. This Guaranty shall be governed by the internal laws
of the State of Georgia (without giving effect to its conflicts of law rules).
17. SUBORDINATION OF BORROWER'S OBLIGATIONS TO GUARANTOR. As an
independent covenant, Guarantor hereby expressly covenants and agrees for the
benefit of Lender that all present or future indebtedness, obligations and
liabilities of Borrower to Guarantor of whatsoever description (collectively,
the "Junior Claims") shall be subordinate and junior in right of payment to all
Obligations of Borrower to Lender (collectively, the "Senior Claims"). If an
event of default under any Credit Document shall occur, then, unless and until
such event of default shall have been cured or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities by set-off or
otherwise) shall be made by Borrower to Guarantor on account of or in any manner
in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the Senior Claims. In the event of a
Proceeding (as hereinafter defined), all Senior Claims shall first be paid in
full before any direct or indirect payment or distribution (in cash, property,
securities by set-off or otherwise) shall be made to Guarantor on account of or
in any manner in respect of any Junior Claim except such payments and
distributions the proceeds of which shall be applied to the Senior Claims. For
the purposes of the previous sentence, a "Proceeding" shall occur if Borrower
shall make an assignment for the benefit of creditors, file a petition in
bankruptcy, have entered against or in favor of it an order for relief under the
Bankruptcy Code or similar law of any other jurisdiction, generally fail to pay
its debts as they come due (either as to number or amount), admit in writing its
inability to pay its debts generally as they mature, make a voluntary assignment
for the benefit of creditors, commence any proceeding relating to it under any
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect, or by
any act, indicate its consent to, approval of or acquiescence in any such
proceeding or in the appointment of any receiver of, or trustee or custodian (as
defined in the Bankruptcy Code) for itself, or any substantial part of its
property, or a trustee or a receiver shall be appointed for Borrower or for a
substantial part of the property of Borrower and such appointment remains in
effect for more than sixty (60) days or Borrower shall indicate its consent
thereto, approval therefor or acquiescence therein, or a petition under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction (whether now or hereafter in
effect) shall be filed against Borrower and such petition shall not be dismissed
within sixty (60) days after such filing, an order for relief shall be entered
in such proceeding, or Borrower shall indicate its consent thereto, approval
therefor or acquiescence therein. In the event any direct or indirect payment or
distribution is made to Guarantor in contravention of this Section, such payment
or distribution shall be deemed received in trust for the benefit of Lender and
shall be immediately paid over to Lender for application against the
Obligations. Guarantor agrees to execute such additional documents as Lender may
reasonably request to evidence the subordination provided for in this Section.
18. MISCELLANEOUS. (a) This Guaranty (together with any collateral
documents executed by Guarantor to secure its obligations and liabilities
hereunder) constitutes the sole and entire agreement between Guarantor and
Lender with respect to the subject matter hereof and supersedes and replaces any
and all prior agreements, understandings, negotiations or correspondence between
them with respect thereto, including without limitation any and all prior
guaranty agreements executed by Guarantor in favor of Lender with respect to any
or all of the Obligations.
(b) This Guaranty is intended to be an instrument under seal. Time is
of the essence of this Guaranty.
(c) Words importing the singular number hereunder shall include the
plural number and vice versa and any pronouns used herein shall be deemed to
cover all genders. The term "person" as used herein means any individual,
corporation, partnership, joint venture, limited liability company, association,
joint-stock company, trust or other entity, or any government or any agency or
political subdivision thereof.
(d) Wherever possible, any provision in this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any one jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(e) No amendment or waiver of any provision of this Guaranty, nor
consent to any departure by Guarantor therefrom, shall be effective or binding
upon Lender unless Lender shall first have given written consent thereto. Any
such amendment, waiver or consent which is so granted by Lender shall apply only
to the specific occasion which is the subject of such amendment, waiver or
consent and shall not apply to the occurrence of the same or any similar event
on any future occasion. No failure on the part of Lender to exercise, and no
delay by Lender in exercising, any right hereunder 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 by Lender. No notice to or demand on Guarantor in any case by Lender
hereunder shall entitle Guarantor to any further notice or demand in any similar
or other circumstances or constitute a waiver of the rights of Lender to take
any other or future action in any circumstances without notice or demand. The
remedies provided to Lender in this Guaranty are cumulative and not exclusive of
any other remedies provided by law.
(f) This Guaranty, each of the Credit Documents and all other documents
relating thereto, including without limitation any consents, waivers and
modifications that may be hereafter executed and delivered with respect thereto,
may be reproduced by Lender by photographic, photostatic, microfilm, or other
similar process and Lender may destroy any original documents so reproduced, and
Guarantor hereby stipulates and agrees that, to the extent permitted by
applicable law, any such reproduction shall be as admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original shall be in existence and whether or not such reproduction was made by
Lender in the ordinary course of its business), and any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
(g) This Guaranty may be executed in one or more counterparts and each
such counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.
(h) All Section headings herein are for convenience of reference only
and shall not limit or otherwise affect the meaning or interpretation of the
provisions of this Guaranty.
(i) If this Guaranty is executed by more than one Guarantor, the term
"Guarantor" as used herein shall include all such persons collectively and each
such person individually and all such persons shall be jointly and severally
liable under this Guaranty. If more than one person is named above as Borrower,
the term "Borrower" as used herein shall include all such persons collectively
and each such person individually.
(j) To the maximum extent permitted by law, the Guarantor covenants and
agrees so long as the Obligations remain outstanding to maintain its primary
depository relationships with Lender.
19. JURY TRIAL WAIVER; CONSENT TO JURISDICTION AND VENUE. GUARANTOR
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
GUARANTOR MAY HAVE UNDER ANY APPLICABLE LAW TO A TRIAL BY JURY WITH RESPECT TO
ANY SUIT OR LEGAL ACTION WHICH MAY BE COMMENCED BY OR AGAINST GUARANTOR, LENDER
OR BORROWER CONCERNING THE INTERPRETATION, CONSTRUCTION, VALIDITY, ENFORCEMENT
OR PERFORMANCE OF THIS GUARANTY OR ANY OF THE CREDIT DOCUMENTS. IN THE EVENT ANY
SUCH SUIT OR LEGAL ACTION IS COMMENCED BY LENDER, GUARANTOR HEREBY EXPRESSLY
AGREES, CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY STATE OR
FEDERAL COURT SITTING IN ▇▇▇▇▇▇ COUNTY, GEORGIA, WITH RESPECT TO SUCH SUIT OR
LEGAL ACTION, AND GUARANTOR ALSO EXPRESSLY CONSENTS AND SUBMITS TO AND AGREES
THAT VENUE IN ANY SUCH SUIT OR LEGAL ACTION IS PROPER IN SAID COURTS AND COUNTY
AND GUARANTOR HEREBY EXPRESSLY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER
APPLICABLE LAW OR IN EQUITY TO OBJECT TO THE JURISDICTION AND VENUE OF SAID
COURTS AND COUNTY. THE JURISDICTION AND VENUE OF THE COURTS AND COUNTY CONSENTED
AND SUBMITTED TO AND AGREED UPON IN THIS SECTION ARE NOT EXCLUSIVE BUT ARE
CUMULATIVE AND IN ADDITION TO THE JURISDICTION AND VENUE OF ANY OTHER COURT
UNDER ANY APPLICABLE LAW OR IN EQUITY.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the undersigned Guarantor has signed, sealed and
delivered this Guaranty as of this ____ day of _____________________, _______.
By:_______________________________
Title:_________________________
(CORPORATE SEAL)
GUARANTOR'S NOTICE ADDRESS:
Attn:_____________________________
Telecopy No.:_____________________
199632.3
EXHIBIT E
SUBSIDIARY SECURITY AGREEMENT
THIS AGREEMENT is made and entered into as of __________, _____,
between NATIONSBANK, N.A. (SOUTH), a national banking association which is the
successor by merger to Bank South, a Georgia banking corporation formerly known
as Bank South, N.A., having its main office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Secured Party"), and
______________________________________, a ___________________ corporation having
its chief executive office and principal place of business at ("Debtor").
STATEMENT OF FACTS
CryoLife, Inc., a Florida corporation which is the parent company of
Debtor (the "Parent"), and Secured Party are parties to a certain Third Amended
and Restated Loan Agreement, dated as of August 30, 1996 (said agreement, as the
same may be amended, supplemented or restated, is herein called the "Third
Restated Loan Agreement"), pursuant to which Secured Party has agreed to make
certain loans available to the Parent. It is a condition precedent to Secured
Party's obligation to make loans to the Parent under the Third Restated Loan
Agreement that the Debtor guarantee repayment of such loans and that the Debtor
secure its guarantee obligations as provided herein.
In consideration of any and all loans or other extensions of credit
which may be now or hereafter made from time to time by Secured Party to the
Parent under the Third Restated Loan Agreement, as well as for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor and Secured Party do hereby agree as follows:
STATEMENT OF FACTS
1. SECURITY INTEREST. (a) Debtor hereby grants to Secured Party a
present and continuing security interest in and lien on all of the Collateral
described in Sections l(b) and l(c) below to secure the payment and performance
of all of the Obligations described in Section 2 below.
(b) The term "Collateral" as used herein shall mean and include all now
existing or hereafter arising rights, titles and interests of Debtor in, to or
under the following types or items of property of Debtor, whether now owned or
hereafter existing or hereafter created, acquired or arising and wheresoever
located, and all cash and non-cash proceeds thereof:
(i) ALL ACCOUNTS RECEIVABLE, ETC. - All accounts, contract rights,
chattel paper, instruments, documents and general intangibles of
Debtor, including without limitation all causes of action,
corporate or other records, deposit accounts, patents,
trademarks, service marks, trade names, copyrights, good will,
customer lists, tax refund claims, computer programs, and
software, and all claims under guaranties, letters of credit,
security interests or other security held by or granted to Debtor
to secure payment of any of its accounts, contract rights,
chattel paper, instruments or general intangibles, and all rights
to indemnification and all other intangible property of any kind
(collectively, the "Accounts Receivable");
(ii) ALL INVENTORY, ETC. - All of Debtor's inventory, including
without limitation all goods intended for sale or lease by Debtor
or for display or demonstration, all work in process, all raw
materials, all finished goods, and all other materials and
supplies of every nature and description used or intended for use
in connection with the manufacture, printing, packing, shipping,
advertising, selling, leasing or furnishing of such goods or
otherwise used or consumed in Debtor's business and all documents
evidencing and all warranty rights and other general intangibles
relating to any of the foregoing (collectively, the "Inventory");
provided, however, that the inventory shall not include any human
tissue; and
(iii) ALL EQUIPMENT, ETC. - All machinery, apparatus, equipment,
furniture, fixtures, leasehold improvements, motor vehicles and
other tangible personal property (other than Inventory as defined
above) of Debtor of every kind and description used in Debtor's
operations or business or owned by Debtor or in which Debtor has
an interest, and all parts, accessories and accessions thereto
and substitutions and replacements therefor, and all documents
evidencing and all warranty rights and other general intangibles
of Debtor relating to any of the foregoing (collectively, the
"Equipment").
Notwithstanding anything herein to the contrary, the Collateral shall
not include any of Debtor's Intellectual Property Rights (as defined in the
Third Restated Loan Agreement) but the Collateral shall include the proceeds
thereof.
(c) Unless otherwise defined herein, all terms contained in this
Agreement shall have the meanings provided for by the Uniform Commercial Code as
in effect in the State of Georgia to the extent the same are used or defined
therein. In addition, the term "proceeds" as used herein includes whatever is
receivable or received when any Collateral or any proceeds thereof is sold,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and also includes without limitation all rights to
payment (including returned premiums) with respect to any insurance relating to
such Collateral. In addition, all references herein to a particular type or item
of Collateral shall be deemed to include all now existing or hereafter acquired
books and records of Debtor relating to such Collateral (including, without
limitation, all computer materials and records). The Collateral also includes in
all cases all monies and other property of Debtor of any other kind which may be
now or hereafter in the possession of or under the control of Secured Party and
all deposit or other accounts of Debtor with Secured Party and all balances or
other property now or hereafter held or on deposit therein.
2. OBLIGATIONS SECURED. This Agreement and the security interest and
lien granted hereunder to Secured Party secures all obligations which may be now
or hereafter owing by Debtor to Secured Party under this Agreement as well as
any and all indebtedness, obligations or other liabilities which may be now or
hereafter owing by the Debtor to Secured Party under or on account of the
Guaranty Agreement, dated of even date herewith, by Debtor in favor of Secured
Party (the "Guaranty"), or under the Third Restated Loan Agreement or any of the
other Financing Documents as defined therein, and including without limitation
any interest which, but for the filing by or against Debtor of a petition in
bankruptcy, would accrue on any of the foregoing indebtedness, obligations or
liabilities. All of the foregoing indebtedness, obligations or other liabilities
are herein collectively called the "Obligations".
3. REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and
warrants to Secured Party that:
(a) Debtor has full power and authority, and has completed all
proceedings and obtained all approvals and consents necessary, to execute,
deliver and perform this Agreement and the transactions contemplated hereby.
(b) Such execution, delivery, and performance will not violate, or
cause a default under or result in a lien (other than Secured Party's security
interest and lien hereunder) upon any property of Debtor pursuant to, any
applicable law, rule or regulation or any agreement, indenture, judgment, order,
decree, or instrument binding upon or affecting Debtor or any of the Collateral.
(c) This Agreement constitutes the legal, valid, and binding obligation
of Debtor, enforceable against Debtor in accordance with its terms (except as
such enforceability may be limited by bankruptcy, insolvency, or other similar
laws affecting the enforcement of creditor's rights or by general equitable
principles), and this Agreement grants to Secured Party a valid and enforceable
security interest in or other lien on the Collateral.
(d) Debtor's chief executive office and principal place of business are
located at Debtor's address shown above.
(e) Debtor has good and marketable title to the Collateral (or, in the
case of any after-acquired Collateral, Debtor will have good and marketable
title to the Collateral at the time Debtor acquires rights in such Collateral).
(f) Except for the security interest and lien granted hereunder in
favor of Secured Party, no person has (or, in the case of any after-acquired
Collateral, at the time Debtor acquires rights therein, will have) any right,
title, claim, or other interest (whether in the nature of a security interest,
other lien or charge, or otherwise) in, against or to any Collateral or any
interest therein.
(g) All information heretofore, herein or hereafter supplied to Secured
Party by or on behalf of Debtor with respect to any of the Collateral is or will
be true and correct in all material respects at the time so supplied.
(h) Debtor has delivered to Secured Party all instruments, documents,
chattel paper, and other items of Collateral in which Secured Party's security
interest or lien hereunder must be perfected by possession and the certificate
of title with respect to each motor vehicle, if any, included in the Collateral,
together with such additional writings, including, without limitation, duly
executed blank and undated assignments and stock powers, with respect thereto as
Secured Party shall request.
All of the foregoing representations and warranties shall survive the
execution, delivery and acceptance of this Agreement by Secured Party and Debtor
and the closing of the transactions contemplated hereby.
4. COVENANTS AND AGREEMENTS OF DEBTOR. Debtor hereby covenants and
agrees with Lender as follows:
(a) Debtor shall do all acts that may be necessary to maintain,
preserve, and protect the Collateral.
(b) Debtor shall not use or permit any Collateral to be used
in violation of any applicable law, rule or regulation, or any provision of this
Agreement or any other agreement with Secured Party related thereto, or any
policy of insurance covering such Collateral.
(c) Debtor shall pay promptly when due all taxes, assessments, charges,
encumbrances and liens now or hereafter imposed upon or affecting any Collateral
or Secured Party's security interest or other lien hereunder (including all
property, excise, intangible, use, sales, stamp and other such taxes), except to
the extent expressly permitted in the Third Restated Loan Agreement.
(d) Debtor shall appear in and defend any action or proceeding that may
adversely affect its title to or Secured Party's interests in the Collateral.
(e) Except to the extent permitted in the Third Restated Loan
Agreement, Debtor shall not sell, encumber, lease, rent or otherwise dispose of
or transfer any Collateral or any right or interest therein and Debtor shall
keep the Collateral free of all levies, security interests or other liens,
charges or encumbrances.
(f) Debtor shall comply in all material respects with all laws, rules
and regulations (including those governing environmental matters) relating to
the possession, operation, storage, maintenance, disposal, and control of the
Collateral.
(g) Debtor agrees that such care as Secured Party gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
such Collateral when it may be in Secured Party's possession.
(h) If and to the extent requested by Secured Party, Debtor shall
account fully for and promptly deliver to Secured Party, in the form received,
all documents, chattel paper, instruments, and agreements constituting
Collateral hereunder and all proceeds of the Collateral received, all endorsed
to Secured Party or in blank.
(i) Debtor shall keep accurate, and complete records of the Collateral
and shall provide Secured Party with such records and such other reports and
information relating to the Collateral as Secured Party may request from time to
time.
(j) Debtor shall keep, procure, execute, and deliver from time to time
any and all, indorsements, notifications, registrations, assignments, financing
statements, fixture filings, certificate of title applications, and other
writings deemed necessary or appropriate by Secured Party to perfect, maintain,
and protect its security interest in or other lien on the Collateral hereunder
and the priority thereof, and Debtor shall take such other actions as Secured
Party may request to protect the value of the Collateral and of Secured Party's
security interest in the Collateral, including, without limitation, obtaining
such landlord waivers, mortgagee waivers and other assurances from third parties
regarding Secured Party's access to and right to foreclose on or sell the
Collateral and right to realize the practical benefits of such foreclosure or
sale as Secured Party may request. Unless prohibited by applicable law, Debtor
hereby authorizes Secured Party to execute and file any financing statement or
fixture filing on Debtor's behalf, and the parties further agree that any
carbon, photographic, or other reproduction of this Agreement shall be
sufficient as a financing statement and may be filed in any appropriate office
in lieu thereof.
(k) Debtor shall reimburse Secured Party upon demand for all costs and
expenses, including, without limitation, actual and reasonable attorney's fees
and disbursements, Secured Party may now or hereafter incur while exercising or
enforcing any right, power, or remedy provided to Secured Party by this Security
Agreement or by law, all of which costs and expenses shall constitute part of
the Obligations secured hereunder.
(l) Debtor shall give Secured Party not less than thirty (30) days
prior written notice of any change in Debtor's chief executive office or
principal place of business or Debtor's legal name or trade name(s) or style(s)
from that set forth in this Agreement.
(m) Debtor shall keep its records concerning the Collateral at Debtor's
address set forth above or at Debtor's other location(s) (if any) set forth on
Schedule 1 attached to this Agreement and shall not remove such records from
such location(s) without the prior written consent of Secured Party.
(n) Debtor shall keep all Collateral consisting of goods (other than
Inventory in transit and mobile goods) at the address for Debtor set forth above
or at Debtor's other locations (if any) set forth on Schedule 1 attached to this
Agreement, and Debtor shall not, without the prior written approval of Secured
Party, remove any Collateral therefrom except for sales of Inventory in the
ordinary course of business and the disposition of obsolete or worn-out
Equipment in accordance with this Agreement and except for the storage of goods
at locations other than those shown above or on Schedule 1 attached hereto if
(i) Debtor gives Secured Party written notice of the new storage location at
least thirty (30) days prior to storing such Collateral at such location, (ii)
Secured Party's security interest in such Collateral hereunder is and continues
to be duly perfected, (iii) all documents and other receipts in respect of any
Collateral maintained at such premises are promptly delivered to Secured Party,
and (iv) the owner (and, if requested by Secured Party, any mortgagee) of such
premises agrees in writing with Secured Party not to assert any lien in respect
of such Collateral and to permit Secured Party to have the right to enter upon
and use such premises in order to inspect, store, process, assemble or remove
the Collateral therefrom after the occurrence of an Event of Default.
(o) Debtor shall furnish Secured Party with such information regarding
the Collateral (and any account debtors thereunder) as Secured Party from time
to time may request.
(p) Debtor shall keep the Collateral in good condition and repair and
shall not cause or permit any waste of any of the Collateral.
(q) Debtor shall insure the Collateral, with Secured Party named as
loss payee under all property coverages and as an additional insured under all
liability coverages, in form and amount, with insurers, and against risks and
liabilities which are satisfactory to Secured Party in all respects, and Debtor
hereby assigns all such policies and all proceeds thereof (including returned
premiums) to Secured Party, to secure the Obligations, agrees to deliver them to
Secured Party at its request, and agrees that Secured Party may make any claim
thereunder, cancel the insurance on default by Debtor, collect and receive
payment and indorse any instrument in payment of loss or return premium or other
refund or return, and apply such amounts received, at Secured Party's election,
to replacement of the Collateral or to the Obligations. Debtor shall not use or
permit the use of any of the Collateral in any manner which will render
inapplicable or invalid any insurance coverage therefor. Debtor shall deliver
the originals of all property insurance policies covering the Collateral to
Secured Party together with loss payable endorsements thereon in form and
substance satisfactory to Secured Party and in the name of Secured Party as loss
payee thereunder. Each policy of insurance or each such endorsement shall
contain a clause requiring the insurer to give not less than thirty (30) days
prior written notice to Secured Party in the event of cancellation of the policy
for nonpayment of premium and a clause to the effect that the interests of
Secured Party thereunder shall not be impaired or invalidated by any act or
neglect of Debtor nor by the occupation of the premises covered thereby for
purposes more hazardous than are permitted by said policy.
(r) Debtor agrees that all risk of loss of the Collateral shall at all
times be and remain upon Debtor irrespective of whether such Collateral is then
in Debtor's or Secured Party's possession.
(s) Debtor agrees that any of the Collateral consisting of Equipment
shall be and remain personal property and shall not, by reason of its attachment
or other connection to any real property, either become or be deemed to be a
fixture or appurtenance to such real property and shall at all times be deemed
severable therefrom.
(t) Debtor shall permit Secured Party (or any person designated by
Secured Party) from time to time to inspect the Collateral and to inspect, audit
and make copies of or extracts from all books and records maintained by or on
behalf of Debtor pertaining to the Collateral (including computer records), all
at such times and places as Secured Party may request from time to time.
5. POWER OF ATTORNEY. Debtor hereby agrees that from time to time, without
presentment, notice or demand, and without affecting or impairing in any way the
rights of Secured Party with respect to the Collateral, the obligations of
Debtor hereunder or the other Obligations, Secured Party may, but shall not be
obligated to and shall incur no liability to Debtor or any third party for
failing to, take any action which Debtor is obligated by this Agreement to take
but which the Debtor fails to take, and Debtor also hereby appoints (which
appointment is coupled with an interest and shall be irrevocable so long as this
Agreement is in effect) Secured Party as its attorney-in-fact with full power
and authority at any time to take any of the following actions during the
existence of any Event of Default hereunder in either Debtor's or Secured
Party's name (but Secured Party shall have no obligation to and shall incur no
liability to Debtor or any third party for failing to exercise any such power or
authority): (a) to collect by legal proceedings or otherwise and indorse,
receive and receipt for all dividends, interest, payments, proceeds, and other
sums and property now or hereafter payable on or on account of any of the
Collateral; (b) to enter into any extension, reorganization, deposit, merger,
consolidation, or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for, any of the Collateral; (c) to
insure, process, and preserve any of the Collateral or to take any other action
which Debtor is obligated by this Agreement to take; (d) to transfer any of the
Collateral to its own or its nominee's name; (e) to make any compromise or
settlement, and take any action it deems advisable, with respect to any of the
Collateral; (f) to prepare, file and sign Debtor's name to any proof of claim in
bankruptcy (or any similar document) against any account debtor on any of the
Collateral; (g) to receive, open and dispose of Debtor's mail pertaining to
anyof the Collateral consisting of Accounts Receivables and notify postal
authorities to deliver such mail to such address as Secured Party may designate;
(h) to indorse Debtor's name upon any checks or other proceeds of any Collateral
and deposit same to any account of Secured Party; (i) to indorse Debtor's name
on any other document, instrument or other agreement relating to any of the
Collateral; (j) to send verifications of Accounts Receivable to account debtors
thereunder; (k) to use the information recorded on or contained in any data
processing equipment, other computer hardware or any software relating to any
Collateral; (l) to make, adjust or enforce claims under any insurance policy
relating to any Collateral; (m) to do all other acts and things necessary, in
Secured Party's judgment, to fulfill Debtor's obligations under this Agreement;
and (n) to pay any and all taxes, assessments, charges, encumbrances or liens
now or hereafter imposed upon or affecting any of the Collateral. The foregoing
power of attorney may be exercised by Secured Party in its discretion, in its
name or Debtor's name, and without prior notice to or demand upon Debtor. Debtor
agrees to reimburse Secured Party on demand for any sums advanced or expenses
incurred by Secured Party in exercising any of the foregoing rights and powers
together with interest accruing thereon daily at the highest rate Debtor has
contracted to pay on any of the Obligations. Debtor's reimbursement obligations
under this Section shall constitute part of the Obligations secured hereunder.
6. EVENTS OF DEFAULT. An event of default under this Agreement shall be
deemed to exist upon the occurrence of any of the following event (each such
event being herein called an "Event of Default"):
(a) If any representation, or warranty of Debtor made in this Agreement
proves to have been untrue, incorrect, misleading or incomplete in any material
respect as of the date made or deemed made;
(b) Failure of Debtor to perform, observe, discharge or comply with any
of the covenants set forth in Section 4 (other than subsection (e), (k) or (l)
thereof) of this Agreement, which failure is not cured within thirty (30) days
of the giving by Secured Party to Debtor of written notice of same;
(c) Failure of Debtor punctually and fully to perform, observe,
discharge or comply with any of the other covenants set forth in this Agreement;
(d) The occurrence of any other Event of Default under (and as such
term is defined in) the Third Restated Loan Agreement.
7. SECURED PARTY'S REMEDIES. Upon the occurrence and during the
continuation of any one or more of the foregoing Events of Default, Secured
Party may, at its option, and without notice to or demand on Debtor and in
addition to all rights and remedies available to Secured Party under the
Guaranty Agreement or the Third Restated Loan Agreement or any of the other
Financing Documents, or at law, in equity, or otherwise, do any one or more of
the following:
(a) Secured Party may declare any or all of the Obligations to be
immediately due and payable and foreclose or otherwise enforce Secured Party's
security interest in or other lien hereunder on any or all of the Collateral in
any manner permitted by law or provided for in this Agreement.
(b) Secured Party may recover from Debtor all costs and expenses,
including, without limitation, actual and reasonable attorney's fees, incurred
or paid by Secured Party in exercising or enforcing any right, power, or remedy
with respect to any or all of the Collateral provided to it by this Agreement or
by applicable law. Notwithstanding anything herein to the contrary, the Debtor's
liability under this Agreement for the Secured Party's attorney's fees shall not
exceed the attorney's fees actually incurred by the Secured Party.
(c) Secured Party may require Debtor to assemble any or all of the
Collateral and make it available to Secured Party at such place or places as may
be designated by Secured Party.
(d) Secured Party may enter onto any property where any Collateral is
located and take possession thereof with or without judicial process.
(e) Prior to Lender's disposition of any Collateral, Secured Party may
store, process, complete, repair or recondition it or otherwise prepare it for
disposition in any manner and to the extent Secured Party deems appropriate (but
Secured Party shall not be obligated to do so).
(f) Secured Party may transfer any of the Collateral into its name,
notify any account debtor under or other person obligated on any Collateral to
make payments thereunder directly to Secured Party, and otherwise collect or
enforce payment of any of the Collateral (but Secured Party shall have no
obligation to do any of the foregoing).
(g) Secured Party may sell or otherwise dispose of any of the
Collateral at one or more public or private sales at Debtor's or Secured Party's
place of business or any other place or places, including without limitation at
any brokers board or security exchange, in lots or in bulk, for cash or on
credit, all as Secured Party, in its discretion, may deem advisable. Debtor
agrees that seven (7) days' prior written notice from Secured Party to Debtor of
any public sale of any Collateral or the date after which any private sale of
any Collateral will be held shall constitute reasonable notice thereof and such
sale may be held at such locations as Secured Party may designate in each said
notice. Secured Party shall have the right to conduct any such sale on Debtor's
premises, without any charge therefor, and any such sales may be adjourned from
time to time in accordance with applicable law. Secured Party may purchase all
or any part of the Collateral at any public sale or, if permitted by law, any
private sale and, in lieu of actual payment of such purchase price, Secured
Party may set-off the amount of such price against the Obligations.
(h) Secured Party is hereby granted by Debtor a license or other right
to use during the term of this Agreement, without charge, any or all of Debtor's
labels, patents, software, copyrights, trade secrets, trade names, trademarks
and advertising materials, or any other property of any similar nature, as it
pertains to any of the Collateral, in advertising for sale and selling any
Collateral or in completing Debtor's performance under or collecting any sums
owing in respect of any Collateral, and Debtor's rights under all licenses and
all franchise agreements relating to any of the Collateral shall inure to
Secured Party's benefit to the extent of Secured Party's rights, titles and
interests in or to the Collateral under this Agreement.
(i) Secured Party also may, without prior notice or demand of any kind,
hold and set-off against such of the Obligations (whether matured or unmatured)
as Secured Party may elect any balance of amount to the credit of Debtor in any
deposit, agency, reserve, holdback or other account of any nature whatsoever
which may be now or hereafter maintained by or on behalf of Debtor with Secured
Party in any of its offices, regardless of whether any such account is general
or special and regardless of whether any such account is individual or joint.
8. APPLICATION OF PROCEEDS. (a) All monies and other proceeds received
by Secured Party upon any collection, sale or other disposition of any
Collateral, together with all other monies and other proceeds received by
Secured Party hereunder, shall be applied as follows:
First, to the payment of the reasonable costs and
expenses of such sale, collection or other disposition which
may have been incurred by Secured Party, including without
limitation actual and reasonable attorney's fees as provided
in Section 7(b) above and all other reasonable expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith;
Second, to the payment of all other Obligations then due
in such order as Secured Party may elect; and
Third, after payment in full of all Obligations then
due, any surplus then remaining from such proceeds shall be
paid to Debtor; and
(b) Debtor shall remain liable to Secured Party for any deficiency
owing on the Obligations after the application of the proceeds of the Collateral
as provided above.
9. INDEMNITY. Debtor hereby agrees to indemnity Secured Party and hold
Secured Party harmless from and against any claim, liability, loss, damage,
expense, suit, action or proceeding which may now or hereafter be suffered or
incurred by Secured Party as a result of Debtor's failure to observe, perform or
discharge Debtor's duties or obligations hereunder or Secured Party's holding or
administering this Agreement or any Collateral unless with respect to any of the
above Secured Party is finally determined to have acted with gross negligence or
to have engaged in willful misconduct. Without limiting the generality of the
foregoing, this indemnity shall extend to any claims asserted against Secured
Party by any person under any environmental, occupational safety and hazard, or
other similar laws, rules or regulations by reason of Debtor's or any other
person's failure to comply with any such laws, rules or regulations. The
indemnity obligations of Debtor under this Section shall constitute a part of
the Obligations secured hereunder and shall survive the termination of this
Agreement.
10. MISCELLANEOUS. (a) Any waiver, forbearance or failure or delay by
Secured Party in exercising any of its rights, powers, or remedies hereunder
shall not preclude the further exercise thereof, and every right, power, or
remedy of Secured Party hereunder shall continue in full force and effect until
such right, power or remedy is specifically waived in a writing executed by
Secured Party. Debtor waives any right to require Secured Party to proceed
against any person or to exhaust any Collateral or to pursue any remedy in
Secured Party's power.
(b) This Agreement may be executed in any number of several
counterparts, each of which when so executed shall be deemed to be an original
and all of which counterparts taken together shall constitute one and the same
instrument.
(c) This Agreement contains the entire agreement between Secured Party
and Debtor with respect to the Collateral and supersedes and replaces the Prior
Security Agreement as well as any and all other prior agreements, commitments,
understandings, negotiations or correspondence between them with respect
thereto. If any provision of this Agreement shall be held invalid or prohibited
under applicable law, this Agreement shall be invalid or ineffective only to the
extent of such invalidity or prohibition, without invalidating the remainder of
this Agreement.
(d) The rights, powers, and remedies of Secured Party under this
Agreement shall be in addition to all other rights, powers, or remedies given to
Secured Party by applicable law or by any other agreement, all of which rights,
powers and remedies shall be cumulative and may be exercise successively or
concurrently without impairing Secured Party's security interest in or other
lien on any of the Collateral.
(e) All singular terms used herein shall include the plural and vice
versa. All pronouns used herein shall be deemed to cover all genders. All
headings used herein are for convenience of reference only and shall not
constitute a substantive part of this Agreement.
(f) This Agreement may not be amended or modified except by a writing
signed by each of the parties hereto.
(g) Except as may be otherwise expressly provided herein, all notices,
requests and demands to or upon any party hereto shall be given in accordance
with the notice provisions of the Third Restated Loan Agreement.
(h) All rights of Secured Party under this Agreement shall inure to the
benefit of its successors and assigns, and all obligations of Debtor hereunder
shall bind its successors, and assigns.
(i) This Agreement and all security interests and other liens granted
or conveyed hereunder shall remain in full force and effect and shall be
irrevocable until such time as (x) no Obligations are outstanding and (y) the
Third Restated Loan Agreement is no longer in effect. Debtor hereby waives any
right Debtor may have upon payment in full of the Obligations to require Secured
Party to terminate its security interest in the Collateral or any financing
statement relating thereto until this Agreement is terminated in accordance with
the foregoing terms.
(j) This Agreement shall be construed in accordance with and governed
by the laws of the State of Georgia without giving effect to its choice of law
rules.
(k) Time is of the essence of this Agreement.
IN WITNESS WHEREOF, Debtor and Secured Party have executed and
delivered this Agreement, and Debtor has affixed its seal hereto, as of the day
and year first above set forth.
DEBTOR:
By:__________________________________
Title:_______________________________
(CORPORATE SEAL)
SECURED PARTY:
NATIONSBANK, N.A. (SOUTH)
By:_________________________________
Title:______________________________
SCHEDULE 1 TO
SECURITY AGREEMENT
DATED ______________, _____
BETWEEN ___________________________, AS DEBTOR,
AND NATIONSBANK, N.A. (SOUTH), AS SECURED PARTY
Additional Locations for Debtor:
---------------------------------
DEBTOR'S INITIALS:
---------------------------------
SECURED PARTY'S INITIALS:
---------------------------------
EXHIBIT F
CERTIFICATE
OF
CRYOLIFE, INC.
The undersigned officers of CRYOLIFE, INC. (the "Borrower"),
a Florida corporation, hereby certify and covenant in their representative
capacities on behalf of the Borrower as follows:
1. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, with all
requisite corporate power and authority to own, operate and lease its properties
and to carry on its business, and is duly qualified to do business in every
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary.
2. Attached hereto as Exhibit 1 is a true and correct copy of
resolutions of the Directors of the Borrower which were duly adopted as of
August ___, 1996 (the "Resolutions"). Signed originals of the Resolutions appear
in the minute book of the Borrower. The Resolutions were adopted in accordance
with law and in accordance with the by-laws of the Borrower. A true and correct
copy of the Borrower's By-Laws, as in effect on the date hereof, is attached
hereto as Exhibit 2. The Resolutions are in full force and effect and have not
been amended, altered or repealed as of the date hereof.
3. The Borrower has duly authorized, executed and delivered, and
approved by all necessary corporate action, the following documents (hereinafter
collectively referred to as the "Financing Documents") pursuant to, and in full
compliance with, authority granted by the Directors of the Borrower in the
Resolutions:
Document Date Other Party
Third Amended and Restated Loan Agreement (the Date hereof NationsBank, N.A. (South) (the
"Loan Agreement") "Lender")
--------------- -------
$10,000,000 Promissory Note Date hereof Lender
Amended and Restated Security Agreement Date hereof Lender
Stock Pledge Agreement Date hereof Lender
The Borrower hereby acknowledges receipt of an executed counterpart or photocopy
(as executed) of each of the Financing Documents.
4. The Borrower has the corporate power to execute the Financing
Documents and to perform the obligations required to be performed by the
Borrower under the terms of the Financing Documents.
5. As of the date hereof, and after giving effect to the execution and
delivery of the Financing Documents, each of the representations and warranties
of the Borrower in the Financing Documents is true and correct in all material
respects and no Default or Event of Default (as such terms are defined in the
Financing Documents) has occurred and is continuing.
6. The seal affixed to this certificate and the Financing Documents is
the legally adopted, proper and only official corporate seal of the Borrower.
7. The Borrower's chief executive office and principal place of
business (within the meaning of Official Code of Georgia Annotated Section
11-9-401(1)(b)) is located in ▇▇▇▇ County, Georgia and its principal executive
office (within the meaning of Section 6323(f) of the Internal Revenue Code of
1954, as amended) is located in ▇▇▇▇ County, Georgia.
8. Borrower's federal taxpayer identification number is ▇▇-▇▇▇▇▇▇▇.
IN WITNESS WHEREOF, the undersigned have hereunto set their signatures
as of this 30th day of August, 1996.
_________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President and Chief
Executive Officer of CryoLife, Inc.
_________________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Vice President and
Chief Financial Officer of CryoLife, Inc.
EXHIBIT 1
BOARD RESOLUTIONS
OF
CRYOLIFE, INC.
(THE "CORPORATION")
WHEREAS, the Corporation desires to continue to borrow money and obtain
other financial accommodations from time to time from NationsBank, N.A. (South),
successor by merger to Bank South, a Georgia banking corporation formerly known
as Bank South, N.A. (the "Lender"), pursuant to the terms of a Third Amended and
Restated Loan Agreement substantially in the form presented to the Corporation's
directors and to be entered into between the Corporation and the Lender (the
"Third Restated Loan Agreement"); and
WHEREAS, the Corporation's indebtedness to the Lender for any and all
loans made by the Lender to the Corporation under the Third Restated Loan
Agreement will be evidenced by a promissory note to be executed by the
Corporation in favor of the Lender substantially in the form of Exhibit A
attached to the Third Restated Loan Agreement (the "Note"); and
WHEREAS, the Corporation's indebtedness to the Lender for the loans
made under the Third Restated Loan Agreement will be secured by all or
substantially all of the Corporation's property pursuant to an Amended and
Restated Security Agreement to be executed by the Corporation in favor of the
Lender substantially in the form of Exhibit B attached to the Third Restated
Loan Agreement (the "Restated Security Agreement"); and
WHEREAS, the Corporation's indebtedness to the Lender for the loans
made under the Third Restated Loan Agreement will also be secured by a pledge of
all of the capital stock of CryoLife International, Inc., a subsidiary of the
Corporation, pursuant to a Stock Pledge and Security Agreement to be executed by
the Corporation in favor of the Lender substantially in the form of Exhibit C-1
attached to the Third Restated Loan Agreement (the "Stock Pledge Agreement");
and
WHEREAS, the Board of Directors of the Corporation deems it to be in
the best interest of the Corporation and its shareholders that the Corporation
enter into the Third Restated Loan Agreement, the Note, the Restated Security
Agreement and the Stock Pledge Agreement (collectively, the "Financing
Documents");
NOW, THEREFORE, BE IT RESOLVED that the Financing Documents, together
with all transactions contemplated thereby, are hereby approved in their
entirety; and
FURTHER RESOLVED, that the president or any vice president of the
Corporation are each hereby severally authorized and directed to execute and
deliver on behalf of the Corporation the Financing Documents, all in
substantially the same forms as were presented to the Corporation's directors,
but with such changes thereto as the president or any vice president shall deem
to be in the best interest of the Corporation; and
FURTHER RESOLVED, each of the aforesaid officers of the Corporation are
hereby severally authorized and directed to do or to cause to be done all such
other acts and things on behalf of the Corporation (including the execution and
delivery of such other documents, security agreements, collateral assignments,
subordination agreements, other instruments, financing statements, stock powers
or transfers, certificates and agreements) as any such officer may deem
necessary or desirable in order to carry out and effectuate fully the purposes
of the foregoing resolutions.
EXHIBIT G
CERTIFICATE
OF
CRYOLIFE INTERNATIONAL, INC.
The undersigned officers of CRYOLIFE INTERNATIONAL, INC. (the
"Guarantor"), a Florida corporation, hereby certify and covenant in their
representative capacities on behalf of the Guarantor as follows:
1. The Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, with all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business, and is duly qualified to do business in every
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary.
2. Attached hereto as Exhibit 1 is a true and correct copy of
resolutions of the Directors of the Guarantor which were duly adopted as of
August ____, 1996 (the "Resolutions"). Signed originals of the Resolutions
appear in the minute book of the Guarantor. The Resolutions were adopted in
accordance with law and in accordance with the by-laws of the Guarantor. A true
and correct copy of the Guarantor's By-Laws, as in effect on the date hereof, is
attached hereto as Exhibit 2. The Resolutions are in full force and effect and
have not been amended, altered or repealed as of the date hereof.
3. The Guarantor has duly authorized, executed and delivered, and
approved by all necessary corporate action, the following documents (hereinafter
collectively referred to as the "Financing Documents") pursuant to, and in full
compliance with, authority granted by the Directors of the Guarantor in the
Resolutions:
Document Date Other Party
Guaranty Agreement Date hereof NationsBank, N.A. (South) (the "Lender")
Security Agreement Date hereof Lender
The Guarantor hereby acknowledges receipt of an executed counterpart or
photocopy (as executed) of each of the Financing Documents.
4. The Guarantor has the corporate power to execute the Financing
Documents and to perform the obligations required to be performed by the
Guarantor under the terms of the Financing Documents.
5. As of the date hereof, and after giving effect to the execution and
delivery of the Financing Documents, each of the representations and warranties
of the Guarantor in the Financing Documents is true and correct in all material
respects and no Default or Event of Default (as such terms are defined in the
Financing Documents) has occurred and is continuing.
6. The seal affixed to this certificate and the Financing Documents is
the legally adopted, proper and only official corporate seal of the Guarantor.
7. The Guarantor's chief executive office and principal place of
business (within the meaning of Official Code of Georgia Annotated Section
11-9-401(1)(b)) is located in ▇▇▇▇ County, Georgia and its principal executive
office (within the meaning of Section 6323(f) of the Internal Revenue Code of
1954, as amended) is located in ▇▇▇▇ County, Georgia.
8. Guarantor's federal taxpayer identification number is ▇▇-▇▇▇▇▇▇▇.
IN WITNESS WHEREOF, the undersigned have hereunto set their signatures
as of this 30th day of August, 1996.
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President of
CryoLife International, Inc.
EXHIBIT 1
BOARD RESOLUTIONS
OF
CRYOLIFE INTERNATIONAL, INC.
(THE "CORPORATION")
WHEREAS, CryoLife, Inc. (the "Parent"), the parent company of the
Corporation, desires to continue to borrow money and obtain other financial
accommodations from time to time from NationsBank, N.A. (South), successor by
merger to Bank South, a Georgia banking corporation formerly known as Bank
South, N.A. (the "Lender"), pursuant to the terms of a Third Amended and
Restated Loan Agreement substantially in the form presented to the Corporation's
directors and to be entered into between the Parent and the Lender (the "Third
Restated Loan Agreement"); and
WHEREAS, it is a condition precedent to such loans that the Corporation
guarantee the obligations of the Parent to the Lender, pursuant to a Guaranty
Agreement to be executed by the Corporation in favor of Lender substantially in
the form attached as Exhibit D to the Third Restated Loan Agreement (the
"Guaranty"); and
WHEREAS, the Corporation's obligations to the Lender under the Guaranty
will be secured by all or substantially all of the Corporation's property
pursuant to a Security Agreement to be executed by the Corporation in favor of
the Lender substantially in the form of Exhibit E attached to the Third Restated
Loan Agreement (the "Security Agreement"); and
WHEREAS, the Board of Directors of the Corporation deems it to be in
the best interest of the Corporation and its shareholders that the Corporation
enter into the Guaranty and the Security Agreement (collectively, the "Financing
Documents");
NOW, THEREFORE, BE IT RESOLVED that the Financing Documents, together
with all transactions contemplated thereby, are hereby approved in their
entirety; and
FURTHER RESOLVED, that the president or any vice president of the
Corporation are each hereby severally authorized and directed to execute and
deliver on behalf of the Corporation the Financing Documents, all in
substantially the same forms as were presented to the Corporation's directors,
but with such changes thereto as the president or any vice president shall deem
to be in the best interest of the Corporation; and
FURTHER RESOLVED, each of the aforesaid officers of the Corporation are
hereby severally authorized and directed to do or to cause to be done all such
other acts and things on behalf of the Corporation (including the execution and
delivery of such other documents, security agreements, collateral assignments,
subordination agreements, other instruments, financing statements, stock powers
or transfers, certificates and agreements) as any such officer may deem
necessary or desirable in order to carry out and effectuate fully the purposes
of the foregoing resolutions.
EXHIBIT H
August 30, 1996
NationsBank, N.A. (South)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
We have served as counsel for CryoLife, Inc., a Florida corporation
(the "Borrower"), and for CryoLife International, Inc., a Florida corporation
(the "Guarantor"), in connection with the loan transactions of even date which
arise under the Third Amended and Restated Loan and Security Agreement, dated as
of August 30, 1996, between the Borrower and the Lender (the "Loan Agreement").
This opinion letter is delivered pursuant to Section 605 of the Loan Agreement.
Capitalized terms used and not otherwise defined herein are used herein with the
meanings ascribed to them in the Loan Agreement and in the Interpretative
Standards (as defined below); provided, however, that in the event of any
conflict in the definitions contained in the Loan Agreement (on the one hand)
and in the Interpretative Standards (on the other hand), the definitions in the
Loan Agreement shall control.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretative Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
(the "Interpretative Standards"), which Interpretative Standards are
incorporated in this opinion letter by this reference.
In connection with this representation, we have examined fully executed
counterparts of the following documents (items (a) through (f) below are
hereinafter referred collectively as the "Credit Documents"):
(a) The Loan Agreement;
(b) The Note;
(c) The Security Agreement;
(d) The Stock Pledge Agreement;
(e) The Subsidiary Guaranty executed by the Guarantor;
(f) The Subsidiary Security Agreement executed by the Guarantor;
(g) Acknowledgement copies of the financing statements on Form
UCC-1 (the "Financing Statements") under the Uniform Commercial Code
(the "UCC") as in effect in the State of Georgia (the "State"), naming
the Borrower and the Guarantor, respectively, as debtors, and the
Lender, as secured party, and filed on ____________, 1996, in the
Office of the Clerk of the Superior Court of ▇▇▇▇ County, Georgia (the
"Filing Office");
(h) Reports of examinations (the "Search Reports"), dated August
___, 1996, and conducted under the Borrower's and the Guarantor's name
by Equifax Business Information Services (which is an independent
contractor and is not affiliated with or supervised by our firm) in the
federal and state tax lien, judgment lien and UCC financing statement
records of the Filing Office; and
(i) The other documents and material written agreements listed on
Schedule I attached hereto.
In the capacity described above, we have also considered such matters
of law and of fact, together with such other records and documents of the
Borrower and the Guarantor, certificates of officers or other representatives of
the Borrower and the Guarantor, certificates of public officials, and such other
documents as we have deemed appropriate for the opinions and confirmations
herein set forth.
With your permission in rendering the opinions and confirmations set
forth herein, we have assumed the following, in addition to the assumptions set
forth in the Interpretative Standards, without any investigation or inquiry on
our part:
(i) The due authorization, execution and delivery of all Credit
Documents by all parties thereto (other than the Borrower and the
Guarantor);
(ii) That the Credit Documents constitute the binding obligations of
the parties thereto (other than the Borrower and the Guarantor)
and that each party thereto (other than the Borrower and the
Guarantor) has all requisite power and authority to perform its
respective obligations thereunder;
(iii) That the only interest, fees and other charges contracted for or
to be reserved, charged, taken or paid in connection with the
Transaction are those set forth in the Credit Documents and that
all such interest, fees and charges will be reserved, charged,
taken and applied by Lender solely as described in the Credit
Documents, and that no interest shall be reserved, charged, taken
or paid under the Credit Documents on unpaid interest and that
under no circumstances shall the rate of interest paid or payable
under the Credit Documents (including any fees, charges, premiums
or similar amounts which may be characterized as interest) exceed
5.0% per month (whether due to prepayment, acceleration or
otherwise);
(iv) The Borrower has, prior to or concurrently with its execution and
delivery of the Security Agreement, rights in and the
unrestricted right to convey the Collateral covered thereby,
including that portion of such Collateral which constitutes
property of a type (x) in which a security interest may be
granted and perfected under the provisions of Article 9 of the
UCC and (y) as to which the federal laws of the United States
have not preempted the UCC with respect to the validity,
enforceability, perfection or priority of security interests
therein (such portion of such Collateral being hereinafter
collectively referred to as the "Borrower UCC Collateral");
(v) The Guarantor has, prior to or concurrently with its execution
and delivery of the Subsidiary Security Agreement, rights in and
the unrestricted right to convey the Collateral covered thereby,
including that portion of such Collateral which constitutes
property of a type (x) in which a security interest may be
granted and perfected under the provisions of Article 9 of the
UCC and (y) as to which the federal laws of the United States
have not preempted the UCC with respect to the validity,
enforceability, perfection or priority of security interests
therein (such portion of such Collateral being hereinafter
collectively referred to as the "Guarantor UCC Collateral"; the
Borrower UCC Collateral and the Guarantor UCC Collateral being
hereinafter collectively referred to as the "UCC Collateral");
(vi) The principal place of business and chief executive office of the
Borrower and the Guarantor are located in the State;
(vii) All of the UCC Collateral of the Borrower and the Guarantor is
situated or located within the State other than that which is in
transit to or from such a location or is mobile equipment;
(viii) The Search Reports are accurate and complete; and
(ix) The Financing Statements give (i) the correct federal taxpayer
identification number for the debtor named thereon and (ii) a
correct address of the secured party named thereon from which
information concerning the security interest to be perfected
thereby may be obtained.
The opinions set forth herein are limited to the laws of the State, the
general corporation laws of the State of Florida and any applicable federal laws
of the United States.
Based upon the foregoing, and subject to the other exceptions,
assumptions and qualifications set forth or incorporated herein by reference, it
is our opinion that:
1. The Borrower was duly organized as a corporation, and is existing
and in good standing, under the laws of the State of Florida.
2. The Borrower has the corporate power to execute and deliver the
Credit Documents to which Borrower is a party, to perform its obligations
thereunder, to own and use its Assets and to conduct its business.
3. The Borrower has duly authorized the execution and delivery of the
Credit Documents to which Borrower is a party and all performance by the
Borrower thereunder.
4. The Borrower has duly executed and delivered the Credit Documents to
which it is a party.
5. The execution and delivery by the Borrower of the Credit Documents
to which Borrower is a party do not, and if the Borrower were now to perform its
obligations thereunder such performance would not, result in any:
(i) violation of the Certificate of Incorporation or By-Laws of the
Borrower;
(ii) violation of any existing federal or State constitution, statute,
regulation, rule, order or law to which the Borrower or its
Assets are subject;
(iii) breach of or default under any material written agreements;
(iv) creation or imposition of any contractual lien or security
interest in, on or against the Borrower's Assets under any
material written agreements (except as contemplated by the Credit
Documents); or
(v) violation of any judicial or administrative decree, writ,
judgment or order to which, to our knowledge, the Borrower or its
Assets are subject.
With your permission, we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above includes only those agreements
listed as such on Schedule I attached hereto.
6. The Guarantor was duly organized as a corporation, and is existing
and in good standing, under the laws of the State of Florida.
7. The Guarantor has the corporate power to execute and deliver the
Credit Documents to which Guarantor is a party, to perform its obligations
thereunder, to own and use its Assets and to conduct its business.
8. The Guarantor has duly authorized the execution and delivery of the
Credit Documents to which Guarantor is a party and all performance by the
Guarantor thereunder.
9. The Guarantor has duly executed and delivered the Credit Documents
to which it is a party.
10. The execution and delivery by the Guarantor of the Credit Documents
to which Guarantor is a party do not, and if the Guarantor were now to perform
its obligations thereunder such performance would not, result in any:
(i) violation of the Certificate of Incorporation or By-Laws of the
Guarantor;
(ii) violation of any existing federal or State constitution, statute,
regulation, rule, order or law to which the Guarantor or its
Assets are subject;
(iii) breach of or default under any material written agreements;
(iv) creation or imposition of any contractual lien or security
interest in, on or against the Guarantor's Assets under any
material written agreements (except as contemplated by the Credit
Documents); or
(v) violation of any judicial or administrative decree, writ,
judgment or order to which, to our knowledge, the Guarantor or
its Assets are subject.
With your permission, we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above includes only those agreements
listed as such on Schedule I attached hereto.
11. No consent, approval, authorization or other action by, or notice
to or filing with, any court or administrative or governmental body of the
United States or the State is required in connection with the execution and
delivery by the Borrower or the Guarantor of the Credit Documents or the
incurrence by the Borrower or the Guarantor of their respective obligations
thereunder, except such consents, approvals, authorizations, registrations or
filings as have been made or obtained and are in full force and effect.
12. Each Credit Document executed by the Borrower or the Guarantor is
enforceable against it.
13. While the laws of the State relating to matters of interest and
usury are not without ambiguities, and assuming that the Borrower is not
required or deemed to pay any interest or other charges for the use of money in
connection with the Transactions in excess of 5% per month, a court applying the
laws of the State should conclude that the Credit Documents are in compliance
with the State's interest and usury laws; provided, however, that we express no
opinion herein as to any provision of any Credit Document (if any) that may be
construed to require or permit interest to be charged or paid on unpaid interest
except to the extent permitted under Official Code of Georgia Annotated
("O.C.G.A.") Section 7-4-17.
14. None of the Loans contemplated by the Loan Agreement, including
without limitation the use of the proceeds thereof, will violate or result in a
violation of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
15. (a) Each of the Security Agreement and the Subsidiary Security
Agreement is effective to create a security interest in the UCC Collateral
covered thereby;
(b) The Financing Statements are in appropriate form for filing in the
State and no taxes or fees, other than normal filing fees, are required to be
paid in connection with such filing, and the filing of the Financing Statements
is effective to perfect the security interest to be created by the Security
Agreement and the Subsidiary Security Agreement, respectively, in that portion
of the UCC Collateral in which a security interest may be perfected by the
filing of a UCC financing statement in the State (the "Security Interest");
(c) Based solely on the Search Reports, for which we take no
responsibility, and assuming that no additional filings have been made since the
effective time thereof, the Security Interest has the priority accorded to a UCC
security interest perfected by the filing of a UCC financing statement in the
Filing Office; and
(d) The opinions expressed in paragraphs 15(a), (b) and (c) above are
subject to the following additional exceptions and qualifications:
(i) The effect of bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights of creditors,
including the U.S. Bankruptcy Code in its entirety and State laws
regarding fraudulent transfers, obligations and conveyances or
regarding receiverships;
(ii) In the case of proceeds, as such term is defined in the UCC,
continuation of the perfection of the Security Interest therein
is limited to the degree set forth in O.C.G.A. Section 11-9-306;
(iii) Continuation statements relating to the Financing Statements must
be filed within six (6) months prior to the expiration of five
(5) years from the date of filing thereof and within the same
period prior to each succeeding fifth (5th) anniversary of such
filing date;
(iv) Additional filings may be necessary with respect to the UCC
Collateral if the Borrower or the Guarantor changes its name,
identity or corporate structure or the jurisdiction in which the
UCC Collateral is located or in the event the Borrower or the
Guarantor changes the location of its principal place of business
or chief executive office;
(v) It may not be possible to create or perfect any security interest
in any of the UCC Collateral consisting of accounts or general
intangibles arising under service agreements, or the proceeds
thereof, that are subject to an agreement that is or purports to
be non-assignable or that may not be assigned under applicable
law; and
(vi) We express no opinion herein with respect to the perfection or
priority of the Security Interest in any portion of the UCC
Collateral which may constitute a fixture (as such term is
defined in the UCC).
Based upon the foregoing, and subject to the other exceptions,
assumptions and qualifications set forth or incorporated by reference herein, we
hereby confirm to you that:
A. To our knowledge, no litigation or other proceedings against the
Borrower or the Guarantor or any of their respective Assets is pending or
overtly threatened by a written communication to the Borrower or the Guarantor.
B. The Borrower and the Guarantor are each qualified to transact
business as a foreign corporation in the States of Georgia. The foregoing
statement is based solely upon certificates provided by an agency of that state
as described on Schedule I attached hereto, copies of which have been delivered
to you at the closing of the Transaction, and is limited to the meaning ascribed
to such certificate by the applicable state agency.
This opinion letter has been delivered solely for the benefit of the
addressees pursuant to the Loan Agreement and may not be relied upon by any
other person or entity or for any other purpose without the express written
permission of the undersigned.
Very truly yours,
ARNALL GOLDEN & ▇▇▇▇▇▇▇
By:________________________________
_____________________, a partner
SCHEDULE 1
OTHER DOCUMENTS REVIEWED
1. Copies of the Certificates of Incorporation of Borrower and Guarantor as
certified on August __, 1996 by the Office of the Secretary of State of
Florida;
2. Good standing certificates (or equivalent) for Borrower and Guarantor as
issued on August __, 1996 by the Office of the Secretary of State of
Florida;
3. Good standing certificates (or equivalent) for Borrower and Guarantor as
issued on August __, 1996 by the Office of the Secretary of State of
Georgia; and
4. Certificates of Borrower and Guarantor, each dated as of August 30, 1996,
executed and delivered by Borrower and Guarantor, respectively, pursuant to
Section 605 of the Loan Agreement and to which are attached certified
copies of Borrower's and Guarantor's by-laws and authorizing board
resolutions.
MATERIAL WRITTEN AGREEMENTS
1.
EXHIBIT I
WAIVER AND CONSENT
THIS WAIVER AND CONSENT is made as of this _____ day of August, 1996,
by the undersigned in favor of NATIONSBANK, N.A. (SOUTH), a national banking
association having offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Lender").
STATEMENT OF FACTS
The undersigned is the lessor of the real property and related
improvements and fixtures located at _______________________________________
hereinafter collectively called the "Real Property". The Lender and CRYOLIFE,
INC. and/or its subsidiary CRYOLIFE INTERNATIONAL, INC., hereinafter
collectively called "Debtor", the lessee of the Real Property, may now or
hereafter enter into one or more security agreements under which the Lender may
be granted a security interest in some or all of the Debtor's now owned or
hereafter acquired accounts, contract rights, general intangibles, documents,
instruments, inventory, equipment, machinery, furniture, fixtures and leasehold
improvements and all proceeds of any or all of the foregoing as well as all
books and records (including without limitation computer and accounting records)
of the Debtor pertaining to any or all of the foregoing, hereinafter
collectively called the "Personal Property". Some or all of the Personal
Property will be placed, stored or otherwise located on the Real Property.
NOW, THEREFORE, for and in consideration of the foregoing premises,
$5.00 in hand paid by the Lender to the undersigned, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned does hereby consent and agree in favor of Lender as follows:
STATEMENT OF TERMS
1. The undersigned consents to and acquiesces in the Debtor's grant of
a security interest in the Personal Property in favor of the Lender.
2. The undersigned hereby waives, relinquishes and releases any right,
privilege or power which the undersigned now has, or may hereafter have, under
or by virtue of any law or any agreement, instrument or other document, to claim
or assert any right, title or interest in or to the Personal Property, including
without limitation any right, privilege or power to levy or distrain upon the
Personal Property for rent, in arrears, in advance or both.
3. The Lender may exercise any rights, privileges, options or powers
which it may have with respect to the Personal Property without regard to the
undersigned's right, title or interest in and to the Real Property, including,
without limitation, any right, privilege or option which the Lender may have to
enter upon the Real Property and inspect, or to take possession of and remove,
the Personal Property, or any part thereof, pursuant to the terms and conditions
of any agreement between Debtor and the Lender or pursuant to any applicable
law; provided, that Lender shall reimburse the undersigned for the reasonable
costs of repairing any actual physical damage to the Real Property caused by
Lender in removing the Personal Property (but Lender shall not be liable for any
other diminution in the value of the Real Property resulting from the removal of
any of the Personal Property therefrom).
4. If the Lender elects to take possession of all or any part of the
Personal Property pursuant to the terms of any agreement between Debtor and the
Lender or pursuant to any applicable law, the Lender shall have access to the
Real Property for the purposes of inspecting, preserving or removing the
Personal Property and the Lender may, in its discretion and without liability to
the undersigned except as expressly provided below, leave all or any part of the
Personal Property on the Real Property for a period of not more than ninety (90)
days after the Lender takes such possession; provided, that Lender shall pay to
the undersigned pro-rated rent (based on the base rent rate then payable by
Debtor to the undersigned) for the days that Lender is in actual possession of
the Real Property if and to the extent that Debtor fails to pay the same.
5. The undersigned agrees to give the Lender prior written notice (at
Lender's address set forth above or at such other address as Lender may
hereafter designate by written notice to the undersigned) of any payment default
by Debtor under its lease of the Real Property and Lender shall have the right
(but not the obligation) to cure such payment default within ten (10) days after
Lender's receipt of such payment default notice and the undersigned shall not
terminate the Debtor's lease of the Real Property on account of such payment
default until Lender's cure right expires.
6. The validity and enforceability of this Waiver and Consent shall not
be impaired, diminished, annulled or affected in any manner whatsoever by the
modification, alteration, extension or renewal of any debt or other obligation
of Debtor to the Lender.
7. This Waiver and Consent shall be binding upon and enforceable
against the undersigned and its heirs, legal representatives, successors and
assigns, and shall inure to the benefit of the Lender and its successors and
assigns.
8. Words importing the singular number hereunder shall include the
plural number and vice versa, and any pronoun used herein shall be deemed to
include all genders.
9. This Waiver and Consent supersedes and replaces any prior waivers or
consents executed by the undersigned in favor of the Lender with respect to the
Personal Property, the Real Property and the Debtor.
IN WITNESS WHEREOF, the undersigned has executed this Waiver and
Consent and affixed its seal hereto as of the day and year first written above.
(Individual Mortgagee or Lessor Sign Here)
Signed, sealed and delivered this ____ day (SEAL)
of ______________________, 1996, in Name:___________________________
the presence of:
Notary Public
[NOTARIAL SEAL]
(Corporate or Partnership Mortgagee or Lessor Sign Here)
(CORPORATE SEAL)
By:______________________________
ATTEST:____________________ Title:___________________________
Title:_____________________
Signed, sealed and delivered this _____ day of _________________, 1996, in the
presence of:
Notary Public
[NOTARIAL SEAL]
EXHIBIT J
COMPLIANCE CERTIFICATE
This Certificate is delivered pursuant to that certain Third Amended and
Restated Loan Agreement, dated as of March 30, 1996 (the Agreement), by and
between CRYOLIFE, INC., a Florida corporation (the Borrower), and NATIONSBANK,
N.A. (SOUTH), a national banking association (the Lender). All capitalized
terms used in this Certificate which are defined in the Agreement are used in
this Certificate with the same meanings given such terms in the Agreement.
Unless otherwise defined in the Agreement, all accounting terms used herein
shall have the meaning given such terms under generally accepted accounting
principles consistently applied (GAAP).
I hereby certify, to the best of my knowledge and belief and in my
representative capacity on behalf of the Borrower, to the Lender as follows:
1. I am the duly qualified and acting chief financial officer of the
Borrower.
2. I have prepared or reviewed the financial statements of the Borrower as
of and for the period ending _________________________, _____, true, complete
and correct copies of which are attached hereto as Exhibit 1 (collectively, the
Financial Statements).
3. The Financial Statements were prepared in accordance with GAAP and
fairly present the financial position and results of operations of the Borrower
(and its consolidated subsidiaries, if any) as of and for the period ending on
the date of the Financial Statements (subject to normal year-end adjustments).
4. I further certify that as of, and for the period ending on, the date of
the Financial Statements, and except as may be disclosed on Exhibit 2 attached
hereto (all of the following being calculated on a consolidated basis and in
accordance with GAAP and the Agreement):
(a) The Borrowers Current Ratio was not less than 2.0 to 1.0 at
any time during such period;
(b) The Borrowers Leverage Ratio did not exceed 1.0 to 1.0 at
any time during such period;
(c) The Borrowers Debt Coverage Ratio was not less than 1.3 to
1.0 for such period;
(d) The Borrowers Net Worth was not less than [insert
$15,500,000 thru 12/31/96, and during each fiscal year thereafter
insert the prior fiscal years required amount plus $500,000] at any
time during such period; and
(e) The Borrowers Capital Expenditures for such fiscal year (or
for the portion thereof ending with such period) did not exceed
$2,000,000 in total.
Attached hereto as Exhibit 3 are calculations demonstrating whether or not
the Borrower was in compliance, as of and for the period ending on the date of
the Financial Statements, with the covenants in the Loan Agreement which are
summarized in items (a) through (e) above.
5. No Default or Event of Default has occurred and is continuing as of the
date of this Certificate other than those Defaults or Events of Defaults (if
any) which are described on the aforesaid Exhibit 2 attached hereto.
I represent the foregoing information to be true and correct to the best of
my knowledge and belief and I execute this Certificate in my representative
capacity on behalf of the Borrower as of this ____ day of _____________________,
_____.
Name:________________________________
Title:_______________________________